TOM ARMINIO: Hello and welcome to Perspectives. I'm Tom Arminio, Faculty Instructor at Penn State Harrisburg and with the World Campus. With us today is Admiral James Loy. In 2005, Admiral Loy completed a 45 year career in public service, retiring as the Deputy Secretary from Homeland Security. He also served as an administrator of the Transportation Security Administration and also as commandant of Coast Guard. Admiral Loy, welcome and thank you for joining us today and taking time out of your busy schedule to discuss what I hoped will be some very interesting topics today.

ADMIRAL LOY: Thanks Tom, good to be with you.

TOM ARMINIO: You're passionate about leadership and you're quite frankly recognized expert on leadership-- leadership issues, teaching leadership. So I really want to focus on some of those leadership considerations today. Well, first I'd like to talk about your time at TSA right after 9/11 Patriot Act wasn't passed yet, Department of Homeland Security did not exist yet, yet the Federal Government and our Congress mandated that as a nation we take some protective measures to protect the [inaudible] public. So as the administrator for TSA, working Under Secretary Manadon that the Department of Transportation, what were some of you your initial challenges, your initial priorities in establishing this new Federal Agency in such a, quite frankly, chaotic time for our country?

ADMIRAL LOY: A chaotic and very fast. The deadlines associated with the legislation imposed on us 36 specific things that we needed to get done and 36 deadlines by which they were supposed to be done. And I will be forever proud of the team as we put it together that accomplished every one of those deadlines despite the headlines that would be on a Newsday the following day after we got number 17 down the head line would say, "Oh they did a great a job," would not say that they did a great, job getting number 17 done. It would say, "No way they're ever going to get number 18 done," but we did. The nature of the times were conducive to a number of those successes. First of all, we have been attacked as a nation that rippled through the very make up of every citizen in this country, let alone the leadership folks in respective places around Washington D.C. The responsibility is inside the FAA for security which were clearly on the lower end of the scale as opposed to safety which is what their organization is really fundamentally all about, left the gaps that were taking advantage of by those 19 bad guys on 9/11/01. The first piece of legislation dealt with what occurred, not with what we might be organized better to do but with what had actually occur on 9/11. It was a commercial aviation tragedy. So the Aviation and Transportation Security Act which was among the first very pieces of legislation or among the very first pieces of executive statement by way of executive orders of the president put out, had to with regaining the American public's confidence that the system by which they traveled from point A to point B had regained its security in a sense that they could be confident, that they would be safe going from point A to point B. So these 36 deadlines that were specified in that law gave us sort of a step at a time, a kind of set of challenges to under take. The things that were amazing to me were how in the immediate aftermath of the tragedy itself, so many facets of American life lean forward to be helpful in the process. In industry for example, I cannot tell you as I sit here this morning how pleased I was, how thankful I was, how American industry leaned forward to be part of the solution. I can remember for example a meeting in Norman at his office one evening. Starting at 10 o'clock, which often we were still had work at 10 o'clock in the evening, to get things done and the question on the table had to with putting lines together. How-- we knew what we were doing was going to provoke lines of the airports. How are we going to deal with that? Someone in the room, other than me had the bright idea that the only place they recognized people enjoyed standing in lines was the Disney World. Norman [inaudible] to his-- leaned over to his executive assistant and said, "Get Neil Eisner on the phone for me." This is 10 o'clock at night, I have no idea what the other week it was. But within about 20 minutes, she had found the Neil Eisner wherever he was. He got on the phone, had a quick a chat with Norman Mineta [phonetic] and committed 6 or 7 people who we came to call in the aggregate loan executives from industry they came and worked with us at Baltimore Washington International Airport, which had become a laboratory of sorts-- to sort out how best the design a system by way of the airports of our country to at least provoke those negative reactions that people might have by standing in lines and most provoke the efficiency of the security system we were trying to established. A silly small example but whether it was lucky [inaudible ] with respect to our training, whether it was [inaudible] of associated with our rallying to recruit these 60 thousand employees that we hired in a very, very short period of time and start up an agency that started from zero and ended up as an extraordinarly efficient operation in the short period of time that we were setting it up.

TOM ARMINIO: We've been talking about the aviation industry commercial--

ADMIRAL LOY: Sure.

TOM ARMINIO: -- and passenger flying, were you concerned in the initial days of TSA? Were you concerned about other modes of transportation, rail, maritime, surface?

