Building The Base

In this week’s episode of Building the Base, Hondo and Lauren join Debbie James, former Secretary of the Air Force, to discuss the future of the defense industrial network. Secretary James discusses changes in national security, including the prevalence of software in DoD operations and the importance of diversity in the workforce. The Secretary identifies room for improvement in both the DoD and industry by emphasizing the need for collaboration with nontraditional companies, suggesting reformation of requirements processes, and advising listeners to come to the DoD with humility and understanding of the decision-making process.

Hondo, Lauren, and Secretary James go on to discuss a variety of topics, including:

  • Digital engineering & additive manufacturing in national security
  • Small businesses in the future industrial network
  • Changes to the SBIR program
  • The Space Development Agency
  • Open systems architecture

What is Building The Base?

"Building the Base" - an in-depth series of conversations with top entrepreneurs and leaders from tech, financial, industrial, and public sectors.

Our special guests are weighing in on a broad selection of topics such as: shaping our future national security industrial base, leadership in challenging times, experiences related to the intersection of business and national security, and personal anecdotes related to their positions of influence.

Building the base is hosted by our own BENS member Lauren Bedula who is the Managing Director and National Security Technology Practice Lead at Beacon Global Strategies, and BENS Distinguished Fellow, Jim "Hondo" Geurts who retired from performing the duties of the Under Secretary of the Navy and former Assistant Secretary of the Navy for Research, Development & Acquisition.

Lauren Bedula 01:07:
Welcome back to Building the Base. Lauren Bedula and Hondo Geurts, here with Secretary Deborah Lee James. Secretary James served as the 23rd Secretary of the Air Force, also spent time on the Hill as a professional staff member for the House Armed Service Committee, and held numerous leadership roles at DOD, and in the defense industrial base. So, Secretary James, thank you for joining us today.

Debbie James 01:42:
It's my pleasure to be here with you, Lauren, and with you Hondo as well, and to be back at BENS.

Hondo Geurts 01:46:
Well, it's great to have you here. It's always fun having one of my former bosses as a guest, although you probably don't remember that way back , but you have one of these really interesting careers where you've got industry first and then government and the Hill. Give us a little background about yourself. How does one grow up to become the Secretary of the Air Force?

Debbie James 02:12:
Well, my journey began 40 years ago when I started out as a national security professional. My first job was in the Department of the Army. It wasn't my dream to be involved with the military as a young person, but sometimes those dreams don't work out. Sometimes you don't get selected. So, I pivoted and went to the Army, which launched me on what became a 40-year journey. Not quite culminating with being Secretary of the Air Force, though I think that will forever be the best job I ever had. I spent a total of about 20-21 years in the private sector, supporting our military. When I say the private sector, I am including certain 501c3 is like BENS, the nonprofit world, some charities as well. But then about 20 years in the government in and out. I've never been a career civil servant. Rather, I have had periods where I have gone in, I was an assistant secretary of defense for Reserve Affairs in the 1990s, and I went back in when I became Secretary of the Air Force in 2013. And then, as you mentioned, Lauren, I was on Capitol Hill for 10 years earlier in my career with the House Armed Services Committee. So, I feel very fortunate that I have seen defense from the inside, from the outside. I've seen it from the executive branch, and the legislative branch as well. So, I think I've gotten a complete 360-degree picture.

Lauren Bedula 04:03:
The focus of our show is on building a national security industrial network. And as you talked about, you've watched the defense industrial base evolve over the last several decades. We're curious to get your take on the changes that have occurred up until now and where we might need to go to address the evolving national security landscape.

