Aviation Acquisition: A Comprehensive Strategy Is Needed for Cultural
Change at FAA (Chapter Report, 08/22/96, GAO/RCED-96-159).
Pursuant to a congressional request, GAO reviewed the Federal Aviation
Administration's (FAA) management of its acquisition process, focusing
on: (1) whether the FAA organizational culture has contributed to
persistent acquisition problems; and (2) potential management
improvements that could result from FAA organizational change.
GAO found that: (1) the FAA organizational culture has been an
underlying cause of FAA acquisition problems; (2) employees' attitudes
do not reflect FAA focus on accountability, coordination, or
adaptability; (3) FAA acquisition officials make little or no mission
needs analyses, set unrealistic cost and schedule estimates, and begin
production before systems development and testing is completed; (4) FAA
fails to enforce accountability for defining systems requirements or for
contract oversight; (5) the hierarchical FAA structure fosters a
controlling environment, diminishes employee empowerment, and impedes
information sharing; (6) FAA operations and development divisions have
separate and distinct lines of authority and communications, which
impedes coordination; (7) FAA officials are resistant to making needed
changes in their acquisition process because FAA culture rewards
conservatism and conformity and discourages innovation; (8) recognizing
its need to improve the acquisition process through cultural change, FAA
implemented a reform effort based on cross-functional, integrated
product teams, and introduced a new acquisition management system; (9)
FAA believes the product teams will improve accountability and
coordination and infuse a more mission-oriented focus into the
acquisition process; and (10) FAA has approved only one product team
plan because it is still having difficulty in gaining the strong
commitment of all employees who have a stake in the acquisition process
and in forging partnerships across organizational divisions.
--------------------------- Indexing Terms -----------------------------
REPORTNUM: RCED-96-159
TITLE: Aviation Acquisition: A Comprehensive Strategy Is Needed
for Cultural Change at FAA
DATE: 08/22/96
SUBJECT: Systems conversions
Federal agency reorganization
Accountability
Agency missions
Air traffic control systems
Federal procurement
Concurrency
Requirements definition
Navigation aids
Interagency relations
IDENTIFIER: FAA Air Traffic Control System
FAA Air Traffic Control Modernization Program
FAA Advanced Automation System
FAA Mode Surveillance Systems
FAA Air Route Surveillance Radar-4
FAA Airport Movement Area Safety System
FAA Automated Terminal Doppler Radar Warning System
FAA Airport Surveillance Radar Program
Microwave Landing System
Instrument Landing System
FAA Integrated Product Development System
FAA Acquisition Management System
FAA Initial Sector Suite System
FAA Airport Surface Detection Equipment Radar
FAA Aviation Weather Observing System
FAA Flight Service Automation System
FAA Integrated Terminal Weather System
FAA Voice Switching and Control System
NWS Automated Surface Observing System
FAA Real-Time Weather Processor
FAA Oceanic Display and Planning System
NAVSTAR Global Positioning System
GPS
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Cover
================================================================ COVER
Report to the Chairman, Subcommittee on Transportation and Related
Agencies, Committee on Appropriations, House of Representatives
August 1996
AVIATION ACQUISITION - A
COMPREHENSIVE STRATEGY IS NEEDED
FOR CULTURAL CHANGE AT FAA
GAO/RCED-96-159
Aviation Acquisition
(341469)
Abbreviations
=============================================================== ABBREV
AAS - Advanced Automation System
ADL - Aeronautical Data Link
AMASS - Airport Movement Area Safety System
ARA - Office of the Associate Administrator for Research and
Acquisitions
ARSR - Air Route Surveillance Radar
ASDE - Airport Surface Detection Equipment
ASOS - Automated Surface Observing System
ASR - Airport Surveillance Radar
ATC - air traffic control
ATS - Air Traffic Services
AWOS - Aviation Weather Observing System
CAMI - Civil Aeromedical Institute
CNA - Center for Naval Analyses
FAA - Federal Aviation Administration
FSAS - Flight Service Automation System
FQI - Federal Quality Institute
GAO - General Accounting Office
GPS - Global Positioning System
ILS - Instrument Landing System
IPDS - Integrated Product Development System
IPT - Integrated Product Team
ITWS - Integrated Terminal Weather System
JSS - Job Satisfaction Survey
MLS - Microwave Landing System
Mode S - Mode Select
ODAPS - Oceanic Display and Planning System
OMB - Office of Management and Budget
OTA - Office of Technology Assessment
TDWR - Terminal Doppler Weather Radar
VSCS - Voice Switching and Control System
IBM -
TWA -
COMPUSAT -
Letter
=============================================================== LETTER
B-265985
August 22, 1996
The Honorable Frank R. Wolf
Chairman
Subcommittee on Transportation
and Related Agencies
Committee on Appropriations
House of Representatives
Dear Mr. Chairman:
In response to your request, this report discusses how organizational
culture has contributed to the persistent acquisition problems at the
Federal Aviation Administration (FAA). The report also presents a
recommendation to the Secretary of Transportation on the steps that
FAA can take to strengthen its acquisition management by changing its
organizational culture.
We are sending copies of the report to the Secretary of
Transportation and interested congressional committees. We will also
make copies available to others upon request.
I can be reached at (202) 512-2834 if you or your staff have any
questions. Major contributors to this report are listed in appendix
V.
Sincerely yours,
John H. Anderson, Jr.
Director, Transportation Issues
EXECUTIVE SUMMARY
============================================================ Chapter 0
PURPOSE
---------------------------------------------------------- Chapter 0:1
In light of the steady growth in air traffic operations and the
failures of aging equipment in the air traffic control (ATC) system,
the Federal Aviation Administration's (FAA) timely acquisition of new
ATC equipment has become increasingly critical for aviation safety
and efficiency. FAA estimates that it will need $13 billion over the
next 7 years to continue its modernization program. However,
persistent acquisition problems raise questions about the agency's
ability to field new equipment within cost, schedule, and performance
parameters.
Concerned about recurring problems with FAA's acquisitions, the
Chairman, Subcommittee on Transportation and Related Agencies, House
Committee on Appropriations, asked GAO to review the agency's
management of the acquisition process to (1) determine whether the
organizational culture\1 contributed to FAA's acquisition problems
and (2) identify how FAA could improve its management of acquisitions
through cultural change, if culture is a contributing factor.
--------------------
\1 "Organizational culture" is the underlying assumptions, beliefs,
values, attitudes, and expectations shared by an organization's
members that affect their behavior and the behavior of the
organization as a whole.
BACKGROUND
---------------------------------------------------------- Chapter 0:2
Over the past 15 years, FAA's modernization program has experienced
substantial cost overruns, lengthy schedule delays, and shortfalls in
performance. The long-time centerpiece of this modernization
program--the Advanced Automation System project--was restructured in
1994 after estimated costs tripled to $7.6 billion from $2.5 billion
and delays in putting key components into operation were expected to
run 8 years or more. For five other major projects, increases in
per-unit costs have ranged from 50 to 511 percent, and schedule
delays have averaged almost 4 years. Shortfalls in performance have
also affected many projects. For example, although FAA awarded a
production contract for the Mode Select radar in 1984, FAA was not
able to field its first full performance radar until February 1995.
GAO's work over the years has pointed to technical difficulties and
weaknesses in FAA's management of the acquisition process as the
primary causes for FAA's recurring cost, schedule, and performance
problems. For example, FAA underestimated the technical complexity
of developing systems, particularly those involving extensive
software development. Also, FAA did not analyze its mission needs,
performed flawed or limited analyses of alternative approaches for
achieving those needs, and performed inadequate oversight of
contractors' activities.
Organizational culture is a managerial factor that GAO has examined
in its reviews of acquisition management at other federal agencies,
such as the Departments of Defense and Energy, but not at FAA.
Organizational theory and research describe an interdependent
relationship between employees' beliefs, values, and attitudes--the
basis of an organizational culture--and their individual and
collective behaviors. Moreover, this culture is affected by forces
both within and outside of the organization. Internal forces include
the organization's structure, incentive systems, and leadership
exercised by top management, while external forces include the needs
of customers and, in the case of government agencies, congressional
committees and Members of Congress.
Research has shown that organizations with more constructive cultures
perform better and are more effective. In organizations with a more
constructive culture, employees exhibit a stronger commitment to
-- mission focus: pursuing goals that define the best course of
action for an organization;
-- accountability: empowering employees and holding them
responsible for their decisions and actions;
-- coordination: involving other employees in decisions affecting
them, resolving differences collaboratively, and cooperating
across organizational lines; and
-- adaptability: accepting new approaches and responding
positively to demands and opportunities posed from within and
outside of the organization.
GAO focused on these four areas in determining whether FAA's culture
affected its acquisitions.
To perform its analysis, GAO drew extensively on studies by FAA and
other organizations, recent surveys of FAA employees who are working
on acquisitions, and GAO's discussions with top agency officials and
other stakeholders in the acquisition process. GAO also reviewed
studies on organizational change and culture in the public and
private sectors.
RESULTS IN BRIEF
---------------------------------------------------------- Chapter 0:3
FAA's organizational culture has been an underlying cause of the
agency's acquisition problems. Its acquisitions were impaired
because employees acted in ways that did not reflect a strong
commitment to mission focus, accountability, coordination, and
adaptability.
To its credit, FAA has recognized the need to improve its acquisition
management process through cultural change. In November 1994, the
agency began to implement a reform effort based on the creation of
integrated product teams. The teams, which comprise representatives
from various divisions across the agency, are responsible for
acquiring systems and ensuring that they are installed and working
properly. FAA expects the teams to improve accountability and
coordination and infuse a more mission-oriented focus into the
acquisition process. FAA has made some progress in implementing its
reform effort. One concern, however, is the agency's difficulties in
gaining the strong commitment of all employees who hold a stake in
the acquisition process. As currently designed, the reform effort
does not address how that commitment can be obtained.
PRINCIPAL FINDINGS
---------------------------------------------------------- Chapter 0:4
FAA'S CULTURE IS AN
UNDERLYING CAUSE OF
LONG-STANDING ACQUISITION
PROBLEMS
-------------------------------------------------------- Chapter 0:4.1
In discussing why FAA's acquisitions were problematic, FAA's top
officials and the external observers who have studied FAA's
management, such as the Center for Naval Analyses and the National
Research Council, focused on the role of FAA's culture. Their
observations led GAO to reexamine the behavior of the stakeholders in
the acquisition process and review such data as the results of FAA
employee surveys. GAO found that the employees' attitudes and
behaviors--in the areas of mission focus, accountability,
coordination, and adaptability--pointed to FAA's culture as an
underlying cause of the agency's acquisition problems.
MISSION FOCUS
------------------------------------------------------ Chapter 0:4.1.1
Ultimately, the goal of any acquisition program is to acquire only
essential equipment and field it within agreed-to cost, schedule, and
performance parameters. In organizations with more constructive
cultures, employees are more customer-focused and more actively
pursue goals that define the best course of action for the
organization.
In reviewing FAA's acquisition problems, GAO found that agency
officials acted in ways that did not reflect a strong commitment to
its acquisition mission. They performed little or no mission needs
analysis, set unrealistic cost and schedule estimates, and proceeded
into the production of systems before having completed their
development.
They also suppressed bad news. For example, in reporting when the
Air Route Surveillance Radar, the first new long-range radar, would
become operational, FAA officials announced delays in 5 of the past 6
years. While a certain level of technical problems in commissioning
a complex new radar can be expected, the consistent pattern of
reporting that the radar was almost ready, followed by annual delays,
indicates that officials were not disclosing the full extent of the
difficulties being encountered. In its 1994 report on FAA's
acquisition of the Advanced Automation System, the Center for Naval
Analyses discussed how organizational incentives discouraged
reporting news of cost increases, schedule delays, and performance
problems. According to the Center's report, the suppression of bad
news prevented top management from taking early action.
It is easy to understand how certain organizational incentives could
cause employees involved in federal acquisitions, including FAA
officials, to act in ways that do not reflect a mission focus. By
analyzing mission needs, they risk raising questions about the need
for "their" projects. By establishing realistic cost estimates, they
may endanger the approval of near-term funding. By surfacing
problems, they may expose their projects to heightened managerial and
congressional oversight and risk criticism for their decisions and
actions.
An analysis of FAA's 1993 survey of employees involved in
acquisitions of air traffic control equipment concluded that
considerable energy must be devoted to survival instead of mission
accomplishment. Responses to a May 1995 survey of these employees
indicated that a large percentage were concerned about the
consequences of reporting bad news:
-- A majority of the respondents (62 percent) agreed that employees
are often hesitant to say what they really think for fear of
retaliation.
-- Nearly half (45 percent) of the respondents disagreed that
pointing out when promised deadlines or deliverables are not
realistic would not be held against them.
ACCOUNTABILITY
-------------------------------------------------------- Chapter 0:4.2
Employees feel more empowered and are more likely to be held
responsible for decisions and actions in organizations with more
constructive cultures. In reporting on FAA's acquisitions, several
observers have found that accountability was not well-defined or
enforced for decisions on requirements and oversight of
contracts--two essential responsibilities in managing acquisitions.
For FAA's acquisition of the Airport Movement Area Safety System,\2
the National Transportation Safety Board found that the agency's
failure to establish accountability for determining the requirements
of the system delayed its implementation. The Safety Board concluded
that if the system had been implemented on schedule, a fatal accident
at a St. Louis airport may have been prevented. For the acquisition
of the Advanced Automation System, the Center for Naval Analyses
reported that FAA did not enforce such normal contract management
procedures as continuously monitoring expenditures, milestones, and
deliverables. GAO reported that weak oversight of the contractor was
a contributing factor in the cost overruns and schedule delays in
implementing that system.
According to internal and external observers of FAA's acquisition
process, the agency's hierarchical structure has fostered a
controlling environment in which employees do not feel empowered to
make decisions or are not held accountable for the decisions they do
make. In 1991, the National Research Council described FAA's
organizational culture as a rigid hierarchy in which "upward
communication is weak and personnel are expected to do what they are
told without challenge." About 80 percent of the respondents to the
May 1995 survey of employees involved in acquisitions stated that
four or more layers of management review are between them and the
head of their division. More than half (52 percent) disagreed that
needed information flowed up and down freely in their division.
