Dear CIA: Whither the Re-Org?
John Sipher and Bernadette Doerr
How is it that an organization like ‘Saturday Night Live’ has managed for 40 years to come up with a novel episode each week, working from scratch each Monday morning? The institution (SNL) remains intact and extremely well-regarded, its players revolve constantly, and yet it has never had a “major restructure” to stay current. How has this organization managed to execute effectively without losing its core identity every time the market or audience changed?
We have become used to stories of corporate executives reorganizing their companies in an effort to make them more profitable, or at least appear more attractive to Wall Street investors. The impulse to restructure affects government organizations as well. Over the past year, Central Intelligence Agency (CIA) Director John Brennan has been leading the largest shake-up at the CIA in over 40 years. The overhaul includes creating numerous new Directorates and Mission Centers. According to the CIA, the restructure (“modernization”) is an effort to address the scale and complexity of challenges confronting policymakers, while also maintaining pace with the impact of technological advancements. It is modeled on the Pentagon’s structure of combatant commands, and attempts to take advantage of hybrid units that merge the spies with the career analysts.
We have no doubt that the CIA effort is well-intentioned, but it has been controversial inside and outside the Agency, and it is not clear if the changes will survive the upcoming change of Administration.[i] We certainly wish the CIA success, but given several lingering concerns, we would like to suggest a few ways the CIA can better ensure the effectiveness of their planned changes.
The literature on reorganizations does not provide a strong basis for optimism. Shuffling organizational boxes is rarely effective unless the leadership also addresses the often powerful cultural barriers, and builds the necessary behavior adjustments to ensure real change. Behaviors are where the rubber meets the road, and culture is just the routines and norms for reinforcing those critical behaviors. If the Agency wants to double-down on its reorg, it should supplement the shuffling of boxes with an intense focus on processes and behaviors. We want the CIA to succeed, and we know that the nation needs it to succeed — however that success is actually defined.
The Problem with Reorganizations
As noted in the introduction, corporations often go through cycles of restructuring and reorganization. Organizational charts are redrawn, and company leadership, shareholders, and employees expect significant change in company performance. For many companies, the pattern of reorganization is nothing short of routine itself. Despite their popularity, reorganizations more often than not fall short of their objectives. Less than one-third of restructures result in meaningful performance improvement, according to a study by Bain & Company.[ii] Most restructures are well-intentioned, but miss the mark. The reasons for this are many, but the underlying reason that reorgs fail is that they are solving for today’s problem, not for the changing nature of the problem itself.
Why do organizations keep restructuring if such efforts are infrequently effective? Motivations are sometimes tied to changes in leadership. As social-science research on the “romance of leadership” has shown[iii], new leaders (throw out the old boss, ring in a new one) often make it their goal to enact a visible change to signal to the market, the board of directors, or their political bosses that they’re “righting the ship” — and what’s more visible than an org chart?[iv]
This is not to say that reorganization never has value. But in a dynamic environment, formal structure will never be perfectly suited to industry, market, political or other performance requirements. Reorgs are so costly and cumbersome that it is impractical to conduct them frequently enough to keep pace with the external environment. By the time leaders have a solution for the problem they are facing today, tomorrow’s problem is already more important.
Excessive focus on structure impedes focus on what really matters: routines and norms for behavior among members of the team and organization — and in particular, those routines and norms that enhance the organization’s ability to adapt as the situation changes. Constantly changing demands require superior coordination between teams, and if the processes and organizational habits are not in place to enable this collaboration, a reorganization will never fix the problem. Likewise, as in the CIA case, creating hybrid teams from individuals whose prior cultures were quite distinct requires a significant investment in creating a common culture. Solving for these questions enables enterprises, even those with complicated formal structure, to move quickly when situations change (as they inevitably do).
Organizations that have established routines and norms for coordinated behavior have built adaptability into their DNA, and they don’t need to make big, sudden changes periodically. They have an inherent capacity to respond to changing environmental demands because they have set the internal conditions for teams to work together in dynamic conditions — that is, they have created a culture for accommodating change.
