New Ideas, Approaches, Methods, and Tools to Inspire Innovative Thought
It is a true privilege to have U.S. Air Force Colonel Eric Obergfell, who is Special Operations Command (SOCOM) head of contracting and procurement director, as this month’s INNOVATIONS author.
Col. Obergfell draws on lessons from a career spent crafting procurement innovation strategies in organizations as different as the Defense Contract Management Agency and SOCOM. He even spent time at Union Pacific watching the 100-year-old railroad company install maintenance sensors on its train cars and adopt other innovations to drive down operating costs.
His wealth of experience has taught Obergfell that there’s no such thing as a one-size-fits all strategy for changing technique, process, or tools. Instead, he is an advocate of mastering each organization’s mission, culture, and challenges, as well as the fundamentals of the contracting craft. The seemingly mundane work of reading CONOPs and corporate policies, watching how decisions are made, and building relationships is vital to crafting successful innovation pitches, he writes.
It’s only after mastering contracting fundamentals that professionals can iterate on new strategies to speed the process and deliver better solutions.
Learn how industry ticks, he advises, and plumb the intricacies of financial markets and startup methods. He even lists online courses and videos to help you do it.
BY ERIC OBERGFELL, CPCM
I have sought to lead procurement innovation as a contract specialist, contracting officer, supervisor, and head of contracting agency, with some success and many failures along the way. In my view, procurement innovation is deliberate or emergent change to the techniques, processes, or tools unique to procurement for a specific organization—and it is critical to national as well as corporate survival. Accomplishing it requires us to develop and empower procurement professionals at every level to internally innovate.
As an industry fellow, I watched in awe as a more than 100-year-old railroad combined its procurement department and a process improvement team to drive down their operations ratio—operating expenses as a percentage of revenue—while improving research and development focus. This team was instrumental in achieving one of the lowest operating ratios in the industry through initiatives such as improving train length and reducing staffing. The team also supported research and development to integrate sensors on train cars to identify maintenance needs early and enable repairs before accidents.
As a government acquisition insider, I’ve observed how the growing demands from Congress to improve federal acquisition have spurred creation of rapid capability offices, pitch days, procurement labs, “WERX” organizations, and use of non-FAR authorities, to name just a few. Each of these initiatives targeted a unique problem for a specific team, but each can be tailored to solve other problems or find opportunities.
In my last two jobs I have aggressively sought procurement innovation strategies, first as leader of a regional Defense Management Contract Agency (DCMA) team, and now as director of procurement for U.S. Special Operations Command. Through these attempts to shape strategy, I learned the importance of understanding the mission, culture, and challenges of the organization.
In my view, this role called for a procurement innovation strategy of sustainment or incremental improvement. We used Lean principles to identify and solve the most important problems and opportunities for the warfighters we supported. We committed to a culture of efficiency-driven growth and excellence: our EDGE.
This type of procurement innovation strategy encouraged all levels of our team to work together to identify and solve problems. As a geographically dispersed team, we had challenges collaborating in the beginning, but this quickly became an advantage when we learned the differences in how each office executed similar tasks. The most exciting results of the culture we created were the recognition individuals and teams received for submitting ideas and solving problems, and the confidence we built in finding opportunities and solving any problem we faced.
The SOF enterprise delivers extremely quick acquisition and contract development through very flat, operator-informed small teams. Close involvement with operators that employ the weapons we buy fosters a culture of extremely high expectations for speed, process accountability, and managed risk.
My first two attempts at deliberate innovation planning with the SOCOM procurement team were unsuccessful. We prioritized problems and opportunities but struggled to get resources in an environment of relentless urgent requirements.
As I better understood the SOF AT&L culture, I came to realize that it forced an emergent procurement innovation strategy of testing and quickly iterating on concepts to shape them to our needs. We are quick to try and either buy into or discard new procurement processes or tools. Rather than a rigid hierarchical structure, we execute more as Gen. Stanley McChrystal describes in his book Team of Teams: as an “agile, adaptable network of teams and decentralized decision-making.”
