I Spy Mismanagement

It's a textbook case of what no incoming CEO should do: Recruit your friends from outside for top management posts, hole up in your office for the first weeks of your tenure, distance yourself from key management decisions, and restrict communications with employees to impersonal e-mails. Yet that's been Porter Goss's modus operandi since arriving at the Central Intelligence Agency eight weeks ago.

Despondent CIA veterans, especially those with private-sector experience, have been asking: How could this happen? They worry that if the former House member, himself a former CIA agent, doesn't get their agency on track quickly, the results could be disastrous and lasting: widespread hemorrhaging of experienced officers; dampened recruitment; loss of public confidence; distrust from international intelligence agencies; and, worst of all, distraction from the daily work of the agency.

And for those officers who stay, a prolonged shakeout would likely foster a hunker-down mentality that discourages creative risk-taking and the questioning of higher-ups -- the opposite of the results Goss vowed to produce.

The CIA's current turmoil is a predictable byproduct of woefully inadequate management and poor communication, say intelligence experts and management gurus.

"The director is purported to have said, 'I don't do personnel.' Well, that's the name of the game," says former CIA general counsel Robert McNamara Jr.

And Goss's early missteps will continue to cost him. As one Bush administration insider put it: "Have you ever tried to recover from a really bad first date?"

Initially, the date went quite well. As soon as he arrived at Langley, Goss called a town hall meeting. He received two standing ovations there. But his relationship with the agency soured when he installed four close aides from his Capitol Hill staff in the upper echelon of CIA management. His choice of Chief of Staff Patrick Murray has proved especially irritating to agency veterans. Goss's team apparently behaves as if it were still on Capitol Hill.

While fierce protection of one's boss translates into success in the halls of Congress, says Jeffrey Smith, a former CIA general counsel who also worked on the Hill, "that does not work in an organization like the CIA, because you're all part of the same team."

Indeed, many of Murray's former colleagues clearly felt that he never viewed them as teammates. Murray served on the staff of the House Permanent Select Committee on Intelligence, and then did a tour at the Justice Department before returning to the House committee, which Goss chaired, to serve as staff director.

"This guy is known as a hothead," says one former Hill aide. A former colleague could hardly contain himself at the mention of Murray's name. "He's a nitwit," he blurted out, describing what he saw as Murray's inept management style.

Another former Hill staffer said that when Murray returned to the Hill, staffers who knew him either left the committee or found ways to work around him rather than deal with him.

According to several CIA veterans, the top officials who have resigned recently, especially Deputy Director of Operations Stephen Kappes and his second-in-command, Michael Sulick, were reinvigorating the agency, especially its clandestine operations. One CIA veteran said that, unlike earlier senior managers in the Clandestine Service, Kappes and Sulick had reached out to former senior officers to draw on their experience and gain their assistance in such difficult areas as relationships with law enforcement and the military.

"The rank and file were finally saying, 'We have the leadership we need,' " this CIA veteran said.

Perhaps most distressing is that the CIA's current reshuffling appears haphazard, says former intelligence analyst Michael Scheuer, the "anonymous" author of Imperial Hubris: Why the West Is Losing the War on Terror. "There doesn't seem to be a pattern," he adds. "There doesn't seem to be a view of where we're going."

Management 101 says: If you want to change an organization, make your blueprint clear, and sell it to your employees. That's precisely what's lacking at the CIA. But now, before the new director can sell (or perhaps even develop) a plan for organizational change, Goss must manage his current personality-driven personnel crisis.

To do that, he may need to enlist the president.Amy Zegart, a University of California (Los Angeles) public policy professor who specializes in intelligence, says, "There are really useful lessons to be learned from the private sector. In the private sector, new CEOs come in and turn around companies all the time."

Zegart did a four-year stint with the management firm McKinsey & Co. From a private-sector perspective, Zegart says, Goss's greatest failure was not to enlist the support of key people inside the CIA. "You can't have four people beating the [Directorate of Operations] into submission," she warns.

