It has been suggested in some quarters that I am unwilling to decentralize decision-making authority. Nothing could be farther from the truth. I strongly believe in the pyramid nature of decision-making and that, within that frame, decision-making should be pushed to the lowest level in the organization that has the ability and information available to apply approved policy.
The defense effort is entirely too big, too complex, and too geographically dispersed for its operations to be managed from a single control point. Out effort has been to create a framework of policy within which meaningful decentralization of operations can be accomplished. However, before we can effectively decentralize we must develop an organizational structure which will permit us to proceed to true decentralized decision-making rather than to management anarchy.
That was Robert McNamara, former Secretary of Defense, in “A Modern Design for Defense Decisions: A McNamara-Hitch-Enthoven Anthology.” The section was reprinted from Civil Service Journal, Vol. 4, No. 4, April-June 1964, pp. 1-5.
It is ironic that McNamara claimed that in order to effectively decentralize decisions, he had to centralize decisions. The organizational structure he wanted was a budget classified by program outputs (like the F-111 aircraft) and then program offices completely dedicated to pursuing the program (like the F-111 program office). But of course, the very highest levels of OSD have to first develop requirements, determine optimal specifications, line up money, put someone in charge, weigh against competing programs, etc., all before the program office is created. Then, program officials just “execute standing orders” inherent in the plan. So where’s the decentralization?
Some claimed that the PPBS program budget was not inherently centralizing. Reorganizing the flow of funds and analysis from organization to future program outputs biased neither to top-down or bottom-up. Of course, that concept is preposterous. All our experience with program budgets has been towards centralization. Always. It’s hard for us to notice, we who have grown up in McNamara’s system still in place from 1961. Here is budget expert Allen Schick in his famous, Road to the PPB:
PPB reverses the informational and decisional flow. Before the call for estimates is issued, top policy has to be made, and this policy constrains the estimates prepared below. For each lower level, the relevant policy instructions are issued by the superior level prior to the preparation of estimates.
Was he referring to clarity on the framework itself, first? I would think one first models a framework for centralized control, and then enables decentralized execution. In this case, you would first map out the org chart for the F-111 aircraft, and then delegate heuristic decision-making authorities for F-111 program officials. Thoughts?
I think it depends on your view of what is the realm of policy and what is the realm of administration. In any case, when you FIRST decide you need an F-111 fleet of this size with such-and-such technical specifications, debate it for a couple years at the staff level, then go set up a program office to go execute, then the “decentralization” is just in “executing standing orders” inherent in the plan created by unaccountable staff persons. In other words, decentralization requires no input into program plans by those doing the work. The lower levels just turning money outlays into purchases for hire.
The fact that the decentralized program office was chartered to go perform an approved program baseline plan, the program office isn’t really allowed to make tradeoffs without first seeking policy approval because of how it will affect other program elements. And in any case, the program office’s standing is tied to its budget, so it will do anything it can to kill rivals and avoid making real tradeoffs in the first place.