For Defence Minister Kevin Andrews, David Peever’s is the review to end all reviews. According to the Minister, The First Principles Review delivers a corporate structure that will enable the defence organisation to deliver on our defence needs for this century. Good luck with that!

Nonetheless, the Review is a substantial piece of work that realigns Defence with its core business: the conduct of warfare and the delivery of decisive lethality. In reconnecting Defence with its mission, the review—like most of its predecessors—doesn’t actually say what that mission is.

But it does set out an organisational structure and an associated approach to organisational reform that places the emphasis squarely on capability outcomes rather than process. In this the government, and the nation, is well served.

The review team was as notable for the breadth of its political and industry experience as it was for the narrowness of its direct defence exposure (only Peter Leahy brought in-depth knowledge of the business of defence) and the absence of applied public sector policy and administrative skills.

Women were conspicuously absent. That’s a real pity, since the blokey culture of Defence, with its preference for competitive as distinct from collaborative operating models, is at least as serious an organisational defect as are its isolation from the mainstream public service and its poor through-life skills development and rejuvenation.

The review highlights five critical organisational imperatives.

First, there’s a clear emphasis on decision-making as the core function of the Defence leadership. To that end, it both simplifies and streamlines decision-making processes by cutting the number of three-star (equivalent) positions that currently crowd around the decision centres.

Second, it rebalances accountability and responsibility by cutting the number of committees in the so-called ‘accountability framework’ and by reducing the number of gatekeepers. But it achieves this rebalance by broadening the span of control of the Deputy Secretary (Policy and Intelligence) and the VCDF to the point, particularly for the VCDF, that the job may well become unmanageable.

Third, it places the proper emphasis on internal alignment—a problem that has frustrated CDFs and secretaries for the past two decades.

The review also acknowledges the importance of behavioural change driving cultural change—an issue on which gender considerations have a direct impact. It would have been useful for the review to have given some consideration to that fact.

And finally, the review touches on, if only implicitly, the fundamental need for trust between the Defence Minister and the Defence organisation. Lack of trust has been the most pernicious and perverse impediment to both organisational and Ministerial performance for much of the past twenty years.

The revolving door through which secretaries have come and gone since at least 1999 has had as much to do with the absence of trust as it has with the incompetence of Ministers or the alleged inadequacies of the secretaries. As the review notes, leadership at the senior levels must be constant and enduring.

While, in my view, there’s been a fairly consistent approach to leadership on the part of successive CDFs, the ever-changing procession of secretaries has generated a civilian organisation that lacks capacity, cohesion and consistency.

Its snappy ‘One Defence’ sobriquet notwithstanding, the review baulked at any serious consideration of that most sacred of Australian defence cows: the diarchy. Most defence organisations get on quite well without a divided leadership. While the diarchy doesn’t seem to do any harm—mainly because secretaries and CDFs strive to make it work—the time must surely come when more serious consideration is given to its contemporary utility.

The review also continues the institutional decline of the leadership roles of the chiefs of service. While their repositioning as ‘capability managers’ in the 1997 Defence Efficiency Review was a sound development at the time, the fact is that their authority and credibility within the Defence organisation has continued to erode as ‘contestability’ is enhanced. More than anyone else, the chiefs are the custodians of the ADF’s fighting spirit, the key to its success in war.

And it’s also clear that the review skirted around that most dangerous of all defence ‘F’ words: FDA (Force Development and Analysis). The most serious defect of the 1997 Defence Efficiency Review was the abolition of a function that was as essential as it was loathed. It’s noteworthy that many senior ADF officers responsible for capability development since 1997 have lamented the fact that the baby was thrown out with the bathwater.

While both the restyled Deputy Secretary (Policy and Intelligence) and the re-engineered VCDF will need strong force analysis skills to exercise their new ‘red card’ powers, the review failed to give in-depth consideration to that most critical of all evaluative responsibilities.

The Review’s implementation plan is both ambitious and optimistic. Anyone with experience of the earlier Strategic Reform Program will appreciate just how difficult it is to reorient an organisation as large and lacking coherence as Defence. The inertia that generates organisational resistance is exacerbated by both the complexity of the task and the difficulty of remotivating a staff that already shows clear signs of change fatigue.

Notwithstanding the Minister’s enthusiasm for a review that precludes further reviews, the fact remains that there are three underlying tensions in the business of Defence that will never be resolved, and that demand constant attention.

