Business Process Transformation at the CIA (Epilogue)

Case Solution

Steve Kelman
Harvard Kennedy School ()

When Dick Calder was appointed director of the CIA (DA) in 1995, he was faced with the task of leading a beleaguered organization at a difficult time. As the unit charged with delivering its most glamorous intelligence to gather and analyze information, it has endured the worst part of a decade of agency budget cuts. However, other directions are not compassionate and see the Prosecutor’s Office as wasteful and indifferent. Hoping to improve processing services and customer satisfaction, Calder proposes a novel solution to the administration’s problems: the return of the budget. As part of this cost recovery plan, DA would return its budget to Mission Directorate, which would then purchase support services from DA or, if desired, from another provider. Calder argues that the spectrum of competition would enhance DA service provision; at the same time, it would encourage other directorates to buy more prudently in line with the agency’s shrinking performance budget, particularly as they could keep the savings made. Furthermore, it is a radical proposition for an inherently conservative agency whose covert mission places unusual demands on the provider of the most routine services. This series of organizational change cases follows Calder’s efforts to implement budget returns in DA. They describe his strategy to gain support for his idea, his experience with various pilot take-back programs he initiated, and the strong resistance he encounters both within the DA and elsewhere. Together, the cases raise questions about adapting to a changing political and fiscal environment and about managing innovation in an organization that is deeply skeptical of change. Case number HKS 1516.1

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