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Reducing the Size of Headquarters, Department of the Army

An After-Action Review

Lt. Gen. Thomas Spoehr, U.S. Army, Retired

Brig. Gen. David Komar, U.S. Army

Lt. Col. Terrence Alvarez, U.S. Army

Lt. Col. Raymond Shetzline, U.S. Army, Retired

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From July 2014 through March 2015, Headquarters, Department of the Army (HQDA) completed an organizational redesign aimed at reducing overall personnel authorizations 25 percent and reducing operating costs by fiscal year (FY) 2019. This effort was known as the “HQDA Comprehensive Review.”1 While some would compare this task to performing liposuction on a whale, the people charged with executing it stepped up to the challenge, ensuring HQDA took appropriate reductions alongside the rest of the Army. This article offers discussion on the challenges, successes, and missed opportunities encountered during the redesign and ensuing approval efforts.

After a brief review of HQDA guidance and reductions, Kotter International’s “8-Step Process for Leading Change” will serve as a comparative framework, helping illustrate the key points.2 Finally, this article provides recommendations for organizational redesign within headquarters that support and operate subordinate to higher echelons (e.g., the Office of the Secretary of Defense and the Office of Management and Budget) and in response to congressional oversight.

Background and Guidance

Prior to the HQDA Comprehensive Review, HQDA leaders had already identified personnel authorization reductions as part of a focus-area review process, designed to downsize all headquarters led by a major general or higher to meet the Army’s end-strength requirements. Known as the FARG (Focus Area Review Group) within HQDA, this effort established the original 25 percent reduction target for thirty-two main Army secretariat and Army staff (ARSTAF) agencies, with twenty-five additional field operating agencies (FOAs) and all two-star–and–above headquarters throughout the Army.3 Leaders soon realized that the FARG focused purely on numeric reductions and did not look at potential organizational redesign, accounting for the various work schedules and workloads specific to each organization.

On 17 July 2014, the secretary of the Army (SA) directed the under secretary of the Army (USA), in coordination with the vice chief of staff of the Army (VCSA), to conduct a comprehensive review of HQDA to “determine the optimal organization and strength and, subsequently, any adjustment of programmed [personnel authorization] reductions.”4 Specifically, the review sought to optimize HQDA’s size, roles, functions, and organizational structure to best support its mission. The new structure would be constrained by the projected budget and the overall Army end strength while addressing senior leader priorities. The review needed to maintain a view of the future strategic environment and provide recommendations for an implementation plan no later than 31 March 2015.

The SA guidance outlined a phased approach, as depicted in figure 1.5 The “initial diagnostic” phase established the facts, to include previous HQDA growth over time, a mission-to-workforce analysis, and benchmark comparisons against other relevant organizations. The second phase, “set up the program,” tasked the USA and VCSA to create a shared vision of the future for HQDA and establish design principles. The USA and VCSA would approve organizational redesigns in a top-to-bottom methodology, moving through the leadership echelons that make up staff organizations. At the end of the final “structure and design the organization” phase, the USA and the VCSA would brief the recommended designs to the SA.

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On 23 July 2014, the SA concluded the 2013 Army FARG’s effort to identify the number of authorizations required to achieve a 25 percent aggregate reduction within Army headquarters at the two-star–and–above level.6 Armed with the approved reduction numbers and with the assistance of all ARSTAF and Army secretariat agencies, the USA and VCSA established a core working group to execute the ensuing HQDA review. Their first task was to establish the program and design principles utilized during the HQDA design review effort. Once the principles were agreed upon, the ARSTAF and secretariat empowered the staff to develop their own organizational designs with help from the Boston Consulting Group (BCG) as outlined in the last phase.

Scope and Initial Phases

During the nine months allocated for the HQDA Comprehensive Review, the USA and VCSA tasked the Office of Business Transformation (OBT) in coordination with the BCG to review the thirty-two main ARSTAF agencies with twenty-five additional FOAs that compose the HQDA tables of distribution and allowance (TDAs).7 BCG had specialized knowledge on business analysis techniques and design experience with other large organizational headquarters. They mapped out the formal and actual organizational structures, identified core missions and functions, conducted in-depth echelon analysis, and provided impartial expertise.

