FROM $75B TO $150B IN CONTRACTS A YEAR,
WITH FEWER RESOURCES

Templeton:       
I am pleased to welcome to the podcast today the Honorable James Geurts, known to most as Hondo. Over three decades of leadership in the national security sector, Mr. Geurts has been recognized for his abilities to rapidly field emerging technologies, create and scale innovative solutions, inspire teams, and develop diverse talent. He is a proven leader in the most challenging and complex situations. 

Currently, Mr. Geurts is a distinguished fellow at Business Executives for National Security, where he provides strategic oversight for their pioneering work related to shaping the nation's future industrial base. Hondo also serves as the Chairman of the National Security Advisory Board for Sierra Space, Vice Chairman for SYC Robotics, and serves on several other boards of innovative firms. 

Prior to his retirement from government service, Secretary Geurts performed the duties of the Undersecretary of the Navy, as the department's number two civilian with responsibility for the effective global operations of the over 1-million person, $200 billion US Navy and Marine Corps team.

From 2017 until 2021, after his presidential appointment and unanimous senate confirmation, he served as Assistant Secretary of the Navy for Research Development and Acquisition. As the Department of Navy's most senior acquisition official, he was responsible for a $140 billion annual budget and ensured the effective procurement and sustainment of the platform systems, technology, and services to enhance the capabilities and readiness of the sailors and marines serving around the globe. 

Throughout his military and civilian careers, Mr. Geurts’s contributions have been recognized by numerous private and public institutions. These include twice earning the Navy Distinguished Public Service Medal and Presidential Rank Award. On a personal note, Hondo is married to his high school sweetheart, Dr. Kelly Geurts, and they are the parents of two adult sons. 

Hondo, welcome to the podcast.

Mr. Geurts:               
Awesome to be here with you, Tim, and all your listeners.

Templeton:       
Excellent. Well, you know, we had a chance to talk about this whole topic, Hondo, of speed to contract, speed to market, and, you have an interesting perspective based on your body of work. And when I asked you, thinking of your past, “What was the most effective time or event where you were able to implement new insights for speed to contract?” your response was different than others. And, what I really liked about it, in all seriousness, was that your response was based on what you actually performed in the positions that I just outlined for our listeners. So, from that, give us your perspective on how you look at change in acquisition and government oversight, and what we need to do to change in the future, based on what you’ve done in the past.
                        


IT’S NOT ABOUT CREATING ANOTHER AUTHORITY, PROCESS, OR REGULATION


Mr. Geurts:  
Yeah. Well, again it’s great to be here with you and talk about this very interesting topic. As we discussed in our pre-call, I can be a bit of a contrarian in this whole debate, because I don't think the real issue is getting another authority or creating a new process, or creating a new regulation.


WHEN YOU ARE FOCUSED ON THE MISSION, IT’S ABOUT ACHIEVING OUTCOMES

Mr. Geurts:
In my experience, both leading acquisition in the Air Force at US Special Operations Command, during most of the war;  and then also in the Navy Marine Corps team, a few things, when I saw a real transformational change, kind of stood out to me. I would characterize one of them as having a laser focus on the mission. Too many times bureaucracies get caught up in measuring activity instead of outcome. And when you're really focused on the mission, it's about achieving outcomes.

“Did I spend a lot of time on the process, or did I deliver something relevant to the field in a timeframe that was also relevant?” To get there, you've got to have somewhat of an abundance mindset. Thanks for the long bio intro. I would characterize it as I went in the Air Force, pre-Desert Storm: Jam, jam, jam; speed, speed, speed; conflict, conflict, conflict. I went to SOCOM right after 9/11, same thing. And I went to the Navy Marine Corps as we made this specific pivot. So, whether I go to where trouble is, or trouble follows me, you could probably debate. My wife could give you some perspective on that.


FOLLOWING PROCESS FOR PROCESS’S SAKE IS OBSOLETE

Mr. Geurts:
But, in those situations, you've got to have a mission focus. And again, it's not about following your process for process’s sake; it's about delivering mission outcomes. Now there are places for process in that, don’t get me wrong. 


