Steve Blank joined me on the Acquisition Talk podcast to discuss the urgency of defense innovation in a world of authoritarian peer competitors. Steve is a serial entrepreneur, a founder of Hacking 4 Defense, a member of the Defense Business Board, a former Air Force officer, and a leader of the lean methodology movement. The conversation takes us to number of important areas, including:

Why the Chinese couldn't have done more damage to national defense than the Pentagon's own requirements

How agile programs like ABMS and Kessel Run are educating leadership

Whether defense accelerators are merely doing "innovation theater"

How no startup could afford to deal with the DoD without a fanatical billionaire

How most people who think they're visionaries are actually hallucinating

When Steve talks to defense staffers, they think "lean" refers to reducing headcount -- and therefore less budgets, jobs, and influence. He explains how that is exactly wrong -- lean is a completely different way of doing business that can be contrasted with the 20th century model defined by waterfall. The difference between lean or agile processes and waterfall is demarcated to some degree by a generational gap. The O-3s and E-3s and below seem to get it. The question is whether the leadership can get on-board before we reach a crisis point. Steve points to Chris Brose's new book as a wake up call that the United States might not win the next major war.

While there are some hopeful signs that defense leaders are beginning to understand 21st century commercial business practices, he cautions how tacking small changes on a much larger system will not work. The entirety of defense acquisition needs to be revamped, including the industrial base. Existing prime contractors are essentially sheet-metal benders, Steve argues, and software-native firms would be able to out-compete them in hardware if given a fair chance. But many in the commercial sector think the $1 million SBIR grants given to startups where everyone's a winner without a path to transition into billion-dollar programs is deterimental. The goal isn't to show up on the field, Steve says, but to win the game.

This podcast was produced by Eric Lofgren. Soundtrack by urmymuse: "reflections of u". You can follow us on Twitter @AcqTalk and find more information at AcquisitionTalk.com.