So where should Goss go from here? Zegart, author of Flawed by Design: The Evolution of the CIA, JCS, and NSC, offers suggestions: First, get out in front of the crisis publicly, with the aid of President Bush, and make clear that the agency is moving forward. Second, hold an offsite gathering with crucial CIA officials, listen to what they have to say, and devise a short-term plan for moving on.

Other observers suggest eliminating, demoting, or diluting Goss's tight advisory group and promoting strong managers from within. There's general agreement that Goss must begin communicating with his troops more clearly and more regularly.

"Porter has been holed up on the seventh floor," says Ron Marks, who spent 16 years at the CIA and worked on Capitol Hill before joining the private sector. "He's yet to develop what's needed for any senior manager handling a massive transition -- communicate, communicate, communicate. You have to make people feel like they are part of the process."

Indeed, a new CEO needs to convince his new colleagues that a process actually exists. But that's something Scheuer says had not been done when he left the agency on Nov. 11.

When asked about Goss's efforts to communicate with CIA employees since his town hall meeting, a CIA spokeswoman said, "Certainly there have been multiple e-mails." That includes a November 15 e-mail that reportedly stated, "We provide the intelligence as we see it and let the facts alone speak to the policy maker," but added that the CIA's job is to "support the administration and its policies in our work." The e-mail warned cryptically of "a series of changes" ahead.

Leaving underlings worried and clueless isn't generally regarded as good management. "I hear that [e-mail], and I say, 'God, no,' " says Zegart, noting that for all his faults, Goss's predecessor was known for dropping in on meetings unannounced just to listen.

Zegart says listening is among a good CEO's most important tools. If Goss is to succeed, she adds, he not only needs to explain his game plan to his personnel but also talk to them about their worries. Smart management, she continued, is "not about being tough; it's about being thoughtful."

Once Goss weathers the current crisis, Zegart and other management experts say, he must develop and communicate a plan for internal reform to senior management and the rank and file.

In the private sector, developing a strategy requires establishing a baseline -- what operating conditions are, what employees have been asked to do, and how close employees are to accomplishing those goals. The technique is known as fact-based change management. And in the business world, this assessment is a detailed process that takes four to six months. At the CIA, the agency is in disarray a month and a half after Goss's takeover.

To develop a baseline at the CIA, said one former CIA officer now in the business world, Goss should look at what the agency has produced over the past four years and compare those results with what it had promised to Congress and the White House. Goss should then identify the gaps between what was promised and what was delivered; design a plan for closing those gaps; and tell senior managers they have, say, six months to make specific progress or face dismissal.

Once Goss establishes a baseline, management experts say, he ought to spell out what he wants to change in the clandestine Directorate of Operations -- the quality of human intelligence or language capabilities, for example -- and decide how quickly he wants results, who should be responsible for producing them, and what support and authority they must have in order to meet his deadline.

In business parlance, this process is called workforce planning. And Marks says it has been sorely missing from the Directorate of Operations: "They've done everything on the fly."

Analysts within the Directorate of Intelligence, Marks says, face another basic problem that is common in the business world -- information processing. There, Goss needs to assess how the division is acquiring, analyzing, and disseminating information; decide whether and how those processes should be augmented with new technology and policies; and develop a plan to make the required changes happen. And that would involve rewriting some job descriptions.

"They're two generations behind," Marks says. "The CIA is a first-generation information business. It is just [fighting] the Cold War again and again and again."

Of course, the continuing uncertainty over Goss's own eventual job description -- as Congress dithers over whether to create a national intelligence director and as rumors fly that the position would be filled by Goss -- does not help.

"There's an impression that Goss is going to be the NID and that he just came here to clean out and move on," Scheuer says. Without a clear message from Goss about his designs for the agency, Scheuer adds, the agency's rank and file will likely conclude that Goss was sent to the CIA just to be a "hatchet man."

The solution, again, is more personal involvement, communication, and listening. But, the management experts say, if Goss were listening to his discontented agency, he'd already know all that.