An Alternative Approach to defence capability planning

An Alternative Approach to Defence Capability Planning

Richard Hodge and Geoff Walpole Australian Department of Defence

A new approach to defence capability planning is proposed. The authors illustrate Boulding's general systems hierarchy with a range of defence systems and 'systems of systems', suggesting that a strategic planning system operates within the class of systems that are of the highest complexity. The design of a new approach centres on a process with a capacity for single-loop and double-loop learning, providing a foundation for shifting Defence from its current, short-medium term planning paradigm that is locked into single-loop learning. The design for Defence strategic planning builds on Argyris' double-loop learning paradigm and integrates a systems approach to thinking about defence future directions. The challenge is to manage the strategic conversation from discussing stressors in the strategic environment and establishing key functional requirements, to analysing the inherent risks in options for future defence capabilities. Defence's high-level need from this 'system' of capability planning is the delivery of formative guidance on Defence future directions that enables others in Capability Development and Acquisition Organisations to continue the design of key capabilities identified in strategic planning guidance. The paper closes with a note on leadership and measures, - the 'sine qua non' for driving the development of adaptive behaviours so essential for designing adaptive defence capability.

INSTITUTIONS that have lost their capacity to adapt pay a heavy price. Continual renewal is necessary. Leaders must know how the processes of renewal may be set in motion." So said Dr Allan Hawke, Secretary of the Department of Defence in his address to the Defence Watch Seminar at the National Press Club in February 2000. Dr Hawke was answering his observation that we, in Defence, have failed to give full attention to deriving our planning from our raison d'être, having our plans logically linked and ensuring that planning is "not only understood but owned". As part of a unified approach to delivering the solution, Chief of the Defence Force Admiral Chris Barrie soon after stated that "this will only happen with strong direction and people owning the process".

This is not a new challenge - many have tried in the past - but meeting the challenge this time around is arguably more important than ever before. With outflow from the currency crisis in Asia, and the longer-term implications of recent events in East Timor, Australia is moving through an epoch in our history that could prove to be defining moments in our fast-evolving posture on regional security matters. Concurrently, the pace of technology development and its social impact make the future more unpredictable. And, on top of that, Defence faces significant resource decisions on the impending "block obsolescence" of many of our major capabilities.

A capability for long-term planning is a critical capability in any organisation. Our approach to capability planning therefore needs to learn from the lessons of the past and do more than develop a good plan. Success in warfare, as in business, derives from being different. Thus building invention and innovation into defence strategic thinking helps us to sharpen our own view of the world and exercise our thought processes to handle the unpredictable challenges yet to come. Interestingly, we learn from Kees van der Heijden's 35 years experience with Shell that "the less things are predictable, the more attention you have to pay to the strategy process [his emphasis]. Uncertainty has the effect of moving the key to success from finding "the optimal strategy" to "the most skilful process".

To this end, we have designed and are trialling a 'systems' process for capability planning. We suggest the traditional systems engineering paradigm is sufficiently adaptable for it to be scaled to the highest level of organisational abstraction that is the domain of planning for the current and future Defence enterprise. This article suggests a capability-planning framework to help us learn our way forward. We briefly examine the place of warfare and capability planning in a general systems hierarchy and then outline a process for capability planning, akin to a double-loop learning process that also embodies stereotypical systems approaches within. The article closes with a note on leadership, because strong leadership and support from the top of the organisation, is the sine qua non for any successful strategic planning endeavour.

General Systems Hierarchy & Strategic Planning

The complexity of strategic planning is not to be understated. Like many other highly complex corporations, Defence's strategic environment is characterised by uncertainty in the events that might arise and complexity borne of high global interdependencies. The questions facing strategic planners are typically these: What do we plan against? What functional competencies are required? And, what investments should Defence make in people, equipment, infrastructure and training to be competent to adapt in a timely way to changing strategic circumstances? Finally, and by no means least in the Government's view, how do we measure and maintain effectiveness and meet the Government's strict criteria for operating most cost-efficiently? These questions are not new, and neither are their multiple dimensions. What is new is how we are building knowledge acquisition and management systems to identify and to further investigate the critical dimensions.

