United States Air Force

1. Air Force Center for Engineering and the Environment The Evolution of AFCEE Financial Management and the Role of Teamwork Mr. John G. LaHue AFCEE Chief Financial Officer (CFO) 8 Sep 2010 United States Air Force

2. Overview • What We’ve Been Through – Brief AFCEE History • LEAN Rapid Improvement • Significant Workload Growth • Transformation • How Did We Get From Here To There? • The Twelve C’s For Team Building and Teamwork • Where We Are Today • AFCEE Organization • Funds Received Scorecard • Summary • Parting Thoughts About Teamwork

3. Evolution of AFCEE Financial Management and the Role of Teamwork • 2005 LEAN Rapid Improvement Event (RIE) • Improved AFCEE Purchase Request (PR) processing • Paradigm shift for Data Specialists to PR Specialists • Paradigm shift for AFCEE Budget Office • Teamwork A Critical Component Of Success • Cross-functional dynamic AFCEE-wide • Teamwork required within the AFCEE Budget Office • “We must all hang together, or assuredly, we shall all hang separately.” Benjamin Franklin • Changed business processes/improved communication • Re-configured systems furniture to support new organization • Hawthorne effect

4. PR Process Improvement CURRENT PROCESS (10 Days) NEW PROCESS (1.5 Days) Funds sent by E-mail only Funds sent inconsistently PM Inputs PR PM PM Provides Project Info MSR Mailbox Supervisor Reviews PR Specialist (Funds Control) Inputs PR & Prepares Folder & Completes Data Entry MSCD Reviews BA Reviews MSR (BA) Reviews Electronic Distro (616/MIPR) MSR Approves Team Lead Reviews (OBAN) +1 day FM Approves Hard Copy Distro (616/MIPR) MSR Approves (OBAN) +1 day FM Approves

5. Evolution of AFCEE Financial Management and the Role of Teamwork • 2006-2007 growth in Non-Air Force funded workload • Primarily surge capacity for the US Army Corps of Engineers in IRAQ; and Defense Agency (Air Force link) • Built a Non-Air Force funded Team to support workload • Accept MIPRs both reimbursable and direct • Civilian pay managed on a reimbursable basis; overhires • No Unit Manning Document (UMD) authorizations • Patriotic pride in support of the war; part of the global team • Required teamplayers and trust • “Team player: One who unites others toward a shared destiny through sharing information and ideas, empowering others and developing trust.” Dennis Kinlaw

6. Evolution of AFCEE Financial Management and the Role of Teamwork • 2008 AFCEE became a key organizational component of Air Force Civil Engineering (CE) Transformation • HQ USAF Program Action Directive (PAD) 07-02 • Centralize management of design and construction execution for Military Construction (MILCON), Housing MILCON, and Environmental Restoration (ERA) • New workload for AFCEE and new workload for the Budget Office • Added a new MILCON Team and built a MILCON financial “checkbook” application • Added an ERA funds component; program grew from approximately $40M to over $400M annually

7. Evolution of AFCEE Financial Management and the Role of Teamwork • Over a relatively short period of time AFCEE underwent significant organizational change • This dynamic continued to drive the need for teamwork • “Teamwork represents a set of values that encourage behaviors such as listening and constructively responding to points of view expressed by others, giving others the benefit of the doubt, providing support to those who need it, and recognizing the interests and achievements of others.” Katzenbach & Smith

8. Evolution of AFCEE Financial Management and the Role of Teamwork • How did we create the teamwork necessary for success? • Need a team-oriented environment • Contribute overall organizational success to the team • Must be unified with other organizational members to accomplish overall strategic goals/objectives • Need more than an overall sense of teamwork • Must develop an effective, focused, intact team that is formed to accomplish specific goals • Bottom line, you are striving to improve results for customers • Includes both internal and external customers • Twelve C’s for Team Building • Each of the twelve C’s requires attention • Organizational self-diagnosing checklist