Debbie James 04:26:
The number one change that I have seen across the board, and I think this goes way beyond the defense industrial base, is the introduction of technology software into literally everything that we do. For the most part, I think it has been a huge benefit for the defense industrial base, and really for the country and the world at large. It has allowed us to be more efficient in our operations, both back office and front office, so to speak, much more efficient in production. I like to think of software as the new coin of the realm; it's more important these days than hardware. Everything like digital engineering, additive manufacturing, 3D printing, all of these technological breakthroughs hinge on software. Software is number one. The number two thing I think has been a really positive development is diversity in the workforce and a greater appreciation for people being an important part of every strategy for every company, as well as for the government. People were considered more expendable when I was starting out. Now people are much more appreciated and valued. Diversity is also important. There were very few women in this arena when I started out, and we still have a ways to go, but there's been a lot of progress there. So, the focus on talent and diversity is another positive. However, there are downsides. There's certainly less competition today than when I started. We've gone from 50-50ish primes in the defense industrial base down to about five. With the best of intentions, we have continued to build up the body of law and regulations that surround the defense industrial base. That causes risk aversion for those involved and some negative consequences. The number one thing that didn't used to be this way is the political dysfunction. When I started out in the early '80s, we had a much more compromising approach in Congress. That isn't there like it used to be, threatening budgets, timeliness of decisions, and program stability. We need to do better in that regard.

Hondo Geurts 6:54:
You mentioned what's happened in the industrial base, and we seem conflicted as a country about industrial policy. We like to think about it but hate to enact it. Over the last few decades, we seem to have let things ride out and let the free market do its work, resulting in a smaller number of big primes and a large number of smalls without much in the middle. Your experience on the Hill or in the building, what's your sense? Should we be a little bit more demanding in the industrial policy side to address this? Or is it more about aligning incentives? What role does policy play versus incentives to move to the industrial network of the future?

Debbie James 7:54:
Yes, we do probably need to scrub our policies, look at the policies, and incentives we currently have on the table. Policymakers in the Department of Defense and companies should work together with colleagues on the Hill to reduce red tape and things that slow things down. We are giving more scrutiny to mergers and acquisitions because there are so few bigger primes now, and even the second tiers are getting smaller. The fact that it's getting more scrutiny is positive. We're making bigger efforts to open up the Department of Defense to smaller, more innovative commercial companies with technology that we would like to have access to, but who just can't figure out how to do business with us and can't get a reliable stream of money to make the business proposition worthwhile to them. We're doing better in that regard, but we need to keep pushing.

Lauren Bedula 09:33:
Debbie, I want to ask you about your work for the Atlantic Council and why it's important to enable non-traditional startups and venture-backed companies to participate. You mentioned the importance of software and some of the hurdles you've observed. Can you elaborate on this?

Debbie James 10:02:
It's important to enable these companies to participate because of the geopolitical threats facing the US and our allies, including Russia, China, terrorism, North Korea, and Iran. We need to be prepared to deter and defeat any enemies, and we can't do it the way we did 20 years ago. Critical technologies identified by policymakers require innovation from the private sector, which we need to harness by making it easier to do business with the Department of Defense, bringing down barriers, and focusing on this issue. The Defense Innovation Unit needs to be elevated to a direct report to the top leaders, and the J SIDS process needs reforming. We need to look at successful acquisition models like the Special Operations Command and the Rapid Capabilities Office of the Air Force to speed things up. Our report has actionable recommendations, and we're trying to make an impact this year.

Hondo Geurts 13:33:
You've had a career bouncing back and forth between industry and government, and some people put down the revolving door as a negative thing, but I think it's positive to have all these experiences. What surprised you the most when you came back into the government after major roles in industry?

Debbie James 14:22:
My greatest surprise, and this is going to sound perhaps a little naive. Let me back up by saying I was fortunate that I had a previous tour of duty in the Pentagon. So, I knew the processes, the procedures, more or less I knew how to do blocking and tackling and move an agenda forward. That is very complicated for people who have had no experience in that before. So, at least I had that going for me. The part that was most surprising was just how difficult it had become to work with Congress and to get your point across and support an agenda. Now I thought I was going to game all that easily since I had been on the staff of a congressional committee. I know the types of ways that you move an agenda and how you have to be brief and provide language and backup. I know all of that, but it had just become so dysfunctional. I can remember on multiple occasions going in and having great discussions, very cordial, collaborative discussions with a congressman or a senator, and the very next day go before this same person as part of a hearing and be ripped to shreds. It was almost like the Dr. Jekyll and Mr. Hyde effect. But that's the way it is nowadays, and you just have to be prepared to roll with the punches. It's distasteful that this is the way it has become. But of course, Congress has a great deal of authority and power. And so we just have to keep working on it.