--------------------
\2 This system was designed to ensure the safety of traffic movements
on airport runways and taxiways by detecting potential incursions and
notifying air traffic controllers.
COORDINATION
-------------------------------------------------------- Chapter 0:4.3
In organizations with more constructive cultures, employees are more
likely to involve others in decisions affecting them and resolve
differences collaboratively. In FAA, ineffective coordination
between system developers and operators led the agency to acquire
systems that cost more and took longer to implement. For example,
installations of new terminal doppler weather radars and airport
surveillance radars were delayed because the project offices did not
coordinate with field offices to ensure that sites suitable for
installing these systems had been acquired.
One major factor impeding coordination is FAA's organization of key
players in the acquisition process into different divisions whose
stovepipes or upward lines of authority and communications are
separate and distinct. Because FAA's operational divisions are based
on a functional specialty, such as engineering, air traffic control,
or equipment maintenance, getting the employees in these units to
work together has been difficult. Internal and external studies have
found that the operations and development sides of FAA have not
forged an effective partnership.
ADAPTABILITY
-------------------------------------------------------- Chapter 0:4.4
Employees are more receptive to change and respond more positively to
demands and opportunities posed from within and outside of their
organization when that organization has a more constructive culture.
FAA's acquisitions were impaired when employees resisted making
needed changes in the agency's decisions on acquisitions. The
Microwave Landing System was one acquisition in which FAA officials
resisted change despite powerful reasons to reconsider their
decision. In the 1970s, because of limitations in its Instrument
Landing System and the expected large growth in air traffic
operations, FAA decided to replace this system with the Microwave
Landing System. Despite pressure from such user groups as the
airlines and general aviation, evidence that the Instrument Landing
System had been improved, lower-than-expected growth in air traffic,
and the emergence of satellite-based navigation technology, FAA
resisted changing its decision to acquire this system into the early
1990s.
Organizational incentives fostering the status quo have been cited in
various studies and in the results of employee surveys as a key
factor that helps to explain why employees resist change. The 1991
National Research Council report concluded that FAA must change its
incentive system from a bureaucratic one that rewards those who
"don't make waves" to one that encourages innovative behavior. A
1994 study for the Department of Transportation described FAA's
culture as one that emphasizes conservatism and conformity,
discourages innovation, and rewards employees for following rules.
The results of the May 1995 employee survey questioned management's
support for change. Half of the respondents disagreed that
management is open and responsive to change, and only 20 percent of
the respondents agreed that employees are given "soft landings" when
innovations result in failure.
FAA HAS BEGUN EFFORTS TO
CHANGE ITS ACQUISITION
CULTURE
-------------------------------------------------------- Chapter 0:4.5
According to organizational theory and research, large-scale cultural
change is a complex and time-consuming undertaking that requires a
comprehensive strategy to create real and lasting improvements. The
larger the organization, the more variables that tend to maintain the
status quo and, thus, have to be manipulated to bring about desired
changes. Efforts to achieve cultural change typically take 5 or more
years to fully implement.
Recognizing the need to improve its acquisition management and change
its organizational culture, FAA began a reform effort in November
1994 called the Integrated Product Development System. This reform
effort is based on using cross-functional, integrated product teams
that are responsible for ensuring that air traffic control systems
are developed and implemented properly. The goals of these teams are
to improve accountability and coordination and infuse a more
strategic, mission-oriented focus into the acquisition process. Team
members include representatives from the engineering division as well
as from the divisions that operate and maintain air traffic control
equipment. In addition, FAA announced a new Acquisition Management
System on April 1, 1996, which is intended to improve acquisitions by
creating a more comprehensive, life-cycle focus on acquisitions;
promoting innovation in contracting approaches; and developing an
environment of continuous learning among acquisition employees. FAA
identifies its Integrated Product Development System as an
"implementing arm" of its new Acquisition Management System.
While it is too early to identify the results of the new Acquisition
Management System, FAA has made some progress in implementing its
reform effort by creating 13 integrated product teams and training
and collocating team members. For example, to enhance the required
skills of the team members, FAA developed a program for training them
to work together more effectively, make decisions more
collaboratively, and resolve conflicts more constructively. In a
complementary action, the divisions responsible for operating and
maintaining FAA's air traffic control equipment have restructured
their units that set requirements to align with the integrated
product teams.
Some areas for concern have, however, arisen. As of June 1996, some
19 months after the Integrated Product Development System was
announced, FAA has still approved only one team's plan. Each team
plan is important because it defines the roles and empowerment
boundaries as well as establishes operating procedures and
performance measures for that team. Also, GAO's interviews with team
members indicated difficulties in gaining stakeholders' commitment to
the new system and in forging true partnerships across organizational
"stovepipes." These indications were confirmed in a September 1995
internal FAA report, which concluded that two functional stakeholder
divisions had not "bought into" the new system at all, while a third
had bought into the concept at the leadership--but not the
working--level. Another internal review revealed the following
problems:
-- Some officials doubt the long-term viability of the new system.
-- Empowerment supported by top management had been negated by
resistance from functional managers.
-- Some functional managers will not support collocation or conduct
business within this team structure.
As currently designed, the Integrated Product Development System does
not address how FAA can gain the strong commitment of all
stakeholders to its reform effort. The system is targeted only
toward members of the 13 integrated product teams (about 500 of the
2,000 employees in the acquisition organization) and 250 other FAA
employees. The system also does little to identify ways to influence
the beliefs, values, attitudes, and behaviors of FAA employees who
are not team members. A comprehensive strategy would define
responsibilities, provide performance measures, and identify
incentives for all stakeholders in the acquisition process to help
make the new system a success and promote a more constructive culture
throughout FAA.
RECOMMENDATION
---------------------------------------------------------- Chapter 0:5
GAO recommends that the Secretary of Transportation direct the FAA
Administrator to develop a comprehensive strategy for cultural
change. This strategy should include specific responsibilities and
performance measures for all stakeholders throughout FAA and provide
the incentives needed to promote the desired behaviors and to achieve
agencywide cultural change.
AGENCY COMMENTS
---------------------------------------------------------- Chapter 0:6
GAO provided the Department of Transportation with a draft report for
review and comment. GAO met with FAA officials, including the
Director, Office of Acquisitions; the Chief of Staff to the Associate
Administrator for Research and Acquisitions; and the Program
Directors for Air Traffic Plans and Requirements and Airway
Facilities Requirements. These officials generally agreed that the
report accurately described FAA's acquisition problems and correctly
identified its organizational culture as a contributing factor. In
concurring with the report's conclusions and recommendations, they
said that although FAA has made great strides toward changing its
organizational culture, the GAO report is correct in pointing out
deficiencies that may prevent FAA from accomplishing such change.
The Program Director of Air Traffic Plans and Requirements emphasized
that procedural deficiencies, such as weak controls over requirements
changes, have been instrumental in causing past acquisition problems.
He said that changes in acquisition procedures could have an
immediate, beneficial effect on the agency's acquisitions and that
FAA is making those changes. GAO agrees that procedural deficiencies
have caused problems with FAA's acquisitions; over the years, GAO
reports have focused on these deficiencies. However, this review
found that FAA's culture is also a cause, and GAO believes that FAA
is correct in looking to cultural change as an important part of the
solution.
These officials also said that this report should recognize FAA's
many structural and procedural initiatives that could affect its
organizational culture. It was not within the scope of GAO's review
to catalog and evaluate all organizational change initiatives that
could potentially affect FAA's culture. This review focused instead
on the primary reform effort--the Integrated Product Development
System--whose explicit purpose was to improve FAA's acquisition
process by changing the agency's organizational culture. However,
references to some of FAA's initiatives were included, as
appropriate, in the text.
INTRODUCTION
============================================================ Chapter 1
The Federal Aviation Administration's (FAA) primary mission is to
ensure safe and efficient air travel throughout the United States.
FAA's ability to fulfill this mission depends on the adequacy and
reliability of the nation's air traffic control (ATC) system, which
FAA is responsible for managing and maintaining. Growth in air
traffic operations and deteriorating equipment have strained the
current ATC system and FAA's ability to sustain its exemplary safety
record. These factors have increased the urgency for FAA to
modernize ATC equipment.
FAA began its program to modernize the ATC system in the early 1980s.
The program included the acquisition of new radars and automated data
processing, navigation, and communications equipment. As of March
1996, FAA estimated that from 1982 through 2003, the total cost of
this modernization program will be about $35 billion. Through fiscal
year 1996, the Congress will have provided FAA with approximately $22
billion of the $35 billion.
GAO HAS REPORTED ON
LONG-STANDING ACQUISITION
PROBLEMS AT FAA AND IDENTIFIED
CONTRIBUTING FACTORS
---------------------------------------------------------- Chapter 1:1
We have been involved in evaluating FAA's acquisitions of major
systems since FAA began its ATC modernization program. We have
chronicled how FAA's modernization program has experienced
substantial cost overruns, lengthy schedule delays, and performance
shortfalls. Our reviews have traditionally focused on the technical
difficulties and managerial weaknesses that caused these problems.
Until undertaking this review, we had examined the role of an
underlying managerial factor--organizational culture--in acquisition
management at other federal agencies but not at FAA.
COST, SCHEDULE, AND
PERFORMANCE PROBLEMS PERSIST
-------------------------------------------------------- Chapter 1:1.1
The most vivid example of FAA's cost, schedule, and performance
problems was FAA's effort to replace existing display and computer
systems in ATC facilities across the nation. The Advanced Automation
System (AAS), the long-time centerpiece of the modernization program
and the most costly project, was restructured in 1994 after costs
tripled to an estimated $7.6 billion from the 1983 estimate of $2.5
billion and after the planned implementation of key components was up
to 8 years behind the original 1983 schedule.
The critical Initial Sector Suites System segment of the AAS project,
intended to replace controllers' existing work stations at en-route
centers\3 and provide controllers with new hardware and software,
including radar displays, was particularly troublesome. Before
scaling back this segment, FAA was attempting to address several
serious technical problems, such as (1) ensuring that 210 separate
work stations would communicate in a stable network, (2) reducing the
need to revise each software code (on average, every line of software
needed to be rewritten once), and (3) converting a system for
communicating flight information on printed paper strips to an
electronic system.
Unplanned cost increases have characterized many other FAA
acquisitions. Per-unit costs increased substantially for eight of
the nine key projects that we have tracked in our annual status
reports on the ATC modernization program.\4 (Table 1.1 shows the
percentage change in unit costs for the nine projects.)
Table 1.1
Changes in Unit Cost for Nine Major FAA
Projects
(Dollars in millions)
Original 1995 unit Percentage
unit cost cost change in
Project estimate estimate unit cost
------------------------------ ------------ ------------ ----------
Aeronautical Data Link (ADL) $3.049 $2.732 -10
Air Route Surveillance Radar 8.870 9.992 13
(ARSR-4)
Airport Surface Detection 3.961 6.182 56
Equipment (ASDE-3)
Aviation Weather Observing 0.229 0.346 51
System (AWOS)
Flight Service Automation 5.001 6.462 29
System (FSAS)
Integrated Terminal Weather 2.955 6.775 129
System (ITWS)
Mode Select (Mode S) 2.473 3.291 33
Terminal Doppler Weather Radar 5.392 8.104 50
(TDWR)
Voice Switching and Control 10.344 63.169 511
System (VSCS)
----------------------------------------------------------------------
Since beginning the ATC modernization program in the early 1980s, FAA
has completed smaller projects, but efforts to develop and implement
most major acquisitions--such as replacing automated systems and
communications equipment--have suffered extensive delays. As of
March 1996, 74 projects totaling $5.1 billion--only about 15 percent
of the modernization program's overall cost--were completed, and 147
projects remained active. For the nine acquisitions cited above,
delays have averaged almost 5 years per project from original
estimates. (Table 1.2 shows the schedule delays experienced by these
nine projects.)
Table 1.2
Changes in First-Site Implementation
Milestones for Nine Major FAA Projects
Actual/ Original
Original current estimate
Project estimate estimate to 1995
------------------------------ ------------ ------------ ----------
ADL 1993 1995 2
ARSR-4 1988 1996 8
ASDE-3 1987 1993 6
AWOS 1986 1989 4
FSAS 1984 1991 7
ITWS 1999 2000 1
Mode S 1988 1994 6
TDWR 1992 1994 2
VSCS 1989 1995 6
----------------------------------------------------------------------
Performance shortfalls have also affected many projects and have
caused rework, redesign, and even cancellation of projects. The
following three key projects that we have reviewed are examples.
-- The Automated Surface Observing System (ASOS) is designed to (1)
measure wind speed, temperature, cloud height, visibility, and
the types and amounts of precipitation near airport runways and
(2) send computer-generated information to pilots. Although FAA
had procured more than 350 ASOS units by May 1995, few had been
commissioned by the end of that year because of technical
difficulties. For example, we reported in April 1995 that six
of the eight sensors in the system did not meet key contract
specifications for accuracy or performance. Furthermore, the
system's overall reliability during testing was only about
one-half or less of the required levels.\5
-- The Air Route Surveillance Radar-4 (ARSR-4) is designed to track
aircraft and weather. Persistent technical problems--most
recently, difficulties in developing software and integrating
this radar with other ATC systems--have delayed its
implementation for years.
-- The Mode Select (Mode S) radar is designed to (1) identify,
locate, and track aircraft by using radar signals to obtain
information from up to 700 individual aircraft at a time and (2)
provide users with a communications channel between aircraft and
ground facilities. Although FAA awarded a production contract
in 1984, technical difficulties prevented FAA from fielding a
full-performance radar until this past year.
--------------------
\3 Controllers in en-route centers, also known as air route traffic
control centers, maintain control of aircraft leaving airspace near
the originating airport until the aircraft enters airspace near the
destination airport.
\4 Since the original estimates, FAA changed the quantity required
for seven of the nine projects. To calculate unit costs, we divided
the original and current costs by the number of units--radars, sites,
or facilities--scheduled to be established under the original and
current estimates.
\5 ASOS' problems are explained in Weather Forecasting: Unmet Needs
and Unknown Costs Warrant Reassessment of Observing System Plans
(GAO/AIMD-95-81, Apr. 21, 1995) and Air Traffic Control: Status of
FAA's Modernization Program (GAO/RCED-95-175FS, May 26, 1995).
