Program Objective Memorandum (POM) Planning and the PPBE Process

What is the POM cycle (Program Objective Memorandum cycle)?

The Program Objective Memorandum (POM) is part of the Programming Phase of the Program, Planning, Budget, and Execution (PPBE) process. The POM describes how the Services and Defense agencies want to allot future funding for a program so that it meets Service Program Guidance (SPG) and Defense Planning Guidance (DPG). The POM includes an analysis of missions, objectives, alternative courses of action, and allocation of resources covering the 5-year Future Year Defense Program (FYDP).

During the POM cycle, planning decisions, programming guidance, and congressional guidance are changed into a detailed allocation of resources or funding to show how the Services and Defense Agencies want to balance their allocation of available resources.

The Services and Defense Agencies recommend the POM to the Office of the Secretary of Defense (OSD). The services submit their combined POM and Budget Estimate Submission (BES) to the OSD on July 30 every year.

Once submitted, program review teams made up of members from military departments, Join Chiefs of Staff (JCS), defense agencies, and OSD staff review the POM. The program review team then presents their findings to the Senior Level Review Group (SLRG), and the POM is discussed. Concurrently, the Joint Chiefs conduct a checks-and-balances review of POM to ensure the balance and necessary capabilities of the proposed force levels.

Both reviews are submitted to the Secretary of Defense before decisions are made in the Program Decision Memoranda (PDM)/Resource Management Decision (RMD).

At the program level, the POM is developed during the Material Solutions Analysis (MSA) Phase. During the MSA Phase a program’s initial POM submission must have an Initial Technical Review (ITR).

POM budget preparation schedule

The POM Budget has a preparation schedule that must be followed to ensure funding each year.

• In February, the Future Year Defense Program (FYDP) is updated.
• In April, the Defense Planning Guidance (DPG) is sent to the Services by DoD.
• On July 30, each service submits their POM (Navy POM, Army POM, Air Force POM, etc.) and Budget Estimate Submission (BES) to OSD, CAPE, and the Office of Management and Budget (OMB) for the FYDP updated POM Review
• From October to December the OMB-OSD review is held. This leads to the Resource Management Decision (RMD)
• In December the DoD Budget Request is sent to OMB
• On the first Monday in February the President’s Budget is due to Congress.

The history of POM

From 1961 to 1965 former Secretary of Defense Robert McNamara worked strenuously to establish greater control over the DoD budget and to help the department work more efficiently and economically.

He thought the budget was central to conceiving and implementing policy. McNamara saw how the budget actually influenced national security. The budget touches policy in many aspects including the national economy, strategic planning, technology, force programming, collective security, military assistance, and resource allocation.

He had personal relationships with President Kennedy and President Johnson, which helped him exert a strong influence on the PPBE and POM process.

Though his dynamic approach and aggressive style created some problems with the military and Congress, he is the creator of the DoD POM process and the PPBE process as we know it today.

What are the phases of the POM Process (PPBE)?

Understanding the POM planning phase

The planning process is led by the Under Secretary of Defense for Policy, with the Chairman of the Joint Chiefs of Staff (CJCS) playing a significant role as the principal military advisor to the SECDEF under 10 U.S.C. §151. The CJCS is responsible for advocating for solutions to department-wide requirements.

During this phase, the President’s National Security Strategy (NSS), the SECDEF’s National Defense Strategy (NDS), and the CJCS’s National Military Strategy (NMS) are reviewed to make sure that Defense Planning Guidance (DPG) aligns with the Administration’s policy goals and to ensure it considers potential threats, force structure, readiness posture, and other crucial factors. The DPG is created with input from the CJCS, military services, and combatant commanders. It usually has guidance on investments and divestments for the services and helps to inform their POM.

Understanding the POM programming phase

The Director of the Cost Assessment and Program Evaluation (CAPE) Office leads the programming phase. During the programming phase, effects of today’s decisions on the future force are analyzed. At the beginning of this phase, the heads of each military service and defense agency develop a Program Objective Memorandum (POM) to describe the resource requirements they are proposing for their programs over five years. These resources include forces, manpower, funding, and more.