ADMIRAL LOY: I certainly was. I was a creature of the sea, so to speak. My maritime background certainly recognized that the last weeks and months of my active duty status as the commandant of the Coast Guard was from a the 9/11 window up until the point that I retired from active duty in May of the following year of 2002. So my first responsibilities really had nothing to do with commercial aviation. They had everything to do with the port structures of our country and the infrastructure safety and security of those elements, of our national infrastructures as regards the notion of continuing the commerce in an uninterrupted status by making certain that if there was another shoe to drop in the aftermath of the trans national terrorist attack of 9/11 that happened to focus on the maritime sector of our country that we would be ready to deal with that in whatever fashion it needed to dealt with.So that was my reaction. I carried that experience into the position of being the administrator of TSA.And one of the serious organizational elements of the new agency had to do with everything other than commercial aviation. The focus without a doubt was on commercial aviation. That's what happened to us.If you think about the same conversations in London--after the Metro attacks in London, I can guarantee you they were mostly about transit systems and--oh, by the way, other elements of transportation, if you had the same conversation in Madrid, it was more about trains and--oh, by the way the rest of the elements of the transportation system. But we have responsibilities at TSA for the other elements of our national transportation network and we worked very diligently to begin a process of dealing with that as well. But the resource flow is what's important here in terms of putting your money where your mouth is, if you will. And the resource flow as dictated by the Congress of the United States was clearly dedicated to commercial Aviation Security.

Tom Armino: So, the Aviation and Transportation Security Act that established TSA, did it provide legal authorities for you, for those others modes of transportation?

Admiral Loy: Legal authorities came and went as events dictated over the course of those early days and weeks. As you can imagine the kind of conversations that we begin to have in the board room if you will of TSA, were multidimensional in nature. It very quickly became obvious to us that folks could line up at the door with all kinds of pretty need security ideas. And by the way, this continued at the adjust when the new department that was established as well. But in that cue of people that was out the door and down the street, not very many of them had considered what the economic implications might be of their new security idea. They didn't consider what the civil liberty's implications of their new security idea might be. They didn't consider what the international implications of their new security idea might be. So we became a vetting process of sorts, recognizing the value of the net gain and security. But at the same time, not allowing inartful ideas to be going forward as recommendations to each of the-- our bosses in the executive branch or to our overseers in congress that had not been vetted through those other kinds of serious questions that needed to be asked. So the challenge of legal authorities, we usually proposed what we needed along the way in order to meet a particular security adjustment that we were making and that was the vetting process that took place. We had a very strong general counsel at the Transportation Security Administration,who to her great credit is still the general counsel at TSA. Francine Kerner, a patriot, a colleague that I have infinite respect for. Because she was the one we were giving every one of those questions to be vetted properly through the Department of Justice and through the rest of her legal colleagues to make sure we were on solid ground.

Tom Armino: As the Deputy Secretary for the department you were intimately involved and responsible basically for consolidating 22 Federal Agencies into a new cabinet post, a new federal department, the biggest reorganization of governments since 1947, the National Security Act. So back to my opening in terms of leadership, what were some of your big leadership challenges, trying to put all those 22 agencies together?

Admiral Loy: Well, it was an enormous challenge. It continues to be by the way, an enormous challenge. Governor Ridge provided the directional flow of where we were going as a new organization. I remember vividly in off site where in we took some 50 or 60 of the senior leaders of both the agencies coming in our direction or that had already arrived after we turned the lights on the first of March in 2003 to sort out where their responsibilities were going to lie, where our directional influences needed to be in the wake of the Homeland Security Act itself which was the legislative document by which we were standing up-- the direction by which we were standing up the new department. But it was important for us to make certain that all of the players in the department could see their own work in the programmatic direction that the department was taking. And we ended up coming away with 5 sort of magic words that still prevail the scene at DHS. Those words were awareness, prevention, protection, response and recovery. Those 5 words became in the words of Michael Jackson, my boss at transportation, and my successor at DHS,the buckets of work that we ended up engaging in over the course of the time that I was privileged to be the deputy at DHS as we set about the business of getting this going. When we-- we did not leave that off site until all of those players could see reflected in things like mission statements and those kinds of things. That's the easy part. But in their traditional as well as proposed elements of responsibility, could they see themselves in those 5 areas plus 1 number and the number was 21. Because we looked at each other and said, "You know, we have a chance to be the first 21st century cabinet-level agency for the United States of America." In the midst of all these other challenge that we have, we can design a department, a cabinet-level agency for the United States of America along lines that we want them to go toward in the 21st century, not just yet another 20th or 19th century organization. That offered the chance or leadership as it relates to vision. And leadership as it relates to risk taking. And leadership as it relates to daily toil and the business of not only embracing change for the value that it represents at the beginning, but managing that change to closure at the other end of the day. There are lots of examples of how the traditional scope of leadership and the new challenges of leadership in the 21st century were going to play out in this new organization. We were enormously frustrated by some of those challenges.We spent days and weeks designing a better personnel system for our department that we wanted to put into play. So it was it was called HRMAX, Human Resources Max. We wanted to get the maximum potential that we could out of the people as we set up the organization with wild and crazy ideas like paying people for a performance as supposed to longevity. You know, those kind of crazy notions. The reality was it became stuck in the court system. It still has not found its way to being embraced by the total government. But I would offer that 1 day when OPM is interested in doing that, they will go back to the work that we did there and the work that was subsequently done by Dr. Chu over at DOD. And find the ingredients for a better civil service wide personnel system for the United States of America. But in the mean time, we had those other buckets of work to cope with as leaders and managers. And getting on with that work became the challenge, now riveted in a comfort zone that all those 22 agencies that were coming out in our way had signed on to these 5 areas of active activity that we would get on with and serve our nation by getting on with it very well. Leadership is a fascinating notion to many of us. And you're right, I have studied it and written about it over time. I believe that leadership as a model can be focused at the individual level. You and I, as what we imagined ourselves to be as leaders and we would like to be and how do we get better at it. There's the old song about whether it's a science or an art. And you have gone down those roads, I'm sure personally as well. But for me, I took it upon myself together with the colleague to literally write a book about leadership at the individual level. And as I wrote that book, found it to be as applicable at an organizational level or even at a national level as I was trying to describe the, you know, the best elements of, dimensions of, foundations for good leadership performance. I have convinced myself that the same thing that applies to you or I as an individual can also become reputationally associated with an organization, let alone a nation. And that's where I think we find ourselves today. And one of the most important things is to recognize the post 9/11 security environment and its requirements about leadership that might be a little bit different from the traditional things of the past. And I offer things like agility, adaptability, collaboration skills. I used to kid Secretary Ridge as being the Secretary of Collaboration whether he wanted to be or not. That's really what he was doing. When he was asked by the President not only to stand up at the department, but then job by job by job to take on things like critical infrastructure of the United States of America, recognizing that there were 17 of those different sectors. And his job was to pull it all together in a single, build the pieces of the puzzle. But then make sure they all fit together in the puzzle itself.

