In the middle of difficulty lies opportunity.

Albert Einstein (1879–1955)

Introduction

Building a stronger future joint force for Australia that is both integrated[1] and sustainable is a highly complex and difficult endeavour. Recent economic circumstances have arguably exacerbated this challenge.[2] In this essay[3] I will argue that Defence investment in intangible assets, accompanied by a paradigm shift in thinking and behaviour away from single domain or Service capability success criteria to multi-domain and holistic enterprise capability, is key to building a stronger future joint force.

This essay defines what intangible assets are and examines how they have changed over time and why they are important to building a stronger joint force. The discussion is contextualised by providing examples of why intangibles matter to the future value and strength of the joint force. This is followed by an analysis and comparison of Defence practices with external industry practices, to highlight possible gaps and opportunities in what is measured.[4] Are current measures of success applicable and transferable to the joint force arena? The final section of this essay challenges traditional military views and assumptions by exploring established paradigms and visualising how they could be different in the future to set the conditions for a stronger joint force to emerge.

Intangibles—the Hidden True Value of Contemporary Enterprises

Education is the most powerful weapon which you can use to change the world.

Nelson Mandela (1918–2013)

What Are Intangibles and Why Do They Matter to the Joint Force?

The definition of ‘intangibles’ refers to non-physical assets and opportunities that are often hidden and are therefore not easily valued, defined or measured. Intangibles include things like human capital (including talent, ability and training of a workforce); goodwill; organisational values and behaviours; employee loyalty and satisfaction; intellectual property such as patents, trademarks and copyright; brand names; and market share.[5] In a commercial context, intangible assets have current worth and the ability to appreciate in value over time. What is potentially less well understood is that intangibles form a critical component of the human dimension of joint force interoperability and integration that includes complex issues such as organisational culture, values, language and education. These issues are complex because they can be interpreted in multiple different ways depending on context and perspective.

How Does the Australian Defence Enterprise Compare to External Industry?

Figure 1 shows the investment changes and component of total enterprise value of tangible versus intangible assets in the top five S&P500 companies from 1975 to 2018.[6] Of note, there has been a significant and exponential rise in investment in intangible assets, which rose from approximately 15 per cent of total enterprise value in 1975 to approximately 85 per cent in 2018. This trend is common across external industry as companies compete in different ways for a greater market share.[7] Although Defence is a public organisation, many companies that support Defence are commercial, and it could be argued that the whole of the Defence Enterprise is behind the current commercial industry investment trend curve—the vast majority of the Defence budget still being investment in the acquisition of tangible depreciating assets such as major platforms and weapon systems, estate and infrastructure.

Is Greater Investment in Intangibles Useful During an Economic Recession?

Some argue that there is a case for investment in more intangible assets during times of economic recession.[9] The key question is what the opportunity cost of Defence’s traditional approach to capability development is. What opportunities are being overlooked or missed, and will this have a negative longer term impact on joint force integration and sustainment? According to some critics[10] the current approach has deep-seated cultural roots within Defence and needs to be challenged through renewed approaches. The latest version of the Defence Capability Life Cycle Manual,[11] released in June 2020, captures the importance of the initial investment in design and research, an important intangible aspect of the capability development process. However, the wheels of capability development are slow to turn and it remains to be seen whether these changes will be adopted widely. It is not clear how recent changes will be practically integrated into the capability development culture across all Services, Groups and domains that make up the joint force. A shared purpose and understanding of how to implement changes at all levels, from the individual to the largest cultural groups, is important for success.

How Should Overall Value and Success Be Measured for a Joint Force?

You must be the change you want to see in the world.

Mahatma Gandhi (1869–1948)

Are Current Measures of Value and Success within the Joint Force Valid?