PROBLEMS ARE CAUSED LARGELY
BY TECHNICAL DIFFICULTIES
AND MANAGERIAL WEAKNESSES
-------------------------------------------------------- Chapter 1:1.2
Our work over the years has pointed to technical difficulties and
weaknesses in FAA's management of the acquisition process as primary
causes for FAA's recurring cost, schedule, and performance problems.
In terms of technical difficulties, FAA has underestimated the
complexity of developing systems, especially highly ambitious ones
that involved extensive software development, such as AAS. FAA's
difficulties in developing software have caused cost overruns and
schedule delays for numerous acquisitions of major systems.
We have also reported recurring weaknesses in FAA's management of the
acquisition process. FAA did not historically manage its
acquisitions of major systems in accordance with the business-like
principles embodied in Office of Management and Budget Circular A-109
and FAA's own acquisition policies. For example, FAA did not analyze
its mission needs and performed flawed or limited analyses of
alternative approaches for achieving those needs. FAA also did not
perform realistic testing before proceeding into full production of
systems and found out later that the systems did not meet the
agency's specifications. Other managerial weaknesses include
inadequate oversight of contractors' performance, difficulties in
resolving issues related to requirements for FAA's various systems,
and problems with securing sites to install equipment.
PRIOR GAO REVIEWS OF FEDERAL
ACQUISITION MANAGEMENT HAVE
ANALYZED THE INFLUENCE OF
ORGANIZATIONAL CULTURE
-------------------------------------------------------- Chapter 1:1.3
Organizational culture is one managerial factor we have examined in
reviews of acquisition management at other federal agencies but not
at FAA. We have defined organizational culture as the underlying
assumptions, beliefs, values, attitudes, and expectations shared by
an organization's members that affect their behavior and the behavior
of the organization as a whole.
In our 1992 report on the acquisition of weapon systems at the
Department of Defense, we found that the Department's organizational
culture contributed to cost increases, schedule delays, and
performance shortfalls.\6 In our view, individuals acted in response
to incentives related to their careers, jobs, program support,
organizational influence, and budget levels. Collectively, these
incentives created an environment that encouraged "selling" and
starting new programs and pushing existing programs ahead despite
development, production, and implementation problems.
In our 1992 report on the Department of Energy, we concluded that the
Department's contract management problems would require a change in
its business philosophy and that its efforts to instill a new
organizational culture were an acknowledgement of the systemic nature
of the problems.\7 Similarly, we reported that the National
Aeronautics and Space Administration would have to change its
organizational culture in order for its contract management
improvement efforts to succeed.\8 Since then, our preliminary work in
evaluating the implementation of the Government Performance and
Results Act of 1993 has shown that effective implementation of this
act will require fundamental changes in the culture of government
management--changing management's focus from what federal employees
are doing to what they are accomplishing.\9
--------------------
\6 Weapons Acquisition: A Rare Opportunity for Lasting Change
(GAO/NSIAD-93-15, Dec. 1992).
\7 High Risk Series: Department of Energy Contract Management
(GAO/HR-93-9, Dec. 1992).
\8 High Risk Series: NASA Contract Management (GAO/HR-93-11, Dec.
1992).
\9 Results-Oriented Management: A Manual for Evaluating
Implementation of the Government Performance and Results Act,
Operating Draft (GAO/GGD, Dec. 2, 1994).
CONSTRUCTIVE ORGANIZATIONAL
CULTURES HAVE SIMILAR
CHARACTERISTICS
---------------------------------------------------------- Chapter 1:2
Organizational theory and behavioral science describe an
interdependent relationship between employees' beliefs, values, and
attitudes and their individual and collective behaviors. Moreover,
these beliefs, values, attitudes, and behaviors do not operate in a
vacuum but are affected by forces both within and outside of an
organization. Internal forces include policies and procedures, an
organization's structure and incentive systems, and leadership
exercised by top management. External forces include the needs of
customers and, in the case of government agencies, congressional
committees and Members of Congress.
Organizational theory and research show that an organization's
culture is more constructive when employees' underlying values,
attitudes, and beliefs cause individuals and the organization as a
whole to behave more often in ways that have desirable results--both
for the organization and its customers. Employees in these
organizations demonstrate a stronger commitment in the following four
areas: mission focus, accountability, coordination, and
adaptability.\10
-- Mission focus refers to the employees' pursuit of goals that
define the best course of action for an organization. An
agency's mission provides the agency with purpose and meaning
and promotes short- and long-term commitment by its employees.
In a more constructive culture, employees are more likely to
think ahead and plan, emphasize quality over quantity, and
subordinate their own needs to the agency's overall mission.
-- Accountability refers to the value an organization places on
involvement, participation, and ownership among its members. A
greater sense of commitment to the organization fosters the
employees' willingness to be held accountable for decisions and
actions. In a more constructive culture, employees are more
likely to take responsibility and work to achieve self-set
goals, give positive rewards to others, and help others to think
for themselves.
-- Coordination refers to the consistency of behavior and the
sharing of beliefs and values by individuals and groups within
an organization. Such consistency facilitates the exchange of
information and fosters coordinated efforts. In a more
constructive culture, employees are more likely to involve
others in decisions affecting them, openly share information,
resolve differences collaboratively, cooperate with others in
the organization, and pursue common purposes.
-- Adaptability refers to the employees' capacity to respond
positively to changing demands and opportunities posed from
within and outside the organization. Adaptability enables an
organization to adopt new behaviors and processes (e.g., in
response to emerging technologies and the changing needs of its
customers). In a more constructive culture, employees are more
likely to resist conformity, think in unique and independent
ways, explore alternatives before acting, learn from mistakes,
and be receptive to change.
When an organization and its employees demonstrate a strong, balanced
commitment in these four areas, research shows that the employees are
more likely to be satisfied and the organization will perform better.
Conversely, an organization is less effective when its employees,
both individually and collectively, are less focused on the agency's
overall goals, are held less accountable, coordinate their actions
less effectively, and are more resistant to change.
--------------------
\10 Our description of the attributes of a constructive culture is
based on the theories and research of Dr. Robert A. Cooke,
presented in Organizational Culture Inventory Leader's Guide. Our
description of the four areas is based on the work of Dr. Daniel R.
Denison in Corporate Culture and Organizational Effectiveness.
OBJECTIVES, SCOPE, AND
METHODOLOGY
---------------------------------------------------------- Chapter 1:3
In light of FAA's persistent acquisition problems and our work at
other federal agencies that highlighted a need to change
organizational culture, the Chairman, Subcommittee on Transportation
and Related Agencies, House Committee on Appropriations, asked us to
examine FAA's management of its ATC modernization program to (1)
determine whether FAA's organizational culture has contributed to the
agency's continuing cost, schedule, and technical problems and (2)
identify steps that FAA could take to improve its acquisition
management through changing its organizational culture if that is a
contributing factor.
To accomplish the first objective, we reviewed reports focused
specifically on FAA's acquisitions as well as selected studies and
research on organizational culture. We drew upon analyses of FAA by
other organizations and analyzed the results of FAA employee surveys.
We also discussed these analyses with employees involved in
acquisitions, including members of the integrated product teams, and
with other FAA acquisition stakeholders. We used common theories of
research on organizational culture to link the behaviors of FAA
employees to long-standing problems in its acquisition process. To
document these problems, in reviewing our past reports and
testimonies on FAA's acquisition of ATC systems we concentrated on
reports that had been issued since FAA announced its ATC
modernization program in 1981. A detailed description of key studies
and employee surveys is provided in appendix I.
The body of research on organizational culture is extensive.
Theories describe the behaviors and problems promoted by different
types of organizational cultures and the elements that are essential
for organizational performance and effectiveness. We primarily used
the organizational research results of Dr. Daniel R. Denison,
professor at the University of Michigan's School of Business
Administration; Dr. Robert A. Cooke, consultant for Human
Synergistics/Center for Applied Research, Inc.; and Dr. Joseph
Coffee, Director of National Education Programs at the Department of
Treasury's Bureau of Alcohol, Tobacco, and Firearms. These studies
were particularly useful because they provided us with a framework
for assessing FAA's culture. A description of these studies is
presented in appendix II.
To achieve the second objective, we reviewed a wide range of ways to
manage organizational change, including approaches for reengineering
and applying best practices, that were explained in our past reports
and testimonies and approaches promoted by (1) private consulting
firms, such as Ernst & Young and Coopers & Lybrand; (2) individual
researchers and writers on organizational culture; and (3) national
management organizations, such as the Federal Quality Institute
(FQI),\11 the National Academy of Public Administration, the Defense
Department's Systems Management College, the Association for Quality
and Participation, the American Society for Quality Control, and the
National Performance Review.
We then developed a strategy for successful cultural change by
synthesizing common components of major studies and asked a variety
of individuals involved in federal management issues and research on
organizational culture and theory to review and comment on our
strategy. We then compared FAA's reform effort for changing its
organizational culture with our strategy for managing organizational
change. Specifically, we reviewed FAA's effort to determine if it
contains the components that are essential for successful change. A
list of the individuals we contacted is provided in appendix III.
We conducted audit work from August 1995 through June 1996 in
accordance with generally accepted government auditing standards.
--------------------
\11 FQI was formed in 1988 as a joint effort of the Office of
Management and Budget, the President's Council on Management
Improvement, and the Office of Personnel Management to act as a
catalyst for quality improvement in the U.S. government.
ORGANIZATIONAL CULTURE IS AN
UNDERLYING CAUSE OF FAA'S
LONGSTANDING ACQUISITION PROBLEMS
============================================================ Chapter 2
FAA's organizational culture has been an underlying cause of the
persistent cost overruns, schedule delays, and performance shortfalls
in the agency's acquisitions of major ATC systems. Weaknesses in ATC
acquisitions stem from recurring shortcomings in the agency's mission
focus, accountability, internal coordination, and adaptability.
Multiple forces within an organization--such as its policies,
processes, structure, incentive systems, and leadership exercised by
top management--affect employees' beliefs, values, attitudes, and
behaviors. Each section in this chapter cites various studies and
the results of FAA's employee surveys to illustrate the effects of
these internal forces. While the complexity of the
interrelationships among these internal forces as well as their
interdependence with external forces allows for a variety of
interpretations, our analysis reflects what we found to be common
themes in the information sources available to us.
INSUFFICIENT MISSION FOCUS HAS
IMPAIRED ACQUISITIONS
---------------------------------------------------------- Chapter 2:1
Ultimately, the goal of any acquisition program is to acquire only
essential equipment and field it within agreed-to cost, schedule, and
performance parameters. In organizations with more constructive
cultures, employees are more customer-focused and more actively
pursue goals that define the best course of action for the
organization.
The effectiveness of FAA's management of the acquisition process was
reduced by employees in the various divisions who did not focus on
the agency's mission to acquire ATC equipment or consider the
long-term, agencywide effects of their decisions and actions.
Program officials took such actions as establishing unrealistic cost
and schedule estimates and rushing acquisitions prematurely into the
production phase. Studies and surveys indicate that these actions
were driven by organizational incentives that did not support a focus
on FAA's mission.
FAA'S ACTIONS DID NOT
REFLECT A MISSION FOCUS
-------------------------------------------------------- Chapter 2:1.1
In reviewing problematic acquisitions, we found that FAA officials
acted in ways that did not reflect a strong commitment to the
agency's acquisition mission. Over the years, program officials did
not perform mission needs analyses; set unrealistic program cost and
schedule estimates; suppressed bad news; and began system production
before completing development, testing, and evaluation. Although
enabling projects to get started and proceed with minimal
interruption, these actions did not foster the agency's mission of
undertaking only essential ATC acquisitions and completing them
within budget and on schedule.
Program officials pushed ahead with acquisitions without
demonstrating the importance of those acquisitions to achieving the
agency's mission. In 1993, we reported that many of the mission need
statements we examined--documents that identified the need for FAA to
invest an additional $5 billion to fix deficiencies in the ATC
system--were not based on the results of any documented mission
analysis.\12 Despite the lack of substantial support for these
acquisitions, FAA's top management approved the statements. As a
result, FAA has acquired systems that do not meet the agency's needs.
For example, as we noted in that report, FAA spent $46 million on the
Real Time Weather Processor to provide controllers with current
accurate weather information. However, the new equipment operated as
much as six times more slowly than the existing system, and in 1991,
FAA suspended this program indefinitely and began to redefine
controllers' needs.
Program officials established unrealistic schedule estimates. The
result was "unexpected" schedule delays. For example, according to
our 1989 report on the Voice Switching and Control System (VSCS)
project, FAA's project schedule was more optimistic than that of the
system engineering and integration contractor who was hired to
provide technical and programmatic support to FAA in managing the
modernization program.\13 FAA officials explained that they preferred
their schedule over the contractor's whose "safe" dates did not
require as much effort to meet. The contractor, however, said that
FAA's schedule was unrealistic because it did not allow any extra
time to absorb unanticipated difficulties. By 1991, FAA's estimated
date to implement the VSCS at the first-site had slipped from May
1992 to June 1994.
Program officials also established unrealistic cost estimates. The
total estimated cost of the AAS project tripled from the original
estimate of $2.5 billion to $7.6 billion. On a per-unit basis, the
estimated cost of the VSCS project increased from the original
estimate of about $10 million to about $63 million or an increase of
511 percent; the estimated cost of the Integrated Terminal Weather
System project increased from about $3 million to almost $7 million
or an increase of 129 percent. The magnitude of these increases
indicates that FAA managers were not being realistic in estimating
the costs of various ATC systems.
Program officials have suppressed bad news. For example, officials
managing the ARSR-4 project reported in 1989 that the first
implementation of this radar would occur in September 1992. Since
1989, despite their consistent indications that the radar was almost
operational, they reported delays in 5 of the following 6 years. In
1995, program officials said the radar system would be up and running
in September 1995; however, the first ARSR-4 radar was operational in
April 1996. In recent years, the reasons for schedule slippages
cited by program officials included software errors that surfaced
while integrating software with hardware, production delays, problems
with preparing sites, and integration problems between ARSR-4 radars
and other ATC systems. While a certain level of technical problems
in implementing a complex radar system like ARSR-4 is normal, the
consistent pattern of reporting that this system was almost ready,
followed by annual schedule delays, indicates that program officials
were not disclosing the full extent of difficulties they encountered.