Tom Armino: Can you tell us a little bit about how you navigated the interagency process after 9/11 in 2003 after the department was established?

Admiral Loy: Sure. I would say, you're looking for a couple of adverbs. And I would say aggressively but carefully. We had to recognize that the relocation of a number of these agencies was not their idea. They were coming to us because there was an appearance of a greater affinity in the Homeland Security business for what they usually did for living, even if they used to do it in treasury or justice or transportation, even agriculture or elsewhere in the federal establishment. And pulling those 22 agencies or pieces of agencies into that single unit called the Department of Homeland Security was ultimately the best--the biggest challenge that we had. There was a little bit of a division of labor. Secretary Ridge was so good at the greater, more global mission oriented. What ended up between he and I calling, the front room of DHS. In other words, the things that caught the imagination of this is the executive or legislative branch or the citizenry at large. He was so good at talking about those things, thinking about and requiring a directional influence to be applied to those things that he wanted to take that on himself. He asked me to concentrate a bit on what we ended up calling the back room of DHS which was the functional elements that were associated with recognizing as 22 agencies came toward us.They each had a legacy behind them-- of how they did things. So whether it was about HR or IT or acquisition or procurement, those kind of functional realities of the back room, I got to be the prince of broken crockery. You know, to break what was necessary to reassemble, the single one way we were going to do function X, Y or Z in the Department of Homeland Security. So it was with great care that I went to find out how different elements of our new department did things and then put together teams and task forces that could compose the single, better right way for us to do it at the Department of Homeland Security. And make absolutely certain that people that had equities in those decisions were there to express those equities and protect those interests so they could feel that they had been involved in the process of coming to the decision that was taken, as supposed to having it sprung on them at the end of meeting number 10 on whatever that function might be. So this notion of aggressively getting it done because we had to meet in an efficiency sense what the resource mandate was that that congress was providing us. In other words, what was the budget that this department was going to get to do what it was expected to do. And then address function by function by function how we could most efficiently do that in a singular fashion as suppose to 22 different ways. Let me give you one sort of silly example. As we pull the department together, there we 19 different bricks and mortar places where we paid bills in the department. That was really not what we wanted it to be. In the short window, that Secretary Ridge and I had the opportunity to lead the new department. We got that number from 19 down to 3 and I believe it's now down to 2. And I think there will always be some unique bill paying challenges associated with the Coast Guard as one of the 5 military services of the United States. But here was a disperate scattered way to do business with lots of overhead that was not necessary and we could save both the dollars and the positions necessary to make that a much better and more efficient way to do business for the department. There were an endless number of those kinds of examples of how we tried to take all of those functional areas in the back room and get them down to an efficient way to singularly do business for the Department of Homeland Security. Governor Ridge's-- Secretary Ridge's slogan was "One Team, One Fight". And we had to go from 22 teams and 22 ways of fighting to one team and one way of fighting that was the always the light at the end of the tunnel for us.

Tom Armino: Well, each one of those 22 organizations had, or still has their own organizational culture?

Admiral Loy: Sure.

Tom Armino: Some have been in existence for a long time, the Secret Service, the Coast Guard had been in business for--

Admiral Loy: 230 years.