DEVELOP AN ABUNDANCE MINDSET, NOT A SCARCITY MINDSET


Mr. Geurts:
The second thing:  You’ve got to have an abundance mindset. Too many times we get caught up in a scarcity mindset, where you're concentrating on what you don't have as opposed to maximizing what you do have.


BUILD AND DEVELOP A BROAD NETWORK


Mr. Geurts: 
And third is you really build your value. You exercise a broad network and not just the network that consists of the people you normally associate with. 

If you put those three together—outcome orientation, abundance mindset, and network development— what that always equates to, to me is learning velocity, right? How fast can you learn? I'm not that smart but I'm a hell of a poacher; I will steal from anybody. And we just got out of Christmas, so I like to remind people that your official Christmas tree was invented by a toilet brush company, and all they did was take toilet bowl brushes and stack them up, right?


GO WHERE SOMEONE HAS ALREADY GONE: DON’T WAIT FOR TIME TO INVENT 


Mr. Geurts:
If you can start where somebody has already gone, you don't have to wait for the time to invent things. And so I think if you put those three things together, you can do amazing things. What I did first at SOCOM, and again, I mean the team at SOCOM: We had a challenge with the standard issue contract bandwidth. How can we get stuck to the field faster?

In about a four-year period, we were able to double the output of how much we could get on contract. We did that with about half the amount of people we had, and about 20% fewer contracts. And then I got the great opportunity to lead the Marine Corps and Navy Acquisition Team. And I wanted to try the experiment again. And in that case, in less than four years, we went from $75 billion a year on contract to $150 billion a year on contract with 20% fewer contracts and maybe 10% fewer people.


WE DIDN’T HAVE A GOLDEN PROCESS. AND WE DIDN’T INVENT SOMETHING NEW


Mr. Geurts:
And the really interesting thing in all of that is we didn't change. We didn't have a golden process. We didn't invent something new. I didn't have to go get a new congressional authority. We just got really focused again, focused on mission outcomes, learning velocity, building and energizing a great network, and then having an abundance mindset—focusing on maximizing everything we have.


Templeton:       
Could I stop you on that Hondo? We have a lot of leaders listening to this podcast and many of us are really beginners, with experts like yourself leaning in and sharing insights. So many before you have talked about the frustrations of working at the top and trying to get through this mentality of bureaucracy. 

But yet you were able to do that. And look at your background, you're a soldier, you're a can-do guy. I'm looking at your “Wake up, Kickass and Repeat” sign in the background of your office, and I believe it. And the point is, your body of work says what were outcomes. And I know when you talk about an abundance mindset, I totally understand that. You laid out in a previous conversation your four Ds of what it really takes to have that focus and be on mission, central to accomplishing what you're trying to get to.

But what are some of the big takeaways, if you're talking to other leaders that would like to be able to duplicate doubling your awards with 20% fewer contracts and 10% fewer people? What are some of the highlights, specifically, where you were able to rise above and lead the team to that level of accomplishment? 


BUREAUCRACIES NEVER LIKE TO TAKE RISKS. THEY’RE NOT DESIGNED FOR IT 


Mr. Geurts:
Again, the team accomplished that. I maybe facilitated it, and every once in a while, put my 18-inch neck to good use to remove some obstacles. I think the first thing is you've got to create a culture of trust in the organization. And you've got to think and talk about things like risk in new ways. We often say we want to take more risks. Bureaucracies never like to take risks. That's not what they're designed to do. And the answer isn't, generically, we should just take more risks. And so some of it is actually, as a team, figuring out how to better allocate resources to the risk you have. Because in the end, we all have finite resources, right? Every person listening to this:  Know you only have so many hours in a day.

And know you only have so many dollars. You only have so many things you can apply them to. But the challenge is if you don't think about risk in the right way and you don't allocate risk appropriately, you'll put too many resources into the things that don't have risk. And you'll actually, as an organization, be taking much more risk because you're going to starve them from the things that really have a lot of risk.


The 4 Ds: THE FIRST ‘D’ IS FOR DECENTRALIZE


Mr. Geurts:
And so, I often talk about the four Ds, which I use, and that are so common in the Navy and Marine Corps. And the first “D” is massively Decentralize the organization, right, to the lowest capable level, right? And so capability means full training. And trust and accountability. And so as a leader, you've got to trust your organization.