Hondo Geurts 15:54:
What skills did your government time maybe give you that were beneficial as you flip back to industry? Or, what were the things early on in your career that you either learned or were exposed to that helped propel you through your private sector experience, your biggest skill?

Debbie James 16:17:
Simply understanding the budget process and decision makers is important. The process may be long, but it's important to understand and respect it. You can work to improve it, but you can't go in guns blazing. It's important to have both government and defense industry experience to understand each other. The revolving door has regulations against certain representational work, but cross-pollination is valuable for collaboration. I am honored to chair the Defense Business Board, which just delivered a report on using authorities to bring in people with significant experience to work on important problems. We also talked about the lack of civilian pipelines and HR specialist retraining to focus on recruiting or branding. We need to refocus our branding to attract people who want to make a contribution to the world.

Lauren Bedula 17:24:
Cross-pollination is valuable for collaboration. Do you have any advice for folks looking to go back into government or for government to attract more talent?

Debbie James 18:07:
One of my endeavors at present is I am very honored to chair the defense business board, which is an advisory body to the Secretary and the Deputy Secretary of Defense. We just delivered a report focused on civilians, not on uniformed military, but it addressed a lot of what you're saying, Lauren. So, this report talked about using to the maximum the authorities that exist today, which allow for people to come in for shorter duration periods of time, the government can pay them a bit more, and they can come in with the knowledge that they will be working on super important problems and helping to solve those problems. We also talked about how there are no civilian pipelines at present in the Department of Defense. So, think about the skills that we think we're going to need for the future, people who are more tech-savvy, people who understand AI, data scientists, or it could be just areas where we have shortages. In talking to the Secretary of the Army a month or two ago, the number one shortage that she told me about that worries her is the shortage of daycare workers. There is no process or there are no people who focus on that we have at present. For the most part, HR specialists fill vacancies or do their best to do so. We have some recommendations there as well. Specifically, we think HR specialists ought to be retrained and repurposed to become either recruiters or branders. We have a branding problem in DOD, I think it's impacting our uniformed recruitment, and it's also impacting our civilian recruitment. But you know, young people, they want purpose, they want to make a contribution to the world, there's ways that we can refocus our branding, or really do some good branding, I think, to help in this regard. So, we've got to get people sort of in that mindset, retrained, and focusing in those areas. It is a big problem. And again, it's one that our body, the defense business board, is trying to advance the ball on.

Hondo Geurts 21:10:
So, you and I work outside government and both have a lot of interest in venture-backed startups and bringing new players, new diversity in terms of products, processes, people into the industrial network. Are you seeing four or five years ago there was kind of an uproar with Google, and there's this notion that you can choose not to ignore national security and then just focus on technology. I've sensed that's changed over the last couple of years now. Google announced they've got their National Security Division. A lot of venture-backed companies are coming out almost national security first or in parallel. What's your sense from what you're seeing in the venture world? And how might we work better together to bring those companies into this industrial network?

Debbie James 22:04:
Right. So, this has been a tough year for the venture world with rising interest rates in general worldwide. The future still remains bright, and I think the venture world remains very interested in doing business with the Department of Defense. But they've got to see certain things changed if they're going to have faith in the system. I also want to say this idea of Google withdrawing from the national security work and then sort of coming back, trying to get back in, I believe Google's CEO is probably reacting to what appeared to be an uproar within employees. I think that's a cautionary tale for many CEOs. The opinions of employees didn't used to matter, but now they do because employees can vote with their feet, and they have choices. So, CEOs try to be mindful of other stakeholders like employees, but sometimes the law of unintended consequences can happen as well. That's a cautionary tale for many CEOs and many companies across the nation. But back to what we can do for venture capitalists, our Atlantic Commission report is also recommending changes to the SBIR program, the Small Business Innovative Research Program, which is a front door for many young small companies to get exposure to DOD and DOD problems. We're recommending opening the aperture as to who can participate. Maybe we allow some venture-backed companies to participate, maybe we raise some of those thresholds. We'd like to think that will help. And then we've got to continue to keep pressing on this so-called Valley of Death, whereby they get a little bit of seed money to start a process, do a prototype, get their foot in the door, and the warfighters on the one hand, who they may be working with, say we love this stuff. They think this is going to be the big time. And guess what? There's no money, there's no program of record, which puts forth money to keep them going. So, then they enter what's called several years' worth of this valley of death. Well, these young companies can't hold on that long. Somehow we've got to keep pressing on putting more money out there to allow us to make bigger bets in the Department of Defense with those companies and even put more money on the table because the law of a million dollars or a couple of $100,000 may be enough in the very beginning, but it's not enough. They have to see that there's a reasonable chance and a reasonable pathway to production and to having their innovation adopted at scale for this to really work. So, again, we've got some recommendations that are targeted in that direction.