The systems design question we then face, is how to approach planning when adaptivity is not an in-built function of any one element but appears only as an emergent property from the organisational decisions and actions we take. We recognise that adaptable organisational behaviour only accrues with organisational experience. And, for experience to develop that is relevant in a planning context, a discovery process is needed at the enterprise level to continually improve the knowledge and experience that adaptable organisational behaviour (and thus our future performance) is built upon.

A central idea in multi-disciplinary discourse, expressed by Kline, is that there is no one view, no one methodology, no one set of principles that provides understanding on all matters vital to human concerns.Hofstede also sees as illusory a suggestion that any theory of social processes would gain universal approval - "an author's claim to have developed a universal theory of organisations is as unbelievable as an inventor's claim finally to have found the Perpetual Motion device". The accepted scientific paradigm encompassed in the First Law of Thermodynamics would give immediate cause to discredit such a claim. For the study of the social world, Hofstede suggests that Boulding's General Hierarchy of Systems is the social scientist's equivalent of the First Law of Thermodynamics. It is useful therefore to begin with an appreciation of the range of systems complexity that comprises the "social" activity of warfighting to aid Defence's planning.

By adapting Boulding's hierarchy of systems complexity to Defence planning, our multidisciplinary debate can be orchestrated across nine systems levels - see Table 1. The labels used in Table 1 are to be read as metaphors of the levels of systems complexity. This adaptation of Boulding's work to a Defence hierarchy of systems complexity has been developed by considering how systems at each level utilise and depend upon data, information and knowledge. The systems' capacity to handle data, information and knowledge is suggested as the key discriminator. This view differs from that presented by Cook and Allison, particularly in their assessment of levels 5 to 9, where they base their assessment on organisational complexity, differentiating the levels of complexity largely by the size and capacity of an organisational unit.

Table 1:A Defence Hierarchy of Systems Complexity (after Boulding)

Level	General Characteristics of Systems at this Level	Defence "Systems" Examples
1.	Label/Metaphor: "Frameworks" - Static structures, requiring accuracy in their description.	MGI (spatial & temporal information), anatomy of the Defence organisation, .
2.	Label/Metaphor: "Clockwork" - Simple dynamic systems, pre-determined, necessary motion (may exhibit equilibrium)	Generators, simple mechanical systems, chemical reactions (HX, CW agents).
3.	Label/Metaphor: "Control/Cybernetics" - Closed loop control systems.	Much of Defence's capital equipment e.g. surveillance radars, GPS constellation, major platforms, missiles and on-board (closed loop) information processing, ESM, etc. . Also facilities and installations (thermostatic control, air purification systems, security monitoring) ...
4.	Label/Metaphor: "Cell" - Self-maintaining systems in the midst of through-put; self-reproduction.	Biological agents, information processing in open systems, "Intelligent" self-healing networks, .
5.	Label/Metaphor: "Plant" - Systems of differentiated and mutually dependent parts with "blueprinted" growth.	Environmental threats, bureaucratic systems such as administrative process, defence acquisition procedures etc ... (bureaucracy "grows" as people "become" their jobs and hence the need for regular inspection and "pruning" where required) .
6.	Label/Metaphor: "Animal" - Systems displaying self-awareness, neurological control, teleological system behaviour is based on image of environment as a whole (more than the sum of the parts). The unit metaphor is animal.	Artificial intelligence, neural networks, imagery processing, Service-specific systems of "indoctrination" and training for ingraining, within individuals, "innate" or early-conditioned, autonomic behaviour patterns that define a collective service and maintain group dignity and esprit de corps. Also, the acquisition of knowledge for its own sake ...
7.	Label/Metaphor: "Human" - Systems that display self-consciousness (knows that it knows), system behaviour based on more complex images with abstract dimensions. The systems' unit is the person.	The people of Defence as individuals, each with their own view of values & mission, training systems for building individual competencies ...etc. Also, the acquisition of knowledge by individuals to guide individual behaviour leading, thus, to "single-user" intelligence systems, .
8.	Label/Metaphor: "Social" - Systems built upon collective shared identification with roles / symbols, set of roles tied together with communication, displaying interpersonal accommodation. The unit for considering social systems is the role, not the person.	Australia's system of warfare, Defence organisational groups/ task-forces/ programs/ units/ squadrons (...etc) with their own system of Defence values and measures, training systems for building unit, service, joint and coalition capabilities. Also the acquisition and sharing of knowledge by units/groups for Defence-wide benefit, including the development of "systems of systems".
9.	Label/Metaphor: "Transcendental" - Systems of unknowns and unknowables.	Defence systems of strategic and futures planning, Intelligence system of indicators and warnings to guide the acquisition and sharing of knowledge, .