Make no mistake: we firmly believe that structure is an important basic scaffolding for any organization, but it should not get in the way of an organization’s ability to keep up with changing conditions. Changing structure without changing how the people and teams who populate it behave is a failure in the making — for the reorg effort, and for long-term performance. A wise reorg focuses first on routines for behaviors that enable rapid adjustment to changing conditions, and second on the structures that best support those practices.
The key to the Saturday Night Live paradox is precisely this: a keen focus on processes and norms for behavior. As Charles Duhigg notes in his book Smarter, Faster, Better, producer Lorne Michaels focused on processes that required the full group to participate in the sketch-building process, then had individual teams disband to execute, but communicate with each other to stay aligned as show date approached. The environment changed constantly — week by week, day by day, even hour by hour — yet the structure for executing the show never really changed. Michaels hit upon adaptability, the holy grail of effective long-term execution, by emphasizing processes and norms for behavior, rather than focusing on structure per se. He structured for improv (changes), not for the set (fixed).
Team of Teams — A Different Approach
How can an enterprise begin to collaborate, adapt, and improve without the pain and churn of internal re-structures — especially an enterprise focused on national security? One of the most successful recent turn-around efforts was General Stanley McChrystal and colleagues’ effort to re-vamp the Special Forces Task Force to face and defeat the Al Qa’ida threat in Iraq. Realizing that this elite force was losing to the decentralized network of terrorists, in 2004 they began to radically change the way the force did business without radically changing its structure. McChrystal, CrossLead CEO Dave Silverman, and colleagues later outlined the lessons they learned and how they fundamentally re-worked their operations in the 2015 book Team of Teams.
In Iraq in 2006, the SEALs, Delta Force, and Army Rangers had the best resources and finest-trained fighting forces in world, but they were losing to a band of highly dispersed and networked terrorists. They identified that Al Qa’ida was succeeding largely due to its network-centric behavior — individuals or cells could be killed off, but individuals and cells within the network would quickly take over their responsibilities and alter their operations. Al Qa’ida did this via focused communication to create awareness between cells, a consistent understanding of the overall mission across cells, and loosely delegated authority to and within cells.
This was radically different from the way the Defense Department had typically approached combat situations, and required a significant departure in operations — in behaviors — to meet the challenge. The key insight for the task force was that to succeed in this endeavor, the teams in the operation would need to interact and communicate with each other with great frequency and intensity. Each team’s composition didn’t necessarily need to change, and the members’ specializations didn’t need to be watered down; the specialized teams just needed much better coordination with each other and to share the overarching common purpose.
Further, they realized that spending time on an organizational restructure would take time and energy away from the fundamental task. Instead, they invested in an intense focus on behaviors that would promote vigilant interaction and communication across and within teams. Rather than focus explicitly on structure, McChrystal and colleagues focused on process and the things they could control. They emphasized sharing information, let loose on formal power, and established a culture that relied heavily on trust. In the process they broke down silos and nurtured behaviors that helped the teams operate more as a network than as a bureaucracy.[v]
General McChrystal’s Special Forces did not look to change the structure of the organization, but instead embarked on a radical effort to change the behaviors of the teams within the organization — share information, trust more, push accountability lower in the organization, focus on the common goal — which ultimately determined the structure that manifest.
Should the CIA Be a Team of Teams?
One of this paper’s authors was an insider at CIA for nearly three decades. While he never thought about it when he was working at the CIA, the culture that underpinned the Clandestine Service was remarkably similar to the Team-of-Teams approach described above. This culture easily accommodated change, and exhibited the principles of empowered execution, shared consciousness, and trust.
The most important work that the CIA does is not at their Washington HQs, but is at the far end of the line. An officer on the street meeting a source is empowered with tremendous responsibility. She is on her own with no means to communicate with higher management. Likewise, the information carried from the CIA Director to the White House is most often collected by an officer on the street in a foreign country, then processed, and placed into context by a junior analyst.