LEARN TO TRUST ‘TIL IT HURTS


Mr. Geurts:               
At Special Ops, we used to say “Trust ‘til it hurts.” If you aren't uncomfortable with the amount of trust you're giving somebody, you're probably not trusting them enough. And trust people, even if they don't look like you or have the same color skin as you, or have the same gender or come from the same service— or whatever the difference is. If you can create that element of trust in your organization, then you can massively decentralize your organization. If you can massively decentralize your organization, then you can get to, instead of one plus one equals two, you start doing multiplication. And that's where you start to get these exponential returns.


THE SECOND ‘D’ IS DIFFERENTIATE


Mr. Geurts:
The second piece is you've really got to Differentiate the work. Bureaucracy loves to pick one way to do everything. I think when I left SOCOM, we had seven different ways we could acquire something.

So, when you Decentralize and Differentiate, you empower people and then you give them lots of tools and then you hold them accountable for picking the right tool or doing the right job. You know, anybody who's a woodworker has dealt with the saw awl. It does every woodworking function very poorly because it tries to do everything right. Bureaucracies do that. 

Pick lots of different ways to do something and then people will be a lot more willing to try things if you give them a bunch of different tools. And you focus learning on “sometimes you learn because it didn't work.” Sometimes you learn because it worked and other people got to go there. So, we can talk through the four D's, but those first two will really let you power up an organization.

Let’s get back to this abundance thing we talk about in the Navy. We don't have enough people, we don't have enough money. We had $150 billion to put on contract and 130,000 people. That sounds like a lot of stuff to me <laugh>, right? And, so rather than focusing on what we don't have, I would always encourage folks to think, “What am I doing to maximize what I can do?” 


LEARN FROM EACH OTHER


Mr. Geurts:
One of those key elements is learning from each other. Right now, if we all have to invent something, it's going to take a heck of a long time. The Air Force at the time was doing some great things through Cameron Holt—I think he has been one of your guests. They were doing some great stuff in SIVERS. I'll just steal it. Why would I want to train or invent a competitive thing? I'll take that, and we'll go focus on an area that has another need. And so, you've got to get this humility that you don't have to be the one to solve every problem. Trust that your team can learn this too.


Templeton:       
We talked about The Four Ds, and I know we're not going to spend a lot of time on it, but you covered the first one, to be able to decentralize,  and then the second,  to differentiate. Go ahead and just give us the other two.

THE THIRD ‘D’ IS DIGITIZE THE WORK



Mr. Geurts:               
So, the next “D”  is “Digitize” the work. Get people focused on where you've got to make judgments, where humility plays a good part, and where there's interconnectedness. And move people out of work that doesn't take advantage of the human element.


THE FOURTH ‘D’ IS DEVELOP TALENT


Mr. Geurts:
And then the final one is, “Develop” talent. It's last because it's one underpinning the rest. And we could do hours of podcasts just on developing talent. But if you don't give people a chance to try and learn and go there, you're never going to develop talent. Because they're always waiting to be the one to make the decision versus learning to make decisions early on. I tell folks, “ I want you to know, you making a 10% mistake on a $100K decision, I can afford for you to learn from that even if you make the wrong decision.”

“I kind of don't want you to make a 10% mistake on a $10 billion program.” But if folks don't learn how to make decisions early on—back to this Decentralization—we can’t actually train them on how to make decisions until they're at a point of making decisions where getting it right is very, very important—and that's just not the way to develop talent.


Templeton:       
As we go forth, in those last four years of work, you brought that same mentality right over and redid it with the project again. And just thinking out loud, you doubled your productivity in terms of what you awarded in terms of contracts on an annual basis. You did it with 20% fewer contracts, and you did it with 10% less personnel. If our listeners would think for a moment: If we were able to take just those stats and bring them across what we're doing on everything, what exponential change and improvement we could make.  We could go through saying, “This isn't a one-off.”

I mean, it's a point. This is something that you did through two different tours. I want you to unpack what you shared with myself and Charlie Williams in our pre-conversation. I just loved it, and wrote it down. You said, “I actually was able to award a multi-billion-dollar contract”— and you can correct me if I'm wrong— ”and did it without an RFP or a proposal.”

