May 1, 2007
Intelligence agencies must decode a human capital crisis.
When Tom Waters decided to become a spy, the first thing on his mind wasn't how much he'd get paid.
On the morning of Sept. 11, 2001, Waters, then a 36-year-old business consultant living in Tampa, Fla., packed his bags for a business trip to Montreal. His girlfriend, Cathy, called to say a plane had hit the World Trade Center in New York. Waters turned on the television and watched as a second plane, United Airlines Flight 175, plunged into the South Tower. "I thought, 'Oh crap, this is not an accident,' " Waters says.
What he did next tells you everything that is good, and that is truly regrettable, about life as an employee of a U.S. intelligence agency.
Three days after Sept. 11, Waters, along with more than 150,000 others, applied to work for the CIA. The CIA typically receives tens of thousands of applications, and accepts fewer than 1 percent. To handle the deluge of job-seekers, hiring officials brought in retired officers and seconded other staff. Nearly a year later, after a battery of interviews, medical exams and psychiatric tests, the agency offered Waters a job, and he joined the first post-Sept. 11 class of the National Clandestine Service-the country's top spies.
Waters, who wrote a book about his experience, called Class 11: Inside the CIA's First Post-9/11 Spy Class (Dutton, 2006), says he and his fellow spies-in-training were singularly motivated: "Everyone was there to make sure another attack didn't happen." The character of this class was unusual. "There was a strong business flavor. Investment bankers, corporate attorneys." Not the expected bunch of recent college graduates with no work experience and few marketable skills.
Waters had chosen a particularly inopportune time to join. Since applying, he and his girlfriend had married and were trying to have children. Waters writes that he "disappeared" for the first year of his marriage, "even when we [did] manage to live under the same roof."
Class 11 chronicles Waters' year of demanding training. The narrative is steeped in his sense of awe, intrigue and unbridled excitement about the lifelong adventure ahead of him. There is no doubt that he wanted to spy for his country. But by late 2004, he and Cathy were expecting their first child and planning for another. The path to parenthood had been difficult and expensive-they blew through much of their savings on fertility treatments. Cathy wanted to stay home with the baby. Waters knew promotions and pay raises in the CIA were based on time served; there was no accounting for his years of professional expertise, which would fetch higher wages in the private sector. Waters questioned whether he could support his family on an entry-level salary and pay for a home in the Washington area, all while pushing 40.
"I sat down and did the numbers and scared the hell out of myself," he says. "I would be 65 by the time my children got out of college. The first phrase that came to mind was, 'Welcome to Wal-Mart.' "
So in February 2005, Waters quit. "That last day, walking out, that was hard," he says. If the money had been right, "I would have never left." Today, Waters is a contractor for the Defense Department, working in counterintelligence at a security facility in the Army's Special Operations Command, back in Tampa. He also has done contract work for the CIA. In many ways, he hasn't left the intelligence community, but now his shopping options extend beyond the discount chain.
Tom Waters could be the poster boy for a new breed of intelligence agency employee. They are the future spies, analysts, technologists and linguists who signed up in the grips of a nationalistic furor over terrorism. They believe America has enemies, and they want to fight them. They hail from the best schools and come equipped with skills intelligence agencies desperately need.
Many of them also have no intention of spending a career in government. Pledging allegiance to a single agency and a 30-year career track is a foreign concept. Monetary concerns figure heavily in their professional calculus. Mobility isn't a ladder, but a hopscotch board. They might have multiple careers, maybe retire early, go to cooking school. Old hands have a name for these 21st century rookies, not all of whom are young. They call them, derisively, the "millennials."
The intelligence community is divided by a generation gap, one that threatens to undermine its ability to perform its missions, including keeping the country safe from terrorists. The intelligence workforce is out of balance. It can be plotted as two humps on a graph. At the beginning of the experience spectrum are the millennials, green, just learning the ropes, no more than a half-decade of experience under their belts. They make up more than 35 percent of the total intelligence workforce. At the far end is a large number of highly skilled, longtime employees, moving closer to retirement by the day. In between those two humps, where there should be a stockpile of experienced middle managers, the future leaders of the community, there is instead a deep, unsettling valley.
The agencies' top leaders are laboring furiously to fill it. In the nearly six years since Sept. 11, the CIA and other agencies haven't wanted for applicants; there are more people who want jobs than there are billets. But training employees takes years. To fill the gap in the meantime, during wartime, the agencies have hired contractors in record numbers. The agencies have outsourced some of the most sensitive functions, including analysis, spying on foreign adversaries, prisoner interrogation and translation services.
