Better business: Army not always amenable to the ways of corporate America.

• Author: Erwin, Sandra I.
• Position: ANALYSIS

It is a study in contrast that an Army that deploys the world's most modern military force is governed by management rules and practices that no sane corporation would tolerate.

But the Army is not in business to make money, so why should it care about those things that obsess Corporate America, such as efficiency and productivity?

Many of the Army's top leaders in fact are fretting about the way the service manages its resources. They confront an alarming financial situation that is caused by escalating war expenses, wasteful buying practices and costly plans to drastically expand the size of the force.

Commanders also must contend with the endemic inefficiencies and bureaucratic logjams that slow down the delivery of equipment and supplies. With military spending at an all time high, many officers wonder privately how it is possible that many traits are woefully short of essential gear such as armored trucks. If the Army were a corporation, these "customer service" problems would be unacceptable.

About a year ago, a directive from Army Secretary Francis Harvey called for a "business transformation" in the services non-combat operations, such as procurement, logistics and facilities. If the Army could squeeze enough inefficiency and waste out of the system, Harvey reasoned, billions of dollars could be freed up for war-fighting.

In an institutionally recalcitrant Army, however, it could take years, or decades, to realize these goals.

"The Army is a 21st century fighting force but the business apparatus is still a mid-20th century apparatus in terms of organization," says Michael A. Kirby, deputy undersecretary of the Army for business transformation.

Kirby, formerly a defense industry executive, is in charge of introducing modern management techniques to Army business operations that he describes as "antiquated."

Harvey directed that the Army embrace the so-called "lean six-sigma" principles that allow managers to make data-driven decisions. The lean six-sigma movement began in the corporate world more than two decades ago as a way to optimize auto manufacturing. It then evolved as an initiative to improve quality control in the semiconductor industry.

"Six-sigma tries to make decisions based on facts," Kirby says in an interview. The Army industrial depots, for example, have been quite successful at applying these techniques and, in the process, have lowered the costs of repairing military hardware, Kirby says.

But he concedes that the...