The POM not only prioritizes and adjusts programs in the FYDP, it also describes the risks associated with not funding or underfunding certain programs.

After each service submits its POM, CAPE reviews the programs, forecasts what resources will be needed over the next five years and updates the FYDP. Based on this program review, the SECDEF may tell the services to make changes.

Understanding the POM budgeting phase

During the Budgeting phase, which is led by the Under Secretary of Defense (Comptroller)/Chief Financial Officer, the military services complete a Budget Estimate Submission (BES) for the first year of the FYDP. The Comptroller then reviews the budget submissions under guidance from the Office of Management and Budget (OMB). The Comptroller’s review ensures there are appropriate funding and fiscal controls, that the efforts are phased over the funding period, and that execution is feasible within that budget year.

Comptroller analysts work during this phase with service counterparts to review and ensure budget requests align with the unified defense budget. After the budget review, the SECDEF may direct the services to make changes. Once any changes are made, the final budget is to be submitted to OMB during December, and is then included in the President’s annual budget request to Congress, which is usually done in February.

Understanding the POM execution phase

Execution, or execution review, evaluates program results and occurs concurrently with the program review (in which programs that best meet strategic goals are prioritized), and the budget review (in which spending amounts are determined). The execution phase assesses a program’s actual performance in comparison with what its planned performance was.

Challenges in the POM Process

Too much focus on budget and schedule

Every year there are thousands or millions of decisions to be made regarding the allocation of billions of Federal dollars. Though the PPBE process is there to manage this, is this enough? There are many challenges including national security, constrained budgets, and then an added uncertainty every time there are Continuing Resolutions (CR).

So much focus is on completing tasks within budget and scheduled time frames that it can be easy to lose sight of making the most of taxpayer dollars by investing in both what is needed to have effective resource allocation now and in the future. It is important to take a harder look at how programs that are best aligned with our National Security/Defense/Military strategy are invested in, and what the potential outcomes of investing in one program over another are.

To truly do this well and make improvements in determining whether the right projects are being funded, art and science must be leveraged together.

Working collaboratively across the hierarchies

Aligning interests to make decisions that benefit the entire enterprise requires some level of enterprise-wide collaboration, and it is very difficult for organizations across any enterprise to agree on priorities beyond their own individual needs. Additionally, moving up the organizational hierarchy, the more senior officials advocate, often in an entrenched manner, for their own programs. Though this is a natural byproduct of our country’s bureaucracy, when interests are aligned well, major investments can become synchronized in concept, timing, and execution.

Constantly changing, time consuming processes

Processes throughout a decision cycle are dynamic. At each phase of the PPBE process, decisions are made, changed, and changed again. Organizations must continuously modify their assumptions and react to changing guidance from “higher ups.” They must react quickly; there is much work to be done on short notice during these periods.

For every one-hour update to guidance for decisions or change that leadership makes, staff spend 100 hours of prep work including updating spreadsheets and PowerPoint presentations to clearly show the proposed decision options. The long hours collecting new data, aggregating that data into common formats, getting updated proposals from subordinate organizations etc., can make budget campaigns an exhausting and traumatic process.

Other PPBE challenges

In addition to the aforementioned challenges, there are ongoing budget constraints and competition between organizations on how our country should address threats to national security. Without detailed justification for funding, programs may lose funding as DoD tries to balance competing priorities. Without detailed justification, decision-makers may misjudge a program’s importance and reduce or eliminate its funding. Another major challenge is the uncertainty created by Continuing Resolutions.

Change management as an opportunity for transformation

The most important barrier to process improvement and changes in the decision-making cycle is that organizations must change. Though change is intimidating, both at the organizational and individual level, it is not impossible-or even as difficult as you may think.