9. Evolution of AFCEE Financial Management and the Role of Teamwork • Twelve C’s for Team Building • #1 – Clear Expectations must be communicated throughout the organization and that includes the following: • Expected performance outcomes (really)! • Constancy of purpose • Support the team with resources of people, time and money • Work of the team must receive sufficient emphasis as a priority in terms of time, discussion, attention and interest directed its way by executive leadership

10. Evolution of AFCEE Financial Management and the Role of Teamwork • Twelve C’s for Team Building • #2 – Organizational context must be understood by all: • Team members must understand how their team will help the organization attain it’s communicated strategic goals • How does their work “fit in” to the larger organization • How important is the teams work in relationship to accomplishment of strategic goals • Team members should also understand how their work fits in regarding the organizations principles, vision, and values • US Air Force Core Values • Integrity First • Service Before Self • Excellence in All We Do

11. Evolution of AFCEE Financial Management and the Role of Teamwork • Twelve C’s for Team Building • #2 – Organizational context must be understood by all (con’t): • Financial Management Core Values • Faithful stewards of the taxpayer’s resources • Trusted Financial Advisor • Strive to continuously improve business processes • Strategic Advisor to Leadership • The Seven Army Values • Loyalty, Duty, Respect, Selfless Service, Honor, Integrity, Personal Courage • US Navy/Marine Corps Values • Honor, Courage, Commitment

12. Evolution of AFCEE Financial Management and the Role of Teamwork • Twelve C’s for Team Building • #3 – Commitment of Team Members and Leadership: • Team members should feel the project is important • Frankly, the project should be important, otherwise you’re wasting peoples time and talent • Team members should be committed to the mission • Team participation should be viewed as valuable • Both to the organization and their own careers • Recognition of a job well done should be anticipated • Improved skill sets is a reasonable expectation • Team members should be excited and challenged • Leadership role key to commitment

13. Evolution of AFCEE Financial Management and the Role of Teamwork • Twelve C’s for Team Building • #4 – Competence of the team: • The team must feel appropriate people participating • Ex: for process improvement each major step of the process should be represented on the team • Team members should collectively have the knowledge, skill and capability to address issues for which team formed • The team should have access to help if necessary • Short burst technical reach back

14. Evolution of AFCEE Financial Management and the Role of Teamwork • Twelve C’s for Team Building • #5 – Team charter must be put in place and include: • Mission, strategies, time-table to accomplish project • Clearly defined goals • Clearly defined outcomes and contributions • Metrics – how measure process improvement/outcome • Leadership support of charter

15. Evolution of AFCEE Financial Management and the Role of Teamwork • Twelve C’s for Team Building • #6 – Team control: • Team must have sufficient control to accomplish project • Control = freedom, empowerment and ownership • Control also includes: • Understanding boundaries • How far can team members go to find solutions • Knowing limitations up front: • Financial resources, time constraints • Leadership must define teams authority to make recommendations and/or implement a plan • Must have defined leadership review process • Keep team direction/purpose on track

16. Evolution of AFCEE Financial Management and the Role of Teamwork • Twelve C’s for Team Building • #7 – Team collaboration: • Team members need to work together effectively • Each must understand roles and responsibilities • Members, leaders, recorders (minutes) • All must understand teams are a joint endeavor • Need cooperation – positive give and take • Need established rules of engagement: • How handle conflict resolution • Protocol for decision making • Rules for meeting management • It helps to have a facilitator: • Objective 3rd party to guide discussion

17. Evolution of AFCEE Financial Management and the Role of Teamwork • Twelve C’s for Team Building • #8 – Team communication: • Team members must be clear about task priorities • Honest feedback must be given/received between team members as needed • Leadership must keep team informed of related issues • Team members should be encouraged to bring diverse opinions to the table • Team members should be able to communicate clearly, both orally and in writing

18. Evolution of AFCEE Financial Management and the Role of Teamwork • Twelve C’s for Team Building • #9 – Creative innovation should be supported: • While financial management entails a legal and regulatory framework, fresh ideas are beneficial • The team should value: • Creative thinking • Unique solutions • New ideas • The team should reward employees whose innovative ideas lead to business improvements

19. Evolution of AFCEE Financial Management and the Role of Teamwork • Twelve C’s for Team Building • #10 – Consequences matter: • Team members must not fear reprisal for providing open and honest opinions and ideas • The subsequent silence can be deafening • Team members must not be able to “finger point” rather than “resolving problems” • Success must be rewarded!