To help maintain a "mind-map" of the General Hierarchy of Systems, Table 1 can be summarised and illustrated as seen in Figure 1. This mapping helps to maintain a focus for warfighting on level 8 and for Defence planning on level 9.

Figure 1: General Hierarchy of Systems (Adapted by Hodge after Boulding)

Hofstede observes that the social world of level 8 is the only level where the social scientists (systems at level 7) are themselves less complex than is the object of their study and he draws the implication that "social knowledge will always be subjective, partial and tentative". What then for strategic planners (who are also complex level-7 systems), but the object of their study is 2 levels of complexity higher than that of the planners? At the very least, their knowledge will also be subjective, partial and tentative.

Boulding's seminal work offers most value for Defence planners in preventing us "from accepting as final, a level of theoretical analysis which is below the level of the empirical world which we are investigating". Any tendency to focus the planning debate solely onto capital equipment (of level-3 systems complexity) grossly misses the point. Einstein observed that "solutions to the problems we face today require a higher level of thinking to that we were at when we created them". Where most of Defence's problems have occurred by maintaining a systems focus at level 3, Boulding's hierarchy helps us maintain a higher-level focus for Defence systems thinking at the complexity of level 8, in addition to all levels below! It helps us to map the gaps in our present knowledge base. It also offers a guide for us to incorporate appropriate skills and knowledge into the design of any intervention and its analysis.

In presenting our proposed system of long-term planning around Defence, we often hear stated that Australia's Order of Battle is not so large that decisions about its future warrant the complexity of "rocket science". The paradox is that Australia's 50,000 regular service women and men might amount in number to "a poor crowd at the Melbourne Cricket Ground". But decisions about Australia's future defence needs - the focus of our study - still reside in the domain of highest complexity with vast uncertainty and therefore the greatest scope for disagreement. Designing and developing the methodology and the filters through which we 'orchestrate the debate' and attain the minimum information necessary for strategic planning is not rocket science - to be credible, it must indeed be designed and developed as a system that copes with far higher complexity.

Organisational Learning

By the time capabilities reach operational status, we should rightly question whether our focus on efficiency and our management of financial risks in the delivery of the project has come at the expense of overall defence capability. Previously, we have had no adequate means of assessing and managing capability risk (i.e. the risk of projects delivering capabilities that do not adapt appropriately with changes in our strategic circumstances). This risk is real and it diminishes the 'Net Present Value' of our combat capabilities. It occurs because we have had no means of measuring capabilities for efficacy and effectiveness against those changing strategic circumstances and then subsequently adjusting projects during delivery.

Our aim therefore is to build systemic links between strategic ends, ways and means, with a view to improving our organisational ability to understand the consequences for strategic planning of unforeseen changes in the ends, ways and means. Building the required level of understanding demands a process of organisational learning. Argyris argues that learning occurs "when we detect and correct error, [that is]... a mismatch between intentions and results," and "when we produce a match between intentions and results for the first time". Argyris also argues that

"discovery of a mismatch is only a first step in learning. Additional steps occur when the error is corrected in such a way that the correction perseveres. Furthermore, there are at least two ways to correct errors [see Figure 2]. One is to change behaviour (for example, reduce back-biting and bad-mouthing among individuals). This kind of correction requires only single loop learning. The second way to correct errors is to change the underlying program, or master program, that leads individuals to bad-mouth others even when they say they do not intend to do so. This is double-loop learning. If actions are changed without changing the master programs individuals use to produce the actions, then correction will either fail immediately or will not persevere."

Argyris's reference to "underlying program, or master program", aligns with those Defence level-5 systems of "indoctrination" and training for ingraining, within individuals, "innate" or early-conditioned, autonomic behaviour patterns that, for example, define a collective Service (or Defence agency) and maintain group dignity and esprit de corps. These behaviour patterns would also include attitudes that underpinning a "replacement" syndrome in acquisition programs that maintain traditional customs, equipment and practice. These are inherently difficult systemic matters to change and lend support to Argyris's claim that taking corrective actions without changing the "master programs" will lead to the correction failing. For example, the only Service to have significantly changed its shape by entirely removing a functional area is the Navy with the removal of its aircraft carrier capability in 1982. And, interestingly, some still feel this "loss" - such is the difficulty when change occurs without adjusting the "master program".