Change management sounds like a major effort that involves consultant teams, surveys, 80-page PowerPoint presentations and complex recommendations, but change can be incremental. It can be “organic” to how your organization already operates. Your organization probably already has what it takes to drive an enterprise view and align interests. If your organization can embrace transparency as a positive virtue and make changes incrementally, with plenty of input from the managers who must interpret leadership guidance, then change can become a much smoother process.

How to improve the PPBE process

You can improve the PPBE process by using tools that will help you navigate the dynamic process that is PPBE. These tools should also help you align interests to create an enterprise view, assess investments against strategic objectives, and allow for an acceptable pace of change in your organization.

When you can find ways to collaborate and organize your organization’s most important ideas in a clearly defined manner, you have taken a great first step towards transforming your organization’s processes.

Keep reading to learn more leading best practices in the POM Process.

Best Practices in the POM Process 

Whose POM is it?

Unless otherwise directed by leadership, the POM belongs to whoever is in charge of your organization. For example, in OPNAV, the POM belongs to the Chief Naval Officer (CNO). After the CNO the Navy POM belongs to the Secretary of the Navy (SECNAV). Be aware of your own organization’s structure. Your organization’s job is to deliver a timely, integrated POM that has priorities, balance and rationale aligned with your organization’s guidance and intentions.

What does success look like and how can you measure it?

A successful POM can be defined and measured in multiple ways, but the most important measure of success is that the job has been completed according to its definition. Secondary measures are trumped by your organization’s guidance.

Success is not as simple as delivering a POM that adequately resources critical capabilities needed by your organization. Leaders must shape priorities, make decisions or decide who will make them, and decide whether to take on more or less risk.

There are tactical steps you can take to help your POM submission be successful, including ensuring:

• The POM is submitted on time
• It is vertically and horizontally integrated
• It clearly expresses your organization’s priorities
• It aligns with your organization’s guidance on balancing requirements, resources, and risk
• It is logical and consistent with the POM storyline or theme that your leadership wishes to tell

 In terms of specific requirements of interest, it is important to track proposed outcomes with actual decisions as they go through the DOD POM cycle. In this case, success would be maximizing favorable decisions that enable the desired outcomes.

However, few decisions are final or irreversible. There are many levels of decision-makers who may be operating under different rules than your organization, but in this case success is negotiating each key decision point from planning through execution, which could take several years.

Success is not just how well a stakeholder protects the resources of his or her programs. If everyone measured success in this way, then the POM would be incoherent and out of balance. It is important that all stakeholders know where they and their programs fit into the portfolio and process, and understand how they work together towards a common goal.

Where does your Portfolio fit in?

When stakeholders understand what goes into their overarching organization’s whole program and how their specific program or portfolio fits into it, it is easier to understand and follow guidelines that will lead to a successful POM. Where and how your portfolio fits depends both on historical and circumstantial contexts.

In addition to organizational strategic documents and program guides, many organizations have a POM or portfolio storyline or theme that summarizes how that organizations requirement priorities and investments relate to higher echelon organizations, administrations, departments and even national strategy. Stakeholders should participate in developing the storyline when appropriate, and should know how to describe where and how their programs fit into the narrative.

How can you understand the requirements space?

It is critical for stakeholders to understand the requirements at play during each phase of POM development and who is responsible for resourcing those requirements. Stakeholders must also understand that those requirements have been documented and validated before they can understand how the issue could be addressed in the POM, the stakeholders and decision-makers who will probably be involved, and what influence other stakeholders may have on the outcome.

Ownership can be ambiguous. Stakeholders often keep ownership ambiguous because they may not want their particular office responsible for payment of the capability, capacity, performance, and programmatic requirements . Thus, it is also common for requirements to have advocates who are not responsible for resourcing them.

Stakeholders should also be aware of the requirements life cycles of their programs including awareness of development and review of formal requirements documentation, gate reviews, Defense Acquisition Boards, and configuration control boards.

It is important for stakeholders to understand the requirements including their validation, configuration, historical and future resourcing status, and who may be responsible for advocating and resourcing them.

How can you understand the trade space?