Now just unpack that for our listeners and let's talk about how we might be able to duplicate that process and some of the key underpinnings of it.
                        

LEARNING LESSON: ASSIGN AN INITIATIVE WITH A 50% CHANCE OF FAILURE


Mr. Geurts:              
Yes. And again, there are maybe two lessons in this story. The first lesson is actually one of learning. And so, for all my time in the Navy and the Marine Corps, the first thing I would rate people on in their performance, was they had to have a major initiative that had at least a 50% chance of failing. And you'd say, “Well, why would you do that? Don't you want everybody to be 100 percent successful in everything they do?” If all I rate you on is what you're successful in doing, and if all you rate yourself on, or all you rate your team on, is what's guaranteed success, guess what? You're always going to do the same thing. And as an organization and as individuals or teams, we're not going to learn. Now again, good judgment is authorized and encouraged here.


TEACH HOW TO LEARN FAST


Mr. Geurts:
And so, part of this was teaching ourselves how to learn fast. Sometimes that meant trying things that had a high chance of failing so we could learn from them. And so, one of those things:  One of the PSs on the shipbuilding side said, “You know, we're in the middle of multi-year; we built a lot of these submarines. We'd like to try and award a multi-year submarine contract, without doing a proposal in RFP.”


LEARN FROM WHAT FAILS


We all have the same data. We all know what everything costs, we know what we want, and we know how to build it. Why are we going through this two-year dance and wasting a bunch of time and overhead? They tried it and it didn't work. It failed.

Now what we didn't do, was say, “Okay, you idiots. Why did you try that and fail?”Right? We said, “Wow, tell us about it.” And we, once a month, got all the PS’s together, we shared things that worked, in Edward, and they said, for this reason, that reason. What about what didn’t? The timing wasn't right. It was big, and we were making some design changes, whatever the reasons. Well, the aviation guys were in the room, they heard the same thing and they said, “We're in lot 42 F-18s. We just awarded an F-18 contract not too long ago. We're going to try this on F-18s for a three-year multi-year, multi-billion-dollar contract. We have all the data. They have all the data. And in about three weeks, they sent an offer to the contractor and said, here's what we'd be willing to pay for three years’ worth of F-18s and the contractor came back and said, “That's awesome, we'll sign up to that deal.”


And in about three weeks we had that deal—normally an 18-month to 2-year process. Now think of all the money we saved on the government side by not having to do all that work. Think of all the money we saved on the contractor side; they could apply all that overhead to doing interesting new things. And we got the best deal we have ever gotten on a three-year, multi-year contract on aircraft in that situation. So again, there's some great learning there. Now, would I apply that to everything? Absolutely not. Is it another kit, or tool we ought to have in the kit bag? Absolutely. Did I have to go to Congress to do that? No. Did I have all the authorities? Yes, we did. We just had to decide to use them.


Templeton:       
Yes. Tremendous story. You sent over a tremendous article, an overview of how you approach this in the areas that need to be improved. But what's really key here, Hondo— and by the way, for our listeners, we'll make a link to that article on the website, for this recording as well as a link to your podcast, Hondo. For those people who are interested, a big part of this is education. It's when you get the person with the body of work that's speaking from the center of their experience, that's when we're all leaning in to listen. Right?

Obviously, you're available and your work has been teaching, mentoring, and going forward, this medium and this podcast is about, really knocking the silos down between those individuals that were in a seat like yourself, who were able to lead—for the lessons to be learned going forward. I know this is part of your life's work, and what you do for those people who are interested to say, “Hey, how do we go forward, how can we take the lessons that Hondo and his team and others that he's affiliated with have learned and taught, and incorporate them into our divisions, incorporate them for what we can do going forward? How would those leaders access that? What are the things that you would recommend or advise?


BEFORE YOU ASK FOR ANYTHING, HAVE YOU OPTIMIZED WHAT YOU ALREADY HAVE? 


Mr. Geurts:               

Yes, I'm going to answer this with maybe two groups of thought.

