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"The DOD is designed to give responsibility down to the lowest level, and that is the complexity that must be solved for. But we are never going to move with speed if we keep it down at the lowest common denominator." - Dana Deasy
"Building the Base" - an in-depth series of conversations with top entrepreneurs, innovators, and leaders from tech, financial, industrial, and public sectors.
Our special guests provide their unique perspectives on a broad selection of topics such as: shaping our future national security industrial base, the impact of disruptive technologies, how new startups can increasingly contribute to national security, and practical tips on leadership and personal development whether in government or the private sector.
Building the Base is hosted by Lauren Bedula, is Managing Director and National Security Technology Practice Lead at Beacon Global Strategies, and the Honorable Jim "Hondo" Geurts who retired from performing the duties of the Under Secretary of the Navy and was the former Assistant Secretary of the Navy for Research, Development & Acquisition and Acquisition Executive at United States Special Operations Command.
Lauren Bedula 10:46
Welcome back to building the base, Lauren Bedula and Hondo Geurts. Here with today's guest, Mr. Dana dz. We are so excited to have Dana join us because he has had incredible experience both in the private sector and public service sector, having most recently served as DOD chief information officer. And prior to that role was global CIO of JP Morgan Chase. So, managing a budget of more than $9 billion and over 40,000 technologists. So, I do not know anyone who knows, CIO related issues of massive organizations better than Dana. He also was CIO at BP. Tyco International, spent time at Siemens America, and even rock wall space system. So, we can hit on some defense industrial base related issues, as well as get into career trajectory today. So, Dana, thanks so much for joining us.
Dana Deasy 11:40
Great to be here. Thanks, Warren for the kind introduction.
Hondo Geurts 11:44
So, Dana, you know, one of the great joys of the show is, you know, guests like you who have these, you know, tremendously varied backgrounds. What kind of got you into the CIO business, which sets you on a trajectory, you know, eventually leading to being the DOD CIO.
Dana Deasy 12:01
Yeah, you know, I, when I started my career in technology, I do not even think the term chief information officer had even been created yet. I think the exotic term WAS IT director was what you aspire to be. back early on in my career. I do not know; I was always challenged by scale complexity. And it found myself always moving to the next job that seemed to have more scale, and more complexity, it probably was not until the halfway point of my career, maybe 15 years into it, that I decided that, you know, I aspired to be a global CIO, I did not set my sights on a particular company or industry, but I did aspire to want to become a global CIO.
Hondo Geurts 12:51
And, and, and did that, as you got into the CIO, or is it was Geurts 12:51 it formalized? Did that change kind of your perspective on? You know, the importance of the digital? You know, did you see the digital age coming? And were you trying to lead turn it? Or? Or were you just kind of at the at the right place, as it came about? You know, what was you? Did you see it come on? Or were you taking advantage of the wave that was behind it?
Dana Deasy 13:18
Yeah, I mean, hard to say, if I saw it coming. I mean, I have been around long enough that I have survived the era of mainframe to the era of the invention of the PC, to the era of the internet, to the cell phone, to distributed computing, to cloud computing. You know, I've, I have been through it all, I would not say that. I was had a crystal ball was outstanding at looking at what was coming next. But what I did find I was good at was whatever did come next. I did have a knack for quickly, being able to grab hold of it and think about how it can be used to help companies or help various industries. And then how do you start the transformation with whatever that new technology was at the time in my career?
Lauren Bedula 14:07
When I think CIO, there are two exciting aspects that come to mind for me, and I am curious to hear if you are drawn to one, one more than the other or maybe it is both but one is modernization, as you talked about just the evolution of digital networks and infrastructure. modernization, I think is it is huge. And then also the security aspects too. So, over your career, seeing the importance of cybersecurity, launch and grow. Do you have any thoughts about either of those? And if you are drawn to one more than the other?