Tom Armino: -- the coast guard-- yeah.So I mean, they can't change overnight despite the one team, one fight. So that continues, I think continues to be a maturing process for the government.

Admiral Loy: Oh, absolutely. And even Governor Ridge and I would look at each other and say, "What do you think? 15 years, 20 years?" If you look back at an example, you sited the 1947 Natural Security Actas the last time we had a major upheaval if you will in terms of organizational adjustment with the federal level. There were others along the way. Education, transportation,those departments were created along the way but you're absolutely right in terms of the upheaval associated with 47. But that was about four agencies, you know, Army, Navy, Marine Corps, Air Force. Each of which has a reasonably like affinity with each other as it relates to the missions to be accomplished for the well-being of the nation. And there were other differences as well. In 1947, it was 2 years after the war was over, many of the senior members of the congress and the senate had gone back home so there was a richness associated with how better to do business. There was a seated senator in the White House known as President Truman at the time, who refused to sign the legislation until the senate and the congress reorganized themselves with respect to how they were going to provide oversight to the new department. Thus, the SASC and the HASC were born, the Senate and the House Armed Services Committees were all born as part of that legislation before President Truman would sign it. Those parallels didn't happen to exist in 2002-2003. Hell, we're still in the middle of whatever the GWOT is, the Global War on Terrorism, a phrase I don't particularly care for by the way. But that's neither here nor there. But to go directly to your question, from 1947, it took 40 years when you're talking about 4 like-minded agencies to get in the Pentagon. Just to get to 1986 at which point you need gold, water, nickels to push it the rest of the way. So the idea that we were going to take 22 agencies of dramatically desperate backgrounds and in some kind of overnight fashion, get them to the point you asked your question about was really a pretty ludicrous question to ask to begin with. But methodically, we had to then focus on as I indicated functionalities. If we could take it one function at a time and make that element efficient and then aggregate the efficiencies that we put together over time, that was the approach that Secretary Ridge and I took when we were offered-- as to say, the enormous honor and obligation and challenge of leading the new department.

Tom Armino: You mentioned congress, in the context of 1947, let's jump forward to present day. Enormous amount of committees, subcommittees dealing with Homeland Security. How much of a challenge was that for you and your staff, preparing testimony-- actually testifying, reacting to questions for the record. I mean, what was your relationship with congress and all the[voice overlapping]--

Admiral Loy: Sounds like you've heardme talk about this before. I still belief it is the single, most jeopardizing element of the whole transition process from where we were before the 9/11 to where we want to be with an efficient new cabinet level agency post 9/11. Numbers don't lie on occasion. These are helpful I think. If you look back over DOD for the last 10 years, for example when you include supplementals, you're talking about-- let's say on the average of 800 billion dollar budget for the Department of Defense where the secretary has to answer to fundamentally 4 committees and appropriating and authorizing committee in the senate, appropriating and authorizing committee in the House. And I will say, yes also. A couple of intelligence committees are certainly have to be responsible overseers for intelligence activities in the department. So let's say 6 or 8 committees of consequence that that 800 billion dollar budget gets overseen by. In DHS, we then-- Mr. Church Hoff [phonetic] then and Janet Napolitano now are probably answering to a 106 or a 110 or a 112 committees and subcommittees. Each of which has not gone through the process of recognizing the value if you will, of efficient oversight. There's turf-consciousness associate with the committee structure on the hill. The rules committees have to get involved to realign in a much more efficient manner the oversight provided to the new department by the congress. And although, some efforts have been made primarily on the senate side. It remains very, very frustrating, I would imagine. I remember one 12 month window. It was not a January to December window but nonetheless, it was 12 month window when Secretary Ridge or I had requests to be a witness at a hearing a 161 times-- a 161 times. You mentioned just a moment ago that preparation process that goes into getting a witness ready to go testify, you lose the day of testimony likely. And then the Q and A aftermath, the question and answer aftermath that is imposed on the staffs by the committee structure in the wake of a hearing is such that, you know, I started to say, "160 times, the last time I check with 365 days in a year." Who the hell is running the department if all we're doing is either preparing for actually testifying or dealing with the aftermath of a hearing? Now I've overstated that maybe slightly. But I believe efficient oversight of the department by the legislative branch of the nation is a desperately ill-conceived manner. It is being done in a desperately ill-conceived manner right now and needs adjustment dramatically.

Tom Armino: Did you have any latitude or flexibility to say no to a [voice overlapping]?

