Here is Roland McKean, one of the founders of the DoD’s Planning-Programming-Budgeting system, who later in the 1960s saw the errors of what he helped create:
With centralization, one set of views plays a greater role in decision-making, and dissenting views play lesser roles. In other words, there are fewer checks and balances on the view of the central group. And if central managers try to control in much detail, they find it imperative to simplify decision-making and to make changing the program rather difficult. Finally, lower level incentives to dissent and criticize and urge changes may diminish if such activities begin to be unrewarding. All these forces can, in the long run, produce disadvantages: (1) the suppression of alternatives; (2) a neglect of part of the costs and gains from alternative policies; and (3) a neglect of uncertainties.
Roland McKean took a young James Schlesinger, future Secretary of Defense, under his wing in the 1960s as they analyzed the errors of PPBE. Here is the consequence of centralization, as well as the impossibility of optimizing weapons outcomes due to uncertainty and incommensurables, from Schlesinger’s 1968 paper, Defense Planning and Budgeting:
They are perhaps especially prone to ignore certain costs… probably because these costs are so hard to measure. If such costs are neglected, people are in effect insisting that performance be improved or efficiency increased—no matter what the cost!
There is a deep truth to this point. It’s like you analyze the properties of eating fish and find that it has a lot of fatty acids, vitamins, and minerals that are good for you. Indeed, fish has much more of these properties than beef, chicken, pork, and other alternatives on a cost-per-pound basis. So you optimize on fish, eating it every single day. Then you get mercury poisoning, a cost you weren’t aware of, and promptly die. Or everyone follows suit and fish populations go to zero.
That’s a silly analogy, but it’s what happens in weapon systems when analysts try to optimize on narrow parameters like weight, speed, power, and cost while neglecting harder to measure parameters like maintainability, software, autonomy, interoperability, upgradeability, etc.
The C-5A and the CH-53K are good examples of overoptimizing transport aircraft. They extrapolated past payload trends out into new territory, then found out that the aircraft was way too heavy in development, had to make all sorts of compromises, and in the end found the thing to be far less cost-effective than paper plans predicted. Had analysts known ahead of time what would occur, they’d have never picked such an overly-optimized plan.
Here’s Hondo Geurts, former SOCOM and Navy acquisition executive, on the Wardroom podcast:
We build a lot of systems that will be very brittle, which would be awesome if it goes exactly how we planned but it never does. We got to build this resiliency and agility mindset into the way we think, as opposed to be hyper-efficient, then create very brittle solutions… That’s how competitive teams win. They don’t win because they architect the perfect solution 10 years in advance. They win because they create adaptable, resilience, opportunistic teams that constantly change the landscape making their competitor chase them.
Preach! This outcome Geurts is talking about is impossible, in my view, to accomplish within the PPBE framework and is why we need PPBE reform.
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