Dana Deasy 14:37
Yeah, I think what I was drawn more towards Saas companies that were trying to figure out when the advent of whatever the new technology was, how they needed to transform and how to be able to embrace it. You know, along the way, I remember my first cybersecurity incident which was a virus was way back when I was at Rockwell International, back in the early 1990s. And at that time, that was a novel unique problem, which we kind of addressed in a very curiosity sort of way. But I do not think back then the way my brain was wired was thinking about it as well, I am starting to see something that is going to become, you know, a mainstay problem. In the corporate world. It was not till probably several years later, that like many people, I woke up to the fact that, you know, cybersecurity was an advent of was a whole new industry. When I was growing up, I would say early on, there was such a thing as the cyber industry, there was no system. That did not probably come until the late 90s, when I first saw the advent of that. So, I would say I was more drawn to companies that we are trying to figure out how to use whatever the new technology was, and how it was going to help transform their company.
Lauren Bedula 16:02
Awesome. Well, I am the security note, but also this idea of transformation, transformation, or implementation here. I am curious, what transformation, drew you to the public sector? How did you end up at DOD? Can you tell our listeners that story? You
Dana Deasy 16:17
know, I wish I could tell you, Lord, that it was part of my master career plan to finish up my career in government? You know, we can talk later about why it was I never intersected with government. That No, I had retired from JP Morgan, and got a call in what would that have been in February of 2018, from the White House, asking me if I would consider coming out of retirement to head up technology for the Department of Defense. But prior to that, I would say that I had spent a lot of time thinking about ending my career, or at any point in my career entering government service.
Hondo Geurts 17:04
Why do you think that is Dana? Why do you think, you know, successful folks? And, you know, why is there still this chasm between, you know, you can be successful in industry, and then, you know, you may interact with government folks, or you can be successful in government. And you may interact with industry, folks, but there does not seem to be a, you know, an easy cross pollination path, nor is it even in people's minds that the possibilities out there.
Dana Deasy 17:31
Yeah, I think, I think Hondo you've, you have hit upon, I have spent some time reflecting on this. So, let us, if you go back to, at least this is, this is my story. But I suspect it applies to a lot of people in our, you know, information technology profession. I graduate getting ready to graduate from high school, I meet with the typical high school counselor. And you are starting to think about what a career might look like. But you are really thinking about what college you want to get to. So, then I ended up in college. And by the time you are in your junior year, you are starting to interview, I knew I wanted to go into the technology industry. But Tom, I was a junior in college. But I never came across anybody that had served in government. You know, my father was in the Navy. But that I was so young at the time that that occurred that I had no relationship to thinking about spending time in the military. So, then I get my first job out of college. And then we all know, two, three years after you get that first job, now you are gonna get your first promotion, then you eventually get that first phone call from a recruiter to go someplace else. Nowhere along that entire path, Hondo that I come across or intersect with anybody in government. So, the issue was, there is no, there is no natural way that people who start to career on the private sector side intersect with the government side unless they happen to a family member or relative. Or they are contacted, you know, sadly to say but a hand on heart, I would not have been in the government if it was not for the fact that they reached out to me towards the end of my career, but it was not something I thought about along the way. And I think sadly, the problem is our society is not set up well, for government service to intersect with people that you know, kind of grew up their career in the private sector.
Hondo Geurts 19:38
Yeah, it is almost it is almost designed. So, it is not to be Don't you know, the design not to ever revolving door you know, I have often talked about, you know, we should have more of a revolving door then, then then not because it adds so much. What would you say you got out of your government time that either surprise you or wish you would have known in the 20 A year ago, Dana, that is out there somewhere, you know, exposed now to potentially this opportunity.
Dana Deasy 20:08
You know, this is gonna maybe sound a little cheesy. But what I discovered about myself if I had a real patriotic streak in me. Once I was in working with men and women that are protecting our country every day, I was became very passionate about service, and about helping the country. But honestly, Hondo, it was not something that I would say hand on heart that I thought about, until once I was in the middle of it. And you just want to give it your all. I mean, once you are in and you are helping your country, some people will say, well, isn't it bureaucratic? Is not it frustrating. And I say, course it is all that. But it is also one of the most rewarding things you could ever, ever do in your career. And I am super glad I did it. I do it all over again, if I was asked to. But I must admit, it is not something I thought about, I never thought about myself as being patriotic, until I found myself in the middle of the job. And you suddenly feel like, God is great, so proud to be an American. I know that sounds a little silly. But once that was done in the Pentagon working every day, I felt really, proud about doing it.