BCG began with a review of a subset of the total HQDA agencies to understand the full scope of the HQDA organization and their roles. In total, they identified that the Army secretariat and ARSTAF agencies with associated FOAs included approximately fourteen thousand personnel authorizations with up to ten echelons, or internal organizational layers, between the first-echelon senior decision makers (e.g., the SA, CSA, USA, and VCSA) and action officers or individual contributors at echelons seven and below (see figure 2).

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The larger the number of echelons or layers in an organization, the more diluted reporting chains became, preventing the full employment of top talent.8 As indicated in figure 3, BCG’s findings from other large organizations showing the increase of time and degradation of message clarity as the number of echelons or levels increase. BCG also found approximately 50 percent of colonels and GS-15–level civilians reported to someone of the same grade, and many general officers (GOs) and their civilian counterparts, senior executive service (SES) leaders, had little or no supervisory responsibilities. They also found that 23 percent of colonels and GS-15s were buried deeper than echelon five within most organizations. The use of additional echelons created shadow reporting chains through the extensive use of deputies deep within organizations, which further confused and lengthened the decision-making processes. Based on this initial review and the developed redesign principles, the USA and VCSA began the “structure and design the organization” phase to change HQDA and FOAs through a methodical de-layering approach, seeking to “flatten” organizations to gain efficiencies.

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Kotter’s 8-Step Process

Kotter International’s “8-Step Process for Leading [Organizational] Change” serves as our comparative model because it provides an authoritative, structured outline with stated goals, and it is a prime example of business redesign best practices. It shares two fundamental goals with the HQDA Comprehensive Review: to decrease operating costs through personnel-authorization reductions and to create more effective and efficient functional processes. Kotter’s 8-Step Process follows:

  1. Create a sense of urgency for change that appeals to the organization, and identifies and communicates the need and what is at stake for success or failure.
  2. Build a guiding coalition from within that can guide, coordinate, and communicate their activities during the change.
  3. Form a strategic vision and initiatives that use coordinated activities to make the “to-be” vision a reality.
  4. Enlist a volunteer army that communicates and works to make the change occur.
  5. Enable action by removing barriers or obstacles by allowing employees to remove inefficient processes or hierarchies from across boundaries and create an impact.
  6. Generate short-term wins that track and communicate progress and energize the volunteers to drive change.
  7. Sustain acceleration. Leaders must adapt quickly, determine what can be done, and build on the change toward the vision.
  8. Institute change through new behaviors, and define and communicate the connections between the behaviors and the organization’s success. 9

Through a comparative analysis of the 8-Step Process, this article will discuss the HQDA Comprehensive Review’s ability to achieve its 25 percent authorization reductions and de-layering while simultaneously maintaining and improving work functions.

Comparison to the Kotter Model and Insights

The SA accomplished the first step, “create a sense of urgency,” during the FARG effort and continued with his tasking memorandum to the USA that established the need and authority for the HQDA Comprehensive Review. Simply put, the Army needed to reduce personnel levels and associated costs by FY 2019 to meet established force structure goals. There were clear reduction targets and a set timeline for completion. On 28 October 2014, the USA and VCSA, supported by OBT and BCG, held an HQDA de-layering kickoff meeting with the Army secretariat and ARSTAF principals. The intent of the meeting was to outline the requirements, introduce the de-layering design principles, ensure all HQDA agencies would participate, and avoid the pitfall of a uniform “salami slice” 25 percent reduction within each agency. The design principles in figure 4 defined how the leaders of each HQDA agency should de-layer, or flatten, the echelons that make up their agency; the principles were used by the USA and VCSA as approval criteria for every redesign submission.10