Trade-space priorities and relationships can be traditional and circumstantial regarding future capability, current readiness, force structure, and personnel requirements. These tend to guide leadership’s intentions and decision-making.

Stakeholders must understand the priorities for a given POM cycle, and must understand where their portfolio falls in that trade space.

This helps manage expectations and to define whether work is useful. Be aware of where your portfolio fits in terms of defining objectives, developing plans, prioritizing approved work, and determining scheduling for that work.

There is another issue regarding overall resource priorities when there are clear differences in advocacy and support. When there are parts of a portfolio that do not have strong external advocacy (for example readiness-related programs that affect maintenance and training), it might be necessary to give these programs higher priority internally during the POM build. This could help those programs to gain higher attention and receive additional support.

Guidance may specify or imply priorities between force structure, future capability, readiness, and personnel, but it is up to the staff to understand how leaders have chosen to interpret this higher-level guidance, what current guidance is, and how that guidance along with the configuration of priorities will affect POM development and trade-space priorities.

How to leverage the POM schedule and deliverables as planning tools

While it is important to know the PPBE processes and to follow the POM serials, it is also important to understand how these processes affect day-to-day planning. Even when times are uncertain, there are many tasks and questions that are predictable. It is important to have a good relationship with your organization’s Programming Division.

Much tasking, preparatory work, and other issues that arise can be anticipated through inference of what will be taking place during that part of the process. Leaders have to make many trade-offs in cost, risk, performance and the like in defining the trade space, even during times of uncertainty. This is due to the fact that many scheduled and process-driven POM events are continuous, despite changes in OSD, Congress, and the White House.

Stakeholders can anticipate when they truly understand the condition of their program or portfolio; its historical performance and likely future performance during each phase of the POM process. It is important to also factor in the stability and maturity of requirements, the program’s performance, the resources available, and how the program’s goals align with leadership priorities.

How stakeholder rule sets change and how to understand them

Often during the transition between phases the POM’s lead changes from one stakeholder to another. Each of these stakeholders has a different set of rules affecting his or her motivations, assumptions, point of view etc. These rule sets affect how relevant a stakeholder’s requirements are to the decisions that will be made by the lead stakeholder. Rule sets also affect how a stakeholder will probably evaluate the requirements in the context of competing requirements and the organization’s whole program.

Phase transitions represent shifts in supporting and supported relationships between stakeholders. This means the lead can change how a program or requirement is thought of compared to other programs or requirements, putting a stakeholder’s portion of the POM at varying degrees of risk. At any given time:

• There may be stakeholders who have not participated in the decisions that have led to the present state of assumptions, priorities, decisions, or rationale
• Details and interdependencies may be lost, forgotten, or not recognized
• the way a program is described may change from phase to phase
• The way an issue is evaluated changes between phases

Stakeholders need to communicate solid analysis and logic for their positions to have confidence in their chances for success at each new phase.

How to understand and exercise your relationships with other key stakeholders

Failure to understand and communicate effectively can frequently lead to misunderstandings or disappointment in working relationships between stakeholders. Stakeholders must have routine, ongoing communication and interactions with other stakeholders within their chain of command, across their organization, with key external stakeholders, and at multiple levels of the organization.

To have timely influence on an issue or decision often requires deliberate participation in stakeholder processes. 

The POM’s quality is dependent upon how effective and well-maintained these relationships are. Taking care of these relationships should significantly influence leadership prioritization of how they spend their day, what work is important, and what work not to do. Protecting stakeholder relationships should be highest priority for work-plan development and workforce management decisions.

How do you manage expectations?

The POM process was designed to create tension among stakeholders and help changing in current and future military capability and capacity be incremental rather than revolutionary. Set realistic goals that are somewhere between inconsequential and revolutionary to help set priorities and scale POM activities appropriately.

You must align with leadership objectives rather than focusing on protecting your own equities. There is a time and place to influence corporate positions, and it is early in the process.