Lauren Bedula 21:27
That is awesome. And I love your point about just a lack of network intersections between the private sector and public sector. I think it is something that to maintain a robust defense industrial base, or industrial base writ large, it is something we have got to fix. And there is really an appetite to serve because of the Patriotic approach or strong feelings that you mentioned. I want to go back, Dana to this pivot, and talk about some of the challenges like what were the hardest parts? Once you decided you were going to sign up? What was it like? And especially some of those challenges? Yeah,
Dana Deasy 22:06
it is a great, it is a great question. And to say the least, there were a few daunting challenges. I mean, must realize, by the time I am retiring from JP Morgan, I was, what 38 years into my career expert in international business, corporate business. But when you enter government, AI knew nothing about how government worked, let alone how the DOD worked, let alone how the organism called the Pentagon worked. And so, when you show up on your first day, you remember back when we were all in, like junior high. And we took our social studies course, on how government in America works. He learned about the branches of government and learned about bills and Congress and all that I felt like I was on steroids, a social studies course, no one had told me, how does authorization work? How does the appropriation work? How did committees work? How do hearings work? How do you interface with Congress? I had no experience with any of that. So, it was less for me about how to figure out how to get in and learn the technology of the DOD, it was more the broader issues of not understanding how to make the mechanism of government work. I will just give you a small example. So, you know, I joined the DOD, unlike any job I have ever done, the first thing I want to do is to step back, say, well, how are we spending our money? And could we redirect some funds to some of the new large digital transformation initiatives? And when I made the comment one day, I said, well, you know, we got 40 some billion dollars, we spending inside the DOD on technology, surely, we can carve out a billion of it to redirect. You know, I got these horrifying looks from everybody was like, you cannot redirect money data. You know, that money is all been authorized. It has been appropriate. It has been legislated. And for me, that was a foreign concept. Because up to that point in my career, you walk into a new company, you see wasteful spend, or you see where it should be spent differently. And you read pivot, you know, you change your mind and go a different direction. So that was the real wakeup, just that one example of trying to move money around in government was a fascinating undertaking.
Lauren Bedula 24:45
And what about the flip side? So, you talk about some of the challenges in the government role? What was your take on the private sector once you are in like any thoughts on how the private sector could be better partners in this tricky dynamic?
Dana Deasy 24:57
Yeah, you know, when I was on the private sector side, and I would touch government for whatever reasons, maybe primarily in the cyberspace, as you can imagine, were given I worked in oil and gas, automotive and financial services. I think on the private sector side, we tend to think in terms of government, the also bureaucratic, maybe at times, not the most capable people in roles. And so, we discount, want to spend the appropriate time to work with government, it becomes only if necessary, so to speak, as a proactive reach out. Now, that is not to say that, obviously, these companies that I work for, they all have government affair offices. But if you were not in the government affairs, part of the company you worked for, you just did not, you know, as I like to say early still intersect a whole lot. And when you did, you approached it with a great deal of skepticism. And I do not think even looking back on it, that is not healthy. That is not beneficial. And it is not going to move the, you know, the country forward. Do I have a solution? What must change? I think we touched upon a little bit, if we can get more people from the private sector to do a stent, whatever that stamp looks like, in government, just so they can appreciate how things work, why things are done, the way they done, I think a lot of the, the misunderstanding of this thing we call bureaucracy, is that, you know, I simply didn't understand why things happen the way they happen in government until I found myself in the middle of it, then all of a sudden, you have this aha moment is okay, I get it, I understand why the government needs to do the approaches that takes. But if you do not have that experience, you almost want to run away from it, versus run towards it.