Even if we are all prepared to make a positive change, what exactly do we need to change? What is the vision of a successful future joint force and how does each individual contribute to that vision? Defence has based its initial classification and understanding of joint force integration issues on a model adopted from NATO as depicted in Figure 2 below. This model has three different dimensions—technical, procedural and human—that are measured according to time and complexity of implementation. Since the First Principles Review of Defence in 2015,[12] the establishment of the Australian Defence Force Headquarters has seen progress in the technical and procedural dimensions of integration. These have been measured through the introduction of Plan AURORA in 2018. While some studies have been completed on cultural analysis to enhance military operational planning,[13] more focus is needed on understanding and harnessing the human dimension of integration, which is arguably the most complex and critical of the three dimensions.[14]

How should success be defined and measured for the Joint Force?

A common theme in the academic literature on organisational change and behaviour is that organisations will generally end up with results directly related to what they measure.[15] What is typically measured is tangible factors that can be clearly reported on in quantitative figures. In measuring success, the dilemma of Campbell’s Law often arises. This states that:

the more any quantitative social indicator is used for social decision-making, the more subject it will be to corruption pressures and the more apt it will be to distort and corrupt the social processes it is intended to measure.[16]

In other words, what is measured becomes the focus, instead of what the organisational vision or true goal is. While Defence must report on its budget expenditure, dollars spent by Defence do not necessarily translate to increased capability or the ability of Defence to achieve its mission. Arguably, then, expenditure by Defence is not an accurate or complete measure of success or value of Defence’s contributions to the nation. Yet there is a disproportionately high level of focus and scrutiny on Defence financial accountability in tangible terms that may overshadow the value of intangibles that may not have been traditionally accounted for in Defence.[17]

The future will require more flexibility and adaptability in terms of budgetary allocations and actual risk management rather than risk avoidance. This approach would ensure any unforeseen emerging opportunities can be capitalised without significant detriment to ongoing initiatives and programs. One issue that is becoming increasingly difficult for Defence is the VUCA environment in which it operates, which requires significant agility, innovation, collaboration and team effort. Budgets and finance are more rigid and are driven by external factors that require strict compliance and reporting and are not necessarily designed for a VUCA environment. Strengthening these fiscal frameworks and building resilience and flexibility into the financial levers within Defence is an important driver for future joint-level transformation.

Part 3: Optimising Intangible Integration Opportunities in a Future Joint Force

Culture eats strategy for breakfast.

Peter Drucker (1909–2005)

What Common Joint Defence Values and Leadership Qualities are Required?

Each Service and Group within the joint force is proud of its own culture, traditions and values. Table 1 is a simple comparison of Service values between the Defence Leadership Framework, the Australian Public Service (APS), Navy, Army and Air Force. It highlights some common themes in values but also shows how some values of one Service could potentially be at odds with those of another Service. A possible example is the meaning of the APS value ‘impartial’ in contrast to Navy’s value ‘loyalty’.

The alignment, agreement and adoption of a common set of values is important to achieve the behavioural and cultural changes required in the human dimension of joint force integration so that all Services and Groups can become a champion team rather than a team of champions. The question is what values should be prioritised to build a stronger and more united joint force team. Until this point, different Services have often placed their own Service values first; however, a set of simple joint Defence values would contribute significantly to enhancing the human dimension of integration of the joint force.

So what should these values be, and why? Are the ‘Defence One’ leadership behaviours[18] relevant to the joint force? Have they been effectively used since they were introduced? Some would argue that there are too many behaviours to remember, let alone implement. A very simple set of Defence values that apply to all elements in the joint force would be very useful. For example, respect and trust could form the core of a set of Defence values that would apply across the entire Australian Defence Organisation (ADO).

Is Joint Force Command and Control Realistic?

Command and Control (C2) has always been a central idea for the employment of Australian forces and it forms much of the foundational architecture and design of our defence communications networks and systems. However, is joint C2 realistic and do we need it to achieve the joint outcomes or the range of response options intended? This idea may be summarily rejected initially on the basis of what has already been invested into joint C2 for the future force. Why reinvent the wheel or change something that works? But does it really work? The counterargument is that trying to achieve C2 in a complex, contested and congested joint battlespace may be practically impossible or far too slow to take advantage of initiative and mission command to more rapidly achieve the desired effect.

