01 Mar 2016
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The Western Front

What the nation’s tech capital can teach the Pentagon (and vice versa)
by Jason Feifer

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Illustration by Brian Stauffer

The government used to be America’s greatest innovator. Among many things, it developed or helped fund the creation of the Internet, GPS, microchips, and even Cheetos. (True story: The military’s need for easy-to-transport meals led to the creation of powdered cheese.) And just decades ago, Washington was involved in two-thirds of all research and development in America; only one-third came from private industry. But today, those R&D ratios have flipped. Both private companies and governments around the globe are innovating far faster than Washington can keep up, which puts the Pentagon in the dangerous position of falling behind. “The way we have been doing business for the past several decades will not be sufficient going forward,” says Rear Admiral Brian Hendrickson (MBA 1997).

That’s why the Pentagon has gone west.

Last summer, Hendrickson and a colleague opened an office in Silicon Valley called the Defense Innovation Unit Experimental, or DIUx for short. Their mission: discover new technologies that can be useful to the military, and figure out ways for the Pentagon to work with the notoriously anti- establishment tech industry. “I’m not saying that Silicon Valley owns the franchise on smart folks and innovative folks,” says Hendrickson. “But you’ve just got to start somewhere.”

So how does the buttoned-up Pentagon introduce itself to the Bay Area’s jeans-and-hoodies set? The same way everyone else does, Hendrickson says: with personal connections. Secretary of Defense Ash Carter has developed strong connections in the Valley, so the team started with his network and then spread out, meeting with startup founders and venture capitalists. They’ve also adjusted the way the Pentagon typically talks to potential partners. The government is used to the request for proposal (RFP) model—an agency has a need, a company proposes to fulfill it, and that’s that. But in the Valley, Hendrickson is always looking for ways to show startups that the Pentagon can be useful to entrepreneurs, too. “We have other things to bring to the table,” says Hendrickson. “If we can present them with a data set and algorithms that they just can’t get anywhere else, that’s interesting to them.”

Entrepreneurs are also interested in capital, of course. The government has it, but its process of selecting and paying for new technologies is ploddingly slow. Traditional military contractors have built their businesses around that process, but Valley innovators can’t wait as long. “We can approach it two ways,” Hendrickson says. “We can say, ‘You need to learn how to do business with the DoD,’ which will confirm a negative bias; or we can say, ‘We need to look at ways that we can do business differently.’” He’s doing the latter, developing a new, fast process for the military to pay companies.

And perhaps just as importantly, Hendrickson can speak and think like Valley types. The region is full of buzzwords—disrupt, pivot, fail fast—that reflect its unsentimental, try-and-fail attitude. “The X in our name is for experimental,” he says. “Not every one of those experiments will go according to plan.” But if the Pentagon wants to keep up with a fast-changing world, Hendrickson knows it’s going to need to embrace that kind of unpredictability, too.

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Class of MBA 1997, Section B

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