The outsourcing could be temporary, assuming intelligence agencies eventually replenish their personnel stocks. Except that the agencies actually are competing with the contractors for workers. According to the five-year strategic human capital plan at the Office of the Director of National Intelligence, "those same contractors recruit our employees, already cleared and trained at government expense, and then 'lease' them back to us at considerably greater expense."
Today's competitive job market is defined not by the institution, but by the free agent. The federal intelligence community has become a place where the millennials learn spying tradecraft, obtain a coveted top-level security clearance and then bolt to contractors for heftier paychecks. This has become so common that intelligence observers now fear it could become the career path of choice-break into the private sector via the government.
Assessing the situation, Ronald Sanders, the intelligence community's top personnel manager, says the notorious phrase "human capital crisis" is not a bad choice to describe the predicament. "Certainly potential crisis is an apt description," says Sanders, chief human capital officer at ODNI.
No one in the intelligence agencies is surprised it has come to this. The crisis was entirely predictable, they say, and can be traced, ironically, to a peace dividend. Following the collapse of the Soviet empire, Congress and the administration decreased intelligence funding and pruned back the workforce. The decision was not without controversy, but the prevailing wisdom held that with the country's main enemy out of the way, there was no need to maintain a wartime footing. Former CIA director George Tenet has said that in the 1990s, agencies eliminated or didn't fill 23,000 positions. "The intelligence community was literally gutted," Sanders says. "By design or by default, we were downsized dramatically. We lost core capability."
What was left of the Cold War workforce moved into the senior ranks and management positions. "Now, you turn around and look behind them, there's nobody there," Sanders says. That's the valley between the two humps.
Fast forward to Sept. 11, when the anemic agencies were thrust to the front lines of a new war on terrorism. The workforce had to scramble against a new enemy, one that few understood. The hiring push, and the contractor spree, ensued. Sanders says staffing levels are "finally getting back to where they were" before the 1990s cuts. But most of the new recruits are filling entry-level jobs. "Our bench strength at the midcareer level is really problematic," he says.
The millennials still aren't fully trained, and aren't ready to head into the valley. It takes, on average, three to five years to season an analyst, and about seven years of work "on the street" to sufficiently train for clandestine work, says Mark Lowenthal, who retired in 2005 as assistant director of central intelligence for analysis and production. He worked in the intelligence agencies for more than 30 years, and spent a good part of his career wrestling with the personnel crisis.
Historically, Lowenthal says, the agencies have trained independently. "If you join [the National Security Agency], you go to the NSA school. We put you in a stovepipe as soon as we get you." On the rare occasion employees want to transfer, managers see them as essentially untrained. "They treat you like they've never seen you before inside the system. You're an outsider," Lowenthal says.
Over time, employees developed narrower, agency-specific expertise about emerging threats. There was no spirit of collaboration, because the workforce wasn't designed for it. This is the institutional reason so many dots about terrorism remained unconnected before Sept. 11.
Now, policymakers are demanding that agencies share their knowledge and expand their targets beyond the old Soviet foe. "The subjects that we worry about have all changed dramatically," Sanders says. The experience gap impedes the agencies' evolution. Personnel managers know they can't fill it by speeding up training times. So they've decided to get smarter about using the expertise they have. To keep the human capital crisis from sinking the intelligence community, they say, the community needs to act like one.
Before he retired, Lowenthal helped launch a communitywide catalog of intelligence analysts, a kind of Yellow Pages that lets managers see who has expertise on specific regions or issues. Such detail is essential for long-term human capital planning, managers say, and reflects a core belief-which is not universally shared-that an analyst is an analyst, regardless of which agency he calls home.
Managers have made some startling revelations in the catalog. For instance, "We are woefully deficient in the number of analysts who have expertise in sub-Saharan Africa," a region of great concern to policymakers, Sanders says. Previously, managers understood such shortfalls only "at the anecdotal level," he says, and couldn't efficiently plot to fill the gaps. In the coming months, managers plan to launch catalogs for intelligence collectors, technologists and acquisition specialists.
Knowing how employees spend their time also lets managers eliminate redundancies, which they can ill afford. Recently, ODNI asked agencies, "Who does what on Iraq?" "[It] took a couple of iterations before people understood the question," Thomas Fingar, the deputy director of national intelligence who oversees analysis policy, said in a speech in Denver in August. Some people replied, "We do everything on Iraq," and others said they did "important things on Iraq" and disseminated their work to "important customers" in all kinds of ways.