20. Evolution of AFCEE Financial Management and the Role of Teamwork • Twelve C’s for Team Building • #11 – Must have proper coordination: • Thorough staff work is required • Must take into account both internal and external customers when planning process improvement related organizational change • Cross-functional teams can be key • Ex: AFCEE fiscal year-end; weekly clearinghouse/cross functional team meeting • Contracting, Project/program management, financial management, legal, strategic planning

21. Evolution of AFCEE Financial Management and the Role of Teamwork • Twelve C’s for Team Building • #12 – Cultural Change: • Must be corporate culture “shift” to more team-based organizational structure of the future • Teamwork must be encouraged and supported by leadership • Established teams must be “codified” in organizational directives; ex: AFCEE Cross-Functional Team • Success should be recognized while failures should become constructive learning experiences • Reasonable risk rewarded

22. Evolution of AFCEE Financial Management and the Role of Teamwork • So there you have it, the Twelve C’s to Improve Business Results Through Teamwork: • Clear expectations • Context • Commitment • Competence • Charter • Control • Collaboration • Communication • Creative Innovation • Consequences • Coordination • Cultural Change

23. Our Organization AFCEE [CL/DD/CD] Col Will Cassidy Deputy Director (Vacant) Civilian Deputy Director Mr. Firman, SES Director Support Small Business [SB] Ms Mary Urey Chief Financial Officer [CF] Mr. John LaHue Contracting [AC] Col Geoffrey Ellazar Legal [JA] Lt Col Kathleen O’Rourke Operations Support [OS] Ms Christine O’Brien • Operations • Legal • Finance • Contracting Technical Expertise Technical Support [TD] Mr. EldonHix Regional Office East (Atlanta) [RO-E] Mr. Thomas Sims Regional Office West (San Francisco) [RO-W] Ms Clare Mendelsohn Regional Office Central (Dallas) [RO-C] Mr. Thomas Manning • Environmental • Engineering • Design • Regulatory Execution MGMT • AOR • Environmental • Housing • BRAC • MILCON • ERA Capital Investment Management [CM] Col Michael Hutchison Contingency Construction [CX] Col Terry Watkins Environmental Restoration [ER] Col Jeff Knippel Capital Investment Execution [EX] Mr. Terry Edwards Housing Privatization [HP] Col Rod Croslen

24. AFCEE Off-Site Personnel WATERBEACH: 10 RAMSTEIN: 15 WATERBEACH: 10 RAMSTEIN: 15 ELMENDORF: 3 ELMENDORF: 3 FE WARREN AFB: 1 NELLIS: 1 LORING: 1 MCCLELLAN: 1 OTIS: 1 NELLIS: 1 SF REO: 10 ANDREWS AFB: 3 KOREA: 1 FE WARREN AFB: 1 LORING: 1 DALLAS REO: 9 YOKOTA: 1 LANGLEY: 1 MCCLELLAN: 1 OTIS: 1 FT SAM HOUSTON: 4 ATLANTA REO: 10 SF REO: 10 ANDREWS AFB: 3 KOREA: 1 DALLAS REO: 9 KESSLER AFB: 1 YOKOTA: 1 LANGLEY: 1 FT SAM HOUSTON: 4 HICKAM AFB: 12 ATLANTA REO: 10 KESSLER AFB: 1 HICKAM AFB: 12 GUAM: 1 AOR: 5 GUAM: 1 AOR: 5 6 “The Sun Never Sets at AFCEE!”