Admiral Loy: Well, we always negotiated whether or not it was to be the secretary or myself or one of the undersecretaries or an agency had or whatever that would actually appear as a witness on the hill. That's the normal give and take of the legislative executive process. And for the most part, you know, I would say the opportunities that were offered in that regard for publically defining what it was we were doing were not all bad. With the secretary could go up and make an announcement about a new piece of policy that had finally come to closure, where an agency head could redefine why his resource request was what it was as suppose to what it was last year because things had changed in the post 9/11 security environment. If you look at the Coast Guard's budget experience and the decade that occurred from 2001 to 2011, enormous emphasis on an organization's adaptive capabilities in a post 9/11 world, where the resources that they asked for, that the department requested for them, that OMB requested for them in the President's budget and were granted to them by the congress and in an appropriated process. You'll see that Coast Guard is shifting gears which had always does to go where the nation needs it to be in the time that it's serving that window of time. I can tell you that on 9/11 itself, when we woke up that morning, Coast Guard was probably spending, I would say 2 or 3 of its appropriated capability. 2 or 3 percent is appropriated capability on something called port security or a Maritime Security. Within 24 hours, we were probably spending 30 percent. Now that's being agile to the task at the moment. And there's a version of that which spans budgetary cycles that allows agencies to be adaptive to the national requirement. And I think the driving influence at the other end of the day routinely was, what is the national need here? And are we organized for, resourced properly for, and led properly by those people that can get done what we need to get done? That kind of a need to us quite clear from Secretary Ridge from Day 1. He lived and breathed it and behaved it. I tried to do the same and many, many other folks including at the agency level did the same.

Tom Armino: I’d like to shift gears, a little bit here. As the department grows and matures and all the components come together and develop a more a departmental wide attitude or identity I should say. How has the department changed after 2005, after Hurricane Katrina?

Admiral Loy: Well, Hurricane Katrina was a terrible experience. Not only for the citizens of our country that were so impacted in the Gulf Coast and in New Orleans proper but for the system that was designed to take care of those kind of things for us as a nation. Stafford Act based-system, where the locals respond first and when they are over their head, so to speak, they seek assistance from the state and when the state finds itself overwhelmed, seek assistance from the federal establishment. I mean, since probably way back when we were literally dealing with each event as it occurred with the piece of legislation that drove a response to it, I would guess the establishment of the Federal Emergency Management Administration, you know, when FEMA was put together, it was the first substantial recognition that we needed a systemic approach to this as opposed to this idea that locals would always respond and be supported as necessary from afar. Hurricane Andrew in Florida was probably the first really significant storm that would have the catastrophic label attached to it that precipitated organizational adjustments up the line. But Katrina as a hurricane, is rivaled only by perhaps the Galveston hurricane of 1900, the San Francisco Earthquake and the Chicago Fire [inaudible]. I mean, it's one of the top 3, 4, 5 in our national experience. But we didn't do a very good job. You know, the terrible pictures of the devastation only to be countered by, you know, some of the unfortunate pictures of President Bush and Mike Brown, you know, when it as appearing to be handled well. When in fact at the trench level, it wasn't handled well at all. There were so much poor performance. You know, when half of your police force shows up the very day you need them the most, there's a statement there about local leadership. When you take days and weeks to seek federal assistance, there is a statement there about the leadership at Baton Rouge and then the governor's office. And then when the response is what it appeared to be day in and day out on the national news networks from even the federal level. There are enormous challenges there that we have to do better at. So there's a lesson learning process and to the great credit of a lot of people, the studies that were done by the White House, by the House, by the Senate, by lots of different people including the department itself, to aggregate lessons learned from Katrina and go forward with a game plan that would never allow that to happen again. I believe is to their credit. The performance of the occasion, nightmare. Learning from that and allowing progress to be made such as that it doesn't reoccur, credit deserves to be placed there where it belongs. I believe there are certain jobs in our national establishment at the federal level that absolutely mandate qualifications of specific experience to hold the job. The administrator at FEMA is one of those jobs. Now in Craig Fugate, you have a guy that has been the emergency manager in the State of Florida for years, a life long experience manager of emergencies responsible for that at the federal establishment. Not unlike James Lee Witt was for President Clinton. When he was the emergency manager in Arkansas and came to have the job for 8 years during the Clinton administration. So the realities there are sort of what I just described. But if you go back to those magic words I mentioned earlier, awareness, preparation-- I'm sorry-- prevention and then response and recovery on the aftermath of a God forbid event notion, we're talking about the response piece, really. And that was something that this-- the department and its full leadership cadre had signed up for as early as those early days of the department. So the responsibility is clear. How they go about refining their response capability to direct that traffic from the federal scene and to engage state and locals, to engage NGO's, to engage the private sector, all those frustrations are part and parcel of a new game plan. Now having said that, part of the work that we were doing early and is now part of the books on the shelf so to speak, is a new national response plan, a new national incident management system that is structured along the fashion that would allow success to be exactly what happens when these nightmares occur. So if you look, we've actually-- thank the good Lord, had a couple of very soft hurricane seasons here for the last couple of years. You can't tell the people in Vermont that. I understand and I'm with you-- I'm with you on that one. But in terms of national level multiple catastrophes, it's been a relatively quite couple of years. Having said that, it's been a nice window of time to really get right the lessons, the resource adjustments, the leadership's adjustments that are going to make certain that what happened in Katrina in the way of a response capability has never repeated and rather, we will be successful. Those storms that have gone by that have been handled very, very well and I would offer for example the Deepwater Horizon Nightmare, the oil spill in the gulf of Mexico to which the department handled those extraordinarily well because they did learn the lessons from Katrina and incorporated those lessons into the National Response Plan. And the National Incident Management System which is now available to train people on how to do it, to be ready when the next one-- the next nightmare comes by.

