What the financial crisis means for DoD

FM says that “Maintaining full-scale forces against purely theoretical future threats will become impossible. Seeking dominance in every theater will become unrealistic. Prioritization will become imperative.”

While the causal mechanism may have been different, this is exactly the same conclusion that was being thrown about several years ago when the portfolio management (PfM) movement was taking off inside DoD. The problem was that senior leadership was not prepared to make the structural changes to the incentives and accountability mechanisms of the legacy acquisitions system.

Incidentally, this is exactly what Secretary Gates was talking about in the speech I blogged. The idea that we have to set priorities is not new. For example, it runs through a 2005 post I wrote about optimization vs. resilience. Optimization is specialization; on the margin, improving performance in one area requires sacrificing performance in another.

Biddle make similar points (in less technical language) in his latest work on Hezbollah and the lessons of the 2006 war for US defense policy. Being a “full spectrum” force means that, necessarily, we won’t be the best we could be in anything.

Perhaps the financial crisis, combined with a new administration, will create the critical mass needed to force a change.

Expand the Group of 7

Watch the effect the financial crisis has on forcing the Core to update the constitution of key organizations.

Mr. Zoellick, in his speech, said flatly that the Group of 7 β€œis not working.” He advocates expanding the group β€” which includes the United States, Canada, Britain, Italy, France, Germany and Japan β€” to include emerging economies like Brazil, China, India and Saudi Arabia.

-NYYimes