Hondo Geurts 25:00:
Having been part of that commission, we talked a lot about moving from being an exporter of technology to an importer and fast integrator of technology. We need to root out the areas where the duty may really be redeveloping what already exists in the commercial world and move that money over into buying more things. So, your sense of having to change where we focus our money to close some of these business equations is very powerful.

Debbie James 25:34:
That sort of model is part of what the Space Development Agency is trying to improve. Even larger companies should prioritize speed. The FDA is trying to set parameters to have contracts completed or from contract to launch in three years, which is quick. They want stable requirements, so if anyone wants to change a requirement, it goes all the way to the top. The top won't be interested in listening unless it's a really good story. Open systems architecture is important to plug in new technologies more easily. These principles need to be applied across the Department of Defense. Having fewer checkers and compressing echelons of review will help streamline the process. At SOCOM and the RCO, the key people all sit in on the same meeting around the same table, which helps to get questions and objections addressed more quickly. The current process can take too long with many offices needing to review, and even a single junior-level objection can halt the entire process for a year. This needs to change.

Lauren Bedula 27:37:
Well, thanks for getting into some of those recommendations. As we chatted about before we started recording, there are a lot of efforts on this issue. And I think there is consensus that there's a problem here, but not a lot of great recommendations to champion. So, I urge our listeners to take a look at the Atlantic Council Report. And I think it's also fantastic Debbie, that you've been collaborating with folks like Ellen Lord, who's tied into the PPBE Commission, which we've highlighted on our show, or some of these other action-oriented groups, so that we can really move the ball along here. So, thank you, thank you for all the work on that front. And I wanted to see, we talked about how government might be able to reform Hondo, I know brought up how you're advising startups or venture capitalists. Now, any advice to our listeners who might be trying to get their technology into government, thank you for highlighting that it's a complex environment. Now with the economic conditions, we've seen some pull out of even trying. So, for those who are eager to still enter the market, what would resonate with you when CEOs or founders would come see you or when you'd speak to the private sector.

Debbie James 28:39:
So, what I would suggest is it's very important that those in the private sector, particularly the younger companies that don't have experience with DOD, come to the table with a bit of humility. So, you may have a fantastic product, but it may not be what DOD needs, it may, with some tweaking, be workable, but it may not be among their top priorities. It may not be the best thing, and they will ultimately be the judge of that. You will not be. So, come to the table with a bit of humility. That would be number one. Number two is come to the table and really listen. Listen to what they do need because, by the way, if you don't have exactly at the moment what they need, as I said, it may be a fairly easy tweak that you can provide, and then you'll have better opportunities going forward to sell the product. And then the third thing is maybe taking some time to get educated on the processes of DOD as best as you can. And I acknowledge that can be a tough, tough thing to do. But when you're talking to a particular say warfighter out in the field, you've got to understand where that person sits in the process. It's not necessarily that person's decision. There are other people who will be at least as involved in that decision, hopefully that person will have a voice. But you have got to be patient because the person you're talking to may not be the decision-maker or may not be the sole decision-maker. So, to kind of understand that process and who's who, before you get too excited, I think would be another good piece of advice.

Lauren Bedula 30:21:
Yeah, that's all great advice. And on the topic of humility, I really enjoyed your book. And I think if our listeners haven't taken a look, they should go get themselves a copy. But you had a lot of great advice in there for folks trying to navigate their career paths and lessons learned. You've spent time in roles that all put an enormous amount of stress whether it says a president of a big business line at SAIC, or as the Secretary of the Air Force, how do you manage it all? How do you stay balanced and deal with stress in those roles?