I realized that my role within SOCOM is to recognize teams that find success with new processes and/or techniques, then share those innovations with others, while shaping policy to scale the successes. In addition to the emergent procurement innovation that the middle of the organization is driving, we created a data science team to find ways to take on opportunities to innovate in procurement process, compliance, category management, workload balancing, and skill development. I found that in this culture, it was best to establish strategic aspirations to guide emergent innovation for the teams designing and executing acquisition strategies while using a deliberate, agile sprint strategy to develop procurement tools through our data science team.
My DCMA and SOCOM experiences provide insight on how important it is to understand an organization’s unique mission, culture, and challenges when shaping a procurement innovation strategy. Both SOCOM strategies were messy and required a lot of work from many people. I know I drove my teammates nuts. I had moments of self-doubt. Still, both DCMA and SOCOM teams excelled—in spite of the strategies, in some cases. In all cases we succeeded because of very talented teammates with a broad range of skills who were determined to find ways to exceed expectations.
I am big fan of David Epstein’s book Range , wherein he theorizes that generalists triumph in situations where the rules of the game are incomplete, unclear, and continuously change, and where feedback is slow or nonexistent. While the Federal Acquisition Regulation (FAR) and its endless supplements might seem to set clear guidelines, and bid proposals provide clear feedback, federal contracting is very broad: There are many contract types, and new authorities are opening new doors.
To prepare to drive procurement innovation strategy today and in the future, I recommend contracting professionals pursue a “range” of training and experiences: focusing on mastering our craft, understanding how decisions are made in our organizations, and studying markets.
Pursuit of Mastery
Although it is impossible to completely master the contracting craft, the pursuit provides us opportunities to innovate. It starts with knowing and continuously seeking to improve the small routine processes and documentation actions we do daily. As we master the basics, we are more capable of iterating on new acquisition strategies that could increase competition, deliver better solutions, or speed the process.
Specific developmental paths, such as Defense Acquisition University (DAU) or corporate certification, are required minimums. Seeking professional certifications such as NCMA’s Certified Professional Contract Manager expands ability to deliver capability. In addition to formal training, I have found that online forums and industry-focused YouTube videos are helpful in bringing innovation to the team. As your skills develop and you find ways to innovate, the next step is to discover where and how decisions about procurement innovations are made in your organization.
Each organization has unique ways of making decisions. These often depend on the leadership team, so they change frequently. Leaders must consistently articulate and demonstrate decision-making processes and innovators must learn them if they hope to have their ideas considered and implemented. Reading Concepts of Operations (CONOPs) and corporate policies, observing, and building relationships are key ways to prepare to pitch innovative ideas at higher levels. As part of your preparation, you also need to get ready to explain the financial implications of innovations you want to propose.
Understanding and Applying Market Knowledge
Many of us in the federal government have limited knowledge of the markets we navigate, and many industries are continuously changing—so we should continue studying this area too.
Industry and government leaders have different incentives to deliver capabilities, and would-be innovators should understand both. On the federal side, courses like DAU’s “Understanding Industry” and recent DAU webcasts cosponsored by the Defense Pricing and Contracts office such as “Striking the Balance: Meeting Warfighters’ Requirements While Achieving Industry Financial Goals” bring market education to the entire community. At SOCOM we host a one-week “Introduction to SOF Acquisition” course in an integrated product team format including industry representatives. The course focuses on key concepts in developing an acquisition strategy for a new program.
Courses such as Yale’s offering of Nobel Laureate Robert Schiller’s “Financial Markets” and Duke’s “Startup Valuation Methods” on Coursera are absolutely excellent in balancing lecture and application. A deeper understanding of markets and incentives prepares us to innovate on business models and contract structures.
Through a range of education, training, and experience specific to contracting skills, and study of your organization’s decision processes and markets, you can supercharge your ability to innovate in procurement.
You can help drive your team’s procurement innovation strategy starting today. Learning your organization’s mission, culture, and challenges is vital for tailoring a procurement innovation strategy. Consistent engagement is key. Focused study to strengthen your contracting skills, understand your organization’s decision-making process, and learn about markets will better equip you to deliver procurement innovation.