FAA officials have rushed into production of ATC systems. Over the
years, cost, schedule, and performance problems have resulted from
excessive concurrency--beginning system production before completing
development, testing, or evaluation programs. FAA has proceeded with
producing numerous systems, including the Microwave Landing System
(MLS), Mode S radar, and Oceanic Display and Planning System (ODAPS),
before their critical performance requirements had been met. The
decision to proceed into the production phase of these projects
proved to be a mistake. After years of delays, the MLS contractors
did not meet established performance requirements. As of May 1995,
the ODAPS contractor had not met a key operational requirement--11
years after the contract was awarded.\14 Although FAA awarded a
production contract for Mode S radar in 1984, the agency implemented
its first full-performance Mode S radar in February 1995.
--------------------
\12 Air Traffic Control: Justifications for Capital Investments Need
Strengthening (GAO/RCED-93-55, Jan. 14, 1993).
\13 Air Traffic Control: Voice Communications System Continues to
Encounter Difficulties (GAO/IMTEC-89-39, June 1, 1989).
\14 Air Traffic Control: Status of FAA's Modernization Program
(GAO/RCED-95-175FS, May 26, 1995).
MISSION FOCUS NOT SUPPORTED
BY ORGANIZATIONAL INCENTIVES
-------------------------------------------------------- Chapter 2:1.2
Employees at all levels have described FAA's shortcomings in mission
focus. Furthermore, internal and external reviews of FAA's ATC
acquisitions show that incentives in its acquisition process did not
promote management decisions and program outcomes that reflected this
mission focus.
According to the current FAA Administrator and his Deputy, "the FAA
needs long-haul piloting, but it's been getting short-hop
management." Similarly, an analysis of responses to a 1993 FAA survey
of acquisition employees concluded that they believed they must
devote considerable energy to organizational survival instead of
using that energy to be proactive and focused on accomplishing the
agency's mission.\15 In a 1995 survey,\16 these employees continued
to indicate their focus on survival, rather than mission
accomplishment, in responses, such as the following;
-- A majority of the respondents (62 percent) agreed that employees
are often hesitant to say what they really think for fear of
retaliation.
-- More than half (53 percent) disagreed that management supports
employees who raise difficult or controversial issues in open
meetings.
-- Half disagreed that management helped employees stay focused on
what really matters.
-- Nearly half (45 percent) disagreed that pointing out when
promised deadlines or deliverables are not realistic would not
be held against them.
In discussions with FAA employees and in reviewing studies and
reports on its acquisition process, we found further evidence of a
link between FAA's insufficient mission focus and the agency's
incentives. For example, the Associate Administrator for Research
and Acquisitions described a "grow-your-own" development process at
FAA. He said that a group of programs has emerged that does not
reflect a unified approach to achieving the acquisition mission
because program managers are rewarded for starting individual
programs and getting them to advance, regardless of the long-term
consequences.
A 1995 internal FAA study on the use of support services contracts
revealed incentives for focusing on short-term results. The study
noted that (1) funding for program officials to pursue new projects
appeared to be given a higher priority than funding for users to
install purchased equipment and (2) a backlog in the installation and
implementation of field equipment had risen to an equivalent of an
estimated 1,300 staff years. According to this study, new equipment
would likely continue to be backlogged and stored in warehouses
unless the agency's Airway Facilities division received increased
resources for installation.\17 In our view, this allocation of
resources reflects a short-term emphasis on beginning new programs
without considering the long-term implications for existing systems.
A 1994 report on the AAS program by the Center for Naval Analyses
(CNA) discussed organizational incentives that did not promote a
strategic focus on FAA's mission. According to CNA, FAA's culture
discouraged program officials from reporting news of cost increases,
schedule delays, and performance problems with the AAS project. This
suppression of bad news prevented top management from taking early
action.\18 Similarly, in a 1993 internal study of its process to
determine system requirements, an FAA team reported that the agency
did not reward employees for how well they met customers' needs;
instead, job standards reflected how a process was performed without
regard to the effect on the agency's overall performance or
budget.\19
In our 1992 review of the Defense Department's management of
acquisitions of major weapon systems, we found that the Department's
organizational culture allowed the needs of the participants in the
acquisition process to create incentives for pushing programs and
encouraging undue optimism, parochialism, and other compromises of
good judgment. Consequently, problems persisted not because they
were overlooked or underregulated but because they enabled more
programs to survive and thus more participants' needs to be met. For
example, because the success of program managers depended on getting
results (e.g., meeting the next major milestone), their strongest
motivation was to keep the programs moving and to protect them from
interruption.\20
It is easy to understand why participants in the federal acquisition
process, including FAA officials, are driven by these incentives. By
analyzing mission needs, they risk raising questions about the need
for "their" projects. By establishing realistic cost estimates, they
may endanger the approval of near-term funding. By surfacing
problems, they may expose their projects to heightened managerial and
congressional oversight and risk criticism for their decisions and
actions. By insisting on full testing before moving to production,
they may delay a project's schedule and cause it to receive reduced
funding. Thus, employees are motivated to push ahead expeditiously
with acquisitions.
--------------------
\15 What We Already Know About the New AXA Organization: 1993 Job
Satisfaction Survey Results, (summer, 1993).
\16 In the ARA Culture Baseline Survey Report, (fall 1995) directions
for responding were listed as strongly agree--almost always describes
the way people think and act; agree--frequently; unsure--about half
the time or lack experience to comment; disagree--seldom; and
strongly disagree--rarely. The results of items must be interpreted
cautiously because 1) the survey instructions appear only on the
first page of the survey, 2) the unsure category has two possible
interpretations, and 3) there are high proportions of "unsure"
responses on many items. Items reported in this chapter range from
16 to 41 percent for responses of "unsure." For discussion purposes,
we present responses in terms of "agreed, disagreed, or were unsure."
\17 Study of Support Services Contracts Within the Federal Aviation
Administration, FAA Task Force (Feb. 1995).
\18 FAA Advanced Automation System Program Assessment, CAB94-30.10
(Apr. 1994).
\19 Report of the Operational Requirements Team, (Nov. 22, 1993).
\20 Weapons Acquisition: A Rare Opportunity for Lasting Change
(GAO/NSIAD-93-15, Dec. 1992).
WEAK ACCOUNTABILITY HAS
HAMPERED ACQUISITIONS
---------------------------------------------------------- Chapter 2:2
In organizations with more constructive cultures, employees feel more
empowered and are more willing to be held accountable for decisions
and actions. In a January 1996 memorandum to the FAA Administrator,
the Department of Transportation's Inspector General described an
"environment for abuse" at FAA caused by the lack of accountability
that reflected "a mind set within FAA that managers are not held
accountable for decisions that reflect poor judgment." We found that
FAA's acquisitions were impaired when officials were not held
accountable for making decisions on system requirements and for
exercising proper oversight of contracts. Both problems were
commonly cited as reasons for the drastic restructuring of the AAS
program. Because responsibility was diffused among many stakeholders
in the acquisition process, establishing accountability for
management decisions and actions was difficult. FAA's multiple
layers of management in its hierarchical structure have contributed
to diffused responsibility and weak accountability.
RESPONSIBILITY FOR DECISIONS
ON SYSTEM REQUIREMENTS HAS
BEEN DIFFUSED
-------------------------------------------------------- Chapter 2:2.1
FAA program officials have not been held accountable for making and
sustaining decisions on requirements for acquisitions of major
systems. In 1993, an FAA internal review team reported that FAA's
process for making and documenting decisions on requirements lacked
discipline and accountability: "No one person or organization has
accountability for meeting mission requirements in a cost-effective
manner." As a result of this weak accountability, multiple changes in
systems' requirements have increased costs and delayed program
schedules. For example, the program manager for the ARSR-4 project
said that the schedule for making the first radar operational,
planned for February 29, 1996, was delayed by the addition of two new
requirements that necessitated more operational testing. These
requirements were added within a day of putting the first radar into
operation.
In the case of AAS, we reported that FAA's failure to resolve issues
related to basic requirements contributed to this system's problems
and the need for extensive restructuring. CNA reached similar
conclusions in its April 1994 review of AAS:
"The systemic cultural problems of the FAA of diffusing
responsibility plus an inability to hold firm on requirements
has resulted in cost growth and schedule slips in the AAS
program."
FAA's difficulties in resolving requirements continued after the
restructuring of its AAS project. The Department of Transportation's
Office of the Inspector General reported in October 1995 that FAA
negotiated the contract for the Display System Replacement without
including all known requirements in its specification document that
was used as the basis for the negotiation.
FAA's acquisition of the Airport Movement Area Safety System (AMASS),
designed to monitor aircraft movements on the ground and alert air
traffic controllers to potential conflicts, illustrates how weak
accountability for determining a system's requirements limited the
agency's ability to improve aviation safety. In 1995, the National
Transportation Safety Board reported that FAA's difficulties in
getting internal stakeholders to agree on AMASS' operational and
performance requirements delayed implementing the system.\21 After
investigating the collision between a TWA MD-80 and a Cessna aircraft
at the St. Louis airport in November 1994, the Safety Board
concluded that if this system had been operational, the accident
might have been prevented. The Safety Board said that progress in
implementing the system was
". . . effectively paralyzed as a result of a succession of
changes in operational specifications imposed from within the
FAA's Air Traffic Service . . . Ironically, most of the
modifications were not associated with issues of increasing
safety. . . . Some requirement changes went against the
basic objective of the AMASS program."
If FAA officials had been held accountable for weighing the costs and
benefits of requirement changes proposed by different stakeholders
and limiting additions to the system's performance requirements, the
system might have been implemented in time to prevent this accident.
--------------------
\21 National Transportation Safety Board Safety Recommendation to the
Federal Aviation Administration Administrator (Feb. 28, 1995).
OFFICIALS HAVE NOT BEEN HELD
ACCOUNTABLE FOR CONTRACT
ADMINISTRATION
-------------------------------------------------------- Chapter 2:2.2
FAA has identified contract administration as a material weakness in
its acquisitions of major systems. The agency reported that senior
management had not adequately focused on problems occurring when
significant changes were made after a contract's award and cited long
delays between a problem's recognition and correction. FAA concluded
that because accountability for contract administration was not
well-defined or enforced, program officials were not encouraged to
exercise strong oversight of contractors. Over the years, poor
oversight of contractors has caused acquisition problems in such
projects as ODAPS, Mode S, and AAS.
-- In 1990, we reported that FAA's management actions to address
development problems with Mode S were ineffective. We concluded
that internal controls in the Mode S project were not adequate
to ensure that appropriate action was taken when contract
problems arose. At that time, the delivery of the first system
had been delayed by 5 years.\22
-- In 1992, we reported that program officials managing the ODAPS
program were slow to address serious development problems with
the system and failed to plan essential activities to ensure the
program's success. At that time, the system was 3 years behind
schedule and had no projected completion date.\23
-- In 1993, we reported that FAA's inadequate oversight of the
contractor responsible for developing AAS software was a major
cause of the system's cost increases and schedule delays.\24
An FAA-contracted review of the AAS project reached similar
conclusions in April 1994. CNA reported that FAA managers did not
enforce such normal contract management procedures as continually
monitoring expenditures, milestones, and deliverables.
--------------------
\22 Air Traffic Control: Ineffective Management Plagues $1.7-Billion
Radar Program (GAO/IMTEC-90-37, May 31, 1990).
\23 Air Traffic Control: FAA Needs to Justify Further Investment in
Its Oceanic Display System (GAO/IMTEC-92-80, Sept. 30, 1992).
\24 Air Traffic Control: Advanced Automation System Problems Need to
Be Addressed (GAO/T-RCED-93-15, Mar. 10, 1993).
ACCOUNTABILITY HAS BEEN
REDUCED BY HIERARCHY
-------------------------------------------------------- Chapter 2:2.3
Past reviews of FAA and responses from employee surveys reflect an
environment of control fostered by the agency's hierarchical
structure. In this environment, employees are not empowered to make
needed management decisions. This lack of empowerment decreases
their sense of ownership and responsibility, which in turns makes
them more reluctant to be held accountable for their decisions and
actions.
In 1991, the NRC described FAA's culture as a rigid hierarchy in
which "upward communication is weak and personnel are expected to do
what they are told without challenge."\25 These sentiments were
echoed in a 1993 FAA employee survey in which a large percentage of
employees involved in acquisitions responded that decisions were not
being made at the most appropriate level and that they had problems
with approvals they perceived to be unnecessary. Fewer than half
reported that they had enough authority to make day-to-day decisions
about day-to-day work problems.
Results from the 1995 survey of these employees also showed a
relationship between hierarchy, empowerment, and accountability.
First, they identified the hierarchical structure as a concern.
-- Most respondents (80 percent) reported that four or more layers
of management review were between them and the head of their
organization.
-- More than half (52 percent) disagreed that any employee could
easily access the head of their organization directly.
Responses to this survey also showed they perceived a lack of
empowerment and access to needed information.
-- More than half (54 percent) of the respondents disagreed that
employees knew that management listens because things changed as
a result of their input.
-- More than half (52 percent) disagreed that needed information
flowed up and down freely in the acquisition organization.
These difficulties with hierarchy and empowerment were also reflected
in their attitudes regarding accountability.
-- Nearly half (45 percent) disagreed that people who repeat
mistakes are held accountable for their poor judgement; only a
fifth (21 percent) agreed with the statement, and the remainder
(34 percent) were unsure.
-- A significant portion of the respondents (42 percent) agreed
that it is difficult to hold individuals accountable because the
way things are structured diffuses responsibility; a third
disagreed; and the remainder (26 percent) were unsure.
We have identified the need to change outdated hierarchical
structures throughout the federal government. As we reported in
March 1993, the centralized bureaucracies of the federal
government--with their reliance on control through rules,
regulations, and hierarchical chains of command designed in the 1930s
and 1940s--simply do not function well in the rapidly changing
society and economy of the 1990s, which are technology-driven and
knowledge-intensive. We have also identified the need for broad
changes to improve federal management by establishing accountability
for achieving program results and emphasizing a long-term focus.\26
--------------------
\25 Winds of Change: Domestic Air Transport Since Deregulation,
National Research Council (1991).
\26 Improving Government: Measuring Performance and Acting on
Proposals for Change (GAO/T-GGD-93-14, Mar. 23, 1993).