Hondo Geurts 27:10
So, Dana, I mean, hey, you have got this unique perspective of large corporate organizations, large government organizations, how would you compare kind of the digital competence, organizationally of you know, pick your large industrial partner versus a larger government? And what are the unique challenges, you know, as you tried to take on modernizing, you know, all these legacy DOD systems, you know, what, what were the unique challenges that government face? You talked a little bit about having, you know, stakeholders on the hill, but I am sure there's others, how would How would you kind of compare that some of the challenges you see in that its modernization space,
Dana Deasy 27:51
you know, the biggest one, I think there is two that immediately come to mind. The budgeting process is a protracted multiyear process. And your ability to influence it in the near term is somewhat limited Hondo. You know, when I walked into the DOD, which would have been early 2018, that budget year was already done in 2019, was close to being locked down. And if you are going to do a large digital transformation program, unless you can miraculously go get brand new dollars, what you are really trying to do is take your existing budget, and re pivoted towards digital monetization, that is very hard to do in government a lot easier to do in the private sector. You know, you go to your board, you go to your CEO, your CFO, you give them the business case about why you need to redirect, it has done. You know, in government, I had to go meet with members, staff members of the various committees that meet with individual senators, even inside the mechanism of the Pentagon trying to redirect money. So that would be one I would say budget makes near term digital transformation challenging at best two would be the entire acquisition process. So, I remember when we started up the AI joint Artificial Intelligence Center you know, once I could get funding, then it was well now you must start the acquisition process to go out and find the appropriate partners you want to work with. And then in the process is not set up for speed is set up for thoroughness set up for fairness is set up for to quote unquote, maximize every taxpayer dollar. But we must understand that moving with speed and digital monitors They should. And then taking advantage of how do you embrace the acquisition process is a contradiction. acquisition process does not equal speed, I am not trying to be critical the acquisition process, I am just trying to be very pragmatic about the fact that it is set up to be a very long-drawn-out process. And even if you think you have got through it, then there's protest. And sometimes you must go back and redo things. Personally, I think the government can learn about acquisition from the private sector, and still maintain what I would call the spirit of what they were intentionally trying to do when they put the acquisition process in place. And that is a fair and open competition that gets the best result for the government taxpayer.
Hondo Geurts 30:58
Yeah, I think you make a really important point that, you know, we tend to in big bureaucracies, try and treat everything the same. Because, you know, we love standardization, because then we believe we can train people to the standard, but buying an aircraft carrier and buying a piece of IT equipment should not be the same. Yeah, we try and go there. And I do like your idea of learning from the private sector, that that there are better ways to do these, these kinds of things.
Dana Deasy 31:27
You know, you it is an interesting point you make about aircraft career versus buying a piece of software. I mean, let us, let us think about the for the digital age came about, it was a very hard, you know, hardware asset driven acquisition process inside the DOD, you know, multiyear acquisition to buy a sub a plane, aircraft carrier. And I think those processes carry over as digital transformation started to occur across the DOD, and not just the DOD, all parts of government, for that matter. And I do not think it is caught up. Which is why I think a lot of young companies struggle when they come into the DOD, because they see themselves selling a very purposeful, unique software to solve a very specific problem. And yet, they can get sometimes tossed into that large acquisition hardware mindset process. And you can see where the divide can start to curve between the private sector and governments.
Lauren Bedula 32:41
What is cool sitting here with both of you, and something that comes to mind, to me is COVID, you are both lead in significant leadership positions with regards to it, transformation. And Honda on the acquisition side, what happened during COVID? Did it help us move in the right direction? Or any stories? You can tell our listeners there?
Dana Deasy 33:03
Yeah, I mean, I would love to hear Hondo your views on it mine was, you know, the old expression about when you have a crisis, take advantage of it. You know, the daunting task that I got asked was, hey, we may have to move upwards of a million people out of their normal work environment, and have them work from home. And, you know, let us face it, we were not set up. I mean, the DOD is not set up for people to work from home. It is set up for people to come into the bases come into the Pentagon, wherever that might be. So, it was truly extraordinary to think that in less than about two and a half months, we had put in place a collaboration tool and solution that allowed over a million people to work from home. Now think about that, if I had gone into the joint staff, the secretaries of the various services, the acquisition heads and said, I have got a solution that will allow us to have over a million people inside the DOD work from home in a secure way. And we will have everybody on board using the common solution in under 60 to 75 days, I never would have gotten to the first page of the PowerPoint, Chuck. People would have thought this guy has lost the plot and they probably would have been out looking for a new CIO. But that is exactly what we did. Everybody stepped up, the security team stepped up that could work in a different way the acquisition team stepped up the whole machinery including Congress, everybody knew that we were facing a real crisis and that we were not going to be able to use the normal methods, techniques, and practices. So, for me, that was a real litmus test, the government can move darn fast and do some extraordinary things when their backs are against the wall.
