May 11, 2016 at 12:00 PM
MOUNTAIN VIEW, Calif. — Defense Secretary Ashton B. Carter will overhaul one of his signature efforts, placing new leadership in charge of the Pentagon's office in Silicon Valley just nine months after it opened and directing the staff there to report directly to him. Carter will also establish a sister unit in Boston, which will also be charged with working with tech companies on concepts with military applications, defense officials said.
Carter announced the changes Wednesday at the Silicon Valley office, known in the Pentagon as DIUx, short for Defense Innovation Unit Experimental. The office was launched to build new relationships with technology companies, but has experienced mixed results. Among its critics have been corporate officials in Silicon Valley who have voiced frustration at the glacial pace of the federal government, and a congressional subcommittee that recently called for more oversight of how DIUx spends money.
The Pentagon chief said Wednesday that he is replacing the top officials at DIUx and putting in place a flatter leadership structure that includes "partners," each of whom has experience in both tech and national security in some capacity. The managing partner will be Raj Shah, who most recently was the senior director of strategy at computer firewall maker Palo Alto Networks in Silicon Valley. He also has flown F-16 fighters in the Air Force National Guard.
"I'm not expecting the technology world to be more like the Pentagon," Carter told media after making his announcement. "And we'll never be like a company because we have a very important mission and we represent the profession of arms. But, that doesn't mean we can't learn how the innovative world in Silicon Valley operates. I'm determined to learn that."
Carter denied that the new changes are a sign of trouble with the Silicon Valley effort.
"It's a sign of confidence… which I have, and that's why there is going to be more DIUx and why I am taking such a continued, strong personal interest in it," Carter said. "I'm proud of what it's done. What it's done is very valuable, and at the same time what it has taught us is that there are some ways that we can improve DIUx and the way the Department of Defense connects."
Other partners in the new DIUx effort — known as DIUx 2.0 — include Christopher Kirchhoff, who served as the director of strategic planning for the National Security Council, Isaac Taylor, who spent the last 13 years at Google, and Vishaal Hariprasad, who co-founded Morta Security, a cybersecurity company that was acquired by Shah's Palo Alto Networks in 2014.
The partners will be full-time employees with the Defense Department with staggered start dates over the next few weeks, said Army Maj. Roger Cabiness, a Pentagon spokesman. Each partner will be required, like other defense officials, to fill out financial disclosure forms.
A new military unit also will join DIUx. It comprises reservists who work in the tech industry when not serving the Defense Department. It will be led by Doug Beck, a vice president at Apple who is a reserve Navy commander, intelligence officer, and combat veteran who served in both Iraq and Afghanistan.
Shah acknowledged that "we have our work cut out for us," but said there are areas where the military and technology companies can work together. He recalled flying fighters near the Iraq-Iran border, and that some pilots strapped iPads to their knees to keep track of where they were.
DIUx had been led by its director, George Duchak, and a military deputy, Rear Adm. Daniel Hendrickson. Their future roles were not immediately clear, but Carter said Duchak will be reassigned within the Pentagon. Carter said he is grateful to Duchak "for helping launch such a pathbreaking initiative" at DIUx and identifying potential partners in industry.
Carter also will realign DIUx so that it reports directly to him, rather than to Frank Kendall, the undersecretary of defense for acquisitions, technology and logistics. It will work in close coordination with Deputy Defense Secretary Robert O. Work and Air Force Gen. Paul Selva, the vice chairman of the Joint Chiefs of Staff, and the Pentagon's other research and development leaders.
Carter said he can't afford to have every Defense Department organization report directly to him, but he is doing it with DIUx because of the need for rapid decision making.
"I think one of the things we learned from DIUx is that the Department of Defense is frequently not rapid and agile enough," the secretary said, adding that he wants to show "from the very top" that agility and adaptability are important to the Pentagon.
The DIUx initiative also will be expanded to include a new office in Boston, a tech-rich city that includes MIT and companies focusing on everything from robotics to textiles. Other offices could be established in the future.
Carter said during his last trip to Silicon Valley in March that DIUx's creation would help entrepreneurs "understand places in the Department of Defense where they secure funding for ideas that they think are relevant to defense." At that time, the Silicon Valley office had identified 22 pilot programs with tech companies that had not previously worked with the Pentagon. Five of those programs were underway, and 17 others were going through the Defense Department's acquisition process, defense officials said.
The Pentagon also established in March a "defense innovation advisory board" led by Eric Schmidt, a software engineer who is the executive chairman of Alphabet Inc., Google's parent company. The board is expected to include up to 12 people with a track record of success leading large private and public organizations that have adopted new technology concepts. Carter said Wednesday that other members will be named soon.
This story was initially published at noon on the East Coast and updated multiple times.