comprehensive-design-principles

Following the second step of the Kotter process, “build a guiding coalition,” the USA and VCSA attempted to build a guiding coalition from within the HQDA principals during the de-layering kickoff meeting. The review had a small core working group, led by OBT and supported by BCG, to enable change, report on progress, and provide an alternative point of view for redesign progress. Senior leaders relied heavily on this group to coordinate efforts, track progress, and communicate pertinent activities throughout the effort. While this reliance on OBT and BCG ultimately proved successful, the HQDA agencies often viewed them as outsiders forcing change rather than assisting the agencies’ champions with implementing common plans and design constructs. Because of this friction, the USA and VCSA often had to directly address concerns and provide guidance to HQDA principals rather than manage other lines of effort such as reorganizing work flow to determine if larger inter- or intraorganization agency change was warranted. A successful example of this guiding coalition was the coordinated effort of the USA, the VCSA, and the director of the Army staff, working as a united front to pull together all thirty-two HQDA principals to achieve the end state on 31 March 2015. However, by limiting the guiding coalition to a small core working group outside of the other agencies, the review did not reach the full potential as envisioned by Kotter.

The USA and VCSA supported the third step of Kotter’s process, “form a strategic vision and initiatives,” by forming a singular strategic vision and set of initiatives that guided redesign activities toward the “future state.” They used the information gleaned from the initial documented review phase to illustrate that HQDA had too many echelons in place for clear and effective communication, leaders had low spans of supervisory control, and numerous deputies or senior employees were too deep within organizations to operate effectively and often reported to each other. The USA and VCSA stated their intent to reduce the number of echelons and redundant management processes, or “de-layer” the headquarters, to reverse these trends. In the long run, de-layering the HQDA could offset some of the impact of the 25 percent personnel authorization reductions, making organizations easier to manage and more efficient in terms of work and information flow, as proven in other large civilian business headquarters. In addition to the de-layering efforts within each of the HQDA organizations, the USA wanted to examine ways to reorganize the HQDA work flow across the ARSTAF and secretariat agencies. An OBT-led group of subject-matter experts reviewed several enterprise work flow functions, to include the Planning, Programming, Budgeting, and Execution (PPBE) process and the Total Army Analysis (TAA) process.11 While the future strategic vision and initiatives were well supported with quantitative data, they were not well communicated across the HQDA and FOA population, except downward through the existing information channels, which were suboptimal in rapidly passing information throughout the thirty-two agencies. Many participants suggested publishing “frequently asked questions,” a headquarters concept plan, and senior-leader meeting notes to the workforce; however, these approaches were never implemented. The lack of information had a significant impact on the speed of the effort and the ability of the workforce to understand how the redesigns would support future state.

In addition, this lack of information transparency made it extremely difficult to “enlist a volunteer army” as identified in Kotter’s step 4. Without this internal ground swell of support, the project moved forward more by established deadlines and through force of will than by an open dialogue—which could propose, develop, or explore nonstandard organizational designs. This lack of information transparency also resulted in many HQDA agencies and FOAs greeting the supporting teams with a range of emotion from indifference to open hostility. BCG and small “subject-matter expert” teams had to overcome this agency bias before they could effectively communicate how organizations could make effective changes within the agreed upon de-layering principles in figure 3 (on page 19).

The review was not successful in Kotter’s step 5, “enable action by removing barriers and obstacles,” allowing employees to remove inefficient processes or hierarchies from across boundaries. As mentioned earlier, HQDA had to maintain its daily workload while reducing authorizations and attempting reorganization through de-layering. HQDA core functions and daily processes had their own distinct management hierarchies and timelines embedded in them that still had to be met. The USA and VCSA tasked the organizations’ principals with de-layering, but OBT with small teams of the agencies’ process subject-matter experts handled the day-to-day work, reviewing the core processes and potential staff mergers as a second line of effort. These teams encountered the same support and information obstacles as discussed above because they were outside the organizations and were not process owners. Despite these barriers, and to the credit of the process owners and involved participants, these small teams gathered and reviewed a vast amount of information that led to recommendations for further analysis and concept exploration. However, there were no significant changes to the HQDA core functions or processes. To improve processes in the future, process owners and stakeholders would have to prepare, plan, and execute their own process-improvement efforts, vice an outside organization, in order to ultimately achieve their defined goals and implement change effectively.