Figure 2: Single-loop and Double-Loop Learning

Integrating Learning to Defence Planning

Our strategy is to design a process with a capacity for double-loop learning to provide a foundation for shifting from the short-term, current planning paradigm that is locked into single-loop learning. The selected approach illustrated in Figure 3 is a simple one, offering both single-loop and double loop learning.

The approach is three fold: First, that we develop an honest understanding of our current strengths and vulnerabilities. We then shift our focus to the future and develop a vision of our desired future outcomes. In the third stage, we integrate those previous two outputs with our financial perspectives to provide guidance for the future development and employment of our forces. This is all very easy to state but much more difficult to achieve. Nevertheless the paradigm is a simple one.

Figure 3: Simplified Capability Planning Cycles

Strategic planning is about ideas, not forecasts or projections.

Examining the futures area enables us to consider new spaces born of strategic competition, political adaptivity, technology and other drivers. And the scarce resources in this futures area are not financial resources but ideas. In Defence's case, it needs ideas about future military objectives, concepts for warfare and future force options. It is an important area. The key actions are to make our thinking about the futures robust enough for it to impact on decisions today about how we develop and employ the force.

The highest level of Defence leadership and management has a balancing role to play here. The validity of the futures work is in stretching our thinking to consider what factors might change the nature of conventional warfare, even cause radical disjunctures in the nature of warfare, or change the way Defence conducts its business. The Defence leadership and management team must then connect its "vision" of desired future outcomes to its financial-based planning. The primary difficulty with connecting strategy and financial-based planning in highly analytical organisations - like Defence - is that the focus tends to drift toward the quantitative (usually financial) data and away from the less tangible (but often more important) strategic issues. We would therefore caution that, if Defence is to derive high quality output from its long-term strategic thinking, it should not constrain that dialogue too early with financial projections and constraints.

While designing this approach, certain comments by the team analysing the size and shape of the South African National Defense Force resonated with us:

"Our principal concept was to maximise value for money. We moved away from previous approaches that tried to couple both a value and a cost to hardware items or major equipment items. The problem with such an approach is that you end up trying to prioritize among a tank,a fighter, a submarine, a pistol, a field hospital, a radio and a fire engine. What we did was to connect the yield, or value, to the tasks that the national defense force is expected to perform. We tied costs to the units of the defense force - the battalions, the regiments, the squadrons, the ships."

"Value for money" is the essence of the belief system of Australia's Defence Acquisition Organisation. In the absence of adequate capability planning guidance, value and cost are linked to major equipment - as pre-existed in the South African case. We have incorporated into our work the same distinction that the South Africans have made between 'value' and 'cost'. The significant difference we have made is to focus attention on the functionality required to achieve strategic ends rather than focussing, as Gryffenberg et al have, on the operational concepts that might be employed. Our reasoning is that operational concepts can and do vary according to the actual context facing the military in planning and conducting real-world operations. And, in view of the fact that innovation is a key warfighting concept of the Australian Defence Force that underpins a formative approach to fighting and winning, using operational concepts as a key construct in our process would offer no boundaries to contain or filter the debate. Focussing on functionality, however, presents a higher level of abstraction than does focussing on operational concepts. It also provides a more enduring basis for orchestrating the debate and allows innovative "ways and means" of achieving strategic ends still to be pursued. In keeping with the common parlance of strategic engineering that "form follows function", we aim to develop iteratively a functional architecture to guide the design and development of the physical form of the Australian Defence Organisation.

How then is such a systems concept integrated into the capability-planning outline illustrated in Figure 3? To explain this, Figure 4 displays again the single-loop and double-loop processes with further details exposed.

Figure 4: Expanded View of the Future Capability Planning Process

Defence's single-loop learning (depicted on the left-hand side of Figure 4) strengthened considerably during 1998-99. By developing the Capability Assessment Reports (CARs) in that time, Defence now has a much better understanding than before of its capabilities in output terms. These outputs can be thought of as many "vertical" views of the organisation. Defence aims to complement that with a collection of "horizontal" views across the warfighting outputs to develop, through the Joint Operational Capability Report (JOCR), a baseline understanding of our joint operational capabilities. Together, these perspectives will provide feedback in the short-medium term to improve our employment and development of the defence capability.