"We discovered a very large community of people acting like 8-year-olds playing soccer, bunched around a ball over here and a lot of areas of the field uncovered," Fingar said. But apparently, just knowing where the overlaps existed helped to get rid of them. "As soon as components of the analytic enterprise [the various agencies working on Iraq] saw that, they didn't need me to tell them to adjust; they began to adjust," Fingar said.
Managers are trying to fill other skills gaps quickly. To beef up the low numbers of linguists who can speak Arabic, Dari, Chinese and Korean-to name a few-agencies last year gave several hundred scholarships to college students. They agreed to study languages in exchange for a work commitment. ODNI also is paying for summer language immersion programs for elementary and high school students. "You've got to get to them as young as possible," says Lowenthal, who was in charge of language programs for analysts.
Officials want to close a gap in the security clearance process, as well. New Director of National Intelligence Michael McConnell wants to speed up that process, which can take more than a year, and to make it less rigorous for first- and second-generation Americans, the native language speakers who hail from immigrant neighborhoods. The clearance process generally nixes people with relatives and business ties overseas, fearing that recruits could be blackmailed or compromised.
All these near- and longer-term fixes might help keep the intelligence ship afloat. But there's also a softer side of management for which there's no easy solution-keeping employees happy.
Every year, Fortune magazine publishes the authoritative ruling on where companies rank in terms of employee satisfaction, the "100 Best Companies to Work For" list. It's compiled through surveys that ask employees to respond to such statements as "I've got all the tools I need to do my job" or "There's a minimum of back-stabbing and politicking."
Fortune's Milton Moskowitz, who co-wrote the 2007 survey, says that regardless of a company's size or earnings, two key trends help dictate how great a workplace actually is: "a strong mission and a strong culture that people buy into," he says, and "communication between management and employees. Not just from the top down, but are there opportunities for employees of these companies to talk back."
The Fortune survey doesn't examine government agencies. But Moskowitz says the essential themes are constant. So, where would the intelligence agencies rank? According to the most recent Intelligence Community Employee Climate Survey, released in April, 74 percent of participants gave a "positive" response when asked, "Considering everything, how satisfied are you with your job?" Only 12 percent responded "negative." The positive rating exceeds that of the 2006 Federal Human Capital Survey, which gauges the governmentwide mood.
But intelligence employees aren't as positive about their managers. Only 57 percent of survey respondents said they "have a high level of respect for my organization's senior leaders." Twenty-four percent were neutral, and 17 percent had a negative response. Asked to rate their leaders' ability "generate high levels of motivation and commitment in the workforce" the numbers fell: 43 percent positive and 25 percent negative. The five-year human capital planning document concluded that "many employees across the [intelligence community] are looking for even stronger leadership, and leaders who will help them fulfill their potential."
Such people are called mentors. The millennials crave them. And that leaves some old hands scratching their heads.
The intelligence agencies have some official mentoring programs, but longtime employees say these don't amount to a widespread, institutional focus on rearing a new generation. Mentoring "is one thing we do badly," Lowenthal confesses. New recruits, particularly younger ones, "have this expectation that they will have a mentor. I don't know where they get it."
Intelligence veterans are flustered by their needier colleagues. Intelligence is a silent service, they say. Most victories never are celebrated publicly, and the culture "does not cater to individual attention," says a former CIA official.
This official recalls an anecdote that exposes the dark underbelly of the generation gap. A senior officer, who managed a pair of new analysts, arrived in the office one day to find that "one of the kids hadn't shown up for work," the former official says. Hours later, the young analyst appeared, and the boss asked, "Where have you been?" The analyst explained that "one of his friends had had a 'professional crisis. We had to sit down and work things out.' " The former official says his colleague was speechless, and later said in private, "You know, I had a bad day once. No one cared!"
Senior employees who think these usually younger millennials are soft blame the parents, suspecting they were too quick to reward the child's every achievement, no matter how insignificant. The old-timers call them "trophy kids," a nod to Ben Stiller's character in the film Meet the Fockers, whose parents built a shrine for their son's 9th place ribbons for various childhood sporting events. Stiller's future father-in-law, played by Robert DeNiro, is repulsed by this celebration of mediocrity. Fittingly, DeNiro's character is a retired CIA operative.