POOR INTERNAL COORDINATION HAS
IMPEDED ACQUISITIONS
---------------------------------------------------------- Chapter 2:3
In organizations with more constructive cultures, employees are more
likely to involve others in decisions affecting them, openly share
information, and resolve differences collaboratively. In FAA,
ineffective coordination has caused the agency to acquire systems
that cost more than anticipated and took longer to implement. One
major factor deterring employees from working together is FAA's
organization of key players in the acquisition process into different
divisions whose stovepipes or upward lines of authority and
communications are separate and distinct.
COORDINATION AMONG DIVISIONS
HAS BEEN INEFFECTIVE
-------------------------------------------------------- Chapter 2:3.1
Poor coordination between FAA's program offices and field
organizations has caused schedule delays. Although coordination
between program offices and field organizations is necessary to
ensure that sites suitable for installing ATC systems are acquired
and prepared, installations of the Terminal Doppler Weather Radar
(TDWR), the Airport Surveillance Radar (ASR-9), and the Airport
Surface Detection Equipment (ASDE-3) have all been delayed because of
problems with putting these systems in the field. For example, as of
March 1996, the implementation of the final 10 ASR-9 radars was being
delayed because planned sites were not ready. Similarly, we reported
in 1995 that FAA had to postpone TDWR's implementation at 11
locations because of the unavailability of sites and land acquisition
problems.\27 FAA's installation of ASDE-3 was also delayed. The
system, as designed, was too heavy for many of the existing ATC
towers where it was to be installed. In four of five regions, the
initial implementation plans were not detailed enough for those
regions to know where the towers should be located or how to
construct them in time to meet the original schedule.\28
AAS is an example of how poor coordination between developers and
users of systems impaired an acquisition.
-- In 1992, about 4 years after awarding the AAS contract, FAA
announced that it would incur an additional $150 million in
costs for design changes for the system's tower component
because the original design did not give controllers enough room
to move around or visibility in the tower cab. If controllers
and developers had collaborated to resolve these concerns during
the original design phase, the additional expense to modify an
awarded contract may have been avoided.
-- In 1993, recognizing the agency's difficulties in resolving
requirements for AAS, FAA designated three top officials from
the program office and its Air Traffic and Airway Facilities
divisions to make final decisions on requirements. However,
this group was unable to resolve important requirements for the
system's continuous operations.
-- Recent work by the Department of Transportation's Office of the
Inspector General found that FAA officials planned to
restructure the AAS contract before senior management and users
of the system agreed on what was needed.\29
--------------------
\27 Air Traffic Control: Status of FAA's Modernization Program
(GAO/RCED-95-175FS, May 26, 1995).
\28 Air Traffic Control: FAA's Implementation of Modernization
Projects in the Field (GAO/RCED-89-92, June 28, 1989).
\29 Inspector General Semiannual Report to the Congress, Office of
the Secretary of Transportation (Oct. 31, 1995).
STRUCTURAL "STOVEPIPES" HAVE
REDUCED COORDINATION
-------------------------------------------------------- Chapter 2:3.2
A major factor limiting coordination among stakeholders in FAA's
acquisitions of major systems has been its organizational structure.
Internal and external observers of FAA generally agree that
organizational stovepipes have reduced coordination, increased
systems' costs, and delayed their implementation.
FAA's senior management has identified the agency's current
organizational structure as a problem that impairs ATC acquisitions.
In May 1995, the FAA Administrator characterized the problem as a
"hierarchical, stovepipe approach that in the past has often resulted
in costly inefficiencies and a failure to deliver products in time to
meet customer needs." Similarly, in a December 1995 agency
newsletter, FAA's Deputy Administrator cited "the bureaucratic
structures that have hampered the full utilization of the talent and
energy that reside in FAA employees." Earlier, in April 1994, the
Assistant Administrator for Information Technology had recognized the
effect of these stovepipes and the need to "change our ways of
thinking--change our individual and corporate culture and change some
of our traditional business practices."
Among the reviews describing the negative effect of FAA's
organizational structure on internal coordination during the
acquisition process was a 1994 report by the Office of Technology
Assessment (OTA) on aviation research.\30 OTA noted that differences
in the organizational culture among FAA's air traffic controllers,
equipment technicians, engineers, and divisional managers made
communication difficult and limited coordination. Implementing these
systems was often delayed because of a tendency for one stakeholder
to establish technical requirements without adequately consulting
those stakeholders responsible for developing the operational
procedures that the systems were designed to support. According to
OTA, when system operators were not consulted early in the
development process, operational problems remained undetected until
after a prototype of the system was developed and tested and
procurement was imminent or underway.
Employees involved in acquisitions have also described deficiencies
in coordination and cooperation. A March 1992 survey of FAA's
research and acquisition staff found that its researchers did not
focus adequately on what end-users, such as controllers, need or on
how the technology would be deployed and maintained. FAA's 1993
study of its process to establish requirements found that the
agency's operations and development sides have not formed a
partnership to articulate requirements and devise a range of
alternatives to meet them rapidly and cost-effectively. This study
reported that the end customer is insufficiently involved in
establishing system requirements. As a result, the study concluded
that FAA functioned as a classically stovepiped organization in which
operators and developers only came together at the Administrator's
level. Therefore, disputes regarding system requirements have been
forced to a very high level before they can be resolved.
More recently, results of FAA's 1995 survey of acquisition employees
showed that the agency has been making progress in promoting
cooperation as an organizational value because nearly two-thirds (65
percent) of the respondents agreed that everyone is expected to
coordinate with others who have a stake in the outcome of their work.
The survey responses, however, indicate the need for FAA to enhance
cooperation.
-- More than half (53 percent) disagreed that employees value team
achievement more than individual achievement.
-- More than half (58 percent) disagreed that most tasks are
assigned to teams rather than to individuals.
--------------------
\30 Federal Research and Technology for Aviation, OTA-ETI-610 (Sept.
1994).
INADEQUATE ADAPTABILITY HAS
HAMPERED ACQUISITIONS
---------------------------------------------------------- Chapter 2:4
In organizations with more constructive cultures, employees are more
receptive to change and respond more positively to demands and
opportunities posed within and outside that organization. FAA's
acquisitions of major ATC systems have been impaired because its
employees resisted making needed changes in the agency's approach to
both specific acquisitions and its acquisition process as a whole.
As a result, FAA has been less able to respond to changes in its
internal and external environments. Institutional incentives that
foster the status quo and high levels of management turnover are two
factors hindering FAA's adaptability.
FAA'S ACTIONS HAVE NOT
DEMONSTRATED ADAPTABILITY
-------------------------------------------------------- Chapter 2:4.1
FAA's reluctance to apply federal principles for acquisitions of
major systems illustrates how the agency has resisted changing its
acquisition process. For the first 10 years of its modernization
program, FAA did not follow government acquisition policy and
principles established by the Office of Management and Budget's
Circular A-109. These principles included analyzing mission needs,
considering a full range of alternatives to meet them, and testing
new systems operationally before committing to full production. In
1987, we recommended that FAA comply with these principles as a step
toward alleviating the cost and schedule problems that had
characterized the acquisition process since 1981.\31 In 1991, FAA
finally issued a revised order on major acquisitions that better
reflected the phases and key decision points of Circular A-109.
The results of an August 1995 internal FAA report summarizing
management problems with AAS indicated that the 1991 order was not
sufficient to overcome the agency's resistance to changing its
acquisition process. On the basis of findings from studies, the
majority of which occurred after 1992, FAA's report concluded that
management actions concerning the AAS program "deliberately
circumvented" the A-109 process.\32
The MLS was one acquisition in which FAA officials resisted change
despite powerful reasons to reconsider their decision. In the 1970s,
because of limitations in its ILS and the expected large growth in
air traffic operations, FAA decided to replace this system with the
MLS. Despite pressure from such user groups as the airlines and
general aviation, evidence that the ILS had been improved,
lower-than-expected growth in air traffic, and the emergence of
satellite-based navigation technology, FAA resisted changing its
decision to acquire this system until 1993. The agency eventually
terminated the MLS project in 1994 because the Global Positioning
System (GPS), when enhanced, was expected to support all types of
aircraft approaches.\33
FAA's attempt to implement cross-functional matrix teams responsible
for acquisitions of major systems is an example of a new process that
was undermined by management's resistance to change.\34 FAA began to
implement cross-functional teams in 1990 with the creation of matrix
teams, which consisted of staff and resources from various FAA
functional divisions working together to develop and implement a
project or group of projects. By assigning experts from each
functional specialty to a project team, FAA hoped to improve
coordination and communication. Although managers of each functional
division represented in the matrix teams formally agreed to support
them, by March 1992, employee survey results indicated that senior
managers' commitment to this concept was weakening and they continued
to foster a "stovepipe" approach.
The effects of FAA's resistance to change on the agency's ability to
respond to external changes in technology and growth in aviation
traffic have been cited by several sources.
-- The Aircraft Owners and Pilots Association predicted in 1990
that the United States would have the technology to implement
GPS by 1995 but expressed concern that FAA's bureaucracy would
slow this system's implementation.
-- The National Research Council concluded in its 1991 report that
"FAA has not demonstrated the capacity to anticipate or respond
to rapid changes in technology or the industry which it serves."
According to the Council, FAA's failure to anticipate changes in
the aviation industry resulting from deregulation caused delays
in responding to the demands posed by increased air traffic.
These delays engendered concerns about air safety and service.
-- The 1994 Air Traffic Control Corporation Study found that FAA
has been struggling to keep up with rapidly evolving technology,
such as the use of GPS satellites for navigation purposes,
despite its potential to improve safety substantially and reduce
the cost of aircraft operations. The study's executive
oversight committee, consisting of the FAA Administrator, his
Deputy, and other high-ranking aviation industry officials,
concluded that "FAA is the weak link in the technological
revolution."\35
--------------------
\31 Aviation Acquisition: Improved Process Needs to Be Followed
(GAO/RCED-87-8, Mar. 26, 1987).
\32 Responses to Institutional Problems Contributing to AAS Program
Failures, Interim Report: Synthesis of Problems Associated with the
Advanced Automation System Acquisition (Aug. 1995).
\33 Air Traffic Control: Status of FAA's Modernization Program
(GAO/RCED-95-175FS, May 23, 1995).
\34 In commenting on our draft report, acquisition officials said
that the failure of the matrix team concept was also caused by an
inherent design weakness; specifically, the concept was not based on
team-based collaborative decisionmaking, shared accountability, and
empowerment.
\35 Air Traffic Control Corporation Study: Report of the Executive
Oversight Committee to the Secretary of Transportation (May 1994).
INCENTIVES HAVE PROMOTED THE
STATUS QUO
-------------------------------------------------------- Chapter 2:4.2
The link between FAA's organizational resistance to change and its
organizational incentives has been cited by various sources within
and outside the agency. For example, the Secretary of Transportation
stated in July 1994 that "We need to change the whole culture of the
ATC system to permit flexibility, ingenuity, and efficiency to come
to the fore." In May 1994, the executive oversight committee for the
Air Traffic Control Corporation Study described FAA's culture as one
that "emphasizes conservatism and conformity, and lacks innovation."
The committee concluded that at FAA, "people are not used effectively
in an acquisition system that discourages innovation and rewards them
for following rules."
Most respondents to FAA's 1993 survey of employees involved in
acquisitions were skeptical that FAA would take advantage of
opportunities to change. According to the results from FAA's May
1995 survey, half of the respondents disagreed that management is
open and responsive to change; and only a fifth of the respondents
(21 percent) agreed with the statement that "management takes an
active role in promoting innovative ideas proposed by employees;" or
that employees are given "soft landings" when innovations result in
failure (20 percent).
FAA's 1993 report on its process to determine requirements, which was
based on interviews of managers, noted that organizational incentives
promoted the status quo. One manager observed that FAA employees are
not innovative because they are "beat over the head for identifying
problems rather than rewarded for finding something that needs
fixing." Another manager noted that employees were not innovative
because if "there's a failure, the FAA puts in another rule."
Similarly, in 1991, the National Research Council's report described
FAA's culture as one that is "resistant to innovation or rapid change
and more disposed to avoiding criticism." The report concluded that
in order to change its culture, FAA must change its incentive system
"from a bureaucratic one which rewards those who 'don't make waves'
to one which encourages creative and innovative behavior."
TURNOVER OF MANAGEMENT HAS
HINDERED ADAPTABILITY
-------------------------------------------------------- Chapter 2:4.3
We have expressed concerns over the years about the instability and
uncertainty caused by the frequent turnover of FAA Administrators and
observed that greater stability within the agency's top leadership
would enable FAA to effectively initiate and sustain corrective
actions. Since its modernization program began, the average tenure
for the Administrator or Acting Administrator has been less than 18
months. FAA has also experienced a high turnover rate for its most
senior acquisition executive, who is charged with overseeing
acquisition policy and program execution. Since 1990, five people
have held that position.
The frequent turnover of FAA's Administrators has enabled them to
focus on the short term and defer making tough decisions. As we
reported in March 1993, the frequent turnover of FAA's Administrators
contributed to the delay in reaching a decision on the extent to
consolidate air traffic facilities for the AAS project. This delay,
in turn, contributed to schedule and cost problems and created
uncertainty over the future of the project.\36
CNA noted in its April 1994 report on the AAS project that the
system's design had never been changed from the original design,
which was based on a consolidation plan that had been, for all
practical purposes, previously abandoned. As a result, unneeded
requirements were carried forward at high cost and technological
complexity.
This frequent management turnover has also led employees to believe
that new initiatives will be short-lived. According to the 1991
National Research Council report, the short tenure of FAA
Administrators has been a problem because it has created a resistance
on the part of the bureaucracy to respond to new directions. Because
FAA employees have believed that an Administrator is not likely to
stay in office long enough to see new initiatives implemented, they
have felt that those initiatives would likely be thwarted by
bureaucratic inertia.
--------------------
\36 Air Traffic Control: Advanced Automation System Problems Need to
be Addressed (GAO/T-RCED-93-15, Mar. 10, 1993).
FAA HAS BEGUN EFFORTS TO CHANGE
ITS ACQUISITION CULTURE
============================================================ Chapter 3
Cultural change is a complex and time-consuming undertaking.