Hondo Geurts 35:12
Yeah, I would, I mean, again, what you did Dana and the team was Geurts 35:12 amazing. What comes to mind is three things, right? When you can put it in a context of a mission outcome, then the bureaucracy, you know, and everybody agrees we need to achieve this outcome. You know, that is important. The second piece is talent. And, you know, Dana, one of the things you did was recruit other versions of you had the great pleasure of working with Aaron Weiss in the Navy, you know, an errand I teamed up. And so, I do think, you know, besides the examples of what is possible, it is also a good litmus test on what talent and bringing, you know, cross, cross-fertilizing talent allows an organization to do. The trick is how do we do that as a normal course of business, not just as a crisis course of business? Now, one of the, I think, unique challenges, I would like your opinion, a little bit on Danish, and, you know, at least in the Navy, I think we had when I got there, 261 different. Now, unclassified networks, and you know, probably double out, if we counted everything else, we had all this, all these anchors, we were dragging, which made modernization really, hard. Because, you know, the cyber certify it, it just became, you know, just overly complex. Do you think we have done a good enough job of, you know, killing off all these old legacy workaround systems? Or is there still more work to go there? If the DOD is really going to get on a high iteration speed, you know, modernized in place kind of mindset?
Dana Deasy 36:47
Yeah, I mean, Hondo, simply put, we have a long way to go still, there, there is still a lot of legacy. I think that legacy is not only I mean, we tend to think in terms of the application, the end user, the person the service use, but it is hardware, it is networks. It is everything. I think the big aha, for me there in trying to solve that problem is, it's not like you go to work with someone in the Navy, that has the single authority to tell everybody across the Navy, we're on now going to all do x, it gets all the way down to the individual, you know, guy who's the captain of a ship, who actually has the, you know, ultimate authority and responsibility for the integrity and the readiness, of that piece of equipment. And that is no different than an army base. It is no different than planes in the air force. And so, you see where I am going with this is that the DOD is designed and this is one of the great things about the DOD, it is designed to give responsibility down to the lowest level, and allow them to have the autonomy and authority to do the mission that needs to be done. The downside of that is, you are now dealing with the lowest common denominator and trying to solve for any legacy issue, you are down to the individual base, you are down to the individual ship. And that is the complexity that must be solved for you do not want to lose the richness of that autonomy and authority we have given folks. But at the same time, we are never going to move with speed, if we keep it down at the lowest common denominator.
Lauren Bedula 38:32
I am gonna go back to something Hondo talked about which was talent and workforce. Because these initiatives that you speak of Dana would not be done without your team and people. And you talked about your admiration for those serving. But on our show, we talked about how you can serve both in and out of government. What were your What was your take, as you are trying to recruit folks? Did you see this appetite towards service or the patriotism that you talked about? Or how can we drive more interest in terms of talent to these issues, both in and out of governments?
Dana Deasy 39:04
Yeah, I mean, the best way to answer this question, as I think through an example, the best way I found that we could attract young people that were their senior year in college are now getting ready to graduate is to bring a man not so much in an intern but bring them in for a week. So, a series of introductory programs where they can learn the DOD. So, we did this in the cyberspace, where we bring kids out of some of the top cyber universities. Having spent some time with my organization, a couple of the services in the cyberspace have been over spent a day of US Cyber Command NSA. And my goodness, by the time you got to that Friday, they are sitting there going, where do I sign up? Because the mission and what they got exposed to was so cool, so compelling, something they had never seen or even thought that they could do. And so, one of the things that I think all agencies of government have that corporate America can never solve for, is the mission. And all you must do is better educate, and spend some time with this amazing young cadre of talent is coming out of schools. And there is a wake up that Christmas side of them, I saw it time and time again, where they suddenly said, I want to spend some time surfing the country, we have to figure out a way to do that at scale, Lauren, across all agencies, I am absolutely convinced that we can get this young talent in, we won't keep it summer, I'm not going to be naive enough to say that, we're going to keep them for five, six years, but maybe that's okay. You know, maybe if they rotate and need to go back into the corporate world, because it may be for financial reasons or for whatever. That is okay. But I think we are missing a trick here where we are not exposing young talent enough about the mission of what the various agencies of government in this case, the DOD do, and boy, you would see them light up in a conference room, once they understood, I can do that for a living. Now, that is way too cool. Where do I sign up?
