The Defense Logistics Agency

Leveraging Corporate Culture To Improve Bottom-Line Performance

DoDs ONLY Logistics Combat Support Agency . . . Supporting the Military Services & Combatant Commanders for Over 40 Years

The DLA Enterprise

FY02 Sales/Services: $21.5B FY03 Sales/Services: $24B (est)
Supply: $18.7B Annually Land/Maritime/Missiles: $2.3B Aviation: $2.7B Troop Support: $7.8B Energy: $5.9B Distribution: $1.4B Other: $1.4B

Scope of Business
#78 Fortune 500 - Above Lockheed Martin Tops in Top 50 Distribution Warehouses 1312 Weapon Systems Supported 132.3M Annual Net Barrels Fuel Sold $13.5B Annual Reutilizations/Disposals 23.3M Annual Receipts & Issues 22 Distribution Depots 4,000 Contracts/Day 30,000 Requisitions/Day

Foreign Military Sales

Sales: $719M annually Shipments: 670M annually Supporting 24 Nations

People
21,000 Civilians 488 Active Duty Military 618 Reserve Military Located in 48 States/28 Countries

Defense Logistics Agency

CORPORATE STAFF

Business Units
DSC Columbus, OH Maritime/ Land/ Missiles

DSC Philadelphia, PA Troop Support

DSC Richmond, VA Aviation

Energy Support Center Ft Belvoir, VA

Defense Distribution Center, New Cumberland, PA

Other Service Areas

Defense Reutilization & Marketing Service
Defense National Stockpile Center Defense Logistics Information Service Defense Automation & Production Service DLA Pacific

DLA
Europe

What We Want DLA To Be Tomorrow

FY 04-09
Characteristics: Transformation Plan: Light and Agile Business Systems Modernization Smaller Footprint Strategic Distribution Knowledge Based Competitive Sourcing Integrated Processes Shift to Commercial Practices Service Oriented Collaboration with Customers Proactive

Business Systems Modernization

Incorporating Commercial and Best Practices Via Commercial off-the-Shelf (COTS) Based Tools Replacing 30-year old Legacy Information System with State of the Art Technologies Major Reengineering Effort From Functionally Stove-Piped Segments to Cross-Cutting Enterprise-Wide Processes

Projected FY 04-09 Savings = $399M

Why Worry about Culture?

Culture As A Barrier
Culture can be a major barrier to the implementation of an organizations strategic objectives

Ignoring the underlying cultural foundations means that the same old patterns will continue to show up

PMA, OMB & OPM Integrate Culture into Performance Goals

Presidents Management Agenda -- Strategic Management
of Human Capital initiative integrates aspects of culture.

Office of Management and Budget (OMB) Scorecard -Government needs to Sustain High-Performing Workforce that is Continually Improving Productivity.

Office of Personnel Management (OPM) Scorecard -Performance Goals:

Agency Fosters a Climate that Values Diversity. A Culture of Learning and Growth Exists. Strategic Awareness.

What is Culture ?

Culture: A Definition
The shared set of assumptions, beliefs, values, and behavioral patterns of a group that guide that groups perceptions, judgments, and actions

Culture
is like the operating system of the organization. It guides what people think and how they act and feel

Culture is not
just an espoused list of values developed by a group of executives at an offsite
Kumbaya

The IDEAL you desire

may be very different from the REALITY you live

FROM TANGIBLE TO DEEPLY EMBEDDED AND UNCONSCIOUS

LEVELS OF CULTURE

Artifactsconcrete, visible expressions and overt behavior patterns

Norms--behavioral expectations Conscious, values , beliefs , assumptions and ideology Unconscious values , beliefs, assumptions and ideology

How DLA is Addressing Culture

First, we ensured Strategic Alignment: Strategic Plan Goal 3: Create and Manage a Customer-Focused Corporate Culture Balanced Scorecard: Learning and Growth Quadrant LG-2: Create and Manage a Customer-Focused Culture LG-2A: Leadership Assessment: Modeling the Desired Culture LG-2B: Employee Perceptions of the DLA Culture Second, we identified the desired aspect of corporate culture necessary to accomplish strategic goal (customer-focused). Finally, we assessed the current culture based on the desired culture and have Culture Champions conducting organization development activities to close gaps.

DLA adopted a performance-based culture model/assessment/360degree leader feedback tool containing the desired aspects of culture necessary to accomplish its strategic goal of Creating and Managing a Customer-Focused Corporate Culture

Denison Culture Model

Objectively Measuring Culture

Strategic Direction and Intent - Clear strategic intentions convey the organization's purpose, make it clear how everyone can contribute and "make their mark" in the industry. This organization has a clear mission that gives meaning and direction to our work. This organization has a long-term purpose and direction. The strategic direction of this organization is unclear to me. This organization has a clear strategy for the future. Our organization's strategy is leading other firms to change the ways that they compete.

Appointed Agency-/Activity-level Culture Champions helped publicize the desired aspects of culture and are helping their leaders to implement suggested action steps for tangible performance. Transformation activities include organizational development and training needs necessary for culture change.

Cultures are Not Homogeneous

Functional or Departmental Hierarchic

Site

Geographic/Regional

Old/New Divisional

Culture and Leadership

Culture and Leadership

Culture and leadership are two sides of the same coin and neither can be understood by itself.
Edgar Schein

What Senior Management Believes

What Employees See

Employees work together in teams Employees are given a great deal of autonomy Risk taking and creativity are encouraged There is an atmosphere of trust Change is embraced Employee empowerment is high Organization is customer-focused Social relationships are encouraged Procedures are flexible and informal

Denison Leadership Model

Adaptability
PatternsTrends Market Place

Mission
Direction..Purpose..Blueprint

Translating the demands of the business environment into action Are we listening to the marketplace?

Defining a meaningful long-term direction for the organization Do we know where we are going?

Involvement
Commitment..Ownership..Responsibility

Consistency
SystemsStructuresProcesses

Building human capability, ownership, and responsibility Are our people aligned and engaged?

Defining the values and systems that are the basis of a strong culture Does our system create leverage?

Every Leader Needs to Have Skills in These Four Areas!

These Four Concepts are Used to Define Leadership Skills

When it comes to establishing or changing a culture the leader sets the tone