Recognizing the need to improve its management of acquisitions
through cultural change, FAA has developed and begun implementing a
reform effort. Much work remains, however, before substantial
cultural change is fully incorporated and can be sustained. A
particular concern is the difficulties in gaining the strong
commitment of all stakeholders throughout the agency. As currently
designed, FAA's reform effort does little to identify ways for
obtaining this commitment.
CULTURAL CHANGE IS A MAJOR
UNDERTAKING FOR ORGANIZATIONS
---------------------------------------------------------- Chapter 3:1
According to organizational theory and research, cultural change is a
complex and time-consuming undertaking. Employees' values,
attitudes, and beliefs are affected by a wide range of internal and
external forces. Dr. Joseph Coffee, who has studied cultural change
in federal agencies, concluded that there is a direct relationship
between the size of an organization and the number of variables that
tend to maintain the status quo and, thus, have to be manipulated to
bring about desired changes.\37 Cultural change efforts typically
take 5 or more years to fully implement.
Through our management reviews of major federal departments and
agencies over the past decade, we have identified diffused
accountability and incentives that encourage short-term responses to
long-term problems as fundamental challenges to improving an agency's
management. Moreover, the lack of coordination promoted by
functionally organized divisional structures and institutional
resistance to change are weaknesses commonly attributed to the
bureaucratic structure that typifies many federal organizations.
Dr. Coffee's research found that federal executives have often
focused on reorganizing and initiating new work processes, while
paying little attention to culture, as ways to effect change. Many
governmental efforts to promote change have emphasized that people
should work more effectively across organizational lines.
Organizations attempting to encourage more risk-taking and
empowerment of lower-level employees while reducing the hierarchy and
the number of rules have found their progress frustratingly slow.
His study on cultural change in the federal government concluded that
many efforts to promote change are not sufficiently comprehensive and
do not address the many variables needed for success. For example,
the study predicted that as cross-functional work groups are created,
desired changes in behavior will less likely be produced if
traditional functional structures are maintained. When this occurs,
the "stovepiping" effect continues, and the values, beliefs, and
behaviors of the employees are more likely to remain aligned with
their functional division.
From Dr. Coffee's and others' research, we conclude that managing
cultural change requires a different set of management techniques and
greater management sophistication in planning and implementation. By
integrating current theories of effective management improvement
initiatives, such as business process reengineering and
results-oriented management, with traditional strategic planning
precepts, we developed a strategy based on common components for
managing organizational change. By focusing on employees' beliefs,
values, and attitudes; their behaviors; and the organization's formal
and informal structures, incentives, and policies, an organization
can apply this comprehensive strategy to change its culture.
Included in this strategy are the following components:
-- Assess the current situation to determine the root cause of
problems.
-- Communicate the need to address the root cause of problems.
-- Develop and communicate a vision for the future.
-- Identify the factors that will impede change.
-- Neutralize impediments to change.
-- Identify and teach the skills required to make the change
successful.
-- Develop performance indicators to measure the extent to which
the organization has achieved change.
-- Implement the strategy for change.
-- Use performance data to improve efforts to promote change.
Appendix IV lists supporting actions that organizations could take to
apply these nine components to change their culture.
--------------------
\37 A Comparative Study of Organizational Culture Change in Federal
Agencies: Success Patterns of Long-Term Efforts, Joseph N. Coffee
(Nov. 1993).
FAA'S REFORMS INCLUDE A PLAN
FOR CULTURAL CHANGE, BUT
STAKEHOLDERS' COMMITMENT HAS
BEEN DIFFICULT TO OBTAIN
---------------------------------------------------------- Chapter 3:2
FAA's primary reform effort for cultural change, the Integrated
Product Development System (IPDS), began in November 1994. We found
that FAA has made some progress in implementing its cultural change
effort. A key area of concern is FAA's difficulties in gaining the
strong commitment to IPDS agencywide. As currently designed, this
new system does little to address how FAA can gain this commitment.
IPDS AIMS TO ACHIEVE
CULTURAL CHANGE
-------------------------------------------------------- Chapter 3:2.1
IPDS is at the core of FAA's effort to improve its management of ATC
acquisitions and its ability to provide modern and reliable ATC
equipment. Although other initiatives underway elsewhere in the
agency will probably affect its organizational culture, this system
was designed explicitly to effect cultural change.
A key component of the IPDS is the establishment of integrated
product teams (IPT). These teams are designed to be cross-functional
and responsible for research, development, and acquisition as well as
for ensuring that new equipment is delivered, installed, and working
properly. IPT members include systems and specialty engineers,
logistics personnel, testing personnel, contract personnel, and
lawyers as well as representatives from the organizations responsible
for operating and maintaining the ATC equipment. In a complementary
action, to mirror the structure of the IPTs, the divisions
responsible for operating and maintaining ATC equipment have
restructured their units that determine requirements.
IPDS evolved from matrix management teams that FAA established in
1990 to promote cross-functional collaboration. Responsible for
developing and implementing projects, matrix teams consisted of staff
and resources from various FAA functional divisions. However, FAA's
management recognized that the matrix teams had continuing
weaknesses, such as the lack of empowerment and accountability as
well as the persistence of stovepiping.
FAA managers developed and proposed IPDS to apply the successful
parts of matrix teams while addressing their weaknesses. We found
three reasons why this new system would likely prove more successful
than the former matrix teams. For one, the new system recognizes the
need to change the acquisition culture. Secondly, IPDS incorporates
many aspects of the model strategy we present in this report. For
example, to equip IPT members with the skills required in the new
environment, FAA developed a training program for the teams that
includes training on working together effectively, collaborative
decision-making, and conflict resolution. Similarly, to convey their
commitment to cultural change, managers in FAA's Research and
Acquisitions division (ARA) piloted a rewards program that recognizes
teams as well as individuals for behaviors that lead to desired
outputs. Thirdly, FAA developed guiding principles for its new
system that address the agency's deficiencies we identified in
chapter 2. For instance, the IPDS emphasizes rewarding teamwork,
communications, and innovation to address shortcomings in
coordination and adaptability and emphasizes life-cycle management
and team responsibility to address weaknesses in mission focus and
accountability.
FAA identifies the IPDS as an "implementing arm" of the new
Acquisition Management System, which became effective on April 1,
1996. Provisions of the 1996 Department of Transportation
Appropriations Act exempted FAA from most federal procurement and
personnel laws and regulations.\38 In response, FAA has announced its
new acquisition management and human resource systems to implement
provisions of the 1996 Act. The Acquisition Management System
consists of three elements:
-- The life-cycle acquisition management system is intended to be a
more comprehensive, disciplined approach to managing the entire
acquisition life cycle, from the analysis of mission needs to
the eventual disposal of products.
-- The procurement system is intended to allow FAA managers to be
innovative and creative in selecting vendors and managing
contracts.
-- The acquisition work force learning system is intended to
increase the capability of ARA employees and align the
motivations of individuals with FAA's overall goals.
The concept behind the life-cycle acquisition management system is to
improve coordination and mission focus by strengthening the
"front-end" of the acquisition process. Specifically, the operators
and developers are expected to work together to analyze mission needs
and alternatives before senior management makes capital investment
decisions and assigns projects to IPTs. The acquisition work force
learning system is being designed to improve mission focus and
increase empowerment, coordination, and adaptability by strengthening
the competencies of employees and developing an environment of
continuous learning. The new learning system is linked to the
agency's new competency-based human resource system that the agency
is developing in response to statutory exemptions from federal
personnel laws and regulations.
It is too early to identify results of the new Acquisition Management
System. However, by June 1996, some 19 months after beginning its
reform effort, only 1 of FAA's 13 IPTs\39 had obtained approval of
its team plan, an action FAA considers to be essential to
successfully implement the new teams. These plans are important
because they outline the team members' roles, empowerment boundaries,
and team operating approaches and procedures.
Feedback from FAA employees and internal FAA reports indicate FAA's
difficulty in gaining commitment to the new system. Evidence of this
problem was cited in a September 1995 internal FAA report summarizing
the views of 50 senior and midlevel managers and technical employees
who were interviewed about programs and functions affected by the
formation of IPTs.\40 According to FAA's report, while support for
the new system at the leadership level of the ARA and Air Traffic
divisions appeared strong, interviewees expressed concerns over
commitment of staff at the working level. Several respondents
concluded that the Flight Standards and Airports divisions had not
bought into the process.
Our interviews with a cross section of oceanic IPT members revealed
that FAA's weaknesses in mission focus, accountability, coordination,
and adaptability continue to undermine the IPDS initiative to effect
organizational change. For example, comments suggested that some
team members have remained motivated primarily by their functional
division's values and attitudes to the detriment of the team's
ability to focus on the agency mission of ATC acquisitions. Also,
because some team members have not been empowered by midlevel
managers who attempt to circumvent the team's decision-making
process, they continue to elevate disputes through the traditional
stovepiped hierarchies. The internal "lessons learned" paper by the
oceanic IPT concluded that
-- lack of commitment exists because of doubts over whether
empowerment had changed or would change;
-- not all team members want the responsibility of empowerment, and
some do not act accountably;
-- empowerment supported by top management has been hampered by
functional managers' resistance;
-- collocation is not supported by many functional managers;
-- working as a team in a cross-functional manner is difficult for
staff to understand;
-- some functional managers will not conduct business within the
new structure; and
-- staff who do not understand the new integrated product
development system concept have to be worked around or through.
--------------------
\38 Public Law 104-50, 109 Stat. 436, 460-61 (1995), 49 U.S.C. Sec.
40110 note.
\39 The IPT with an approved plan is responsible for acquiring
oceanic ATC systems.
\40 Staff Report: A Survey of Programs and Functions Impacted During
the ARA Reorganization (Sept. 1995)
CULTURAL REFORM EFFORT DOES
NOT ADDRESS HOW TO OBTAIN
STRONG COMMITMENT BY
STAKEHOLDERS
-------------------------------------------------------- Chapter 3:2.2
Dr. Coffee's research indicates that targeting a small segment of an
organization is less likely to effect substantial change because the
existing culture continues to shape the beliefs, values, and
behaviors of the majority of the organization. If change is to
occur, the different stakeholders have to be integrated into the
effort to change so they come to value and support a different vision
of their organization. The study concludes that when senior managers
throughout the organization are supportive and involved in its
efforts to change, the probabilities of sustaining change increase
substantially.
Implementation of the IPDS included a formal memorandum of support
signed by senior management from the various stakeholder divisions in
April 1995. The memorandum states generic roles in the acquisition
process and the functional managers' dedication to supporting the new
IPTs. For example, ARA will "provide overall program oversight;" the
Regulation and Certification division will "provide input to the IPTs
on behalf of system users;" Air Traffic Services (ATS) will "initiate
mission needs statements on behalf of system users;" and officials
from the Airports division will "coordinate with ARA and ATS on
functional requirements."
Of course, the memorandum, by itself, does not guarantee commitment.
In implementing matrix teams, the predecessor of IPTs, FAA obtained
the formal agreement of functional managers, who provided personnel
to acquisition project teams, to support their staff in team roles.
The results of a March 1992 survey of about 600 research and
acquisition staff found, however, that (1) managers had not fully
empowered employees, (2) team's decisions had been second-guessed
and/or overturned, (3) the commitment of senior mangers to matrix
teams was weakening, and (4) senior managers continued to work as
individuals, thus fostering a stovepiped approach.
FAA management has recognized the risk for stovepipes to impede
change. According to a senior ARA official responsible for planning
and implementing the IPTs, the implementation of IPDS has been slowed
because the key stakeholder groups have different values and
objectives. For example, as a member of the acquisition reform task
force studying the issue of life-cycle and workforce competencies,
this official found that each division has had different ideas of
what characterizes a competent workforce for the life-cycle of an
acquisition.
ARA has recognized the implementation difficulties presented by
stovepipes. Its draft transition plan for the IPDS concluded that
establishing IPTs alone is insufficient to sustain needed cultural
changes:
"The team-based performance philosophy of IPDS requires a
culture and special organizational focus.... What matters is
that the parochial motivations of functional organizations need
to give way to true partnerships cutting across 'stovepipes' in
an integrative manner. The FAA IPDS model accomplishes this
objective from a structure standpoint. What remains is the
change in culture and thinking necessary to make it successful."
As designed, however, FAA's reforms are likely to have a limited
effect because they focus on IPT members and do little to neutralize
the impediments to change. The 750 members of the 13 IPTs include
only about 500 of the approximately 2,000 ARA employees and about 250
of the remaining FAA employees, including representatives from the
other major stakeholder divisions--namely, the controllers and
maintenance technicians who use and maintain the new equipment. The
IPDS does little to identify how FAA can influence the beliefs,
values, attitudes, and behaviors of FAA employees who are not members
of IPTs. A comprehensive strategy would have defined
responsibilities, provided performance measures, and described
incentives for all stakeholders in the acquisition process to help
make the IPDS a success and promote a more constructive culture
throughout FAA.
CONCLUSIONS
---------------------------------------------------------- Chapter 3:3
Changing FAA's organizational culture will not occur overnight. Both
organizational research and FAA's experience have shown that much
work remains before the agency's shortcomings in mission focus,
accountability, coordination, and adaptability are ameliorated.
To FAA's credit, the agency has recognized the importance of cultural
change, and its Integrated Product Development System is a promising
first step. However, FAA will not know whether this system has the
potential to create and sustain a more constructive culture unless
the agency is able to fully establish the integrated product teams
and gain the strong commitment of all stakeholders to the new system.
A comprehensive strategy for cultural change is needed that includes
the means for obtaining the support throughout FAA.
RECOMMENDATION TO THE SECRETARY
OF TRANSPORTATION
---------------------------------------------------------- Chapter 3:4
We recommend that the Secretary of Transportation direct the FAA
Administrator to develop a comprehensive strategy for cultural
change. This strategy should include specific responsibilities and
performance measures for all stakeholders throughout the agency and
provide the incentives needed to promote the desired behaviors and to
achieve agencywide cultural change.
AGENCY COMMENTS
---------------------------------------------------------- Chapter 3:5
We provided the Department of Transportation with a draft report for
review and comment. We met with FAA officials, including the
Director, Office of Acquisitions; the Chief of Staff to the Associate
Administrator for Research and Acquisitions; and the Program
Directors for Air Traffic Plans and Requirements and Airway
Facilities Requirements. These officials generally agreed that our
report provided an accurate history of FAA's acquisition problems and
correctly identified culture as a contributing factor. In concurring
with our conclusions and recommendations, they told us that although
FAA has made great strides toward changing its organizational
culture, our report is correct in pointing out deficiencies that may
prevent FAA from accomplishing such change.
