You don’t learn to walk by following rules, you learn by doing and by falling over – Richard Branson

Canada has a new budget statement, and with it came a confirmation of what we have been hearing for a while.

I particularly like the shorthand approach to the Public Service’s directed change agenda as employed by Kathryn May in the 12 November edition of The Functionary. The first five of seven statements she offered follow:

“Take a few risks: One of Michael Sabia’s marching orders.

Heed the signals: Streamline. Simplify. Nod if you understand.

Rule reduction: The internal rulebook is getting a makeover.

Incentive to go: Suddenly, a chance to retire early with no penalty.

From the outside in: 50 private-sector leaders will be brought in.”

One additional paragraph is also highlighted by Miss May, taken from a letter distributed by Sabia the day after the government’s budget document was released: “The government has defined its priorities. Our job is to relentlessly focus on them… simplify so that we can move faster… take a few risks to get things done… and act with a sense of personal accountability to deliver the results the country needs.” ‘Move faster to deliver results’ seems to be the operative objective, by streamlining processes (removing the complexity debt), using a new rule book and taking a few risks.

A number of Special Operating Agencies have been created to address some of this government’s priorities, one of which is the Defence Investment Agency (DIA) to address all major defence procurements over $100M. I think it safe to assume that these change orders apply to the acquisition of weapons systems platform acquisitions going forward.

It is useful to look at these strategies from the context of the DIA.

It Starts and Ends with Risk

Every employee manages risk by doing what their employer tells them on how to do their work. This protects their employer’s reputation and financial wellbeing by achieving desired goals. In most democracies, there logically is a degree of risk aversion within governments, and that degree has been very high in Canada where weapons systems platform acquisitions are concerned.

The Clerk of the Privy Council (Michael Sabia) who is the senior Public Servant has clearly signaled that less risk aversion is required in the federal government. Practitioners and observers have been begging for just such a change for many years.

The experts say that such a change would be accompanied by a document laying out what would change in the Treasury Board’s risk management system. Heads of departments (and government agencies) would then release a comprehensive explanation of the risk tolerance that would be acceptable going forward, but will that now occur?

The Department of National Defence (DND) has in the past failed to provide clarity on risk tolerance, so it will be difficult to ascertain what risks are now acceptable that were to be avoided before. Nor should we expect or want a Wild West approach where the most powerful gunslinger could risk the life of the institution.

I suspect that the new CEO of the DIA (Mister Doug Guzman) will set the new risk standard after discussing risk tolerance with the Prime Minister.

The accepted behaviour to take a degree of risk – or not – is baked into most organizational cultures, and so it has been with Canada’s Pubic Service. Accompanying the government’s culture of risk aversion is the ever lurking blame game – there have been few safe spaces in the past, aside from those provided by leaders that committed to ‘always having your back’.

With the DIA initially populated with personnel from various departments who have been involved in complex military procurement projects, it will not be easy to change cultural gears by merely joining a new organization with a new boss.

Nevertheless, nothing sends a stronger signal about risk tolerance than bosses admitting – in a transparent and vulnerable manner – their risky decisions in terms of context and rationale. In doing so, they communicate their level of risk tolerance and define safety for all who follow.

The creation of the DIA is a great opportunity to address this cultural concern. Mr. Guzman can issue his risk tolerance guidance and then openly discuss with his executive leaders in Town Halls every risky decision that he makes or is aware of and endorses. If done, the culture could change very quickly to one where he may need to gently apply the brakes on occasion. And if he has experience with complex projects, he will be aware of the need to employ advanced risk treatment techniques broadly and in particular for those risky decisions – each risk tailored by adaptation going forward, and with a ‘nuclear option’ exit strategy to avoid the DIA’s demise.

The Other Supporting Strategies

Two other somewhat risky strategies are highlighted above to achieve enhanced speed of delivery. The first is a new (and hopefully much thinner) rule book that should enable streamlined processes. And the second is the announcement of an early-retirement plan to facilitate downsizing the Public Service, which could also address those who refuse to get onboard and such seniors replaced by more aligned and capable leaders from outside the government.

