Pentagon Money Man: ROTC Alumnus Leads Charge Against Inefficiency

Fall 2011 Focus cover     From Focus magazine, Fall 2011 >>

By Annmarie Sarsfield Edwards

Washington, D.C.
while one might assume the budget director for the United States Army would be a “numbers” guy, Maj. Gen. Phillip E. McGhee says he’s more of a “relationships” guy.

Throughout an Army career spanning more than three decades, he’s been served well by lessons he learned from 1974-1979 at what was then Columbus College and in the friendly town where he changed tires in Sears’ automotive section, in then-new Columbus Square mall.

“It was all about relationships at small, tiny Columbus College, where everything was based on personal relationships,” McGhee said. Because of that, “I’ve worked every day to make people feel important, because they are the ones doing all the work. I ask them, ‘What are you working on?’ and they’ll tell me, and of course I already know what they are working on. Then I thank them: ‘Thanks for what you are doing.’”Maj. Gen. Phillip McGhee

It’s an attitude that’s pervasive throughout the third story, outer “E-ring” Pentagon office of the Army’s most powerful money man, known officially as the deputy assistant secretary of the Army for financial management and comptroller.

Overseeing a $239 billion budget for FY2011, the former Columbus College business major works to streamline inefficiencies and wisely spend resources for 1.1 million soldiers, 260,000 civilians and 350,000 contractors. He insists he just oversees the effort, providing leadership and strategic guidance.

“I’m not a money genius. My analysts down the hall are,” McGhee said, motioning. “I learn more from my team than they do from me. They amaze me every day.”

Strategic Thinker

It’s the day before the FY 2013 budget is due and McGhee, dressed in fatigues, has calmly cleared time in his schedule for two retirement ceremonies and an opportunity to chat about his beloved alma mater, now Columbus State University.

McGhee, who earned a chest full of distinguished service and meritorious awards en route to becoming a two-star general, said the greatest recognition of his career was to be invited to Columbus State in 2010 to commission 15 ROTC cadets as Army second lieutenants.

“It was the biggest honor for me to go back to that commissioning ceremony,” he said. “I told them what I wish I’d been told when I graduated from college.”Maj. Gen. Phillip McGhee and his deputy director, Barbara Bonessa, discuss with reporters at a Feb. 14 Pentagon briefing the Army’s fiscal year 2012 budget request. The Army requested $29.5 billion less than in fiscal year 2011.

In his commissioning address, McGhee highlighted what a 30-year Army career looks like, emphasizing that a new second lieutenant is only “focused on a 25-meter target. You ask them what they’ll be doing and they’ll tell you `infantry or armor officer,’ but really they don’t know. They are just thinking about having enough gas money to drive to their first duty station.”

McGhee praised the strong background provided by the university’s ROTC program, where he and six other cadets were commissioned upon graduation in 1979. He also outlined skills the Army expects officers to develop to become great leaders.

“We are looking for a strategic thinker, an adaptive thinker, a critical thinker, a team player, a team builder, a change agent, a consensus maker and someone who is culturally astute,” McGhee said. “We start our young officers at the tactical level and progressively move them to the operational level, then the strategic level of war. We are growing the bench of our future Army senior leaders.”

McGhee learned all of these skills during a career that had him most recently at Camp Arifjan, Kuwait, where McGhee was handpicked by the undersecretary of the Army as the first financial management general officer to go into the geographic region of war — in this case, the dual-front theater of Iraq and Afghanistan.

“He said, `You’re going into the theater to reduce the cost of the war,’” McGhee recalled. “I thought, `Why don’t you just shoot me now?’”

But the well-trained McGhee didn’t shy from the opportunity to bring his philosophy and strategic planning skills to the war-torn region. He went back to basics, the roots he learned long ago in Columbus. “It comes back to personal relationships,” he repeated.

Strategic Goals

McGhee brought with him a strategic vision with four goals that he hoped to accomplish and had 30 days to assess his needs. He sent for 51 managerial accountants, 21 cost analysts and 17 master Six Sigma black belts from the Defense Finance and Accounting Services and corporate America to enhance transparency, oversight, controls and visibility of taxpayer dollars spent on the wars. He then sought the “buy in” of commanders to make resource-informed decisions with the $25 billion being used in that theater.Maj. Gen. Phillip McGhee and his wife, Candy, talk with a wounded veteran in June in the courtyard of the Mologne House, a 200-room hotel on the grounds of Walter Reed Army Medical Center, during a Father’s Day barbeque.

His first initiative, “get cash off the battlefield,” involved strengthening the host nations’ financial systems and removing U.S. dollars.

“Our currency makes their currency worthless, and we want to strengthen their financial infrastructure,” McGhee said, flipping through monthly Theater

Financial Management Report binders featuring 32 performance metrics. They show U.S. currency use has dropped drastically and today is only a slight sliver on one graph.