The Program Director, Air Traffic Plans and Requirements, emphasized
that procedural deficiencies, such as weak controls over requirements
changes, have been instrumental in causing past acquisition problems.
He said that changing procedures could have an immediate, beneficial
impact on the agency's ATC acquisitions and that FAA has been making
those changes. We agree that procedural deficiencies have caused
problems with FAA's acquisitions. Over the years, GAO reports have
focused on these deficiencies. However, this review found that FAA's
culture is also a cause, and we believe FAA is correct in looking to
cultural change as an important part of the solution.
FAA officials also told us that our report should recognize the many
structural and procedural initiatives throughout the agency that
could improve its organizational culture. They told us, for example,
that
-- Offices for air traffic and airway facilities requirements were
restructured to complement the establishment of IPTs.
-- Airway Facilities' business, strategic, and operational plans
now address initiatives of the IPDS.
-- ATS and ARA also instituted more discipline in the process for
establishing and modifying requirements.
It was not within the scope of our review to catalog and evaluate all
of FAA's initiatives that could potentially affect its culture. Our
review focused instead on the agency's primary reform effort--the
IPDS--whose explicit purpose was to improve the acquisition process
through cultural change. However, references to some of FAA's
initiatives were included, as appropriate, in the text.
SUMMARY OF STUDIES USED TO
CHARACTERIZE FAA'S ORGANIZATIONAL
CULTURE
=========================================================== Appendix I
Air Traffic Control Corporation Study: Report of the Executive
Oversight Committee to the Secretary of Transportation, 1994.
Basis for Study: The Secretary of Transportation established the
Executive Oversight Committee in September 1993 to study how the air
traffic control (ATC) system could be restructured to resolve
long-standing problems with acquisition, budget and finance, and
personnel. The Committee comprised senior executives from the
Federal Aviation Administration (FAA), the Office of the Secretary of
Transportation, several organizations within the Executive Office of
the President, three other government agencies, and two existing
government corporations.
Approach: The Executive Oversight Committee focused its research on
13 prior studies on the subject; other U.S. corporations'
experiences; international ATC organizations; the cost and existing
use of ATC services, projected financial performance, and the
viability of an ATC corporation; and the identification of the best
practices in acquisition, budget, management, and personnel that
would be possible under corporatization and the limitations of a
government agency. The Committee examined a range of approaches to
improving the ATC system to evaluate how (1) these alternatives would
permit rapid modernization of the ATC system; (2) obstacles to
day-to-day operations could be removed; (3) users and employees could
change the organization's culture; and (4) aviation safety could be
improved.
Significance of Findings: The Executive Oversight Committee
concluded that "the FAA acquisition process takes too long, lacks
flexibility and accountability, and results in products and services
that cost too much." The ability of FAA's current management to be
responsive to customer needs and to acquire advanced technology is
limited because of "an organizational culture that is not responsive
to change, emphasizes conservatism and conformity, and lacks
innovation."
FAA Advanced Automation System Program Assessment, the Center for
Naval Analyses, CAB94-30.10, Apr. 1994.
Basis for Study: FAA asked the Center for Naval Analyses (CNA) to
assess the organizational, management, and financial status of the
agency's Advanced Automation System (AAS).
Approach: CNA's panel of 38 senior experts performed a 90-day
independent analysis of the AAS program. Team members included
computer hardware and software experts, former program managers and
program analysts familiar with complex technology programs, corporate
managers, major systems developers, and former legislative staff.
The team received briefings from FAA and IBM, visited government and
contractor facilities, attended program reviews and technical
meetings, interviewed participants in the program, and reviewed
records and financial data.
Significance of Findings: The study included a specific focus on the
organizational culture that characterized FAA's management of the AAS
program. The team's report cited systemic cultural problems at FAA
related to such problems in the acquisition of AAS as increased costs
and schedule delays. For example, the suppression of bad news
prevented FAA's top management from taking early action.
Federal Research and Technology for Aviation, Office of Technology
Assessment, OTA-ETI-610, Sept. 1994.
Basis for Study: The study was conducted by the Office of Technology
Assessment (OTA) in response to a request by the House Committee on
Science, Space, and Technology and its Subcommittee on
Competitiveness and Technology (now the Subcommittee on Technology,
Environment, and Aviation).
Approach: OTA reviewed FAA's technology and regulatory development
programs, focusing on, among other things, the ATC system. OTA
conducted a series of workshops between June 1992 and February 1993
to obtain the views of officials involved in global aviation issues,
including representatives from international aviation-related
organizations, airlines, independent and federal research centers,
and aircraft manufacturers and contractors.
Significance of Findings: OTA's report focused in part on FAA's
difficulties with its acquisitions of major systems. The findings
are less than 2 years old and directly address managerial and
cultural problems that have delayed development and implementation of
ATC technologies. For example, OTA notes that "ATC system
development issues are as much cultural as they are managerial." OTA
also discusses FAA's shortcomings in analyzing and establishing
operational requirements. For example, OTA found that delays in ATC
modernization usually stem from inadequately addressing operational
issues throughout the stages of system planning and development at
FAA.
Report of the Operational Requirements Team, Federal Aviation
Administration, Nov. 22, 1993.
Basis for Study: In July 1993, the Acting Administrator of FAA
assembled a team of employees from Air Traffic, Logistics, System
Engineering, Aviation Standards, and the System Capacity Office to
investigate FAA's requirements process from an agency's perspective
and to make practical recommendations to improve the process.
Approach: The team reviewed past reports related to FAA's process to
determine requirements and interviewed 21 individuals from inside and
outside FAA to obtain their perspectives on various phases of the
requirements process. Interviewees included such high-ranking FAA
managers as the Acting Administrator and Deputy Administrator,
Associate Administrators, Directors and Executive Directors, and
Regional Administrators as well as a contractor senior
vice-president.
Significance of Findings: The report was written by FAA employees
about FAA problems. It focuses on faulty management practices in the
areas of accountability and coordination in the acquisition process
and cites FAA's culture as one of four primary areas of deficiency.
According to the report, "FAA does not have a culture or rewards
system that encourages teamwork, communications, or accountability."
1995 ARA Culture Baseline Survey Report, Federal Aviation
Administration Civil Aeromedical Institute, fall 1995.
Basis for Study: In May 1995, the Office of the Associate
Administrator for Research and Acquisitions (ARA) distributed surveys
on organizational culture to all headquarters employees to determine
the current state of ARA's culture.
Approach: The survey on organizational culture assessed the
following nine dimensions of ARA's culture: customer focus,
organizational design, teamwork, innovation, motivation, results
management, empowerment, communication, and leadership. FAA's survey
was distributed to all ARA employees at their offices. Employees
filled out the survey and mailed it back to FAA's Civil Aeromedical
Institute (CAMI) in Oklahoma City. The response rate was 47 percent
(480 responses out of 1,028 employees).
Significance of Findings: These survey results indicate that ARA has
significant problems in its organizational culture. The biggest
weaknesses are in the dimensions of organizational design, which
measures the degree to which FAA's structure and infrastructure
support quality work and cross-functional collaboration; innovation,
which measures the extent to which ARA's culture encourages
risk-taking and learning from failure; and leadership, which measures
the extent to which ARA's culture encourages management to instill a
common vision, lead by example, and help employees focus on quality
results.
What We Already Know About the New AXA Organization: 1993 Job
Satisfaction Survey Results, Federal Aviation Administration, Civil
Aeromedical Institute, 1993.\41
Basis for Study: In the summer of 1993, FAA's Civil Aeromedical
Institute administered a Job Satisfaction Survey (JSS) to 56 randomly
selected employees. The survey was intended to measure employee
satisfaction with, among other things, managerial practices in
employee empowerment and improvement orientation.
Approach: After the new acquisition organization was formed in 1994,
the Civil Aeromedical Institute randomly selected 56 headquarters
employees responsible for acquisitions who were assigned to the new
organization and analyzed their JSS responses.
Significance of Findings: Employees portrayed their acquisition
organization as low in empowering them and lacking in openness to the
point of making them apprehensive. For example, responses indicated
that considerable energy had to be devoted to organizational survival
and not doing anything that might "rock the boat."
Acquisition Team Assessment Survey, Federal Aviation Administration
Civil Aeromedical Institute, Mar. 1992.
Basis for Study: In the 1992 survey, FAA's Civil Aeromedical
Institute asked acquisition employees to respond to questions
regarding their attitudes and perceptions of the implementation of
matrix teams.
Approach: In March 1992, the Civil Aeromedical Institute sent a
series of surveys to solicit responses from approximately 600
acquisition employees (team members and nonteam members) who had
played a role in implementing matrix teams.
Significance of Findings: The summary of survey results concluded
that although cross-functional teams were the right approach,
problems continued. For example, acquisition employees said that
empowerment was limited and indicated that the commitment of senior
managers to the concept of matrix teams was weakening.
--------------------
\41 AXA was the original designation of the new acquisition
organization, which was renamed ARA.
ORGANIZATIONAL THEORIES USED TO
ANALYZE FAA'S ORGANIZATIONAL
CULTURE
========================================================== Appendix II
Interpreting the Cultural Styles Measured by the Organizational
Culture Inventory: Organizational Culture Inventory Leader's Guide,
Robert A. Cooke, Ph.D. and Janet L. Szumal, Human Synergistics,
Inc. 1989.
Summary of Contents: Dr. Cooke discusses the "Organizational
Culture Inventory," an instrument he designed to present a
quantitative approach to profile the culture of organizations in
terms of behavioral norms and expectations. Using the inventory, Dr.
Cooke collected data indicating that outcomes generally valued by
organizations (such as members' satisfaction and motivation) are
directly related to constructive cultural and behavioral styles. Dr.
Cooke's description of constructive (v. defensive) cultural types
establishes a framework to classify organizational culture according
to (1) the factors that promote it, (2) the behaviors resulting from
those factors, and (3) the problems or advantages that result from
those behaviors.
GAO's Analysis: Dr. Cooke's theory and descriptions of defensive
behaviors, the factors that promote defensive behaviors, and the
problems associated with them very closely correspond to
independently derived studies of FAA's management by numerous
internal and external sources during the last 10 years. By combining
Dr. Cooke's theory with Dr. Daniel Denison's conclusions on the
correlation between positive management styles and organizational
effectiveness, we have established criteria to evaluate FAA's
acquisition management culture.
Bringing Corporate Culture to the Bottom Line, Daniel R. Denison,
Ph.D. Organizational Dynamics: Special Reports, 1988, and Corporate
Culture and Organizational Effectiveness, Daniel R. Denison, Ph.D.
1990.
Summary of Contents: Dr. Denison's work presents the results of a
study of the perceptions of 43,747 respondents in 6,671 work groups
in 34 companies. Data on the 34 companies were drawn from the Survey
of Organizations archive at the University of Michigan's Institute
for Social Research. The survey instrument was based on
organizational theory by Rensis Likert Associates and research
conducted at the Institute for Social Research between 1966 and 1981.
Data on the organizational cultures of 34 companies were then
correlated to financial ratios (used as a measure of performance)
from Standard and Poor's COMPUSAT listing. The study supports Dr.
Denison's conclusions regarding the correlation between positive (or
constructive) corporate cultures and better performance records.
Dr. Denison describes four elements of organizational culture--
involvement, mission, adaptability, and consistency--that form a
framework for a model of organizational culture and effectiveness.
Dr. Denison's research revealed that companies in the private sector
whose employees were empowered to actively participate in
decision-making and management, as measured by the four elements of
organizational effectiveness, reaped a return on investment that
averaged nearly twice as high as those firms with less participatory
cultures.
GAO's Analysis: The results of Dr. Denison's study provide evidence
that the cultural and behavioral aspects of organizations affect
their performance. This study establishes criteria to support FAA's
need to change the negative aspects of its acquisition management
culture. Denison's description of a participative culture
corresponds closely with Dr. Cooke's description of a constructive
culture. Dr. Denison's data and correlations relate to private
sector organizations. Although using financial ratios as a measure
of effectiveness is not directly applicable to nonprofit, government
organizations, such as the FAA, because of the movement to improve
government by making federal agencies more businesslike and
accountable and the universality of Denison's four elements of
organizational effectiveness, we believe they are applicable to
improving FAA's management of ATC acquisitions.
A Comparative Study of Organizational Culture Change in Federal
Agencies: Success Patterns of Long-Term Efforts, Joseph N. Coffee,
Ph.D. Nov. 1993.
Summary of Contents: Dr. Coffee's study of 19 federal organizations
focuses on the factors that cause cultural change efforts in federal
agencies and the factors that enable federal agencies to maintain
cultural change. Dr. Coffee's initial premises are that (1) certain
preconditions must exist, (2) similar activities begin and initially
sustain the effort, (3) change-related activities will be of a
similar nature, and (4) major changes in organizational culture take
place over a significant period of time.
Dr. Coffee concludes that cultural change efforts in the federal
government are driven by external threats or crises; an
organization's history is the source of many of the elements that
resist change as well as some that drive a change; reducing hierarchy
or autocratic management is not normally seen as a cause of a change
effort but as a means of achieving that change; leadership plays a
key role in instigating cultural change in an organization;
incremental change appears to be the preferred approach to cultural
change in the federal government; the type of organization and
purpose of a change effort appear to be the key variables affecting
the success of a change effort because they influence the amount of
resistance to it.
Dr. Coffee describes a "legal-rational" model as the cultural base
for federal organizations with the following characteristics and
problems it poses for changing organizational culture:
-- Organized in clearly defined hierarchy of offices. While
cross-functional teams have been established in many agencies,
the traditional hierarchy has usually remained side-by-side with
the new groups that form a new hierarchy.
-- Multitude of rules and procedures to ensure that the interests
of the organization are served. As employees find ways around
existing rules, more rules and procedures are created. Thus,
many strategies for change include an effort to streamline
procedures.
Dr. Coffee also describes the life-cycle stages of cultures in
federal organizations. His description of the "maturity stage" is
particularly applicable to FAA. In the maturity stage
-- the culture is a significant constraint on innovation and causes
stakeholders to believe that change is unnecessary;
-- aspects of the culture cause dysfunctional behavior; and
-- functional and mission effectiveness declines.