The first group of thought:  Before you ask for something you don't have, really challenge yourself to be sure that you've thought about it. Have you maximized all the things you do have? Have you really empowered the folks on your team? Are you truly leveraging all of the diversity you have on your team? Right? There's a little bit of a misnomer, that to be a transformational or innovative leader, you have to actually be transformational or innovative yourself. And I think that's hogwash. There are a bazillion people much more innovative or transformational than I am. But as a leader, you have to enable some of that. You have to create the conditions that are nurturing that. And that's not normally by reorganizing or trying to come up with a gimmick process or something like that.


BEWARE OF THE GIMMICKS. LEVERAGE EVERYTHING AVAILABLE


Mr. Geurts:               
So, the first thing I would say is to beware of gimmicks. Leverage everything that's available, but don't wait for the golden process or something to solve the problem. If you've got a great team that you've developed and the members trust each other, the process won't matter. And if you don't have a great team that trusts each other, the process won't matter here either. There are certainly places where you can use some of those process techniques, but we kind of hide behind those.


DO YOU HAVE CURIOSITY?


Mr. Geurts:
And then at the individual level, I would say, you know, there are three core traits to really either focus on yourself or at a team level. The first is, do you have curiosity? Do you have the curiosity to explore? Are you getting out of your silo? Have you figured out what your teammate is doing next year?

Have you figured out what the Air Force is doing that you might be able to steal or have you gotten an idea from industry? It's great that as a senior leader, people come talk to me. But I don't have all the right ideas. My ideas can be outdated. So don't just listen to just the most senior people. There are plenty of good ideas everywhere. But you've got to be curious. And if you don't spend a little time being curious to explore, you'll never learn things.


DO YOU HAVE THE HUMILITY TO LEARN?


Mr. Geurts: 
And then the second piece is really having the humility then, to learn, and that can also help you explore. But if you just discount it because it's not what you think or how you were brought up, that doesn't do you much good. So, if you have those first two elements, you're in pretty good shape.


DO YOU HAVE THE BOLDNESS TO ACT?


Mr. Geurts:               
And then the third I would say is you've got to have the boldness to act. Just go, don't take walks, go out and swing. Right? I just go out and swing. And that's why I say I'm a little bit of a contrarian because I found if you can get that mindset into the team at the individual level, at the team level, at the program level, then you start illuminating all these opportunities to do things a little differently or do things a little faster or try something new or whatnot. And the other nice thing about that is when the old has- been like me, walks out the door, you don't start all over again because now it's in everybody's DNA, it's in the culture. And then you stop looking for heroes, right? And now you're just mission-focused, getting a job done.


DON’T LOOK FOR A HERO 


Mr. Geurts:               
Then everybody who comes in after you contributes and then goes. So, don't look for the gimmick or the hero as much as some of these more basic core tenets. You do that at scale across the size of our whole team, industry startup, venture capital, government, holy moly. That's why this country's great because that's what we do. We don't over-essentialize planning and pick one perfect way to do everything. But we've got to unlock that true potential throughout the country. 

And for the last 20 to 30 years, we've had the luxury of being complacent. That doesn't mean at the individual level, but at the country level. And we're just not going to win. And I hate losing, right? I hate losing. So, we've got to get past all this stuff and with a good mission focus, I can overcome some of the challenges we all have as humans. That’s just naturally being part of a human, ego, and all that other stuff. We really get mission outcome-focused. Again, I've seen it in multiple services and multiple situations; really amazing things can happen.


Templeton:       
It's probably the special ops background. You said something, and this is like Management 101, and everybody always surpasses it. And I loved it. It's trusting someone ‘til it hurts.  I had an interview with a guy a long time ago. He was mentored by his boss, David Packard, the founder of HP. And I asked him the question, “What was the single biggest thing that David Packard shared with you or advised you to do in your career when working with him?” And he thought for a long time - he was an engineer. He took an extended amount of time to think about it. But he said this: “What David Packard taught me to do was to hire and develop people that were smarter and better than me.” And then he looked at me and said, “Do you know how hard that is to do?”

He said “ It goes against our human nature. But it's the single biggest reason I was able to move up into the senior ranks of HP.” And when you start talking about trusting people until it hurts and putting people in a position to fail—I love the idea that people are evaluated on projects where they have a 50% failure rate.

