IPM and OCM: How to Recover and Correct the Recent DoD Accounting Audit Results

On 15 November 2018, Reuters news agency and several other news outlets released articles describing the failure of the U.S. Department of Defense in a recent comprehensive audit.  Over 1200 auditors examined the financial accounting of some very high-level and notable projects, including personnel, DoD property (including military construction projects), and weapon systems and found them seriously wanting.  The results of the audits showed that there was little discipline, tracking, or reporting in financial matters, which should not surprise anyone that has served in the military.  End of year spending and project or program cost overruns are almost a punchline by many service members, though it is no laughing matter.

choice-8345807So how does an establishment like the US DoD change the culture to become more fiscally responsible and ensure that project and program costs make sense?  How does the United States government ensure accountability on future projects and programs to remove the issues?  The most responsible way would be to incorporate timely reporting and collection using an Integrated Project Management (IPM) methodology.

IPM is combining (or integrating) cost, schedule, technical performance, vendors and suppliers, quality, and risks are managed to improve overall project management and project governance. It would be overly simplistic to say that it could be fixed using a centralized accounting system for the more than $2.7 trillion in defense assets, but standardized processes and enforcement of timely reporting is very achievable at all levels.  This is a great benefit provided by IPM policies and practices.  This ensures that all the elements are properly coordinated by the organization, not just the project manager responsible for the successful completion of a project.

In December, the full results should be released by the Inspector General and new efforts can be sought to make next year’s audit smoother and show fewer discrepancies overall.  With a surge in military organizations (and services as a whole) moving to become compliant with the Program Management Improvement and Accountability Act (PMIAA) of 2015 (which was fully endorsed by former President Barack Obama in December of 2016), the DoD should be well armed to initiate new projects to improve outdated and defunct processes and be more fiscally responsible in future projects.  This again will be no small task.  It will require a great amount of effort be placed not only in IPM practices but also in Organizational Change Management methodologies to change the overall culture and mindset of the people responsible at the lowest levels to be held accountable for following best practices.

Organizational Change Management (OCM) is much greater than the project management practice of Integrated Change Control.  In projects, Integrated Change Control provides the tools for effective tracking and reporting of change within a project, which is important. OCM, on the other hand, deals with the people and culture side of change on an enterprise-level.  It deals with understanding what needs to change in terms of organizational structure and culture, determining the way the change will happen and then managing the effects of those changes using communication, stakeholder/sponsor buy-in for the plan, coaching and training, and then finally managing resistance to change within the organization.

pmi-veteran-military-program-webinar-series-april-2017-1-638.jpgSince the PMIAA, which you can read more about by clicking the picture on the left, required that all heads of federal agencies (of which the DoD is a member) have a Chief Financial Officer, who will subsequently appoint a Program Management Improvement Officer to make the necessary fundamental changes to get the agencies on track financially and in program and project methodology, it makes sense to use Integrated Project Management and Organizational Change Management approaches to solve these issues.  Program, project, and change management are not new concepts for the DoD.  Rudimentary project management methodologies are used even at the lower enlisted levels of military branches, though they are not called project managers, they are called Non-Commissioned Officers, Staff Non-Commissioned Officers, and Petty Officers.

Project and Program Management are naturally compatible with mission success.  Integrated Project Management allows for tools and techniques that are working in one area or organization to be utilized in many organizations to enable success.  IPM isn’t a new set of rules to follow. Instead, it is streamlining successful ‘rules’ and processes and then sharing those successes with other teams to help everyone find success.  This can be done by utilizing the many systems that are already created to house the many valuable lessons that are being learned in every minor and major operation or exercise by organizations every day.  The US Army’s Center for Army Lessons Learned (CALL), and the Marine Corps’ Marine Corps Center for Lessons Learned (MCCLL) are just two examples of projects that were intended to begin the IPM implementation in individual services, but they are not being used to their full potential.  That is the first change needed to begin the culture shift that will spearhead the effort uproot the old and inefficient ways of tracking finances, equipment, facilities, and personnel and replace them with consistent, scalable processes and policies for future success, which must be managed with OCM methodologies.

So how does this happen?  What creates the timeline of change?  That depends on the DoD Service-level decision makers and at what level they decide to effect the changes.  Is it to be top-down planning, with a bottom-up refinement of the goals and plans?  Do they instead pick the most vital and important systems and processes and begin work there?  Is it more cost effective to hire a team (or several teams) of specialists to perform the future state and then using significant Organizational Change tools, begin work from the top down?

These are all questions that need to be answered, but nothing will change if the results of this DoD-wide audit are ignored or not taken seriously.  Effective communication, Organizational Change Management, and Integrated Project Management methodologies will be critical to successfully changing the attitudes and culture of the DoD as a whole, and continued and scalable success long term.

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