25. CFO Chief Financial Office John G. LaHue Air Force Funds Tony Cano Non-AF Funds Suzanne Meyer MCON & Inv Funds Vic Alba Fin Systems & Reporting Boyce Marting Operating Funds Debra Durnell RBA, Kuwait, MNSCT-I Iraq, DESC, AFSVA, AAFES, DDC, DLA, Navy, Army, Afghanistan, FMS, MOAs Design and Construction Management (DM/CM) support . BRAC, MILCON, MFH, NAF, & Medical PB-15 (A&AS) Audit/Internal Control, Fiscal Policy Funds Control, Tri-Annual, GPC, Civ Pay, Travel, BRAC Move Focal Point AFCEE O&M, AFRPA O&M, AF ERA (PMO), AFCEE ERA Operations, Biz OPS FWS, Forestry, FWG, Pubs 11WG, SAF, WHS, ACC, AETC, AFSPC, AFRC, AFMC, AFSOC, AMC, ANG, PACAF, USAFE, Army, ANG, MILCON FC25, MILCON FC3X, MILCON Army, (JCMO), MFH P721/P727, SIOH, Chief Financial Office (AFCEE/CFO)

26. Funds Received Scorecard • Grand total of dollars: ~ $2.1B obligated FY05 ~ $2.5B obligated FY06 ~ $2.7B obligated FY07 ~ $2.2B obligated FY08 ~ $2.1B obligated FY09 • Track record to-date: • Funds managed include O&M, ERA, MFH, BRAC, ARRA, MILCON, FMS, Army, Navy, Marine Corps, NAF, Working Capital Fund, Counter-Narcotics, Iraq/Afganistan/Pakistan, Defense Agencies, etc. • March 2009 UCI • CFO received “Superior Performance Team Award” • DTS Travel Business Area – received outstanding practices recognition • Workload Environment: • Robust fiscal policy requirement; we have our own lawyer (teamwork) • MOAs/variety of customers world-wide • Southwest Asia (SWA) priority for quick response • Diversity of appropriations and cost accounting drive complexity • Financial “Dashboard” provides financial data transparency

27. SUMMARY • AFCEE financial management is complex • Broad spectrum of funds received • Ongoing fiscal policy and funding issues • Wide ranging customer base • Funds tracking/accounting a major challenge • Transfer to Kelly USA drove additional workload • Relative to the size of AFCEE, volume of work is huge • Track record to-date good: • 100% obligation rates at fiscal year-end • UCI’s: last 2 outstanding, March 2009 Superior Team Award • Transformation drove major organizational change • Evolving requirements/reporting/funding baseline • CFO right-sizing to workload • Cross-functional/organizational coordination is key • ACCOMPLISHMENTS IMPOSSIBLE WITHOUT TEAMWORK!!

28. Parting Thoughts About Teamwork • IT IS AMAZING WHAT CAN BE ACCOMPLISHED WHEN IT DOES NOT MATTER WHO GETS THE CREDIT –TEAMWORK FUELS EXTRAORDINARY PERFORMANCE • A TEAM IS MORE THAN A COLLECTION OF PEOPLE – IT IS A PROCESS OF GIVE AND TAKE • COMING TOGETHER IS A BEGINNING – KEEPING TOGETHER IS PROGRESS – WORKING TOGETHER IS SUCCESS • “Michael, if you can’t pass, you can’t play.” Coach Dean Smith to Michael Jordan in his freshman year at the University of North Carolina • “When a team outgrows individual performance and learns team confidence, excellence becomes a reality.” Coach Joe Paterno, Penn State University • “Individual commitment to a group effort – that is what makes a team work, a company work, a society work, a civilization work.” Coach Vince Lombardi, Green Bay Packers

29. Summary I n t e g r i t y - S e r v i c e - E x c e l l e n c e Questions ?