The importance of a high awareness of CNO Guidance, Testimony, Speeches, and Decisions

Treat everything that your chief of operations says or publishes as guidance to follow. If you do not have a good understanding of leadership’s messages, then it can lead to problems, especially if leadership wants things to happen one way and a stakeholder takes another route. As staff, it is your responsibility to align yourself to leaders’ guidance and priorities.

The collection of messages coming from your leadership forms a story over time and creates themes that affect the POM’s priorities, structure, balance, and how it is justified. Though each stakeholder need not interpret guidance independently, it is important to recognize, account for, and act on the parts of leadership’s messaging that have something to do with that stakeholder’s requirements or programs.

A coherent POM or portfolio narrative leads to straightforward understanding and alignment.

How to follow ambiguous or inconsistent guidance

Sometimes guidance is ambiguous or inconsistent, and sometimes parts of the chain of command may follow a different path. However, a stakeholder should follow the guidance given, and have a plan if top leadership has made clear what he or she wants, but the chain of command takes a different route. Stakeholders who fail to follow organizational guidance should expect changes to their POM submissions.

In some cases, there may be reasons to not follow guidance or to choose one source over another. However, you should always coordinate with leadership. When you deviate from guidance, you may have to prepare two versions of the POM database. One would be aligned with the advocated guidance and the other would need to be ready to use if the submission is rejected and compliance is directed.

When sponsors fail to have this hedge position prepared, they are handing their voice to integrators who in a short time frame must make the affected programs match with guidance and balance the programs as directed by leadership.

How and when should you solicit and interpret decisions?

Senior leaders must make trade-offs between or across programs and cannot signal decisions before the right time. Do not expect to learn the outcome during an executive briefing, and do not try to infer what the outcome will be based on how well your presentation was received.

It is a waste of your energy and leadership’s energy to solicit a decision out of order or one that is dependent upon undecided or uncertain requirements, programs, or issues.

You should also understand who the decision-makers are and how they operate, including what kinds of presentations they like, the content they expect, and the other stakeholders from whom they typically ask advice.

Usually when there is a disconnect between the presentation and the outcome is when guidance is not followed. Leadership must know the consequences of what has been presented and may not be aware until they see the numbers.

How to avoid surprises in the POM cycle

It is important to establish and maintain transparency throughout the POM process. However, surprises can still happen when two stakeholders interpret decisions or guidance differently. Here are some best practices in avoiding surprises:

• Remain aware of critical issues and activities throughout the cycle
• Ensure stakeholder involvement in planning and decision meetings
• Make sure you know what is happening with reviews at key stages in the POM cycle
• Keep the lines of communication open at executive and working levels

Avoiding surprises requires communication, coordination, and collaboration within a chain of command to make sure everyone knows who is responsible for a program or phase.

How We Can Help

Decision Lens has been working with Federal customers on challenges for over 15 years. We provide a unique capability that enables large organizations to create a clear organizing construct for their decision-making processes. We help leaders and subject matter experts offer their judgements on the fundamental elements of the decision.

Our software has capabilities that help organizations balance their resources when they must make difficult investment decisions. Decision Lens helps organizations free up more time and resources through automation and smart analytics that suggest probable solutions and scenarios.

Communicate how well your alternatives match your strategic goals

Decision lens helps to communicate how well alternatives match strategic goals and shows how to gain the most value in funding allocation. Decision Lens helps give POM decision-making rigor and credibility across large swaths of programs, offices, and funding pools so that trade-offs can be identified.

Reusable and Modifiable Portfolio Planning

It can be difficult to collaborate through mediums like spreadsheets. They are difficult to reuse, aggregate, or even update, making them incredibly inefficient. Decision Lens helps define the process, and includes elements that enhance collaboration and communication, as well as analytics to justify decision making. Using Decision Lens, your portfolio can be reused and modified year after year to continuously optimize your organization’s decision-making processes.

Show the reasoning behind your decision-making

Decision Lens helps you weight your priorities to show which alternatives best align with what priorities. It is easy to show the reasoning behind the decisioning, so that choices are easy to understand and justify. The transparency and collaborative nature of this data-driven process reduces risk and increases confidence and clarity