Since tremendous responsibility and power rests in the hands of people far from the official center of power, there needs to be an extremely high level of trust between the top and bottom of the organization. Further, the officer on the street may have to grasp politically subtle issues and complicated technical details that can have a direct effect on U.S. security, foreign policy, or economic needs. As outlined in the recently published book The Billion Dollar Spy by David Hofmann, a single ten-minute contact with a source in a dark alley could be worth billions to the U.S., and ongoing contact could make the difference between victory and defeat in a time of war. Senior executives in Washington need to provide enough information and context to the field agents so that they can be comfortable releasing the reins and allowing the agents to operate in isolation. Trust is fundamental to effective execution at the CIA.
Potential Cultural Problems with the CIA Reorganization
Despite the dangers of tackling a massive organizational restructuring, it is sometimes necessary. In these cases, it has to be clear to everyone involved exactly why the changes are being made. General McChrystal revamped his team of warriors for a singular reason: they were losing the war. Why did Mr. Brennan choose to up-end the CIA structure? The rationale for the overhaul was never adequately explained, at least publicly.[vi]
When the ex-CIA author asked former colleagues why the Director wanted to change the structure, nearly everyone said that Brennan felt that he needed a single, accountable person for each key issue. That is, he felt that the organization was insufficiently centralized, and that he received different views and recommendations on issues from different parts of the organization — spies, analysts, and others. He preferred to have a single corporate answer to take to the White House.[vii] Reducing the diversity of views seems like precisely the wrong direction for an agency facing increasingly complex challenges to take.
Beyond that, the Director and subsequent leaders will need to convince the workforce that the changes will do more than help them provide corporate responses to the White House, but will explicitly help improve the collection and dissemination of intelligence at the front lines. While Director Brennan may define ‘success’ as a more streamlined process to support the 7th Floor, it is not clear that the designers of this re-org thought about helping to support the collectors of the Agency’s core asset: intelligence.
We think the CIA should be flexible enough to contain different units for different purposes. Building a one-size-fits-all construct risks damage to the specialized expertise built up around the very different means to support the wider mission. At the same time, there is almost no way that a Director of a Mission Center could provide a single, corporate answer to Director Brennan. The nature of these multiple and differing threats defies the ability to provide simple, corporate answers.
This focus on improving process at the top of the organization, and not at the pointy end of the spear where the bulk of the work is done, risks the possibility that additional layers of bureaucracy will hinder real information from making its way up the chain. While the changes may make it easier for any Director to reach to one person for answers, there is a likelihood that those answers are less granular and valuable than they might otherwise be. A single point of contact may well provide a single, corporate viewpoint that meshes the opinions of the operators and analysts, but such a top-down structure with single points of accountability could also have the effect of removing dissent from reaching the top. This danger could be made even more likely if the leadership has a tendency toward micro-management — something that the recent leaders at the CIA have been susceptible to.
Brennan’s other articulated goal for the re-org was to encourage greater internal cooperation and collaboration. Of course, this prompts the question: is a massive restructuring effort the best way to achieve this goal? The supposed model for the restructure is the CIA’s counterterrorism center (CTC), a large unit comprising officers from all directorates. While the CTC has indeed been successful, the construct is not new, nor is it unique. Other similar units already exist, and efforts to seek collaboration and synergy have been ongoing for years with a good deal of success. While the CTC is now seen as an exemplar, it wasn’t always so. It was considered a backwater for years, and did not attract the best officers. It wasn’t until 9/11 and the need to meet the new emphasis on targeting — the disambiguation of data, and the search for needles in a haystack — that the CTC structure proved valuable. The CTC has fit the specific need to target terrorists, but it is not at all clear that this same structure makes sense for more strategic targets, or issues that require specific expertise — like supporting officers in hostile operating environments (e.g., Moscow, Beijing), overseeing sophisticated technical programs, or providing strategic analysis on long-range threats.
The literature on organizational theory and practice makes clear that any design or re-design effort should start with the organization’s mission. The culture of an organization develops and hardens out of mission execution and success. For example, despite often working together on similar issues and in the same spaces, the cultures of the military, FBI, diplomatic service, and the CIA are very different. In this regard, a change effort should define what the organization should be doing (behaviors and practices) prior to any consideration of the right structure. If Director Brennan expects his changes to last beyond 2016, he will need to provide a compelling and consistent rationale for why the change is necessary, and better explain why he believes that he could not effect change without a major reorganization.