"This is not a system where everybody sits around the table with their Play-Doh and shares and applauds for each other," the former official says. "It values devotion to the system and overwork, and an absolute feeling of being part and parcel of that system." But that, the former official admits, "creates turnover." Whether that's an acceptable outcome depends on who's asking the question.
Sanders says in core skills-analysis and collection-"our retention is very high." His office has measured top-performing employees against the overall government figures. "The attrition rate for the people with the highest performance ratings is markedly lower than it is for overall attrition," Sanders says. "So, we are keeping the very best people."
But some former spies say otherwise. Lindsay Moran, who worked in the clandestine service at the CIA from 1998 until 2003, has written that the agency's official attrition rate-about 4.5 percent-is, "like almost everything else about the agency . . . deceptive." Spies, she argues, are leaving at a higher rate.
"When I was a clandestine service trainee, we used to joke about people who were on the 'five-year plan,' " Moran wrote in Government Executive in 2005. Recruits would join, undergo training and then quit after a short overseas tour. "Sometimes these officers left for personal reasons, but more often they came to the disheartening realization that the operations directorate [where the spies work] was poorly managed to the point of near dysfunction," she wrote. Contradicting Sanders, Moran wrote that the CIA suffers from "reverse Darwinism: The best left early, while mediocre officers stayed and inevitably were promoted."
Lowenthal bemoans attrition as an unfortunate byproduct of the intelligence system. Before he retired, the community was attracting bright crops of analysts. "They were not all refugees from failed dot-coms," he says. "They were joining because they felt we had been attacked, and they wanted to serve our country. What else could you ask for?"
The rookies come from companies where mentoring isn't a foreign concept, and from a workplace culture that encourages versatility. Once they get inside the intelligence system, with its demand for an outdated kind of devotion, the excitement that drove them to service dissipates. "We do things to them in terms of career management that beats that out of them," Lowenthal says.
But the millennials and the trophy kids have a thing or two to teach their bosses about management.
"Intelligence reform" is an umbrella term that encompasses the changes in workforce culture that agency managers want to make. They want to enhance employees' use of technology, to allow a new generation of analysts and collectors to collaborate, to share information so they can connect the dots. To a lot of managers, these are buzzwords, but they have real meaning. And no one understands that better than the millennials.
"If you think about what skills those kids bring in, they have grown up with cell phones, e-mails," says Tom Waters, the former spy. "They do not know how to stovepipe information. It's completely foreign to them. Their encyclopedia is not Britannica, it's Wikipedia."
These new workers approach their jobs in a fundamentally different way, Waters says, one that's an anathema to many old-timers, but completely in line with where legions of experts and critics say the community needs to go. "They'll hear something, and they're going to immediately bounce it off their buddies, who are cleared." Problem-solving sessions could look a lot like two young analysts sitting down together and "working it all out." Intelligence could evolve into a far more open, and informal, craft.
Managers are starting to catch on. In the past year, the intelligence community has launched its own version of Wikipedia, called Intellipedia, which lets more than 3,600 users share information-and challenge it-in a classified setting. Analysts write posts and add to entries about the most difficult targets the agencies face. This year, employees will begin using other online collaboration tools, including one that gives credit by name to anyone who provides "insight that fills an intelligence gap," according to a DNI planning document.
Intelligence managers also want to sate younger workers' appetite for mobility. In the future, all promotions to senior positions will require joint-duty assignments. Employees must serve at more than one agency and try their hands at different skills. Sanders says he has spoken to hundreds of rookies full of wanderlust. "I can scratch that itch," he tells them.
Sanders and his colleagues are in a rush against retirement to institutionalize their reforms. "I don't think we have time for this to take 10 years," he says. "We're about two years into something that I hope we can get done in four, and at least say, we've reached the tipping point."
However agencies get there-probably through a generational shift-managers are banking on the fact that, for a select and sufficient few, the allure of the intelligence business always will be unique, and will bring the most dedicated to their door.
In Class 11, Waters writes about his first day at CIA headquarters, when he and his colleagues huddled around the famous agency seal, carved in granite on the lobby floor. "We grin like maniacs. . . . This is where presidents and dignitaries take pictures commemorating their visits. To stand here is to truly appreciate the exclusivity of our new jobs."
Today, Waters still has some entree into that exclusive club. His contractor work brings him, on occasion, back to headquarters. And though that trip is tinged with nostalgia, he says some things remain the same. "I've got that same, stupid grin on my face when I drive in again." he says.
May 1, 2007