As PPBE Reform Advances, Linking Budget to Strategy and Staff Training is Key

The recent release of the DoD’s Commission on Planning, Programming, Budgeting, and Execution (PPBE) Reform Interim Report brings some strong recommendations for modernizing the Pentagon’s budget process, especially for those of us who have worked in and with the Defense community. While the interim report makes several astute observations about how the PPBE process can be improved, there were two particularly compelling recommendations that stood out to the MDC team:

  1. Improving the Alignment of Budgets to Strategy
  2. Improving the Capability of the DoD Programming and Budgeting Workforce. 

While the final report is expected in March 2024, it is worth repeating that the Commission’s findings and recommendations are intended to “ensure that DOD’s resource allocation processes are streamlined and modernized to secure the United States military’s ability to deter and, if necessary, win any fight against any adversary with the right capabilities and force structure while upholding congressional oversight responsibility.”

Because the DoD is managing multiple priorities at once, stakeholders are in general agreement that there need to be bigger, faster changes to the DoD budget process to keep up with the speed of innovation and the needs of today and tomorrow. Yet, with most of the recommendations, the details of “how” the process would change are important. That is why we believe prioritizing a few key steps will jump start—and even shape the success of—the rest of the process. Read on to learn how.

It Begins with Strategy

At MDC, we believe this process must begin with strategy, bolstered by active stakeholder engagement from Department of Defense leadership. Implementing constraints and outcome-based incentives is critical if PPBE reform is to be truly successful. This means the Department should be held accountable to ensure each Service branch’s strategy is clearly detailed through the budget requests and allocations.

The Commission on PPBE Reform agrees In its interim report, Commission members noted:

[Pull-Out Quote] “The Commission is examining ways to strengthen the Defense Planning Guidance (DPG) to provide greater specificity, particularly in terms of areas for taking risk, linking the DPG to force sizing and shaping constructs, areas to invest in or divest of capabilities, and roles and missions for the Services. The Commission is also examining ways to improve analysis through greater use of operational measures, such as holistic execution phase reviews beyond financial metrics; using strategic goals, objectives, and measures of operational performance; and linking metrics back to the strategy to facilitate a more continuous planning process.”

This involves taking deliberate actions to better align Congress and the DoD. Appropriators have a vested interest in the budget priorities, so ensuring a solid structure around strategy milestones and communications would benefit all parties. We know that when the Department teams are actively engaged with legislative counterparts to build understanding, more conversations and feedback loops will naturally follow. This enables Congress and Department personnel to make more collaborative decisions about strategy in the year of execution and for future programming.

At MDC, we have the management consulting experience needed to help leadership develop this strategic approach for partnering with Congress to further national security goals. We empower teams to link strategic priorities with budgetary constraints, and we can develop a clear communications and milestone strategy for each Service branch that articulates essential capabilities needed in the current year and future. The earlier these conversations are established with congressional counterparts, the more likely the discussions will naturally incorporate mutual understanding. 

Recruiting and Retention: Building and Educating the Workforce

While execution and engagement should flow from strategy, we clearly recognize connecting strategy and budget is a complex endeavor that’s predicated on the availability of expertise to assist with defining requirements and aligning resources and capability effectively.. That is why the second interim report recommendation we prioritize is improving the capability of the DoD programming and budgeting (P/B) workforce.

When assessing the sufficiency of the Office of the Secretary of Defense (OSD) and Cost Assessment and Program Evaluation (CAPE)’s workforce, the Commission discovered that as many as 18% of positions were unfilled as of the first quarter of FY 2023. This has a significant impact on current workers as well as each offices’ future capabilities.

[Pull-Out Quote] “There is also considerable stress on the workforce, especially in P/B where the responsibility for oversight of both the budgeting and execution phases of PPBE, along with seemingly endless crises such as funding for support to Ukraine, means there is little downtime for training, leave, and a reasonable work-life balance, leading to recruiting and retention challenges. Improving recruiting and retention. As an action that can be implemented now, the Commission recommends continued efforts to recruit and retain personnel for both CAPE and P/B, including seeking approval for new approaches such as direct hires, incentives, and bonuses. Continued efforts to reduce workload and improve analytic capabilities, perhaps through greater use of open architecture analytic platforms such as Advana (Advanced Analytics), should also be pursued.”

To tackle this problem, DoD needs new strategies for hiring, incentivizing and training, and skilling to empower a new agile and transformative budget process. MDC has a deep bench of experienced professionals who have worked on extended DoD Program and Budget teams for decades. Our program management expertise enables us to understand each role, from program element monitoring to Service Programming Leads, plus we have the expertise and ability to educate and train staff on everything from PPBE basics to appropriation-wide PPBE efforts.

We strongly recommend training at all levels of an agency, not just for those directly involved in the PPBE process. It is critical that leaders across the organization have a clear understanding of the basics of the budgeting process. Issues and challenges most often arise when leaders and key staff lack a good conceptual knowledge of how programs are funded within the DoD.

In any agency, if the planning and programming management staff have been scaled back to bare bones and a significant cross section of staff have not been trained on the process, it is much tougher to tie budget to strategic priorities. Ultimately, the process is only as good as the people who know how to do the tough, intricate, important work.

At MDC, we understand the processes, tools, and techniques that make a real impact in aligning strategy to the programmatic and budget recommendations DoD is developing. It is our hope and expectation that, as the PPBE Commission finalizes its report in the coming months, the Department can take a number of tangible, meaningful steps to impact the process positively. We stand ready to help and we will continue to work with our clients and the DoD partner community to bolster their strategy and staffing plans.

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