Defense in a Complex World from the Point of View of a Corporate Strategist

“Initiative, simultaneity, depth, adaptability, endurance, mobility, innovation”

“Our ability to continue to adapt and respond faster than our adversaries is the greatest challenge we face over the next 30 years.”

The quotes above come not from a Fortune 100 CEO or an esteemed academic, rather they are taken verbatim from the new US Army Operating Concept (AOC) and the Air Force’s new strategic statement “A Call to the Future.” Leaders in today’s ever-changing global landscape are aware of the difficulties that our modern world presents. Their ability to address these challenges will become a key determinant of their future success (or lack thereof). A complex world is not unique to start-ups or established blue-chip companies. In fact, this challenge transcends organizations of all sizes, shapes, and flavors.

The parallels may not be intuitive, but “initiative, simultaneity, depth, adaptability, endurance, mobility, [and] innovation” — words I’m accustomed to hearing from start-up founders in my work as a strategy consultant — are highlighted as key tenets within the AOC.

No organization on earth has faced the global scale of complexity and the multitude of missions as our armed forces in the past fifteen years. Soldiers have solved larger, more nuanced problems than most corporate leaders will face in their lifetime. Commercial executives operating in the same global environment — and less fraught with physical peril — should emulate their approach and maturity of thought.

Yet building a defense paradigm that thrives amidst the pressures of the 21st Century is one of the largest challenges our military has faced. We’ll need examples from history, case studies from private industry, and ultimately trust in our own people to build an organization fit for our time.

The vision statements in AOC and A Call to the Future are impressive frameworks for approaching the unknowable, unpredictable tomorrow, but translating these strategic values into policy and practice will require a herculean effort. Karen Courington does an excellent job outlining Congressional policy, internal service regulations, resources, and culture as the primary levers to deliver transformation in the branches.

I’ll use her framework and apply lessons learned from my work with multinational corporations. Large institutions work in similar ways. They’re governed by the same choices of planning vs. emergence and process vs. people. The commercial and the public sectors share an interest in building the right organization for the 21st century.

Structuring Policy for Adaptation

The structure of today’s Armed Services — like that of most Fortune 500 companies — was invented for a different era. Global stability allowed incumbents to focus on a few main objectives and gradually introduce innovative solutions. Organizations positioned elites to create a central strategy that would unfold with little reassessment.

Our military structure today is no different. Branch headquarters manage logistics and introduce new technologies while the operational units perform dedicated missions under the direction and funding of a separate leadership regime. In corporations, executives plan production with centralized services and leave divisions to distribute in the market.

The model works until an unexpected factor disrupts that relationship

Shocks to an organization expose knowledge gaps, domain conflicts, and ambiguity in decision rights. Amazon caught IBM off-guard with its move to cloud services. The market was lost before Big Blue could muster a response. Microsoft missed the mobile revolution for a similar reason: product groups quarreled over domain and corporate functions failed to fund vital trials and prototypes.

Defense Secretary Ashton Carter outlined IEDs as a prominent example of how this outdated structure fails in complex combat environments. The link between functional and operational units crumbled when the roadside bomb emerged as a threat in Afghanistan and Iraq. Soldiers were left to improvise their vehicles without adequate funding while headquarters scrambled to procure a solution without the requisite field knowledge to test and deploy new capability.

Every organization struggles with blind spots.

Structure determines the magnitude and nature of those strategic omissions. Goldwater-Nichols consolidated responsibility for joint-staffs warfighters without a commensurate share of force development. Many functional companies fail to orient their employees to specific markets and most product-centered firms will have redundancy in operations. No structure is perfect, and tradeoffs have to be evaluated through the organization’s governance structure (Congress, shareholders, overlords, cthulhu, etc.).

Future conversations with Congress should examine a streamlined structure that aligns with a hierarchy of missions rather than a disjointed set of interests between centralized functions and decentralized operations groups. Branches and Commanders should align with common missions to mirror accountability for specific strategic purposes. GE is a great example of a conglomerate simplifying a massive shared services platform under common objectives.

In the absence of an overhauled defense paradigm there are still ways to enable agility. The JIEDDO task force was created as a response to organizational failure that Ash Carter and other’s had outlined. It eliminated bureaucratic ambiguity, eased the task of team coordination, and pooled the funding needed to start the procurement process. How? They created an organization with the right authority and knowledge to solve the problem. The result: faster deployments of life-saving technology.

DoD needs a framework that enables task forces with the funding, capacity, and autonomy needed to tackle emergent issues before they hit fever pitch. JIEDDO, Rapid Equipping Force, and the Intelligence, Surveillance, and Reconnaissance Task Force are great responsive case studies, but these examples should be the modus operandi — not an exception for crisis.

