Problem curation and lean methodology with Pete Newell

Pete Newell joined me on the Acquisition Talk podcast to discuss a range of issues around problem curation and lean methodology. He is the CEO of BMNT, a firm that helps clients build problem solving teams to address significant issues. He is also on the board of Hacking 4 Defense and is a former Colonel who led the Army’s Rapid Equipping Force just prior to retiring. During the episode, we discuss a range of issues including:

• How to build and maintain discipline through the innovation pipeline
• Advice for business leaders in the Covid-19 crisis
• How Hacking 4 Defense is developing a new generation of entrepreneurs
• What it means to be disciplined in an agile/iterative environment
• Ways large enterprises can break away from their self-sabotaging processes

The episode features a host of lessons learned from Pete’s years of experience transitioning technologies. During his time leading the Rapid Equipping Force, Pete was able to take a $150 million budget and build an investment portfolio more than five times that size through partnerships and other methods. Ultimately, the REF transitioned 170 programs into production during Pete’s time there.

Pete explains how the Pentagon has become quite good at opening the aperture for new companies and ideas to get small projects started. More work is needed, however, on giving companies showing success multi-year/multi-million dollar programs of record. One problem he points to is in the handoff phases through the innovation pipeline. He recommends thinking about: (1) how we move people through stages; (2) how contract language should change as projects mature; and (3) what sources of funding are available. Until the government is able to demonstrate more successful transitions, it won’t impact the psyche of entrepreneurs and investors who still look upon public sector with suspicion.

Podcast annotation

One of the things I want to focus on is the entrepreneurial spirit in the Department of Defense. Pete points to the constraints faced:

When you find someone who is super passionate about a problem, they eventually hit a glass ceiling where they’re told that’s somebody else’s issue and they can’t carry it forward. There’s no personal mobility where you say one day I’m an infantry platoon leader and the next day I think I have an answer to individual ISR [intelligence, surveillance, reconnaissance] system and I’m going to run with this for the next two years and build a program or product and hand it off to scale it. You just can’t do it.

I think that’s generally true, but recently we’ve seen some entrepreneurial military operators become product leaders. I recently spoke with Lt. Sean Lavelle who is a P-8 TACCO and is continuously delivering in-house software to the fleet. Capt. Bryon Kroger famously made similar moves, helping create Kessel Run, whose model is now being deployed in perhaps dozens of software factories across the Department. The scaling of Kessel Run, however, was something of a fluke. Kroger said there was a hefty dose of serendipity due to the cancelling of the AOC 10.2 program in 2017 which provided a ready funding stream for redirection. That’s a rare opportunity fully taken advantage of.

The thing about Lavelle and Kroger, as well as others able to move the needle in complex organizations, is how impressive they are in terms of knowledge about technology, bureaucratic processes, and everything else that matters. Here’s Pete on that point of entrepreneurs:

Quite frankly, an entrepreneur is somebody who understands the system they’re in well enough so that they can actually manipulate it or bend it to their will to get something done.

 

… The whole system has to be loaded with experts. That’s the real gap. I can’t go to a class in the military to learn about entrepreneurship much less get experience actually doing it unless its completely by accident or in the corner some place. Unfortunately, the people who do that on their own and are good at it end up leaving the service and go work for some civilian company.

Pete has helped get a generation of students involved in solving military problems through his leadership in the Hacking 4 Defense program, which is expanding to 40 schools in the United States in FY 2021 and is also branching out to other nations and problem areas. Here’s Pete:

We have three TAs [teacher’s assistants] and six instructors for 32 students. And we’re still working hard to help the students discipline their work. You’re going to create a series of hypotheses about a component of the problem or a component of the solution, and then you’re going to create a series of minimal viable products in order to test you’re hypothesis to gather data that moves you toward a firm understanding of the problem and a potential solution and pathway. The discipline starts when you look people and say ‘your hypothesis sucks; I don’t understand the gibberish you just wrote.’ To look at an MVP and say it’s a weak product.

The experiential learning process challenges the traditional incentives of the classroom. Whereas student success is often measured based on regurgitation of definitions where the best are expected to always stay on the treadmill, Pete describes a process of critical feedback about an ill-defined problem with real world applications.

It is ironic how the safe space in Hacking 4 Defense allows for a scientific process: creating hypotheses, testing with MVPs, receiving critical feedback, and iterating. This kind of incremental approach is precisely the method seen in the commercial sector, but is not easy to work out in defense acquisition. Pete imagines a H4D “on steroids” which goes beyond the product-mission fit to address scaling the solution through the government’s business practices:

I think there is a burning demand for a national security entrepreneurship program…. something like Hacking 4 Defense on steroids, a capstone to their academic career, and they’re going to leave that and go back into public service as an public-servant-entrepreneur. And we’re going to breed thousands of these over several years.

One of the most important places for entrepreneurship in defense acquisition is the “valley of death.” The defense innovation hubs have made it easier than ever for non-traditional companies to get small amounts of funding for projects, but still to be figured out is the transition to a multi-year/multi-million dollar contract. But as Pete relates, this is just one part of the Pentagon’s larger problem of tailoring an acquisition pipeline. Tightly coupled contracts that specify everything may be appropriate for a mature production effort, but not for exploring solutions to a nebulous problem at the front end. Another aspect is about transitioning people through the pipeline and the valley of death. Here’s Pete:

For any organization trying to apply an innovation pipeline framework has to be willing from a personnel standpoint to look at how people move between stages.

This may not have been what Pete had in mind, but I always considered it odd that projects transitioned from the labs to the program offices in the DoD without the personnel. Could not a successful lab project manager transition to become a program manager or at least chief systems engineer? Often, the transitioned talent is resident in the contractor. But even then there is high churn in project staff. I think a lot of this personnel transition stems from the long timelines associated with program approvals. If you could compress cycle times, increase flexibility to solve problems, and reward successes, perhaps more people would be willing to sign up for the effort.

Thanks Pete Newell!

I’d like to thank Pete Newell for joining me on Acquisition Talk, and his communications manager Terri Vanech for making this possible. Be sure to read Pete’s articles, including this one with Steve Blank in the Harvard Business Review, What Your Innovation Process Should Look Like. A couple other notables include Self-Sabotaging Systems: Why Doing the Right Thing Results in Failure, and Leading Dual-Use Companies through the Covid-19 Crisis. Check out his various articles on LinkedIn and on the BMNT blog. Watch Pete’s appearances on Government Matters, and listen to him on the What’s Next podcast, the Time4Coffee podcast, and The Innovators podcast. Learn more about Hacking 4 Defense here.