In support of Kotter’s sixth step, the USA and VCSA did “generate short-term wins,” tracking and communicating success and progress, by quickly approving many smaller agency redesigns. Picking this “low-hanging fruit” was achieved through a stepped review process, focusing first on echelons two through five, as depicted in the final phase of figure 1 (on page 16). Throughout the overall echelon reorganization review and approval briefings, the principals informed the USA and VCSA simultaneously on their projected reorganization design and, if necessary, sought exceptions for specific “violations” of the de-layering principles. Requests for exception usually dealt with span-of-control limitations due to the nature of work required by U.S. Code, General Order 2012-01, or public law.12 At each of these briefings, the USA and VCSA attempted to further energize the principals to drive change. Due in part to the principals’ thoroughness, and with support from the BCG, in terms of documentation and alternative design development, the USA and VCSA quickly reviewed and approved the organizations’ concepts. As the approval process matured, the USA and VCSA showed flexibility as decision makers, acknowledging that not every organization could achieve 25 percent reductions within the constraints of the entire rule set. They understood that, in the long term, work flow mattered more than the de-layering principles (rules) as long as leaders preformed due diligence and did not recommend growth. The one rule that remained firm was the 25 percent reduction, which had to be achieved by each organization.

During the effort to reorganize, the HQDA Comprehensive Review was successful in achieving Kotter’s seventh step, “sustain acceleration.” By completing the echelons in descending order, starting with echelon two and proceeding downward into the more populous echelons, the principals and organizational designers could build on the previous work as well as gain more experience with the application of the concepts and design principles.

The HQDA Comprehensive Review “instituted change” as defined in the eighth step of Kotter’s process through the codification of the de-layered organizations’ concepts in revised TDAs, which clearly identified the removal year for each authorization. The review, however, largely did not create new behaviors across the ARSTAF and the Army secretariat, as most organizations continued to function as before with only changes to the number of echelons, providing supervisors greater span of control and ensuring no deputies existed below echelon three. Ultimately, change decisions remained internal to each agency instead of across agency functions. The USA and VCSA also sped the TDA documentation process by temporarily suspending the requirement for the preparation of command-implementation plans and concept plans per Army Regulation 71-32, Force Development and Documentation.13

While the main effort to create new TDAs for FY 2019 did not create any significant new behaviors, the core-process review and staff-merger effort did attempt to identify potential new organizational options. One option considered was combining the Office of the Assistant Secretariat of the Army for Manning and Reserve Affairs and the Office of the Deputy Chief of Staff G-1 so that policy creation and operational planning and execution would be within one organization vice two. In addition to new organizational structures within the headquarters, the core-process review and staff-merger effort looked at potential new processes to streamline the existing workload. Task force subject-matter experts examined the TAA (a process that supports the size and skill distribution of the Total Army) and select steps of the PPBE process. These potential changes in organizations and processes were tasked as areas for further analysis due to external oversight factors, the ongoing reorganization, and existing roles and responsibilities defined in General Order 2012-01, vice tackling as part of the overarching effort.

What Was Achieved

The HQDA Comprehensive Review developed and executed the reduction of the HQDA staff by approximately 2,100 personnel authorizations by FY 2019.14 These reductions constitute approximately 15 percent of the effort; the headquarters does achieve the 25 percent target when incorporated with the FARG reductions and significantly reduces the number of echelons within the staff by flattening the organization. These reductions also increased manager median span of control to eight from as little as one across much of the headquarters, in addition to reducing the percentage of managers by one-third. The reorganized agencies eliminated 70 percent of same-grade reporting, vastly improving vertical information flow, and senior leaders (those at the GO and SES levels) have increased roles and direct responsibilities over more processes and information. The effort moved 94 percent of the GS-15s to or above echelon five, which better aligns talent to decision making, rather than just informing decisions. Additionally, it reduced the use of deputies below echelon three (two-star GO and SES level) by FY 2019. Overall, these changes successfully flattened HQDA, increasing effectiveness and efficiency, and placed the headquarters on par with other large corporate headquarters. While implementation and rebalancing of personnel to open positions remains to be accomplished, the Office of the Administrative Assistant supported by the United States Army Force Management Agency (USAFMSA) and the affected organizations completed documenting the de-layered and reorganized changes in TDAs by 1 October 2015 (FY 2016).