Tom Armino: So what I hear you saying is that you're fairly confident now that the department is focused on all hazards rather on just incident specific.

Admiral Loy: It was not the department's choice. You know, whether it was event driven, as you say by Katrina or even in the original legislation, if you look very carefully, there was no prescription away from natural disasters. There was a natural focus on the manmade disaster or a terrorist event because that's what had precipitated the total change, if you will, that caused the department to be formed to begin with. But it's clearly on all hazards, it's clearly an all hazards department. And as they go forward, they have sort of-- it's not a matter whether they would choose not be that. I was going to say, they have no choice in the matter which they'd probably don't have a choice in the matter but that's not the point. The point is that it is the right process to recognize the huge resource and people investment in being a good emergency manager whether it is a natural catastrophe or a manmade catastrophe. You can prepare well to perform well only if you do so. It's about act of doing it. It's not about talking about it. You know, talk's cheap, behavior counts.

Tom Armino: Absolutely. Approximately one month after President Obama took office,he issued Presidential Study Directive 1, PSD 1, organizing for Homeland Security and Counter Terrorism. And in that document, the President stated it and now, I'll quote it, "My highest priority is to keep the American people safe. I believe that Homeland Security is indistinguishable from National Security, conceptually and functionally. They should be thought up together rather than separately. Instead of separating these issues, we must create and integrated, effective and efficient approach to enhance the national security of the United States."So with that in mind, how would you define Homeland Security?

Admiral Loy: Well, I would define Homeland Security as a subset of this greater phrase, ?national security,? but I would also define national defense as a subset of national security and there're probably are other elements that might find a way under that umbrellas as well. But I really do believe that the challenge in the post 9/11 security world that we're all really trying to understand, let alone have figured out and organized for and resourced for, we're in the process of doing that but that's a maturing process that'll take place overtime. But I believe that the integration process probably occurs as it relates to counsel and advice to the President at the National Security Council. In the days that we we're at the Department, there were two distinct organizational elements over there. There was a National Security Adviser which have been there since 1947. And there was a Homeland Security Adviser which had come to be when the President asked Governor Ridge, you might remember from-- at the State of the Union that day, he was with the first lady up in the balcony of the House of Representatives and accepted his role as being an adviser to the President around this new word called-- this new phrase called Homeland Security. And then of course, eventually was part and parcel to the effort to stand up, designed and stand up the new department as it's for secretary. Now having settled that, the new administration has actually left-- has actually merged the staffs inside the National Security Council structure to let both sides of the equation if you will-- all sides of the equation if you will, follow towards the single ?National Security Adviser" who is the person advising the President. You know, this is about a changed dynamic. In my mind, the notion of change whether it's embracing it as the beginning or managing it to make it happen, the changed dynamic is always about four things. It's always about structure, that's often the boxes on the org chart, you know, sadly but let's leave to that for then moment. It's about processes which suggest how those boxes on the orchard talk to each other, deal with each other towards the mission accomplishment at the later end of the day. It's about a place to have ideas vetted, that's the third thing. You need a window in that structure where you can slip in neat ideas to be dealt with and vetted by the processes in the structure to get around to whether or not that was a good idea or not and actually make it happen. And in the last thing of the four is-- are the people. You know, they populate the processes and populate the boxes and vet the ideas. And if ever pressed to, which is the most important of those four things that I have found to be common to our changed dynamic, I will always say the people. If you put the right people in the processes, in the structures, vetting the ideas, we have a dramatically better chance of getting to where we need to go at the other end of the day. That is changing in the thinking patterns and the intellectual vitality of what goes on in the White House as it relates to counseling the President, giving him the last best review process which of things that are invariably start with study groups, find their way to deputy's flora inside the National Security Council, advance to principals, meetings inside the National Security Council such that the National Security Adviser can take that collective wisdom as advising counsel to the President. That's how the system works. And I do believe that we need to recognize that there are probably some structural elements and process elements in that changed dynamic that need attention in the post 9/11 security environment, then had been traditionally there in the past. In my day, I could enter the Coast Guard's silo and live in it, be promoted in it, progress in it for 35 years. Mike has 42 years and probably really never have to talk a lot to anybody outside my silo. When I-- when you ask me about leadership earlier, I think perhaps the most significant characteristic of leaders that I think we need to be designing in to our educational systems and structures today is the notion of collaboration skills. The ability for that synthesis to take place in to a single National Security piece of advice to the President is about somebody,the National Security Adviser, all the players around those principles and deputy's tables and the leaders of those task forces and study groups to pull together a dramatically different array of inputs then they had been required to do in the days before 9/11. I'm not suggesting that the task before 9/11 were easier of harder. I'm just suggesting that the post 9/11 security environment mandates this capability about collaboration. Let me give you one example. When the President signed Homeland Security Presidential Directive number 7, it was about guaranteeing the critical infrastructure's security of the-- the critical infrastructure of the United States of America. Now, think about that. That is one big enchilada to take on. In the directive, inside the directive that the President personally signed, there were 17 sectors enumerated, identified with a cabinet-level secretary responsible to put together a sector-specific plan as to how they were going to protect the critical infrastructure of their sector. And these are transportation, banking and finance, food, water, et cetera ,et cetera. I can remember vividly the first meetings that Governor Ridge asked me to hold with my deputy counterparts, the number 2s in all the cabinet level agencies of the department--of the Unites States' Federal Government to get on with the business of understanding what should those sector-specific plans look like, what should they contain, what's the outline for them and then send them on their way to produce those plans. We were responsible for 8 of the 17 plans. The other 9 were distributed out to other cabinet-level secretaries. As you can imagine, when deadline number one came, in came those sector-specific plans and as a human experience wouldn't suggest, they range from A pluses to F minuses. So all of a sudden at the Cabinet Secretary Level in the United States government, Secretary Ridge who has the big rose pinned on him as the guy responsible to get the total plan back to the present and on date certain, has to help his other cabinet-level secretary, colleagues understand, "You did really well Frank. You didn't do so good, Sam." Here's the changes we would offer and his offer assistance to getting their sector specific plan up to date. And then when it was all done and we had 17 documents that passed muster, that was about half the work. 'Cause the other half of the work was how do these 17 sector plans fit together. For example, we distill chlorine in the chemical sector in Houston, put it in a tank car and take it to California and put it in the water supply. So the Chemical Sector, the Transportation Sector and the Water Sector, their sector specific plans have to play nicely in the sandbox together to be efficient. That set of challenges was again another iterative process to get us the point of-- after government Ridge and I had long gone, by the way, to actually publish a national infrastructure protection plan for the United States of America. The collaboration skills necessary to keep people focused on points and not feel bad to not get turf-conscious to et cera, et cetera. That's the leadership skill of the post 9/11 security environment that I hope we are fostering in our educational systems and the people that we are vetting to fill these jobs 'cause it's an absolute mandatory dimension of good leadership. And if we're sticking someone in those jobs that is much more interested in just their piece of the sandbox, just there turf,just what they're responsible for without adequate appreciation from the guy on the left and the guy in the right, we stand in to danger. And it's skills like that, that go together with a more traditional leadership notions. All of which are based on a foundation, of course, of integrity and honesty and work ethic and ethical values, you know, this Cultural values that are the foundation of any kind of a leadership process. That as it relates to this notion of national security is I believe some of the most critical things that we have to be thinking about.

