One Defence: leave it to Peever
10 Apr 2015|

Smiling faces beam from the cover of Creating One Defence. These happy folks, with photos balanced for gender and Service, are pleased that Defence business processes have had their 36th substantive review since 1973. They may agree with the report that there are ‘low engagement levels amongst employees’, that they’re ‘inward looking, complicated and difficult to manage’, that they’re ‘risk averse and resistant to change’, and that they’re ‘subsumed by box-ticking and process tinkering’, and badly in need of ‘changes to behavioural mindsets’. If so, One Defence is the answer to their problems, for it’s nothing less than an ‘end-to-end holistic review’ and a ‘total systems approach based on evidence and analysis.’

It’s important to look beyond the business-speak of One Defence because David Peever and his colleagues on the review team are correct in their diagnosis of Defence’s management problems. Their critique is all the more stinging because of its accuracy. If implemented, the 70 recommendations in the report will modernise the organisation. A small number of recommendations should’ve been taken further and a few left out altogether but, as reviews go, One Defence is sensible, serious and purposeful. It needs to be studied closely.

The reviewers tackled a central conundrum: ‘we were puzzled as to why Defence has been unable to reform itself’ and identified three ‘root causes’ which have created ‘complacency and inertia’:

The high operational tempo and increasing national security demands over the past decade have demanded high levels of the senior leadership’s time and attention;

Budget uncertainty, with $18.2 billion removed from the Defence budget from 2009–10 onwards which has led to reactive planning, deferred military capability and a hollowing out of enablers …

Leadership churn from 1998 to the present, resulting in nine ministers with an average tenure of two years, six Secretaries with an average tenure of two and a half years and five Chiefs of the Defence Force with an average tenure of four years.

Defence might take some comfort from this diagnosis because none of these factors are the organisation’s doing. A high operational tempo is the result of worsening strategic circumstances. The fact that the operational record since 1998 has been exemplary surely says something worthwhile about Defence’s management skills. Australians love to indulge in the ‘lions led by donkeys’ myth, but operational success is based on good military and civilian leadership as well as good fighting forces. Looking forward, a savvy reading of our strategic outlook would judge that Defence’s operational tempo will remain high. Senior military leaders and our politicians will continue to be absorbed by military operations. So this root cause of ‘complacency and inertia’ will remain, but let’s remember that Defence is there for the purpose of doing military operations – it’s not a diversion.

On the second root cause—budget uncertainty—Peever’s team is 100% correct. Strip mining $18.2 billion dollars in a couple of years after 2009 essentially destroyed Defence’s capacity to implement the Strategic Reform Program, the implementation plan for the 2008 Pappas Review, the previous big externally led review of Defence . The spending plans of defence white papers since 1976 were all rapidly undercut by Government-directed budget rethinks. The 2000 White Paper is partially exempted from this generalisation because, while it underestimated key program costs, the document also committed to a ten-year spending plan, which in reality was exceeded by a government riding high on the minerals boom. The global financial crisis put an end to such largesse, but while the government cut funds there was no change to the grandiose force structure plans set out in 2009 and 2013.

The message for government is clear: if you want Defence to manage itself better, you need to stick to deliverable and long-term spending plans. Those two qualities require a large measure of political bipartisanship and a willingness to not over-promise. It would be naïve to think that Defence is out of the woods about its future financial stability. Broader economic pressures on Government are growing and the central money agencies in Canberra are circling because that’s what White Pointers do. So Peever’s second ‘root cause’ won’t go away either.

It would be nice to think that leadership churn will go away, but One Defence’s third root cause is probably a permanent feature of our political system and the way it intersects with the Australian Public Service. Thirty-six month (maximum) terms of office means that Governments are never far from campaign mode and, as a consequence, ministerial longevity is a rare gem. The tenure of Secretaries and CDFs is the gift of governments. It’s obvious from the shorter tenure of Secretaries that Governments are happy to tinker with those positions more readily than they are CDFs. As Hayley Channer and I observed in an earlier post, four of the previous six Secretaries before Dennis Richardson left the job in publicly unhappy circumstances. One Defence doesn’t dwell on the point, but an obvious lesson for any government is that it needs to get its relationship right with Secretaries—and not just in Defence. Leadership churn is a feature of modern public life, so no one should imagine that One Defence will make that phenomena go away.

Notwithstanding that, the three ‘root causes’ identified by the review team are likely to be constant realities for Defence. If implemented, the recommendations will produce better outcomes, even in the midst of high tempo operations, budget disappointments and leadership change.