To complete implementation, HQDA developed the Intermediate Review Council, allowing a forum to adjudicate issues not addressed or developed during the effort and ensuring the de-layering principles would not be violated or discarded in the future. They managed TDA documentation with USAFMSA and the affected agencies, working to align on-hand personnel and remaining authorizations so the authorization reductions could be reached through natural attrition. The full implementation and realization of the loss of the personnel authorizations identified during the FARG and the HQDA Comprehensive Review will incrementally run until FY 2019.

Conclusion

While the effort will not be fully implemented until 1 October 2018 (FY 2019), the senior leadership must maintain awareness of any external changes or decisions that may affect the HQDA Comprehensive Review implementation. As with any project or reorganization, stable leadership continuously measuring the effort is key to achieving the objectives as defined in their vision. Despite senior leadership (SA, USA, and CSA) moving on to other duties, the new leadership continues to implement the authorization reductions in accordance with the documented changes.

The HQDA Comprehensive Review effort would have benefited from having a continuous communication plan throughout the change review that was targeted to inform all levels of the organization. The lack of information transparency was a critical misstep. Better communication to the lowest level in HQDA could have aided in the speed of change and overall support for the effort. Publishing a headquarters concept plan could have provided a clear end state for the workforce to align to and identify other potential ways to accomplish the various tasks. Sharing meeting notes with all leaders could create support and enlist the army of volunteers that this effort failed to achieve.

The initial reorganization research and planning greatly benefited from the use of the support contractors. They augmented the staff, provided business practices, and documented their findings. They were crucial to the effort—not only for their expertise in conducting a review, but also for serving to expand the concepts and help move the project forward. This need for contractor support made it apparent that the Army lacks the specialty institutional training to complete the art and science for an organizational redesign of this scale. This could be addressed in professional training. Army training builds deployable units, and task-organizes for operations. However, current training focuses on building instead of creating organizations by merging and sharing or removing existing force structure. The Army could benefit from a greater understanding of organizational design that focuses on building lateral instead of hierarchical organizations that support the rest of Department of Defense, the joint community, and the Army.

The HQDA Comprehensive Review built a sound design to achieve its reductions by FY 2019, along with the rest of the Army. It enabled leaders at all levels to redesign their organizations to effectively and efficiently meet their mission, while absorbing a mandated 25 percent personnel authorization reduction. This comparative analysis discussed the challenges, successes, and hindrances of this dynamic and complex effort. As the Army moves into more reductions and the need for more innovative organizations becomes the norm, it can benefit from looking back at this and other previous efforts to learn from our mistakes and to build on our successes.

