As published in the Mandarin by Kiah MD John Glenn

With over 50 Defence Reviews in the last 50 years, have they achieved a fundamentally better outcome or simply fiddled with the alignment of the deck chairs? There have been at least 50 Defence reviews in 50 years. The 2015 First Principles review listed 48 since the 1973 Tange review and there have been quite a few since.

Not all were about procurement, of course, but all have been about better Defence capability in one way or another.

Have they achieved a fundamentally better outcome or simply fiddled with the alignment of the deck chairs? Does it matter if the procurement agency is called the DMO or CASG, if it’s a proscribed organisation or whose name sits where in an organisation chart? Not really.

What matters is the effect – the flash to bang. If you can’t have a big bang, you need more flashes. It’s the Defence equivalent of the commercial metric: time cost of money. We need a measure for the time cost of capability. For all the reviews and all the change managers, we have so little effective change. For all the commentary and all the think tanks, not much useful, practical, implementable advice is offered.

“More of the same” isn’t the answer. We need the courage to challenge the status quo.

Focus on the objective

The Defence capability life cycle, revamped as late as December 2021, is a four-step approval and acquisition process: strategic concepts, risks and requirements, acquire, and sustain & retire. The language throughout centres on acquiring “major systems”.

Major systems acquisition isn’t the aim – it’s an activity and an approach. The purpose of capability development is “deployed capability at speed”, within the capability cycle of an adversary. It’s about delivering a capability advantage, but it isn’t the capability life cycle driving that message.

Despite the introduction of an Integrated Investment Program – the alignment of approvals across projects, infrastructure and IT – little has really changed. Capability development is focused on major systems acquisition, with the approvals process centred on major platforms and their ancillaries.

It’s largely what we have been doing since Adam was a boy – about when I was in uniform. It’s historical, understood, fits into the budget process and is easy to manage. It’s also pedestrian, hardly disruptive or innovative, and unsuitable for today’s environment.

We need major systems, but we also need continuous capability innovation and development. These systems need to be affordable and rapid, but occasionally they need to be evaluated and replaced just as quickly.

It’s true that multibillion-dollar investments take time to approve, assess and deliver. Flash to bang for big systems isn’t going to get much shorter. But that doesn’t have to be the only way to introduce capability.

We need to create the conditions for doing something different or we won’t get anything different.

What different might look like

Think Apple. Its iPad comes with 3G, 4G, wireless, multiple cameras and various memory options. There are constant new releases, managed in an ecosystem that co-exist with earlier versions. They are backwards compatible and strive to “sweat” the assets to maximise value. On my count, there are now 21 iPad models supported in the Apple ecosystem.

The ecosystem encourages third-party participation, which leverages the latest in thinking and innovation. It encourages the best and the brightest to develop and deploy upgrades and new capabilities at unparalleled speed. This is product lifecycle management – not acquisition and sustainment or even asset management.

We must be prepared to discard the aged and simple concept of homogeneous product suites with a minimum number of versions from single suppliers. It’s logistically simple but fundamentally flawed. Today’s answer isn’t a risk-free, well-considered and exhaustive introduction of service and training cycles, with spare holdings to support quarter-century or longer platform lifecycles.

Consider the introduction of the Bushmaster and its impact in Ukraine. It certainly didn’t take decades of preparation and training. The war would have been over while we tried to catalogue them with a unique 13-digit number.

We need to welcome innovation and seek opportunistic capability growth. It’s about continuous, incremental development with ongoing, rapid upgrades. We have to embrace mixed fleets, eschewing simplicity for quantity as well as quality.

If we treat capability management as a product life cycle, we will get a different answer in procurement. It’s a continuous incremental lifecycle, managed by the buyer and serviced by delivery partners. It’s also a markedly different approach to what is in place today.

ASDEFCON is a dodo

For the uninitiated, ASDEFCON is the Australian Defence suite of contracts. Derivatives of it are adopted across the public sector because so many people with Defence experience are dotted across the procurement landscape. Reviewing ASDEFCON is a perennial past-time, the “Yes Minister”-ing of the incumbent minister.

Exhaustive, jobs-worthy reviews of the templates don’t make much difference to how business is done (there was another in December 2021). The issue isn’t simply red tape or flawed processes.

The problem is that ASDEFCON is definitive about how things are procured – the checkpoints, acceptance of deliverables, project management and so on. It enshrines project management and systems engineering concepts reflective of days gone by without supporting anything new.

There’s no encouragement to embrace alternative approaches, continuous development or even a model of collaborative working. Typical performance frameworks, as one pundit puts it, share elements with behavioural economics theories nudging behaviours, except it feels like it’s nudging the wrong behaviours.

The second issue is that the procurement suite is full of rules and processes that few can explain the underlying logic of. A lack of understanding of the intent and reasoning behind the rules makes it difficult to make sound, principle-based decisions when faced with alternative approaches.

Rules and task skilling give organisations great control and seemingly make them safe. But they offer little freedom and scope to adapt and innovate.