McGhee’s team worked with the State Department and Treasury Department to strengthen the financial infrastructure so that, instead of $100 million a week in U.S. currency being spent, 97 to 98 percent of all transactions in the theater are done electronically today. The small amount of cash used in theater is now the host nation’s currency.

“The Iraqis have one of the newest, most technically advanced banking structures in the world,” McGhee said proudly. “We were told to leave Afghanistan alone, but they have one of the highest cell phone usage rates in the world, with 25 percent of the adult population having cell phones. If you have a cell phone, that opens the door to mobile banking. Now the same banking we do here we can do on a mountain in Afghanistan.”

Twenty-one Department of Defense financial management systems were brought into the theater to implement this change, McGhee’s second goal.

“Now we can control the cost of the war,” McGhee said. His analysts scrutinized the driving forces behind war costs, and McGhee and the Army’s logistics community set about driving them downward.

“Once you know the cost of the war, you can affect it,” he said. “The cost of war in Iraq and Afghanistan is driven mostly by logistics. Understanding the logistical cost drivers allows you to control cost.”

For example, one area needed 100 trucks to deliver supplies. The 18-wheel trucks all lined up outside camp, leased for a 24-hour period while drivers were paid for a 12-hour day. But only four trucks could be loaded an hour. The solution was to rewrite the contract to stagger when trucks arrived.

“The war fighter has to be effective. They don’t worry as much about being efficient — (and) rightfully so,” McGhee said. “The war fighter didn’t care if we rewrote the contract as long as he got his stuff on time. We got their stuff to them five days earlier while saving $380,000 a day.”

McGhee’s fourth and final goal was accomplished with a rewritten financial management doctrine that will be an asset in future wars. By the end of McGhee’s two-year tour in 2010, the theater was saving about $2.5 billion per year.

“I didn’t save it,” he said. “Commanders and our soldiers saved it. It was one of the most challenging and rewarding experiences of my career. I’ve had the opportunity to work with so many great people out of that theater.”

His challenges now at the Pentagon keep him busy from 5 a.m. until about 7 or 8 p.m. every day, leaving precious little time to spend with his granddaughters, Hailey and Aidan. They are the children of his only son, Air Force Lt. Col. Select Shawn McGhee, and his wife, Stacey.

The general’s wife, Candy, has more time to dote on the girls. With retirement the anticipated next stop for McGhee, in a few years, he’ll have more time to teach these young ladies the philosophy he began developing in Columbus, which he now sums up with a simple statement:

“It’s amazing what you can get out of people if you treat them with respect and make them feel important every day.”

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Military Intelligence Pipeline

Other top officers who are Columbus State alumni:

  • Brig. General Rodney J. Barham, A.A. ’79 (accounting), B.A. ’79 (business management), currently serves as deputy commanding general for reserve forces at Fort McPherson in Atlanta. Nominated to become major general.
  • Brig. Gen. William A. Bankhead Jr., B.A. ’79 (history), is the commander of ground forces within the Idaho National Guard and lives in Boise.
  • Col. David C. Coburn, BBA ’83 (accounting), works in the same area of the Pentagon as Maj. Gen. Phillip McGhee, ’79, in the Army’s office of financial management. Nominated to become brigadier general. (He currently has two daughters attending Columbus State.)
  • Brig. Gen. Patricia (Sibley) Heritsch, ’80 (general studies), is the commander of the Army Reserve’s 100th Training Division, which is in the process of moving its headquarters from Louisville, Ky., to Fort Knox.

If you know of other alumni who have reached similar status in the military, email us at

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Photo captions, from top:

Maj. Gen. Phillip McGhee (Courtesy of Department of Defense)

Maj. Gen. Phillip McGhee and his deputy director, Barbara Bonessa, discuss with reporters at a Feb. 14 Pentagon briefing the Army's fiscal year 2012 budget request. The Army requested $29.5 billion less than in fiscal year 2011. (Photo by C. Todd Lopez, courtesy of Department of Defense)

Maj. Gen. Phillip McGhee and his wife, Candy, talk with a wounded veteran in June in the courtyard of the Mologne House, a 200-room hotel on the grounds of Walter Reed Army Medical Center, during a Father’s Day barbeque. (Photo by Ron MacArthur, courtesy Cape Gazette, Lewes, Del.)

Maj. Gen. Phillip McGhee, left, other soldiers and his Kuwaiti counterpart, Khaled Al-Sader, center, tour in May 2010 Camp Arifjan in Kuwait, where McGhee was then in charge of supplying Third Army troops in Afghanistan and Iraq. (Photo by Spc. Monte Swift, courtesy of Department of Defense)