First, the strategic environment is in constant churn. Second, aligning resources with the mission is always fraught. As John Glenn remarked, ‘while I hurtled through space, one thought kept crossing my mind—every part of this rocket was supplied by the lowest bidder’. The Minister’s indication of a return to a defence budget at two percent of GDP is some recognition of that conundrum. And third is the tension between effectiveness and efficiency.

No country is ever going to want to send its children to war with capabilities the effectiveness of which has been compromised by the efficiency of their delivery cost.

Most readers of The Strategist will be aware that 18 August is Vietnam Veterans’ Day, formerly known as Long Tan Day, marking the anniversary of the most famous battle fought by the Australian Task Force in Vietnam, in 1966. This year it also marks the centenary of the birth of perhaps the country’s most famous—or notorious—defence mandarin, Sir Arthur Tange (18 August 1914–10 May 2001). Some reflections on his legacy are timely.

First, he had an enormous impact on the two departments of which he was head for 11 and ten years respectively, External Affairs (as Foreign Affairs was then known) and Defence. When he became Secretary of External Affairs in 1954, aged 40, it was a collection of individuals, many of them highly talented, but not well organised for policy advice and implementation. When he left, it was a far more efficient and effective body. Its role in the Indonesian Confrontation of 1963–66 has been described as world’s best practice. After ten years, he was finally eased out by a new minister, Paul Hasluck, at the direction of the long-serving Prime Minister Robert Menzies, but was allowed to remain in office, albeit with minimal influence, for a whole year. That, unfortunately, was the year in which crucial decisions were made leading to the commitment of combat forces to Vietnam. The frosty relationship between Tange and Hasluck, two formidably able individuals, prevented them from forming an effective working relationship, which might have greatly improved Australia’s Vietnam policy. Read more

Beyond running a huge civilian workforce, the Secretary of the Defence Department is torn at by an extraordinary array of g-forces: government, generals, gear (the buying, building and running of), geopolitics and geography. On bad days, and even on normal afternoons, some of those must indeed feel like gravitational forces.

To change the alliterative flavour and go to the top of the alphabet, see the need for the Secretary always to have an A-game: alliance, admirals, armoury…. Peter Jennings and Hayley Channer have charted the ever-shortening lengths of the tenures of the blokes who sit in the Secretary chair (so far, all blokes), and judged:

The volume of work is unbelievable and the stakes in terms of peoples’ lives and money spent are enormously high. Mental exhaustion is a serious risk. For all these reasons Defence doesn’t fit well into the daily Canberra spin cycle.

Read more

The incoming government’s promise to boost defence spending to 2% of GDP within a decade has attracted a lot of commentary, including here, here and here on The Strategist. And well it should. It’s a massive promise that, if kept, will reverse a sixty year downward trend in the share of the Australian economy allocated to defence. (See graph below.)

Three questions follow naturally: is it possible, is it necessary and is it really going to happen? I offer some thoughts on each below.

Is it possible for Australia to spend 2% of GDP on defence?

Absolutely ‘yes’—it’s simply a matter of priorities. Many countries spend more than 2% of GDP on defence and Australia did so continuously from 1939 to 1992. What’s more, Australia is now much more prosperous (in terms of real GDP per capita) than back in those days. So, in theory at least, the opportunity cost of higher defence spending would be less acutely felt than in the past.

Of course, that’s not the way people think. In a developed country such as Australia, individuals judge economic utility in terms of more or less rather than in absolutes. We desire shiny new granite kitchen benches just as much as our grandparents desired plumbed toilets; and just like our grandparents, we expect our living standards to rise year on year. Read more

At the state and company level the objectives a defence industry strategy might seek to achieve look different to those at the federal level that were discussed earlier (here and here). They’re broader in scope, worry more about resources and are sharper in bite.

For the states their defence industry objectives are generally fairly pragmatic: bringing in money and/or jobs. This is often somewhat undiscerning in that any kind of money and any kind of jobs are sought—although a premium may be paid (literally) for sustainability as will be discussed later. The net result is that at the state level the defence industry sector is conceptually broader then at the federal level, in encompassing acquisition projects, long-term sustainment and ADF basing.

At one end of the continuum between jobs and money, Victoria perhaps focuses mainly on money, wanting simply a robust defence industry that contributes to Victorian economic growth and prosperity. High-value, innovative manufacturing is favoured, being considered to give the best return on investment. Queensland is at the other end of the spectrum in mainly seeking jobs, as its submission to the White Paper that stressed expanding the ADF presence in South East Queensland, Cairns and Townsville reveals. Read more