Rules are the refuge of micromanagers

A few years ago, a very senior executive publicly stated at a conference: “I’m tired of probity complaints. From now on no one, no one, is to accept even a cup of coffee from industry.” I get the probity issue but what was the leadership issue? He didn’t trust anyone to make a wise decision over $5.

The problem with too many rules is that they remove choice. They target the few at the expense of the many and focus on activities, not outcomes.

The alternative to no rules isn’t anarchy – it’s building values and principles into the fabric of work and creating a culture of freedom, responsibility and autonomous decision-making. It’s about equipping staff with fundamental values on which to make a decision, rather than point them to historical rules of engagement. It’s about holding people accountable for not trying, for not making decisions, rather than discouraging them from having a go.

Ultimately, rules are the refuge of micromanagers. They seem to add value but instead add constraint and distrust. We must educate the staff to make sound, principled choices rather than lean to compliance without thought. We need leaders with courage and freedom, combined with wisdom, to keep them safe.

We will ultimately fail if we create and maintain an environment where everyone is fixated on rules and fearing consequences. It’s why Defence procurement fails to adapt, address issues and be successful now. It’s the fear to act; to drive for outcomes over process.

Contrary to popular belief, decisions made in good faith won’t send you to jail. It won’t even harm your career.

Of course, it’s not the freedom to do anything. It’s the freedom to try to be successful. Freedom is a privilege that comes with accountability. That’s accountability for outcomes, not just activity.

Accountability is more than a word

Defence has a capability life cycle supported by manuals, plans, documents, guidance and a committee system the envy of any bureaucracy. It couldn’t operate without some of these, but it could operate with a lot less.

The system makes clear where the responsibilities and accountabilities lie. But responsibility and accountability is a three-legged stool, unstable without consequences.

The claim that individuals in the public sector can’t be held accountable for outcomes is nonsense. Like in industry, leaders in the public sector should be held accountable for the work they can achieve in their tenure.

For senior executives, it’s about establishing successful strategies and having them executed. For the staff, it’s about delivering on the things that are within their remit to deliver.

A bit more accountability, a little less tolerance for excuses and a little more reaction to underachievement – especially those senior enough to be on contract – would go a long way to sharpening outcomes.

Industry is not your friend

“I expect industry to make ‘best for capability’ decisions.” These are words used frequently, written in contracts. This, too, is nonsense.

It’s rare for people in industry to make decisions to the detriment of their company. If they’re discovered to be doing so, they become even rarer.

When companies tell you they act in your best interest, they fib. The best they can do is act with enlightened self-interest – act in your interest to benefit their own. It’s not wrong; it’s the way business works.

Neither do these companies work cooperatively with others unless it’s in their interest. Don’t expect competitors to behave unnaturally. IP is their lifeblood. Clients are their food, and they don’t like to share. All you can do is create conditions for better behaviour – for it to be advantageous to collaborate.

This isn’t to say you can’t have good and productive relationships with suppliers. You just need to understand that relationships take work, require give and take, have to be measured and managed, and benefit from honest reflection.

The defence industry is a closed ecosystem. It’s a self-licking ice cream with a revolving door between itself and industry where newcomers and change aren’t welcome. This isn’t sustainable. Defence must seek to understand industry and leverage what it offers, in the way it can offer it.

Defence must set the scene and lead the change because industry will follow. It’s in their best interest to do so.

Driving value for money, faster

There is no easy fix, no one size fits all, to generating value for money in complex procurement – and Defence procurement is complex. It’s essential to be clear on the value you’re seeking, and to understand that there is a marked difference between value in the public and private sectors.

For Defence, the value is capability. Not only fast but improved capability – better than any potential adversary. It’s not great contracts without risk and safe projects on schedule but delivered, deployed impact.

That requires driving procurement in a way Defence has never done before. It needs to be incremental, continuous and rapid. It means thinking differently, changing the rules, or even easing them. It means encouraging and empowering people to be different, giving them the freedom not to circumvent processes but adapt and develop them.

But with freedom comes obligations. Empowered individuals must be effective and held accountable. They need to be genuinely responsible with consequences.

In the end, you can’t rely on industry to do the right thing by you. They will do the right thing for themselves. It’s a bonus when their interests and your interests coincide. Industry will be influenced by revenue and longevity, but they will only change if the buyer demands they change.

That’s sophisticated buying. It’s about structuring an agreement so that the other party works to your benefit to further their own. It’s about knowing the alternatives, seeing beyond the status quo. Knowing that what industry does outside of the defence ecosystem might hold the clues for what Defence needs to do in the future. Creating good deals requires leadership, and the onus is on the buyer to lead.

What is self-evident is that those who brought us this far – those who created today’s constructs and whose experiences are limited to that journey – are unlikely to take us somewhere new.

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We are on the lookout for those who can deliver outcomes, not just activity – could that be you? Why don’t you find out?

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Don’t be caught playing it too safe

If past approaches haven’t worked, it might be time to try something new. Talk to us about what we have done, and what we might do for you.

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