WASHINGTON -- In a rare joint appearance, all three Armed services secretaries participated in a panel discussion hosted by the Center for a New American Security Monday.In a conversation with CNN's Pentagon correspondent Barbra Star, Army Secretary Eric Fanning, Navy Secretary Ray Mabus, and Air Force Secretary Deborah James discussed their responsibilities, national security challenges, and opportunities to innovate.The secretaries agreed that budget instability has diminished the ability of the services to focus on modernization and investments in the future, which will present the next administration with a number of immediate challenges to address."We start every year with a continuing resolution and don't really know what the [budget] top line is," Fanning said. "It takes an enormous amount of time for the institutional leadership to constantly think through the budget multiple times, year after year."The secretaries expressed concern that the rise of potential adversaries like Russia, which has pursued modernization of its military while behaving more provocatively, has diminished the nation's advantage in several key areas."The Russian incursion into Ukraine provided something of a wake-up call for the Army," Fanning said. "They've been watching us; they've been studying us; and they've made improvements. Our decisive advantage that we thought we had wasn't as big, it turns out, as we hoped it was, or even [as big as] we thought it was."Among the secretaries, addressing this capabilities gap was seen as a top priority. Secretary Mabus noted the Navy is increasingly focused on pilot programs, rather than programs of record, to get technologies into the hands of service members to respond quickly to emerging threats.Similarly, the Army created the Rapid Capabilities Office in August to respond to near-term needs of warfighters and commanders."The office will tackle issues such as electronic warfare, position navigation and timing, counter unmanned aircraft systems, and cyber," Fanning explained. The purpose of the office, he said, is "to get capabilities fielded faster to our Soldiers."The Secretaries agreed that meeting challenges in talent acquisition and retention will be critical to the nation's ability to fight and win future conflicts."Cyber is one of those areas [where] we've got to have the expertise," Mabus said. "We've got to have enough of that broad thinking and different sorts of thinking."According to the secretaries, part of the solution in the cyber arena will involve recruiting and retaining the best talent to build a workforce that is adaptive and innovative in confronting future challenges.Diverse teams made up of personnel from different backgrounds, thought processes, and disciplines will produce the greatest innovations, James explained.Hiring diverse individuals from different walks of life, whether civilian or military, is one of the key parameters of Secretary of Defense Ash Carter's Force of the Future initiative, he said."I think everybody can agree that we can't build and retain a cyber force like we have done traditionally with other aspects of the force," Fanning said.He emphasized that the Army "can't compete with the private sector in terms of money, so we could be more attractive by appealing to a sense of patriotism and the Army's unique mission."All three secretaries emphasized that, as they begin preparations to transition to the new administration, they still have jobs to do. Based on the last eight years, they know it will not get any easier to address these issues."Something I didn't understand quite as well as I might have going in [was] just how difficult it is now getting things done in Washington," James said."We're in a very divisive situation, especially around sequestration, continuing resolutions. … We have to get back to the art of compromise in this town."