Hondo Geurts 41:31
Thank you, Dana. So you've, you know, you and I are both now doing some fun stuff back on outside, you know, seeing a bunch of, you know, this incredible kind of ecosystem of startups and folks trying to scale and Geurts 41:31, and I do think a lot of folks are seeing both the business opportunities and the service opportunities of working with the government, DOD in a way they maybe hadn't five or seven years ago, before Ukraine and before COVID. And before, and now the Israel, Hamas conflict. What are What recommendations would you give to a startup thinking about wanting to work with the DOD, you have talked a little bit about, have some humility and learn, learn the real problems before offering solutions? But I am sure there's other advice you are giving folks when they think they want to do work with the DOD? Could you share Sherman out with our listeners? Yeah,
Dana Deasy 42:28
absolutely. And I have got some strong views on this topic. Because I guess I saw young companies when I was inside the DOD, failing to heed the advice I am about to give. And now today back on the outside helping young companies, I can see it repeating itself. I think the first one is spending more time understanding the mission of who you are going in to see their problems. And do not he do not feel this urgency, you must push your agenda in your product early on. So, I will give you a perfect example. I cannot tell you how many young companies would come in to see minnows at the DOD. And about only 10% and Hondo would take the time and say, Mr. Deasy, let me tell you the problem set I am told you are trying to solve for, let me tell you about the digital transformation that you are trying to put in place. And where we fit into that. All too often young companies were wanting to come in because they only get a 30-minute slot. And they want to push their product or their services as hard as they can on you to try to make an impression. So that's problem number one. Two is, you know, this Hondo, the DOD could just suck you up. I mean, once you have a viable solution is starting to get some legs. If multiple services come after you, we are gonna we are gonna crush you as a young company. So, I think the second thing is to learn how to say no to the DOD. And that is incredibly hard, especially if you are young company and you have a new user or your venture backed or have equity backed firm. And you are going to go tell your board I have just said no, to a potential customer in the DOD, that is hard. But if you do not say no, you are gonna get diluted. And then you are not going to end up being successful. I think the third one is, young companies need to spend more time with their boards, educating them on how long the acquisition process is going to be. Now, the DOD needs to help this we need to help young companies and give them a real list in timeframe from the point that they are going to get to be able to bring a product again, test it, evaluate it till the time it comes out the other end and you see a purchase order. You know, that could be yours, literally. And I think part of the problem is the investors of these young companies do not understand A cycle of government. And so that breaks down. And I think the last one i do not over represent yourself. You know, when a young company would come in and see me and they would say, well, we are in the Department of the Navy. Well, by the time you were done, and you would kind of pull that string, they were in helping one small base somewhere in the US, but they gave you the impression. They are doing something across the I mean, it is disingenuous, you lose credibility. And when you are a young company, you are it is so desperately trying to create credibility as fast as you can. So, you know, do not you know, do not hit your own self goals, so to speak. Just be thoughtful about those things.
Lauren Bedula 45:52
Wow, so much. Great advice there. Dana, thank you so much for coming on the show to share. Not only that advice with entrepreneurs who are looking to support the national security communities, but to everyone looking to serve or maybe pivot from the private sector to government, sharing your story, I think inspires so many and helps folks realize it is possible. So, thanks for taking time out of your busy schedule to share that on today's show. Dana and for everything that you have done in that DOD position.
Dana Deasy 46:22
Lauren and Hondo thank you very much for thinking about me give me a chance to tell my story today.