And again, good judgment is always encouraged, right?  But we can just surpass these things, but they're core to your success and building the team out. And so, it’s exciting for me. And, as we bring this to a close, I've always asked for the single biggest idea in terms of speed to contract change. When you have a blank canvas, what are the things that you would do going forward? You, you've laid some really good details and steps moving in the right direction. But, final thoughts for those people that are listening that number one, are doing self-evaluation. Number two, are not looking for the silver bullet, right? Or the hero. I like that. But really looking for a process to move the bar up and bring the team along with them.

Final thoughts?
                        

LEARN TO MAKE A DECISION ON YOUR OWN


Mr. Geurts:
Yes, maybe two quick war stories, because I don't want everybody to think I was born into enlightenment or went to the right school or something like that; I  was the knucklehead second lieutenant.

I showed up at my first job. I'm there for a week. The major I was working for is gone somewhere. So I have this indecision. I walk into the colonel who happened to be an old strategic rear command guy, and I said, “Hey, Colonel, you know, Lieutenant Joe Bag of Donuts here. I have got this decision; I'd like your advice. You know, here's what I'm kind of thinking.” And he looked at me and starts to ask me about my background, and did I get a college degree, and did I really get a commission.

And I thought he cared about me for a little while. And then about five minutes into it, he goes, “So we were dumb enough to send you on a scholarship and then commission you and you're not smart enough to make this decision or confident enough to make it on your own? Tell me why I need you in my US Air Force?”

That was as a second lieutenant, right? That was okay. Again, it wasn't a grand process, it was okay, I got it.


FORCED TO LEARN AT AN EARLY AGE

Mr. Geurts:
And then, a little later, as you mentioned, I’m married to my high school sweetheart, had two kids, and we were really struggling. We had some developmental challenges. I was working late and getting a little frustrated. My wife mentioned, “We have some issues, we’ve got some challenges here.”

I came in the next day. My boss had seen me moping around a little bit and kept asking me what was going on. I said I don't know. Finally, he calls my wife at home and finds out we have some challenges. And she said, “If he can get home for dinner, that would be really nice, not working so late.” So, he comes and hands me a set of orders that I have to be at home by 6 o'clock every night. Or I'm going to get an Article 15 and thrown out of the Air Force <laugh>. 

What both of those lessons taught me early on— and I was uncomfortable trusting people, empowering people, and inspiring people—it wasn't that I had some great divine inspiration or read a book. This was pure survival from my standpoint. Any success I've had was because I was forced to learn that perhaps earlier than others.

And then I just got a lot of practice at it, so I got very comfortable. And so, what I tell everybody out there: Have curiosity, humility, boldness; and really look for the good in people. Encourage the good in people, and then again, hold them accountable, but trust them, and give them a chance. Particularly if they don't think like you or don't look like you or aren't your best friend or anything else like that. We do things like that as a team, whether that's in industry, whether that's small business startups, or within the government. This country can continue to do the amazing things it's always done. If we don't, we're not going to get where we need to get. And I appreciate you having a podcast like this with a great array of guests, that you’ve brought together here to have this discussion so we can learn from each other and move forward.


Templeton:       
That's right. Well, I've got to say you've heard it straight from Hondo. And I've got to tell you on a gut level, Hondo, just the stories of your experiences, they're inspiring. And if you're listening to this and you're not inspired, if you don't have a chill running down your back about what you can do in your own position right now by taking this simple advice and going to the next level, then I don't think you have a pulse. 
 

DON’T CONFUSE LEADERSHIP WITH A POSITION IN AN ORGANIZATION


Mr. Geurts:               
My last final thought:  Don't confuse leadership with a position in an organization, right? I purposely, in any org chart I ever had, put myself at the bottom. You, whatever you are in business, wherever you are in an organization, can actually affect change more at the lower level than at the more senior level. So don't wait for permission, don't wait until you get to the next grade. Don't wait until you make the next box on your chart to get after things and you'll be a lot happier. And my guess is you'll drive a lot more outcomes for your organization with that mindset.


Templeton:       
Well said, well said. Hondo, we appreciate it. I look forward to continuing the conversation and trust that when that opportunity comes, you'll take the time to join us again.


Mr. Geurts:
Awesome. Thanks very much, Tim.