A further improvement in Defence planning processes to emerge in 1999 was the Resources Assessment Report (RAR), to help the organisation better understand its investment profile in financial terms in the short-medium term. The RAR will be an important planning tool, but we need to heed Hamel's warning that the quantitative powers of financial figures are seductive and the comfort zone they provide can limit the amount we stretch our thinking. As David Norton speaks about the 'Balanced Scorecard', he also offers a word of care about financial measures, describing them as "yesterday's strategy"

"Today's financials reflect the investments an organization made a year ago. They also reflect the training an organization made a year ago and the advertising it did a year ago. The balanced scorecard, as the name implies, achieves a balance between these lag indicators and the lead indicators that need to be focused to make things happen. That's an important distinction."

To develop the lead indicators that Defence needs to balance its 'scorecard', we must consider a longer planning horizon, throw away the current financial security blanket and step out to the areas depicted on the right-hand side of Figure 4.

Defence's approach to the double-loop learning and capability planning is embryonic and in different stages of maturity. A notional "start" point in the process is a body of future warfare work, in which Defence staff aim to challenge the current assumptions and criteria that underpin our current portfolio of strategic policies and military strategies. For example, the discussion of the Revolution in Military Affairs (RMA) has given rise to an orthodoxy in Defence that the RMA's high technology / low-manning paradigm is "right" for Australia in the future. That orthodoxy amongst others needs constant testing. True revolutions occur through activists who challenge the prejudices and dogmas of the incumbents. In a sense, then, activists more often create the future than prophets do, so we should be careful in dismissing new thinking. Having activists challenge the status quo is a rational starting point for developing good foresight. As Hamel observes, this requires "more than good scenario planning or technology forecasting ... To create the future, [Defence] must first be capable of imagining it." The first type of deep personal adjustment that needs to be made to our governing values or "master program" is "overcoming blindness by sharpening our own view of the world". One therefore needs to resist the temptation to plagiarize others.

Integrating a Systems Approach

The steps of the process depicted in the far-right side of Figure 4 rely on inputs from the current assessment of capability and a vision of the future capability. As with any systems engineering process, the analysis for capability planning begins with definition of a need. The high-level need from the "system" of capability planning is formative guidance on Defence future directions.

Requirements Analysis

Requirements for capability planning refer to political requirements placed upon Defence. By comparing the current military strategic objectives with the range of plausible future military challenges (derived in the futures work), strategic planners can propose a range of strategic objectives as the baseline "requirements" for planning purposes. These strategic objectives need high-level, preferably Government, endorsement as an expression of the Government's needs from Defence.

To be useful for planning purposes, the strategic objectives need to be set in a context that defines the following issues (adapted from Blanchard and Fabrycky).

the likely range of deployments of the force (expressed currently within the military strategies);
the prime missions to be achieved;
the key performance parameters which at this level are casualty tolerance and rules of engagement;
the effectiveness requirements that are captured in a readiness notice;
the operational life cycle, that is the likely duration of the mission;
the environments into which the forces will likely be deployed; and
the probable adversary capabilities.

Building responses to this range of issues develops a contextual planning baseline of politico-strategic requirements.

Functional Analysis and Allocation

If requirements-analysis defines the "why" for capability planning, functional analysis defines the "what". The process involves deconstructing the strategic objectives into operational and mission objectives. In doing so, utilising language that clearly defines what military effect is achieved in which environment. The choice of verbs used to define the desired effects, and the subsequent categorisation of the verbs, provides the basis for functional allocation to define a range of key Defence abilities. We are then able to analyse the functionality necessary to achieve the strategic objectives. Expert military judgement can then be used to define a set of relationships between the functionality needed by Defence and the minimum forces necessary to achieve the strategic objective, thus converting the "whats" into "hows".

In the overall strategic planning context, then, discussion of Defence functionality can now intercede any discussion relating force structure to strategic objectives. If made to be the focus of discussion at the strategic level, a debate on functional priorities raises the attention away from prioritising "among a tank, a fighter, a submarine, a pistol, a field hospital, a radio and a fire engine."