GAO's Analysis: Dr. Coffee's study describes factors that affect
the organizational cultures of federal agencies and their ability to
change. These factors are applicable to FAA.
------------------------------------------------------ Appendix II:0.1
GAO'S SYNTHESIS OF THEORIES: Dr. Cooke's theory of constructive and
defensive organizational cultures presents a framework that can be
used to analyze the FAA. By overlaying Dr. Denison's theory of the
four organizational elements required for effectiveness and
performance, we can make a direct link between FAA's ineffective
management of acquisitions of major ATC systems and the defensive
aspects of its organizational culture. Dr. Denison's elements of
effectiveness correspond closely with Dr. Cooke's descriptions of
constructive cultures--the opposite of defensive cultures. Dr.
Coffee's assertion that employee involvement is essential corresponds
directly with Dr. Denison's premise that involvement is a key
element of effectiveness. Dr. Coffee presents research specific to
the federal environment regarding the factors associated with
achieving successful cultural change.
INDIVIDUALS WHO REVIEWED GAO'S
STRATEGY FOR CULTURAL CHANGE
========================================================= Appendix III
Dr. Sharon Caudle
Senior Analyst
Los Angeles Field Office
U.S. General Accounting Office
David Childress
Assistant Director, Defense Audits
Accounting and Information Management Division
U.S. General Accounting Office
Dr. Joseph Coffee
Director of National Education Programs
Bureau of Alcohol, Tobacco, and Firearms
Department of the Treasury
Paul Francis
Assistant Director, Defense Acquisitions
National Security and International Affairs Division
U.S. General Accounting Office
Dr. Thomas Hilton
Civil Aeromedical Institute
Training and Organizational Research Laboratory
Federal Aviation Administration
Department of Transportation
Dr. Lynn Kahn
Office of System Architecture and Program Evaluation
Federal Aviation Administration
Department of Transportation
Dr. Ralph H. Kilmann
Professor of Organization and Management
University of Pittsburgh
T. Christopher Mihm
Assistant Director, Federal Workforce Management Issues
General Government Division
U.S. General Accounting Office
Dr. Ralph Nash
Professor Emeritus of Law
National Law Center
George Washington University
Dr. Kathleen Robertson
Principal
Booz-Allen & Hamilton, Inc.
Katherine Schinasi
Associate Director, Defense Acquisitions
National Security and International Affairs Division
U.S. General Accounting Office
COMPONENTS OF A STRATEGY FOR
CULTURAL CHANGE
========================================================== Appendix IV
This appendix describes the strategy for cultural change presented in
chapter 3 with some explication. It is designed for use by
organizations suspecting that culture is an underlying cause of their
problems. The components are presented as a series, but they are not
sequential in the sense that each must be completed before the next
can begin. For instance, an organization can communicate the need
for cultural change at the same time it communicates its vision of
the future. Similarly, an organization can identify the skills
required for the cultural change to succeed as it develops its
strategy for change.
We validated our strategy for cultural change by soliciting comments
from various experts on cultural and organizational change. These
experts generally agreed with our strategy but suggested some
clarifications, which we incorporated. For example, several experts
suggested that we note the role that politics and the three branches
of government play in the agencies' efforts to change. Several
experts we consulted also noted the importance of selecting a
leadership team to drive agencies' efforts to change. Our strategy
for cultural change includes the following components:
1. Assess the current business and political situation to determine
the root cause of problems.
-- Question management, customers, employees, suppliers, the
Congress, et cetera, to identify root causes of problems.
-- Conduct an analysis of the organization's strengths and
weaknesses, opportunities for and threats to the organization.
2. Communicate the need to change the organization's culture.
-- Select a leadership team to drive the cultural change.
-- Explain the rationale behind the decision to change the culture.
3. Develop and communicate a vision for the future.
-- Build consensus around a new corporate vision at the executive
level.
-- Define the organization's mission, goals, and objectives.
-- Link the new vision to mission requirements and the current and
anticipated needs of stakeholders (the workforce, bargaining
units, the public and customers, and the three branches of
government).
-- Promote the new corporate vision to stakeholders by (1)
demonstrating how current values no longer serve the
organization's mission and (2) presenting data that assail
beliefs inconsistent with the desired corporate environment.
4. Identify factors that may impede cultural change
-- Identify stakeholders in the change process (e.g., the
workforce, bargaining units, the public and customers, and the
three branches of government) that may not support cultural
change.
-- Identify the key leverage points (e.g., reward systems,
structure, and leadership) that may inhibit cultural change.
5.Develop a strategy for cultural change that includes ways to
neutralize impediments to change.
-- Create ownership by involving stakeholders in planning cultural
change.
-- Hold all employees accountable for promoting the new vision for
change.
-- Maintain a standard of cross-organizational coordination.
-- Realign reward systems to maintain interest in and motivation to
change.
-- Decrease the levels of hierarchy in the organization to enable
change through empowering the workforce.
-- Maintain a continuity of leadership style.
6. Identify and teach the skills required to make the cultural
change effort successful.
-- Audit and match current skills and abilities to change
requirements.
-- Identify strategies for improving the readiness of the workforce
(e.g., training, education, details, and benchmarking).
-- Identify organizational resources that can be used to promote
learning new skills and abilities.
-- Develop a formal training program to equip managers for
implementing change at the local level.
-- Develop training that clearly demonstrates how the new, desired
culture will benefit the organization and the individuals who
promote it.
7. Develop performance indicators to measure the extent to which the
organization has achieved cultural change.
-- Measure adherence to mission, goals, and objectives.
-- Establish a baseline measurement of the current organizational
culture (e.g., with a survey).
-- Develop a customer feedback system.
-- Realign data collection and reporting with new goals and
objectives.
8. Implement the strategy for cultural change.
-- Widely distribute management's plan for change.
-- Begin change with fanfare to create momentum.
-- Maintain momentum by keeping the leadership team in the
limelight.
9. Use performance data to improve efforts to change the culture.
-- Ensure that critical mission-related goals and objectives are
tracked and widely reported.
-- Meet periodically with the workforce to review performance data
and discuss ways to improve.
MAJOR CONTRIBUTORS TO THIS REPORT
=========================================================== Appendix V
RESOURCES, COMMUNITY AND ECONOMIC
DEVELOPMENT DIVISION WASHINGTON
D.C.
Robert E. Levin, Assistant Director
ATLANTA REGIONAL OFFICE
Christopher A. Keisling, Evaluator-in-Charge
A. Paige Smith
Ray B. Bush
BIBLIOGRAPHY
============================================================ Chapter 1
STRATEGIC CHANGE MANAGEMENT
---------------------------------------------------------- Chapter 1:1
Air Traffic Control Corporation Study. Report of the Executive
Oversight Committee to the Secretary of Transportation. Washington,
D.C.: May 1994.
Best Practices of Improvement Driven Organizations: How Today's High
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FAA Advanced Automation System Program Assessment. the CNA
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The Financial and Non-Financial Returns to Innovative Workplace
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Managing Quality and Productivity in Aerospace and Defense.
Department of Defense, Systems Management College, Nov. 1989.
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Transforming Organizational Structures. Accompanying Report of the
National Performance Review, Office of the Vice President of the
United States. Washington, D.C.: Sept. 1993.
"Taking the Next Step: Implementing Organizational Change,"
Presented by Lt. Col. Robert K. Saxer, National Defense
University, Industrial College of the Armed Forces, at the 1995
Acquisition Research Symposium. Washington, D.C.: Aug. 1995.
ORGANIZATIONAL THEORY
---------------------------------------------------------- Chapter 1:2
Coffee, Joseph N. A Comparative Study of Organizational Culture
Change in Federal Agencies: Success Patterns of Long-Term Efforts.
Nov. 1993.
Cooke, Robert A., and Denise M. Rousseau. "Behavioral Norms and
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Cooke, Robert A. and Janet L. (Hartmann) Szumal. Interpreting the
Cultural Styles Measured by the Organizational Culture Inventory:
Organizational Culture Inventory Leader's Guide. Human Synergistics,
Inc., Arlington Heights: 1989.
Denison, Daniel R. Corporate Culture and Organizational
Effectiveness. New York: John Wiley & Sons, 1990.
Denison, Daniel R., and Aneil K. Mishra, "Toward a Theory of
Organizational Culture and Effectiveness." Organizational Science,
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Desatnick, Robert L. "Management Climate Surveys: A Way to Uncover
an Organization's Culture." Personnel (May 1986) pp. 49-54.
Johnston, Kenneth B. Busting Bureaucracy: How to Conquer Your
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Kilmann, Ralph H. Beyond the Quick Fix: Managing Five Tracks to
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Meares, Larry. "A Model for Changing Organizational Culture."
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Nadler, David A., et al. Discontinuous Change: Leading
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Pritchett, Price, and Ron Pound. High-Velocity Culture Change: A
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Reynierse, James H. "Measuring Corporate Culture." The Bankers
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Zeira, Yoram, and Joyce Avedisian. "Organizational Planned Change:
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RELATED GAO PRODUCTS
============================================================ Chapter 2
AIR TRAFFIC CONTROL
---------------------------------------------------------- Chapter 2:1
Air Traffic Control: Status of FAA's Modernization Program
(GAO/RCED-95-175FS, May 26, 1995).
Air Traffic Control: Status of FAA's Modernization Program
(GAO/RCED-94-167FS, Apr. 15, 1994).
Advanced Automation System: Implications of Problems and Recent
Changes (GAO/T-RCED-94-188, Apr. 13, 1994).
Air Traffic Control: Improvements Needed in FAA's Management of
Acquisitions (GAO/T-RCED-93-36, May 5, 1993).
Air Traffic Control: Uncertainties and Challenges Face FAA's
Advanced Automated System (GAO/T-RCED-93-30, Apr. 19, 1993).
Air Traffic Control: Status of FAA's Modernization Program
(GAO/RCED-93-121FS, Apr. 16, 1993).
Air Traffic Control: Advanced Automation System Problems Need to Be
Addressed (GAO/T-RCED-93-15, Mar. 10, 1993).
Air Traffic Control: Justifications for Capital Investments Need
Strengthening (GAO/RCED-93-55, Jan. 14, 1993).
Air Traffic Control: FAA Needs to Justify Further Investment in Its
Oceanic Display System (GAO/IMTEC-92-80, Sept. 30, 1992).
Air Traffic Control: Advanced Automation System Still Vulnerable to
Cost and Schedule Problems (GAO/RCED-92-264, Sept. 18, 1992).
Air Traffic Control: Status of FAA's Modernization Program
(GAO/RCED-92-136BR, Apr. 3, 1992).
Air Traffic Control: Voice Communications System Challenges Continue
(GAO/IMTEC-91-49, Aug. 5, 1991).
Aviation Acquisition: Further Changes Needed in FAA's Management and
Budgeting Practices (GAO/RCED-91-159, July 29, 1991).
Airport Safety: New Radar That Will Help Prevent Accidents Is 4
Years Behind Schedule (GAO/T-RCED-91-78, July 10, 1991).
Major Acquisitions: Top Management Attention Needed to Improve DOT's
Acquisition Process (GAO/T-RCED-91-45, Apr. 24, 1991).
Air Traffic Control: Status of FAA's Modernization Effort
(GAO/RCED-91-132FS, Apr. 15, 1991).
Air Traffic Control: FAA's Advanced Automation System Contract
(GAO/IMTEC-91-25, Mar. 5, 1991).
Air Traffic Control: Efforts to Modernize Oceanic System Delayed
(GAO/IMTEC-91-2, Jan. 16, 1991).
Air Traffic Control: Continuing Delays Anticipated for the Advanced
Automation System (GAO/IMTEC-90-63, July 18, 1990).
Air Traffic Control: Ineffective Management Plagues $1.7-Billion
Radar Program (GAO/IMTEC-90-37, May 31, 1990).
Air Traffic Control: Status of FAA's Effort to Modernize the System
(GAO/RCED-90-146FS, Apr. 17, 1990).
Air Traffic Control: FAA's Implementation of Modernization Projects
in the Field (GAO/RCED-89-92, June 28, 1989).
Air Traffic Control: Voice Communications System Continues to
Encounter Difficulties (GAO/IMTEC-89-39, June 1, 1989).
Air Traffic Control: FAA Should Define the Optimal Advanced
Automation System Alternative (GAO/IMTEC-89-5, Nov. 30, 1988).
Air Traffic Control: Continued Improvements Needed in FAA's
Management of the NAS Plan (GAO/RCED-89-7, Nov. 10, 1988).
Microwave Landing Systems: Additional Systems Should Not Be Procured
Unless Benefits Proven (GAO/RCED-88-118, May 16, 1988).
Federal Aviation Administration's Advanced Automation System
Investment (GAO/T-IMTEC-88-3, Apr. 12, 1988).
Aviation Acquisition: Improved Process Needs to Be Followed
(GAO/RCED-87-8, Mar. 26, 1987).
Air Traffic Control: FAA's Advanced Automation System Acquisition
Strategy Is Risky (GAO/IMTEC-86-24, July 8, 1986).
Examination of the Federal Aviation Administration's Plan for the
National Airspace System--Interim Report (GAO/AFMD-82-66, Apr. 20,
1982).
ORGANIZATIONAL CHANGE
---------------------------------------------------------- Chapter 2:2
Business Process Reengineering Assessment Guide, Exposure Draft
(GAO/AIMD, Aug. 1995).
Best Practices Methodology: A New Approach for Improving Government
Operations (GAO/NSIAD-95-154, May 1995).
Results-Oriented Management: A Manual for Evaluating Implementation
of the Government Performance and Results Act, Operating Draft
(GAO/GGD, Dec. 2, 1994).
Executive Guide: Improving Mission Performance Through Strategic
Information Management and Technology (GAO/AIMD-94-115, May 1994).
Improving Government: Measuring Performance and Acting on Proposals
for Change (GAO, Mar. 23, 1993).
Weapons Acquisition: A Rare Opportunity for Lasting Change
(GAO/NSIAD-93-15, Dec. 92).
Organizational Culture: Techniques Companies Use to Perpetuate or
Change Beliefs and Values (GAO/NSIAD-92-105, Feb. 27, 1992).
*** End of document. ***