Uniformity, while it might look nicer on a wiring diagram, risks the resilience and flexibility needed to meet unexpected threats. Under this modernization effort, the CIA has to fight with the same tools across the bureaucracy rather than allowing a combination of centers, components, and issue managers to provide the best match for a given threat. The CIA has changed many times over the previous 60 years to meet new needs, in everything from hiring and training to budget structures — all despite senior CIA officers’ well-earned reputation as masters at resisting change. The changes have taken place to meet a variety of needs, and a massive overhaul risks putting form before function by placing a one-size fits all structure onto an organization that is required to perform a wide variety of functions. The CIA doesn’t need to become the CTC — or SNL, for that matter — to stay adaptable as the environment shifts. It does need to focus on internal behaviors that keep it agile and able to preempt new threats as they emerge. In that sense, though the CIA is dead serious and SNL is live comedy, they really aren’t so different from each other after all.
John Sipher is currently a Director of Client Services at CrossLead. He retired from the Central Intelligence Agency in 2014 after a 28-year career in the National Clandestine Service. At the time of his retirement he was a member of the CIA’s Senior Intelligence Service. He is the recipient of the Agency’s Distinguished Career Intelligence Medal.
Bernadette Doerr leads the R&D team at CrossLead. Her prior work in management consulting and as a PhD scholar in the Management of Organizations group at UC Berkeley’s Haas School of Business informs both her research interests (organizational adaptability, culture, teams, and performance), and her approach to studying real organizations, the people who lead them, and the things that make them tick.
[i] Steve Slick — head of the Intelligence Studies Project at the U. of Texas, Austin — penned an excellent article on how to assess Director Brennan’s modernization effort. Slick provides several clear benchmarks to help a future Administration determine whether the effort has been a success (http://foreignpolicy.com/2016/05/04/measuring-change-at-the-cia/). Among them: Has full integration of analysts and operations officers improved the quality of human source reporting and utility of the CIA’s assessments? Will the restructured CIA be more effective in implementing assigned covert action missions? And, will the CIA’s “modernization” help create a more closely integrated and collaborative intelligence community? These are very good questions, although we are not certain that they can be answered adequately by the CIA’s customers. Despite the importance of covert action and intelligence reporting, there are no clear metrics to define “success.” Nor are there means to gauge or measure intelligence that is potentially lost based on changed org dynamics.
[ii] http://www.bain.com/publications/articles/key-to-successful-corporate-reorganization.aspx
[iii] Meindl, J., Ehrlich, S., & Dukerich, J. (1985). The Romance of Leadership. Administrative Science Quarterly, 30(1), 78–102.
[iv] Each time the CIA got a new boss, one of us would jokingly wonder in what way he would piss on the fire hydrant to demonstrate control of his domain. It is a natural impulse for a newly-appointed leader.
[v] In the Team-of-Teams parlance, they focused on establishing shared consciousness, empowered execution, and trust — three of the four principles required to establish an adaptable organization (the fourth being common purpose). Shared consciousness is a holistic understanding of the environment (how all of the teams interact together, via communication of what each of the other teams is doing). Having this overall perspective of the operation, individuals and lower-level units can be empowered to take actions and make decisions that would otherwise have been centralized (empowered execution). None of this can be done without a strong foundation of trust, as individuals within teams need to firmly believe that their teammates will do as they say, and the same can be said for teams themselves (belief across teams).
[vi] At his press conference announcing the reorganization, Director Brennan commented that the old system was anachronistic, and mentioned the need to “wring efficiencies” out of the system. However, according to The New York Times, he was unable to articulate how the previous system was hampering operations, insisting instead that he sought increased cooperation and collaboration. http://www.nytimes.com/2015/03/07/us/major-overhaul-set-for-cia-with-thousands-to-be-reassigned.html
[vii] Indeed, according to The New York Times, Director Brennan showed flashes of frustration when briefing the press on his restructuring effort, noting that, “under the CIA’s current structure, there is not one single person in charge of — and to hold accountable for — a number of pressing issues.” http://www.nytimes.com/2015/03/07/us/major-overhaul-set-for-cia-with-thousands-to-be-reassigned.html