Synthesis of Force Structure Options

The next step in our approach is to assess the relative value of a range of force structure options to achieving a range of strategic objectives. In the process, the strengths and weaknesses of an option can be explored and opportunities identified to improve the suitability of each option to provide the functionality that a range of strategic objectives is dependent upon. Our approach to synthesis, as in any generic systems engineering process, is about design, involving the creation of alternative force structure options that are more representative of the final solution.

Analysis of Risks and Capability Trade-offs

As force structure design progresses, many possibilities for capability trade-offs occur. Our approach aims to capture judgements about:

the fitness-for-purpose of force elements or force element groups to providing the required functionality;

the critical vulnerabilities that emerge from gaming the force option across several scenarios;

the key components in each alternative force structure that are sufficient to achieve the strategic objective as well as those that might be seen as indispensable;

whether 80 per cent of the value of a force option arises from 20 per cent of its components, and, finally;

what "wildcard" alternative capabilities might be better suited to provide the functionality the strategic objective is dependent upon.

Answers to these indicators will assist in analysing what capabilities might be traded-off within the given resource constraints. As usual with a systems approach, these steps are to be addressed iteratively until the military participants believe they have achieved an optimal solution for the given force option and strategic objective they are considering.

Selecting "Best-Fit" Option

Selecting the "best-fit" alternatives is the business of the Defence Executive. We, as designers of this process, are focussed solely on supporting the decision-makers by effectively and efficiently capturing, managing and visualising knowledge about the value of a range of force options. Analysis of the capability trade-offs and selecting the best-fit option present the analysts, and more particularly the decision makers, with their second personal "programming" challenge: that is, to overcome denial. As suggested by Hamel

"the challenge for us is always to distinguish between those concepts we know that we must jettison and those we know are part of our path to the future. The deepest reason might be an unwillingness or inability to look outside our current experiences. Or we see the action we should take, but it is so uncomfortable that we cannot admit to it even amongst our peers"

Overcoming such denial is the second key aspect of Defence "master programming" that this double-loop learning process will cause us to examine. Regrettably, Hamel records that "such denial is typically strongest at the top of companies."

Process Outputs

Ultimately, the decisions of the Defence Executive and then Government need to be presented to various customers: the public, industry partners, Defence staffs, and parliamentary members. For capability systems developers, output in the style of formative guidance is desirable over normative direction. The latter provides little or no discretion to those receiving the guidance. Vicente observes that "normative approaches focus on legislating work [and] descriptive approaches focus on portraying work." What makes formative approaches unique is that they

"focus on identifying requirements - both technological and organisational - that need to be satisfied if a [solution] is to ... work effectively. Although these requirements do not specify a new design, they are still highly informative and thus very valuable because they can be used to rule out many design alternatives."

Vicente's work focuses on cognitive work analysis (CWA), for individuals and organisational groups that clearly applies to systems of complexity level-8. He demonstrates how CWA can:

"provide systematic basis for designing information systems with the autonomy and support that workers need to engage productively in flexible, adaptive behaviour. By deliberately creating the conditions for productive adaptation, [it] can give workers some responsibility to "finish the design" locally as a function of the situated context..."

By adopting this approach to developing products of the capability planning process, recipients of the capability planning guidance (particularly the Capability Staff of Defence Headquarters) are empowered with better source material to continue the design of identified component capabilities of the organisation within constraints defined in that guidance. Should the Capability Staff also develop formative outputs for the Acquisition Staff to finish the design, then Defence will open an opportunity for everyone involved in strategic planning, capability development and acquisition to creatively contribute to shaping the Defence force capabilities.

Wider Benefits Accrue

By iteratively applying this 'systems' approach over the years, Defence is developing unique knowledge and competencies, as a high-value component of warfare in the knowledge domain. No one else thinks about Australia's strategic challenges or about capability planning as we in Australia do. Argyris observes that much of what is discussed about knowledge focuses on the process of knowledge accumulation, incremental gains in knowledge creation, and in codifying knowledge and making it accessible. He also suggests that such knowledge of the type that we are considering here in capability planning, is very different: we are about developing an ability to integrate very disparate kinds of knowledge and create value in two ways. First, by applying new knowledge to old problems we displace the existing knowledge base. And, secondly, by synthesising discrete kinds of new knowledge.

