Monday, March 2, 2015

Augustine's Laws -- or how your Government really works.

The January 2015 Defense Acquisition Research Journal reprinting of Augustine’s Laws regarding Major Defense System Development Programs.  Although they are probably familiar to those in the defense acquisition business it was my introduction to them. 
Norman R. Augustine first proposed his laws to highlight the problems with government acquisition and program management of major defense items.  Originally written over the course of several years in the late 1970’s and early 80’s they have been unfortunately vindicated by the experiences of the last 48 years.  Mr. Augustine has served in a number of government and industry positions including Chairman and CEO of Lockheed Martin, Secretary of the Army, Chairman of the American Red Cross and President of the Boy Scouts of America.  He has a B.S.E. and M.S.E. in aeronautical engineering from Princeton University, and over 33 honorary Doctorates.
I would like to comment on a few of them, but for those who are interested in his book, Augustine's Laws - Amazon.  (I would note the published set may differ slightly from those originally published in the Acquisition Research Journal (hereafter referred to as ARJ)
Law I:     By the time of the nation’s tricentennial, there will be more government workers in the United States than there are workers.
Mr. Augustine notes that the rise in the percentage of civilian workers employed by all levels of government has been pretty much on a straight line up since the origin of our nation.  Everything since he first wrote this in 1978 supports his conclusion that 100% of our work force will be government employed within the next 50 years. It doesn’t matter if it is a Republican President or Democrat -- more and more government agencies are made and pay salaries that outstrip the commercial standards for all but the top.  Do you wonder who will pay for that? 
Law II:    People working in the private sector should try and save money if at all feasible.  There remains a possibility that it may someday be valuable again.
A review of government receipts as a percentage of Gross National Product suggests that by 2120 the government will have all the money that is generated in the US Economy.  As noted in the first law, that leaves a gap of about 50 years between when everyone works for the government and when they have all the money.  This leaves, as Mr. Augustine surmises, the possibility the last person left in the private sector will have to support the entirety of the nation’s work force.  If we look around I wonder if we are seeing acceleration in the government’s control, through the slowdown of the GNP growth.
Law III:  One-tenth of the people involved in a given endeavor produce at least one-third of the output, and increasing the number of participants merely serves to reduce the average performance.
“The contributions made by a group of people working in a common endeavor tend to be highly concentrated in the achievements of a few… As one digs deeper into the barrel, so to speak, in order to increase manning on a given task, the average output is merely driven downward…”
Law VIII:  In the year 2054, the entire defense budget will purchase just one aircraft.  This aircraft will be shared by the Air Force and Navy 3 ½ days each week, or alternatively, by the Air Force and Navy six months a year, with the USMC getting it every Feb 29th).
Perhaps his most famous law – I think we clearly see the accuracy of his prediction in the cost of modern fighter and bomber aircraft and the continuing reductions in the numbers that are affordable each year.  A simple check of the Air Force Fact sheets available on the AF Public Website shows how valid his observations were.  As Mr Augustine points out this should really be known as Calvin Coolidge’s Revenge, honoring the President who once asked, “Why can’t we buy just one aeroplane and let the aviators take turns flying it?”
Law VII:    There are many highly successful organizations in the United States.  There are also many highly paid executives.  The policy is not to intermingle the two.
To quote from Mr. Augustine’s 1982 article in ARJ, “Law Number XVII examines the incentive system – and demonstrates that managers who produce exceptional results can expect the rewards they receive to be increased.  Unless, of course, those rewards stay the same or go down.”  He goes on to cite that great capitalist Nikita Khruschev who when speaking on the benefits of the incentive program said, “Call it what you will, incentives are the only way to make people work harder.”  Of course, Mr. Khruschev was speaking Russian and something may have been lost in translation or when his shoe hit the podium.
We see the reality of this observation clearly in the marketplace today, with the best and brightest going to such highly incentivized companies as Citicorp, Lehman Brothers, Goldman Sachs and others.  On the government side we have Fannie Mae, Freddie Mac and of course the ever popular and efficient USPS.
I would add that many of the 5o some observations (or laws) deal with the inefficiency of the Congress.  Let’s leave with the thought that Congress as far exceeded even Mr. Augustine’s expectations when it comes to inefficiency and ineptitude.
There is another great management guide called Leadership Secrets of Attila the Hun, but I’ll save that book review for another day.

No comments:

Related Posts Plugin for WordPress, Blogger...