Monday, 13 November 2017

The 12 Pre-Conditions for Innovation Success – 1: the Customer

Why is innovation important in the defence market? Because a small country deploying a small defence force won’t derive either an operational or economic advantage doing the same thing as everybody else, only cheaper. Innovation – in equipment, organisation and process - is the difference between being ordinary (possibly irrelevant) and vulnerable, on the one hand, and strong, resilient and prosperous on the other.

Defence is a monopsony market. That means the defence customer has a significant shaping effect on the market: its size, its behaviour and the barriers to entry. If he is the launch (and possibly sole) customer for a new piece of equipment, or service, then its success depends to a significant degree on how he addresses both the operational need and the opportunity to be innovative in meeting it. It also depends on the partners and suppliers he chooses to deliver this new capability – and making a wise choice is a pre-condition (one of many) for innovation success.

So what are the pre-conditions for innovation success that the defence customer needs to satisfy? There are a dozen, in my view, and they need to shape key attributes and behaviours on the part of Defence and the ADF. Boiled down to their essentials, this is what I think they are:

1    1.   Nurture and grow your technical expertise
2.   Nurture and grow your professional expertise
3.     Maintain your situational awareness: keep abreast of emerging threats as well as emerging technologies and their potential effects on your own capabilities and operations
4.     Understand your needs and articulate them properly
5.     Be methodical in conducting R&D and capability development: this will help you understand your needs, as well as helping you identify solutions
6.     Seek opportunities for innovation in your organisational practices, processes and procedures as well as in your equipment inventory (innovation in the latter is usually wasted without innovation in the former as well)
7.     Take every opportunity to engage with and inform your industry and research base – the more they know about what you do, how you do it and what difficulties you face (within obvious limits!), the better able they are to support you – see Israel as an example
8.     If it needs to be done at all, do it quickly. Urgency eliminates irrelevancy: a short deadline ensures a focus on the outcome, not the process
9.     Establish a disciplined acquisition strategy that both reflects the urgency of the need and tolerates sensible risks (see 1 and 2 above) and remember that obsessive risk-aversion is itself another source of risk
10.  Appoint a champion with sufficient seniority to drive the project forward in spite of bureaucratic obstacles – or to kill it, if this turns out to be the correct course of action; and give him or her the best possible project team
11.  Make sure you’re nurturing your industry base – In a technology driven monopsony a smart customer doesn’t allow his industry base to fall into a technical rut or to fall behind in a technology sense. 
12.  Nurture a culture and capacity to work with your industry base to identify opportunities and develop solutions, both for yourself and also, potentially, for allies and export customers.

Defence – the ADF, CASG and DST - is mobilising itself to satisfy these pre-conditions. The 2016 Defence White Paper and Defence Industry Policy Statement kick-started the change process. But to continue satisfying the pre-conditions for innovation and operational advantage in both Industry and Defence we need to see the emerging cultural changes embedded permanently in the ADF and in Defence’s capability development and acquisition processes. The early signs are very promising – but these are unsettled times: Defence and Industry together need to make these changes future-proof.

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