As warfare becomes more complex and systemic, knowledge synthesis is becoming more important. The process of drawing things together creates in itself a new knowledge. We come to new awakenings about the substantive issues being considered AND about the process of synthesising knowledge itself. That we practice synthesising knowledge is inherently valuable. We have to deal with unexpected matters, in a timely way, during times of crisis. The experiential learning we gain from strategic planning will help all in Defence to be better able to see things and respond to our advantage like no one else does.

Leadership

Strong leadership and support from the top of the organisation, is the sine qua non for any successful strategic planning endeavour. The leader who does well in single-loop learning (the left-hand side of Figure 4) typically are transactional leaders. These leaders typically have a performance-goal orientation, manage by exception, and provide rewards contingent upon goal achievement. That kind of leadership though is far less relevant for double-loop learning (on the right-hand side of Figure 4). Those that do better there are transformational leaders, able to give individualised consideration, intellectual stimulation, inspire a clear picture of the future that is optimistic and use symbolism to focus efforts. These leaders have a learning-goal orientation.

A challenge for the Defence Executive is to identify and develop people with a balance of one or both leadership styles and employ them in keeping with their leadership orientation. A large part of the input and learning about our future needs might well come from those operating in the current force under transactional leaders. The Defence Executive also has the challenge of itself acquiring and maintaining an appropriate balance in its leadership orientation to provide appropriate resources, guidance and protection for the transformational efforts of strategic planners.

One of the measures of success of the capability planning process will be the extent to which the Defence Executives sees themselves as the architects of the future defence enterprise. Without that perspective, the guidance emerging as the product of the process will fall short of its objective: to manage capability risk better. As stated earlier, we need to be able to describe what capabilities should exist in our limited "basket of assets" and state clearly how much of each is enough and why.

The process by which we think about future changes and set future guidance also needs to find a "rhythm" that keeps pace with the rates of change in the defence strategic and technological environment, and that also synchronises with the Government's corporate budgeting cycle. Key Defence decision-makers have endorsed this evolutionary process, and recognise that it will take a number of years to mature and settle into a "rhythm"

The most significant issue the Defence Executive has to deal with is the development of appropriate measures to guide the actions and decisions of the portfolio. Appropriate measures must cascade throughout the portfolio to drive the behaviour within the enterprise towards achieving enterprise-based outcomes. As Hauser and Katz observe, "organisations are what they measure". For example, we have identified the need for making deep personal adjustments in behaviour as part of the "double-loop" learning process. Overcoming "blindness" to changes in our current and strategic future environment and overcoming "denial" that occurs when we can see what changes are needed but we find hard or impossible to accept are key to Defence future success.

It is understandable that many would prefer not to go down in history as the ones who jettisoned concepts that Defence members (military and civilian alike) have traditionally held as valid. The opportunity is now here, for those same people to see themselves as the inaugural leaders of a systemic approach to Defence capability development that launched the building of adaptive behaviours through which adaptive force structures are designed and created. We must therefore keep these capability-planning goals in mind and ensure that the rewards used throughout Defence are appropriate to drive the actions and behaviours of Defence people in keeping with the planning goals.

Measures appropriate to this end are an integral part of the research that will be addressed in a separate article under preparation.

Previous publication:

This paper is an updated version of a paper titled "A Systems Approach to Capability Planning", presented at the Systems Engineering Test and Evaluation 1999 Conference, Adelaide, South Australia, 20-22 October 1999, Conceiving, Producing and Guaranteeing Quality Systems and published in the refereed technical papers of the Conference Proceedings.

About the Authors:

Richard Hodge is a senior professional officer with DSTO, currently attached to the Strategy Staff of Defence Headquarters. He plays a leading advisory role to Strategic Policy and Planning Division on the design and conduct of a systems-approach to strategic planning and analysis. Richard is also engaged in doctoral studies with the University of South Australia related to his current work. He has been working in a scientific advisory role for the past 8 years, including 3 years as Counsellor Defence Science (B) in the Australian Embassy Washington. While there, he negotiated the current bilateral treaty-status agreement covering research, development and engineering between the US and AS Departments of Defence.

Commodore Geoff Walpole AM RAN is currently Director General of the Force Structure Priorities Branch in the Strategy Staff of Defence Headquarters. He has over 30 years experience in Defence, including in a series of appointments in 'force structuring' areas of both Navy and Defence. He has also been a major capital equipment 'user', having served at sea in many of the Royal Australian Navy's vessels including two guided missile frigate/destroyer commands.

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