Debbie James 30:50:
Well, I wish I could say I was perfect at managing all of that, Lauren, and I'm not. But in that book, and thank you for mentioning it, “Aim High: Chart Your Course and Find Success,” I do devote an entire chapter because one of my key principles and one of my key life lessons learned is you have got to demand that you maintain some semblance of a life outside of your working life so that you don't become all consumed so that you don't become a workaholic. By the way workaholics tend not to be the most productive people, they tend to be very hard on talent that works for them. And remember, we talked about the importance of not wanting to lose your people to those who are micromanagers, workaholics, and so forth. So, you'll be a better professional if you have that outside of your work life, you'll be a more fulfilled human being. So, I'd say the number one way I tried to keep myself grounded was always through my family and making sure that I carved out time to be with my family. Now with that said, I admit I'm not perfect. There were times when I was all in and seemingly working around the clock, Secretary of the Air Force, I traveled a great deal. But then there are other times when I was able to step back a bit more, get home at a proper hour, I take my vacations, I always take my vacations, people who seemingly don't do this, I think it's a mistake. So, you must sort of rock and roll with it, you must be prepared. And hopefully that's part of teamwork, you hopefully have a good team on the job. So, that when you need to take a step back, by the way, you might have to take a step back because you have an aging parent who needs help, or you have a child who needs extra attention, there's all kinds of reasons, or you just want your vacation, hopefully, you've got a team that can cover for you. Likewise, people are not islands unto themselves at home. Single parents who don't have any kind of a support system, I don't know how they do it, you have to have a team at home, be it a daycare person, be it your parents, be it your neighbors, there's got to be some group of people that will help you at home too, so that you can lean into the job when you need to.

Hondo Geurts 33:01:
Yeah, that's such an important point. I talk a lot about staying fresh and how to stay. Most of the worst decisions I ever made in my life were when I wasn't fresh, just tired from working too hard or not getting a mental break or anything else. It's so important. We were talking before the show that I recall I was working for you way back when, and you had an award ceremony, and my parents came in to see you. And you invited all the parents of the award winners in your office, and you spent like an hour with them. My parents walked out, and they said, "How in the world does the Secretary of the Air Force have an hour in a day to spend talking to us? Doesn't she have more important things to do?" And in that talk to them, you probably don't remember, you talked a lot about service and the value of service. So, in your careers, you look back, and you mentor folks coming up the chain of command. How do you think about service now? It doesn't have to be service in government, but service in some way? And how has that helped maybe keep you fresh and keep you grounded in those things that are enduringly important, not temporarily important kinds of things?

Debbie James 34:16:
Well, first of all, I will tell you, the Secretary of the Air Force probably had lots of important things on that day to work on, but people and talent, that was my number one priority. So, doing those ceremonies and talking to the parents and the children and the siblings, that was always my pleasure. It was always my honor. And I probably picked up a good story or two about you growing up, Hondo. So, you know, I have that in my back pocket for a later time. Service comes in many, many different ways. It doesn't have to be service to the country through the military or through working through the government. Service basically is helping other people. It's doing something good for other people so that you may have an impact on other humans and your communities so that you leave your organization, hopefully in a better position than the position you found it in when you first arrived at that organization. So, I think you talked about mentorship a little bit. I've always been a big recipient of mentoring people. And I've never been in a formal program, which of course exists today. But I just have always had either great bosses or senior colleagues who have given me good advice and even more, so they've opened a door to me along the way that I could have never opened for myself, particularly when I was just starting out earlier in my career. So, that's what mentorship is all about. So, the number one way I think all of us, as I'll say, more seasoned professionals at this stage in life, we can pay it forward, and we can make sure that we're mentoring others.

Lauren Bedula 35:56:
Well, Debbie, on that note, you've brought so much great advice to our listeners today. Thank you for talking through your career path and ways we can continue to foster talent and very actionable ideas about how to strengthen collaboration between the National Security community and high-tech sector. And this idea of rocking and rolling with it. That's something I'm going to take with me too. I love it. Thank you, Debbie, thank you very much.