Google proposes that “planning is stupid”. Your best people should respond to change in real-time rather than rely on a broad strategy calculated with segments of yesterday’s information. (This video does a great job explaining this.) At Undercurrent we’ve found that efficient teams have the following characteristics:

Self-organized: determine how to prioritize and accomplish the work
Lean: groups of 7 +/-2
Autonomous: able to do the work without interference or outside approval
Multidisciplinary: contains the diverse skills, capabilities, authority required to do the work

The early stages of JIEDDO held those characteristics. Teams with the right ingredients, a clear direction, and simple guidelines achieve more than an “optimized procedure” every time.

Regulations Should Enable Collaboration

The growth of Joint Staff and Unified Command appears to be a reaction to the complicated task of matching, sorting, configuring, and shaping force projection with inputs from each of the branches. It’s a really, really complex problem to optimize dozens of staffing and resourcing variables with a rapidly changing set of missions. The AOC introduces modular force design to address this problem. It reduces the computational burden on Combatant Commanders if units can sync without heavy hand-holding.

It’s a really, really complex problem to optimize dozens of staffing and resourcing variables with a rapidly changing set of missions.

Spotify has operated with a modular concept of team design for the past several years experimenting with squads centered around specific features like “Search” and “music quality”. Product teams collaborate when necessary. The networking team needs to be included to discuss data streaming with the audio quality group, for example. Notice that the squads aren’t dedicated to a specific capability like “programmer” or “data scientist”, but rather a specific purpose. Each team is staffed with the capability it needs to build great products. And when multiple teams need to interact to achieve a broader goal they link with respective counterparts and create a new squad to tackle that challenge. Modularity paired with rules of engagement and interaction brings out the true value of this structure. The company has expanded it into 30 countries and generated over $750 million in revenue growth through the past two years using this model.

The catch is that Spotify has well defined domains, product partitions are clear, and integrations between functionalities are linked. Mapping a modular organization with an ambiguous, changing, or yet to be determined mission is a difficult task. Aligning on common purposes, as mentioned above, is the first step to clearing this ambiguity. But there are several best practices that should be addressed in any modular organization.

Once given a purpose, teams need the autonomy to complete their mission. Micromanaging a small group of experts eliminates any chance for collaboration.
A common platform (technology, protocols, and regulations) should be established with the input of the respective interests to ease the cost of knowledge transfer.
Teams should have the power to change course and strategy within a defined “safe-to-try” scope

Imagine a more collaborative, detailed, and democratized “Key West Agreement” within each Area of Operation. Now imagine that interacting with a similar group represented by the relevant Branch Headquarters. Interfacing between the branches is vital for a vision of the future that involves increasingly multi-pronged approaches to the theater. Balance between a defined and an evolving set of operating procedures must be developed in each AOR for modularity to work.

Enabling a Self-Editing Culture

Congressional minders may cringe at the term “self-editing organization” for fear of runaway agencies, but it’s critical that our teams have the autonomy to act in today’s world. Regardless of the macro-organizational structure, if day-to-day operations do not enable our existing workforce to use the fullest extent of their personal expertise and ability — every marginal person added to the system is putting a higher burden on the enterprise.

Formal rhythm and regimen of decision-making has a strong history in our armed forces. Hierarchy still plays a huge role in corporate America and we often see management hesitant to distributing authority. Total chaos and autonomy isn’t the answer to an already complex operating environment, but constructive dissent is vital to an organization that learns and adapts over time. Zappos has been flirting this line through the introduction of Holacracy, a governance platform that manages change through specified roles and decision rights.

Risk levels have to be identified up and down the ranks to give the proper level of autonomy and self-determination of individuals. CRIC in the Navy is a great way for young service members to identify gaps, inefficiencies, and opportunities in the service. Informal social networking is a powerful tool to aggregate information across a massive organization. IBM has developed one of the best employee social networking protocols I’ve seen at a multinational corporation.

Common Challenge, Common Interest

Ash Carter’s nomination as the new Secretary of Defense is a promising signal for the future of how our armed forces will organize. Leadership is one of the core components of successful transformation in any large institution and his viewpoint on how the Pentagon should work is aligned to a progressive notion of how 21st Century organizations will work. It will be incredibly exciting to see his impact unfolding in the coming months.

Equally exciting are the conversations and initiatives spearheaded by groups like CRIC, the Military Writers Forum, and the Defense Entrepreneurs Forum. Organic movements within organizations are often the most powerful. If embedded and endorsed as culturally important they can truly shape how an institution evolves over time.

Corporations and other agencies would be wise to keep an eye on the Pentagon and defense leaders should study responsive companies to gain insight on how they fill gaps in our uncertain world. We’re on the verge of a completely new way of operating super-organizations. A lot of basic questions surrounding job-matching, team-creation, and organic innovation are yet to be answered within our largest institutions.

Let’s learn how to tackle this together.

Michael Cata is a strategist at Undercurrent, a consulting firm focused on helping companies and organizations become more responsive in an uncertain world.

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Notes:

Although the parallels I draw are intended to show that corporations are in some ways analogous to the armed forces, commercial markets do not carry comparable weight to the effort required to maintain national security. Military strategy is not my area of expertise, and I welcome your feedback.