Document created: 18 August 03
Air University Review, March-April 1975

Program Management and 
Major Modifications

THE past two decades have produced an abundance of literature reflecting the changing nature of management theory and practice. The two major changes in traditional management thought have been the introduction of the systems concept and the professional system program manager. In the early 1960s, new approaches to managing weapon systems acquisition were being implemented within the Department of Defense. Concurrent with these management revolutions in government were similar changes in business and industry.

It is, in short, quite possible that the only truly effective methods for preventing, or coping with, problems of coordination and communication in our changing technology will be found in new arrangements of people and tasks, in arrangements which sharply break with the bureaucratic tradition. In either case, by changing people or changing organizations, a reappraisal of our traditional methods of achieving organizational goals is urgently in order.^l

The primary purpose of this article is to examine the applicability of program management concepts to management of major modifications to existing weapon systems. The vehicle of implementation discussed, akin to a system program office (SPO), is the so-called Mini-SPO, comprised of a small number of functional specialists collocated with a Mini-SPO director or modifications (mod) manager and charged with overall management of a major weapon system modification. A major modification is defined as a program in excess of $100 million.

A second purpose is to identify some of the problems faced by a Mini-SPO/ mod-manager in trying to implement program management concepts in a bureaucratic environment and, finally, to offer some suggestions on how to cope with these problems.

In 1964 the Air Force developed series of Air Force Systems Command (AFSC) Manuals known as the 375 series. These manuals were designed to set up program of guidance for management logic and control over acquisition of al future weapon systems. This original guidance has been replaced with the current 800 series of Air Force regulations and related directives for system, subsystem, and equipment programs. General in nature, these regulatory documents are all geared to the management of major weapon systems acquisition. While billions of dollars are expended on new acquisitions, many other programs that do not share the acquisition spot-light are equally important to overall force structure and national security. They are programs designed to improve the safety or extend the capability of existing weapon systems. These major weapon system modification programs are managed by the Air Force Logistics Command (AFLC). At this time the total price of in-being or approved major modification programs exceeds $2 billion. This sum is accounted for in only nine programs. Obviously, major modifications are indeed high-density dollar programs, and only the soundest of management practices should be applied in the execution of those programs.

Many AFLC major modification programs bear a striking resemblance to AFSC system acquisition programs managed under the system program office concept. They share similar development risks, and it is not uncommon for the AFLC program to be of a more immediate national urgency. Most modification programs have direct parallels to AFSC acquisition life-cycle phases—conceptual, validation, development, production, and operational. They meet "major program" criteria as established by Air Force Regulation and are governed by an official USAF Program Management Directive. The objectives of acquisition program managers and modification managers are the same: to bring their program to fruition on time, below cost, and within performance parameters. This is particularly true in the case of a modification designed to increase the capability of a weapon system, as there are often high development risks involved. In sum, many major modification programs are high-risk, high-cost efforts deserving of program management with centralized control over all the technical and business aspects of the modification. Reporting to the President in 1970 on major weapon systems acquisition, the Blue Ribbon Defense Panel made the following recommendation:

The matrix approach organizationally and in quality, not numbers, of personnel should be strengthened. Caliber, rank, and experience of personnel should be determined by the requirements of the program.²

The matrix organization referred to is the system program office. The majority of the major modification programs are tailor-made for spa management techniques but on a smaller or Mini-SPO scale.

Basic to successful program management is recognizing when or even if a program office is needed; in other words, when to form a matrix organization, as opposed to using the regular functional organization to do the job.³ This is a decision of much more importance than meets the eye and a difficult one to make accurately. The essence of the decision revolves around the fact that there are always many programs competing for the scarce manpower resource. Making the determination that a program office or Mini-SPO is warranted is only part of the problem. Since establishment of a Mini-SPO is always at the expense of the functional organization, timing becomes critical. The question involves when, how much, and how long. At what point in time should the Mini-SPO be formed, how much manpower should be allotted to it, and how long should they remain dedicated to Mini-SPO business? Considerations include magnitude of the effort, unfamiliarity of tasks, degree of interdependence existing between tasks, phase of the program, and corresponding workload.