An alternative and fundamentally different approach to C2 is command and feedback. This approach makes full use of the concept of mission command and teaming by leveraging the speed of information sharing and encouraging more decentralised decision-making. It involves a clear and comprehensive commander’s intent up front, a shared purpose, and comprehensive understanding of the vision. Once this is clear and tested through rehearsals, the stage is set and the show goes on without significant interference or any direct control from the higher commander. The commander may influence through minor indirect adjustments made by monitoring key feedback loops to ensure the ‘show’ is still on track. The feedback loops allow any form of complex system to self-organise inside the VUCA environment and achieve the desired objectives through more creative and innovative approaches that leverage opportunities at the local context. This type of flexibility and adaptation on the move can only occur if trust is placed in subordinates to make the best decision as the ‘show’ unfolds. This approach acknowledges and embraces the VUCA environment and allows those inside the arena to make decisions to meet the commander’s intent without suffering penalties for using initiative. There is a collaborative culture of learning from mistakes and improving as a team. This approach allows a different type of thinking and instinctive action to occur that allows fleeting opportunities to be leveraged when they arise. A common language and shared understanding and purpose is critical for success of the command and feedback approach.[19]

How to Leverage the Human Dimension of Joint Force Integration

There is no magic bullet, nor technological break-through that will win this fight for us. Empathy may be as important a weapon as an assault rifle.

General Jim Mattis, 2019

If the ADO seeks to create a more agile and dynamic joint force that is capable of responding to a wide range of future challenges, then investment in enhancing the human dimension through better joint education and cross cultural understanding is critical. Advanced technology and strategic capabilities cannot currently be employed to their full potential without the human element. Even artificial intelligence, robotics and autonomous systems are merely different vehicles to compete in the VUCA arena and influence and deter actions by adversaries. The human dimension contains factors that can transform the joint force of the future. The power of the human dimension should never be underestimated, even if there is no clear logic or reason behind what seems to work and what does not. Just because something cannot be measured in our current remit does not mean that it is not important or worth investing in now, despite the uncertainty and lack of guarantee of success. There are times when taking calculated risks is more important than remaining in a known comfort zone.

Conclusion

This essay has argued a case for greater Defence investment in intangible assets, accompanied by a paradigm shift in thinking and behaviour towards a united multi-domain and holistic enterprise capability approach. There is strong evidence to suggest that future organisational success is determined by the type of investment choices that an organisation makes. The ADO can learn from external industry and adopt a renewed approach that considers more investment in intangible assets that appreciate over time.

In addition, measures of success need to be renewed to align with the joint force vision and purpose. This is likely to require additional analysis as to whether some traditional assumptions and ways of thinking are still valid for a joint force context. Various arguments point towards the human dimension being critical to successful joint force integration. This comes down to a shared purpose and understanding of what the priorities are for a joint context within a VUCA environment. Better internal integration of the various cultures within the joint force through a shared understanding will in turn enable the joint force to be stronger because it will operate together as a united team. However, there is no easy or quick solution to this complex challenge and it is important to define what success looks like from the start so that implementation can be visualised and successfully achieved.

Change starts with individual decisions and the values and behaviours that each member of the joint force demonstrates. A set of simple Defence values that all elements of the joint force can readily adopt is the first critical step towards enhancing the human dimension of joint force integration. The associated change and renewal of behaviours is likely to be a catalyst that can leverage other hidden intangible value that will contribute to building a stronger, integrated and sustainable future joint force. If the ADO seeks to create a more agile and dynamic joint force that is capable of responding to a wide range of future challenges, then investment in enhancing the human dimension through better joint education and cross-cultural understanding is critical for future success.