Tom Armino: Yeah, I'd like to take your comments about critical infrastructure protection maybe to the next level and as well as collaboration. I often talk with my students about what I call C3N, collaboration, cooperation, communications and networking and in terms of critical infrastructure protection, the numbers that we see in various documents are 85 percent of the critical infrastructure in the United States is owned and operated by the private sector.

Admiral Loy: Private sector, true.

Tom Armino: So having that collaboration or that--that's another challenge is taking that collaborative work and that collaborative effort with the federal government into the private sector and so—

Admiral Loy: You're absolutely correct. Maybe one of the better examples of that is in the Chemical Sector where we have a new set of regulations associated with post 9/11 realities in the Chemical Sector. And the great plus there was, this was not a couple of feds going into a closet where there may or not have been a light on in designing a new set of regulations for the post 9/11 security environment. This was in open fora where the Dow's and the Dupont's of the world were at the table offering their inputs to that kind of a constructive process. So A, they're weren't surprised when the red package hit the street because they had owned it, they were part owners on it because they were part of the team that put together that red package to begin with. So you're absolutely right, whether it's impact about the federal level. I mean federalism is a wonderful concept. Feds, states, counties, cities, villages, tribes, et cetera, et cetera, all the way down the line. But this is America at large that we are securing so the equity is associated with who those folks are and what they represent. You will invariably have a better product at the other end of the line if they are represented at the table when you are designing the better way to do business. I think that the chemical FATS package and the way it was received by the industry when it finally published is a classic example of how to do it good, how to do it well.

Tom Armino: And just for our students, you're referring to what's called the CFATs.

Admiral Loy: Yes.

Tom Armino: The Chemical Facility Anti Terrorism—

Admiral Loy: Absolutely.

Tom Armino: Yeah.