The Mini-SPO must be formed before the task grows to the point that there is risk of fragmented effort among functional managers, with each working his share of the program commensurate with his own priorities. On the other hand, the Mini-SPO formed prematurely will result in insufficient workload and attendant slack time. This not only utilizes resources poorly but establishes an unfavorable reputation for the Mini-SPO, which in all likelihood is already under severe criticism from the hard-line functional manager.

The answer to how many personnel to devote to a Mini-SPO is directly related to the magnitude and unfamiliarity of the task. A sizable effort of a first-time nature involving high risk and high cost would require manning to a higher degree than a lesser program.

More important than quantity is the quality of personnel selected. The concept of program management evolved because the ordinary way of doing things was not adequate for the task at hand. It is imperative that only highly competent personnel be assigned to perform in the out of the ordinary" environment of the Mini-SPO.

Regarding the question of how long to keep a Mini-SPO in operation, no clearly defined solution can be found. Phase-out or slowdown of Mini-SPO activity cannot be tied to an event; it must be driven by program demands. Depending upon the nature of the program, a Mini-SPO might begin phasing out as production goes into full swing, at the time of modification kit proof, when first article configuration is established, or at any other time when it is determined that the program IS going smoothly and will continue to progress in a routine fashion through completion. This is the time to start phasing down the Mini-SPO and returning personnel to their functional jobs.

At the start of a program the entire level of effort is centered in the functional activity. After the Mini-SPO is formed and begins to assume program responsibilities, the functional level of effort starts to decrease. It never drops completely out, however, because the Mini-SPO will require support from the functional organization on an exception basis throughout the life of the program. As the program reaches maturity and day-to-day business approaches a routine status, Mini-SPO activity will begin to slow-down. As routine is established, functional responsibilities will once more increase until the formal phase-out of the Mini-SPO.

The essence of Mini-SPO organization is versatility: the organization can be built around the task; as the task changes, so must the scope of the organization. The structure must be dynamic enough to meet the needs of a continually changing program environment.⁴ Contrary to the bureaucratic form of pyramidal structure and its "crisis-centered" environment, the Mini-SPO must be a "knowledge-centered" organization. In the knowledge-centered organization, closely coordinated, integrated teams circumvent chains of command and depend upon a high degree of reciprocity between the participants. In this type of organization, the traditional functional theory has some application; but if carried too far, it will result in an authoritative environment that can offend and stifle the creative bent of the members.⁵

There are many alternatives from which to choose an organizational structure. These range from pure functional to pure project or to any combination of the two. In reality, however, initial selection of organizational structure is relatively unimportant because as the program progresses organizational structure will evolve to meet the need. Much more important is the selection of system program office personnel.

The caliber of the program manager is all-important. The successful program manager has been characterized as "a person who usually found a way to work around the regulations by carefully utilizing the source of authority from which the program draws its sponsorship." ⁶ Equally important is the selection of competent, eager, and dedicated personnel to man the Mini-SPO. These should be personnel specialized in budget, audit, contract surveillance, technical advice, programming, procurement, engineering, and other disciplines as determined by needs of the program.⁷ These people should be detailed to the Mini-SPO for the duration of the program. In addition, a memorandum of agreement, with a scope of individual personnel tasks and limitations, should be drawn up between the parent functional organization and the Mini-SPO.

After identification of the Mini-SPO team, collocation of members under one roof is an absolutely essential step. This step must be taken to guard against divided loyalty of functional personnel assigned, late or inadequate staffing, and outright loss of personnel to other higher-priority programs. In addition, collocation fosters an esprit de corps, a sense of belonging, and a common goal, which will reduce conflicts with functional duties.

Recently a panel of military program managers, examining their role, likened it to that of the general manager of a small company. The comparison is especially apt. It would be impossible to write a meaningful position description for that job. It is equally impossible to write one for the mod-manager's job. What the general manager does is whatever is needed to move the affairs of the business. A general manager is not a "doer" of any job, but he sees to it that what he wants is done; and what he wants is a harmony of things done so that his objectives are met. This implies controlling and coordinating the work so that no one aspect dominates others to the detriment of the harmony of the whole.