Notes

  1. Secretary of the Army, Memorandum for Under Secretary of the Army, “Comprehensive Review of Headquarters, Department of the Army (HQDA),” 17 July 2014, accessed 25 October 2016, https://www.us.army.mil/suite/doc/43187208.
  2. John Kotter, “The 8-Step Process for Leading Change,” Kotter International website, accessed 25 October 2016, http://www.kotterinternational.com/the-8-step-process-for-leading-change/.
  3. Army Regulation (AR) 10-88, Field Operating Agencies, Office of the Chief of Staff, Army (Washington, DC: U.S. Government Publishing Office [GPO], 5 March 1990). HQDA field operating agencies are organizations that directly support HQDA staff agencies and principal officials. Field operating agencies are reliant on the supported unit for specific administrative functions.
  4. Secretary of the Army Memorandum, “Comprehensive Review of Headquarters, Department of the Army.”
  5. Ibid.; Under Secretary of the Army and Vice Chief of Staff of the Army Briefing, “HQDA Comprehensive Review Delayering Kickoff Meeting with HQDA Principal Officials,” 28 October 2014.
  6. Secretary of the Army and Chief of Staff of the Army Memorandum for Distribution, “Focus Area Review Group Decision Implementation,” 23 July 2014, accessed 25 October 2016, https://www.us.army.mil/suite/doc/44288646.
  7. A table of distribution and allowance is a document that authorizes missions, equipment, and infrastructures for Army units that are organized to perform specific missions and are made up of military or civilian personnel, or a combination of both.
  8. Secretary of the Army and Chief of Staff of the Army Memorandum, “Focus Area Review Group Decision Implementation.”
  9. Kotter, “The 8-Step Process for Leading Change.”
  10. Ibid. The design principles were approved by the under secretary of the Army and presented at the HQDA Comprehensive Review delayering kickoff principals meeting.
  11. Harold W. Lord, ed., How the Army Runs: A Senior Leader Reference Handbook, 2011-2012 (Carlisle, PA: U.S. Army War College, 2011), accessed 26 October 2016, http://www.dtic.mil/dtic/tr/fulltext/u2/a551164.pdf. The Planning, Programming, Budgeting, and Execution process is described in para. 4-14 and the Total Army Analysis process is described in para. 5-16.
  12. General Order 2012-01, Assignment of Functions and Responsibilities within Headquarters, Department of the Army (Washington, DC: U.S. GPO, 11 June 2012), accessed 25 October 2016, http://www.apd.army.mil/Search/ePubsSearch/ePubsSearchDownloadPage.aspx?docID=0902c85180010c8d. This order assigns functions and responsibilities to the Secretariat and Army Staff agencies.
  13. AR 71-32, Force Development and Documentation (Washington, DC: U.S. GPO, 1 July 2013), para. D-4.
  14. Under Secretary of the Army and Vice Chief of Staff of the Army Briefing, “HQDA Comprehensive Review BCG Final Report—Project Context, Approach, and Executive Summary,” March 2015.

January-February 2017

 

Lt. Gen. Thomas Spoehr, U.S. Army, retired, led the Army’s Office of Business Transformation from July 2013 to July 2016. Prior assignments include director of program analysis and evaluation, Headquarters, Department of the Army (HQDA); deputy commanding general (support), U.S. Forces–Iraq; and director of force development, HQDA, G-8. He earned a bachelor’s degree from the College of William and Mary and a master’s degree from Webster College. His military education includes the U.S. Army War College and the U.S. Army Command and General Staff College.

Brig. Gen. David Komar, U.S. Army, has led U.S. Army Training and Doctrine Command’s Capability Development Directorate since June 2016. Prior assignments include director, CJ7, NATO Training Mission–Afghanistan; and deputy chief of staff and chief of force design for the Chief of Staff, Army’s Task Force Modularity, HQDA. He earned a bachelor’s degree from Lafayette College, and master’s degrees from the Naval War College, the Air University, and Webster University. His military education includes the Air Command and Staff College and the U.S. Naval War College.

Lt. Col. Terrence “Terry” Alvarez, U.S. Army, was the executive officer to the director of the Business Operations Directorate, Office of Business Transformation. He was previously assigned to U.S. Army Alaska and the 1st Infantry Division, and he has deployed to Iraq and Afghanistan. He holds a BA from Gettysburg College, an MA from Webster University, and an MMAS from the U.S. Army Command and General Staff College.

Lt. Col. Raymond Shetzline, U.S. Army, led one of the small groups for the HQDA Comprehensive Review as an analyst for the Office of Business Transformation, Performance and Analysis Division. His previous Pentagon assignments include deputy chief of staff G-8, Director’s Initiative Group, and Program Development Division. He holds a bachelor’s degree from the U.S. Military Academy, and master’s degrees from the Naval Postgraduate School and George Mason University.