Defence reform – let’s address the Minister in the room!
10 Apr 2015|
Ministers have got to get their hands dirty!

Let’s not speak of them when accountability or lack of it is everywhere else, but where the Westminster system suggests it should be! The First Principles Review (FPR) is another review which heralds ‘transformational change’ and points the finger at the Australian Defence Organisation as the primary culprit of the current malaise. For those who have read the public version, much of it seems logical and supported by the evidence presented. But let’s try and get the back story clear before we start making judgements about the most recent in a long line of defence reviews.

Firstly governments and ministers are not blameless. Significant defence reform is almost always initiated by governments and implementation plans then approved by the Minister or Cabinet or both. The growth in top-line staff numbers, much trumpeted in the media as proof of uncontrolled inefficiencies, has in all cases been agreed by Government to meet operational needs or been a response to recommendations from Government-initiated reviews.

Nevertheless Defence, like all large organisations, needs a good pruning from time to time. The last one that happened in 1997 was the result of the Defence Efficiency Review (DER) and was carried out just before the commencement of nearly two decades of operational commitments— the greatest fertiliser for organisational expansion known. While Defence lost track of the actual savings achieved, the radical organisational reform recommended by the DER was implemented, continuing the outsourcing and centralisation of corporate business functions already started within Defence.

The Defence experience in the late 90s and lessons from the private sector since suggest that successful reform needs to be top down and implemented quickly. The FPR implementation timetable reflects this urgency and is a pleasant contrast to the passive nature of the 2009 Strategic Reform Program (SRP). Retaining the FPR Team to monitor the implementation also seems a sensible step.

Notwithstanding these positive aspects and with the exception of the defence Chief Finance Officer function, it’s not clear how the hierarchical/matrix mix which underpins the operation of the Defence organisation is to be managed. There are a number of key processes that run horizontal across the organisation and while the FPR has rightly highlighted the weak enterprise and the need to strengthen the centre, the underpinning rationale is not clear. The Report does little to shed light on this aspect. Logistics is a simple example of an enterprise function which seems to have been broken up and its functions reallocated by the FPR. As a consequence, it may now suffer from the Defence Reform Program disease which caused unintentional cost shifting between different parts of the Department because a hierarchical siloed approach to reform was adopted for functions which are in fact cross-organisational in nature. Rather than improving efficiencies it adds cost and reinforces ineffectiveness.

Contestability is also a much exercised term. On the one hand, it is absolutely critical to the process but I have never been convinced that there is a silver bullet—civilian or military—to achieving success. The importance placed on contestability and the bifurcated organisation to support this notion depicted in the Review suggested a return to the days of staff combat rather than the collaborative approach sought in recent years. One would hope that the best-qualified person is sought to lead either the Policy and Intelligence group or the Capability Acquisition and Sustainment organisation whether in a uniform or a suit—in the hope of building the Minister’s ‘One Defence’.

The report also recommends removing the Service Chiefs ‘statutory appointment’ status ‘to ensure the absolute clarity of the Chief of Defence Force’s command and authority’—a questionable outcome for a problem that I doubt has existed in recent years. Nevertheless, amongst the Service Chiefs’ roles is to advocate. Whether they do this successfully or not is a matter of judgment—but it’s a serious shortcoming to overlook this key and legitimate role. Ministers should take every opportunity to listen. Homogeneous advice processed through the VCDF may seem ‘easy’ and politically clean but it will certainly have political consequences for Ministers who do not manage it well.

That brings us back to the Minister.

Successful reform is led and driven by the Minister—not just through media conferences and press releases. Defence is at its best when the Minister of the day regularly engages with the Department and mutual respect can be developed. While they may prefer to, Defence Ministers can’t stand back and point fingers—they need to get their hands dirty. Even if this may result occasionally in some political mud sticking. The Department will no doubt do its best to implement the FPR good and bad. But if it is to be a truly landmark review the Minster needs to own it and work with the diarchy and the Defence leadership to implement it. Regardless of how politically risky it may appear, to be ‘Creating One Defence’ must be the Minister’s initiative not something the Department takes ownership of by default. Let’s see how this unfolds at the six and nine-month review points.

A final point—sadly it seems industry was again left wondering by the Government’s announcement—with such significant organisational change on the table one would hope the Government doesn’t use the implementation period as a reason to stop or further delay planned acquisition programs placing further economic strain on a vital element of Defence capability.