This touches upon what is likely to be the most important function of the mod-manager: getting people to communicate with each other to achieve a common understanding of the needs of the program and their place in the harmony of the total program.⁸ Stated more conventionally, the mod-manager is responsible for planning, organizing, directing, and controlling a modification program, with the objective of satisfying cost, schedule, and performance requirements.

Mod-managers face some unusual problems in trying to direct and harmonize the diverse forces at work in the Mini-SPO environment. Their main difficulties, observation suggests, arise from three sources: organizational uncertainties, unusual decision pressures, and vulnerability to top-management mistakes.

Many newly appointed Mini-SPO directors will find that their working relationships with functional branch, division, or directorate chiefs have not been clearly defined. Many decisions vitally concern the mod-manager, but he must often interact with external forces in dealing with them. Unless he does so skillfully, the questions are apt to be resolved in the interest of individual departments at the expense of the program as a whole. The mod-manager must handle these delicate situations single-handed, with little or none of the experienced top-management guidance that the line manager enjoys.

Severe penalties of delay in both cost and operational capability often compel the mod-manager to base decisions and recommendations on relatively few data, analyzed in haste. Decisions to sacrifice time for cost, cost for quality, or quality for time are common in most programs, and the mod-manager must be able to make them without panicking. Clearly, then, he has a special need for total and intelligent support from higher management.

Though top management can seldom give the mod-manager as much guidance and support as his functional counterpart enjoys, they can easily jeopardize program success by lack of awareness or ill-advised intervention.⁹ This is particularly true in the initial phases of a program when a mod-manager may be constrained by a lag in contract negotiation or some minor legal tie-up between the government and the contractor. Too often these minor lags are elevated to the general-officer level without the mod-manager's concurrence or at times without his knowledge. The resultant high-level guidance is not always in the best interest of the overall program and sometimes creates more problems than it solves. In addition, this often casts the mod-manager in a bad light at the upper levels of management when in reality he has been too busy getting the job done to protect himself or practice "image management."

Given the responsibility for a program, the Mini-SPO director must establish his authority to carry out the task. Authority is necessary if one is to get a modification completed on time and within cost and performance requirements. However, a degree of personal freedom is required in the Mini-SPO environment, particularly for the specialists. Balancing these two conditions of freedom and authority is one of the more challenging problems facing the Mini-SPO director.¹⁰ Authority derives from many sources. As a result of his position, the Mini-SPO director has official authority delegated from upper-level management. More important in the program management environment is what Henri Fayol called personal authority, "compounded of intelligence, experience, moral worth, ability to lead, past services, so forth. . . ."¹¹ A significant measure of the mod-manager's authority springs from his approach to getting the job done and the manner in which he performs it. The environment of program management therefore places an extraordinary premium on talent for leadership as distinguished from command, on persuasion as distinguished from direction.

One student of program management has described this authority as derived in part from the program manager's "persuasive ability, his rapport with extraorganizational units, and his reputation in resolving opposing viewpoints within the parent unit and between the external organizations."¹²

The remainder of this article will discuss some of the common everyday problems that the mod-manager might encounter and will offer some suggestions on how to cope with them.

Universal Support. Newly appointed Mini-SPO directors may be dismayed to discover that there is less than complete and enthusiastic support from all concerned agencies, including his own headquarters, and within the Air Staff. Every program competes with all others, and competition is especially fierce in periods of tight budgets.

To gain total program support, the mod-manager must sell his program.

The program manager's main job is to make the program look good. I don't mean to fake it. I mean to be on top of the program, to anticipate what the boss expects, what the budget people expect, what OSD expects, and even what Congress expects. The image of an energetic, capable program is a great asset in recruiting the people you want in the program office, and in obtaining the right kind of support from functional organizations. The morale and success of the program office staff are largely a reflection of that image. A good image results in cooperation and a bad image results in struggling all the time to get what you need.¹³

Taken in the context and scale of the Mini-SPO environment, this quote succinctly defines the approach a mod-manager must pursue in achieving universal support for his program.

The Magic Wand Syndrome. One of the quickest and easiest ways to draw unwelcome attention to a program is to miss a much touted and publicized milestone. Sometimes the milestone will be missed because of uncontrollable circumstances. More often, failure to meet milestones will be the result of the "magic wand syndrome," a feeling deriving from over-optimism that all the detailed tasks associated with a major undertaking will automatically be accomplished—perhaps by someone waving a magic wand.