Admiral Loy: That's a package that represented the physical structures owned and operated by, as you say, the private sector but so critical to the nation's well-being that a federal look at mandating certain requirements associated with its protection, was absolutely in order. Now the difference-- I often segregate things between the what's and the how's. The what's have to do with policy statements being offered by governmental structures but the hows are invariably better produced by those who are impacted by that new piece of policy where you can marry them up together, you will invariably, as I say, end up with the better solution to the challenge, whatever the challenge might be.

Tom Armino: I'd like to talk about another Presidential Directive. President Obama issued PPDA, Presidential Policy Directive Aide on National Preparedness on March 30th 2011. And he directed that the Homeland Security enterprise build and improve the capabilities necessary to prevent, protect against, mitigate the effects of respond to and recover from those threats that pose the greatest risk to the security, the nation. So in that regard—

Admiral Loy: Magic words.

Tom Armino: That's right, going back to your five words. How do the Secretary and the President get the message at strategic communications, how do they get the message out to the American public to stay engaged and develop what we hope becomes a cultural preparedness?

Admiral Loy: Well, there's no simple answer so I can't give you the 5 second answer as if there and pretend there was one.

Tom Armino: The silver bullet.

Admiral Loy: There is no silver bullet. The reality is the answer to that is a dramatically multi [inaudible] faceted notion as well. So it's somewhere between a new alert system that, you know, that Secretary Napolitano just announced a bit ago and as much grief as Secretary Ridge and I took with respect to our old system, it was designed to be at its base, a communication device to the American public. that's what we were trying to do. I'm not trying to protect it, you know, so to speak against the new one. I think the new one's better and Lord knows here we are 10 years later, a refinement process overtime is to be expected, otherwise the current people in those jobs aren't doing their jobs as well as they should be. But when you were talking for example about communication's devices, we should go back to the notion of information sharing as well. Whether it was Hart-Rudman Commission, whether it was 9/11 Commission, whether it was every task force that looked at the Katrina aftermath. I mean all of those investigatory bodies, you know, have looked very carefully at this notion of information sharing as part of the communication's process to equip citizens to be better citizens, equip communities to be better communities, equip states to be the better states, et cetera, et cetera. I think they've come an awful long way. "See something, say something," at the moment is Secretary Napolitano's sort of core flag. She put the flag in the ground and on the flag it says, "See something, say something," and we site of course the Detroit bomb, you know, the Detroit Christmas bomber, we site the Time Square bomber, as opportunities where someone at the scene, familiar with the scene can most easily detect something abnormal at the scene. So if it's a bunch of we and the Close Guard incorporated the fishing community because they're-- on those water is more than any other-- anyone else. They will know if something different is going on but there's a challenge between recognizing it-- first of all, between looking for it, recognizing it and reporting it. So the general core notion of what's on the flag "See something, say something," I will suggest that if I was in the front office of DHS these days, we would be embellishing with "See something say something" really means and how do you programatically build on the flag that's in the ground to make certain that one of the most dramatic enemies that we have complacency doesn't kick in, in the wrong moments that we don't have it-- that we don't want it to be kicking in. We talked about complacency. I don't know whether it was everyday but it was sure often even in the very early days. Here we are 10 years later. When is it that we are going to be able to totally relax and resume as if things were now 9/10/01 and behind?The answer that is never. The reality is we're living in the first couple of decades in the 21st century and we have to prepare properly for that. So the communications obligation of the federal establishment to have first of all multiple elements in the intelligence processes that capture things when they need to be captured, analyze them for the value they represent and then get distributed to the people that need them so as to act if necessary. That is a normal functional responsibility of the Secretary's Office and the Department of Homeland Security these days. Staffing it accordingly and if I added a different leadership competency to what I mentioned just a moment ago in this-- in answering this question that you had, it would be about skills associated with managing risk. These things have to be prioritized. We can't be all things to all people all the time so there is absolutely a sense of prioritization that has enter the question about, "Are we going to put resources and attention here or are we going to put it there?" Well, what is the risk that necessarily needs managed? What's the threat? What are our vulnerabilities? What are the mitigation strategies that are associated with eliminating the threat or reducing the vulnerabilities and what are the programmatics all the way down to some kind of a metric based study team that keeps us apprised of how things are going with regard to that. John Pistole as the Administrator of TSA at the moment is a terrific example of a guy who walked into the job and on day one, introduced risk management as a high profile leadership trait that he was going to impose and mandate for all those who are running the show over at TSA. That kind of notion, I think needs to be seaped through all of the elements, not only the department but of the National Security establishment. And as I say, whether it's about structural change, process change, idea vetting change or the people that are in those jobs, it's about a change model that you have to understand and manage properly through the course of getting from where you are to where you want to be.

TOM ARMINIO: Okay. Admiral Loy, I wanted to thank you very much for your insight, your insight into TSA, your insight into the Department of Homeland Security and your insight into leadership. Thank you very much for your time. I'm confident all of our students will benefit greatly from your expertise. Thank you.

ADMIRAL LOY: Thank you Tom, good to be with you.