If program continuity is to be maintained, the mod-manager must administer an antidote. That antidote is skepticism. Skepticism is the second requisite of program management. Planning is the first. Planning will disclose what has to be done. Skepticism will probe the estimate of how simple it will be to do it. The searching questions are: Have detailed tasks been delineated? Has sufficient time been allotted for administrative processing? Have adequate provisions for contingencies been made? ¹⁴

Functional Specialists. The mod-manager may find himself faced with functional specialists who see their discipline as the central core of a successful program. Their commitment to their specialty leads them to try to dictate to the program what will or must be done, as distinguished from advising what should be done. Further, there is no lack of regulations with which they can bolster their claim.

The expert, in fact, simply by reasons of his immersion in a routine, tends to lack flexibility of mind once he approaches the margins of his special theme. ¹⁵

One of the most difficult concepts to put across to functional specialists is that the mod-manager is responsible for determining what will be done. The functional specialist is responsible for how it is done. There is no clear-cut method for solving this problem. One program manager said that he often overcame the opposition of functional specialists by "working harder than they did." This program manager found that he could so overwhelm a specialist with facts, figures, and analyses that it became too much of a chore for the specialist to refute the program manager's position.¹⁶

The Low-Pass. Filter. Nothing dampens spirit faster than a system where everything stops at the mod-manager's desk waiting for his return from somewhere. If he is not careful, the boss can become the chief clerk and proofreader in the office, the one who checks everything to make sure it is right. This is poor utilization of what little time the mod-manager will have left after trying to satisfy insatiable demands for briefings and information updates.

The best way to go is to select the best people you can get, give them a reasonably free rein, and rely on being able to fix their mistakes without too much damage being done. Weekly staff meetings will provide a backstop to catch the really significant mistakes. If weekly meetings are not an adequate backstop, the problem is not organization but ineffective subordinates. The solution then is not centralization of decision-making but replacement of personnel.¹⁷

IN CONCLUSION, billions of defense dollars are being spent on operational weapon system major modification programs. Management requirements for these programs closely parallel those of major acquisition programs. This suggests the advisability of applying system program management techniques to management of modification programs—the Mini-SPO for mods—on a scale governed by the scope of the modification,

Note

1.William H. Read. "The Decline of Hierarchy in Industrial Organization." Business Horizons, Fall 1965. p. 47.

2. "Staff Report on Major Weapons Systems Acquisition Process." Report to the President and the Secretary of Defense on the Department of Defense by the Blue Ribbon Defense Panel, Appendix E. July 1970. p. 41. Hereafter cited as Report to the President.

3. David I. Cleland and William R. King. Systems Analysis and Project Management (New York: McGraw-Hill Book Company. 1968). p. 154. Hereafter cited as Systems Analysis and Project Management.

4. Ibid., p. 171.

5. Ibid., p. 147.

6. Report to the President, p. 30.

7. David I. Cleland and William R. King. Systems, Organizations, Analysis, Management: A Book of Readings (New York: McGraw-Hill Book Company. 1969), p. 289. Hereafter cited as Systems, Organizations, Analysis, Management.

8. Introduction to Military Program Management, prepared by the Logistics Management Institute Department of Defense: Document LMI Task 61-28. Washington, D.C., March 1971, p. 4. Hereafter cited as Introduction to Military Program Management.

9. Systems, Organizations, Analysis, Management, p. 296.

10. Systems Analysis and Project Management, p. 227.

11. Henri Fayol, General and Industrial Management (London: Sir Isaac Pitman and Sons, Ltd., 1949), p. 21.

12. Systems, Organizations, Analysis Management, p. 285.

13. Peter F. Drucker, The Effective Executive (New York: Harper and Row, 1966), pp. 23-24.

14. Introduction to Military Program Management, p. 55.

15. George A. Steiner and William G. Ryan, Industrial Project Management (New York: The Macmillan Company, 1968), p. 29.

16. Ibid.

17. Introduction to Military Program Management, p. 10.

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