The first of these two needs to be completed ASAP, preferably within 12 months. It could involve sector-specific tiger teams of experienced and open-minded practitioners, both serving and retired. They could be tasked to efficiently reduce regulations to minimal ‘thou shall’ statements supported by listed ‘considerations’ to be selected based on context applicability.

With the new rulebook in place, it would inform process reengineering, in my view best conducted by a reputable external provider. The end product should tag every required process as follows:

  • The process step’s objective to be achieved (the ‘what’) must be clear.
  • A responsibility and accountability framework for each process step must define the ‘who” by employing RACI diagrams (or equivalent) that identify who is responsible to do what, who is accountable overall, who has to be consulted and who must be informed.
  • Progress within the process map – the ‘how” – should privilege collective and concurrent ‘swarming’ followed by parallel processing, only defaulting to sequential activities if necessary
  • The governance approval authority must also be identified, along with the delegated authorities to the execution teams. And though off topic, two linked cautions are offered for senior governance:
    • The Committee cannot be effective if all projects over $100M are addressed at the same table, because they will have insufficient time to explore issues, manage risk and provide appropriate decisions.
    • The members should be largely unencumbered by higher priority demands to enable timely decisions.

The second of these strategies regarding DIA personnel requires a deft hand. Early-retirement decisions by self-selecting volunteers will mean that a lot of valuable ‘lived experience’ will be lost to the DIA. Tracking this retired Alumni  is important for potential availability for part-time employment. Such losses could significantly reduce those expected to transfer into the DIA, necessitating one of two actions: temporary replacements likely via short term contracts, or persuading other officials to leave home departments to join the DIA with promotions or sign-on bonus incentives. However, overuse of the second option could potentially souring relationships with the in-service contingents in DND.

The importing of intermediate leaders via Interchange Canada can be as disruptive as useful. Therefore the CEO could immediately pursue available ‘good fit’ leaders from outside the government who have the skills required and interest in a minimum three-year well- incentivized commitment.

A Caution about Moving Faster  

At a Canadian Club lunch in Toronto on 7 Nov, the Prime Minister is reported as saying “…the risk is not to take risk”, a sentiment often quoted in the business community.

Those whose careers have been in operations know the potential damage to delivering effective and long-lasting results with an over-emphasis on efficiency. Early results can soon turn into abject failure once in-service for a few years. This is especially so with weapons systems that must remain reliable and affordable for decades once in-service – Canadian Armed Forces (CAF) members’ lives are literally at stake. Hence, taking such risks requires guardrails.

When customers and/or politics delay the launch of platform projects for years, the only possible DIA option to enable timely CAF capability is leasing military-off-the-shelf systems. But these come with risks in terms of financial liability to the government and harm to CAF members if the gear is just ‘adequate’.

Reframing the Prime Minister’s Comments

The risk faced in the DIA is not only to not take risk. It is to having the related business acumen and competencies (in the broadest sense) to shape projects before contract award to enable companies to manage the baked-in risk to delivery of the right weapons systems at the right time. This currently is a challenge to be overcome.

Setting the client’s requirements takes whatever time it takes, and I assume that is outside the DIA’s scope. As I have observed when not done right by the CAF, chaos can follow in change orders during implementation.

As frequently opined by one of my bosses, complex platform procurements slip one day at a time. As risks emerge, sustained urgency from everyone involved in government is the antidote to project failure in terms of schedule (and its sibling, cost) and the CAF.

To facilitate urgency, leaders must act like bulldozers by removing risks to the execution team’s timely progress.

And as implied in the book ‘How Big Things Get Done’, the DIA should never pressure the prime contractor of a complex acquisition project to rush the planning, which invites otherwise avoidable risks that slow down or destroy projects during construction, integration and commissioning.

So What

We all understand that risk aversion cripples, and crippled projects are unable to move to contract award quickly.

At its best, the DIA will be the catalyst to a short transformational journey for Canada’s weapons systems platform acquisition business to achieving more timely delivery of effective platforms. At its worst, we can hope that it will ignite a slow evolution to improved timeliness through incremental evolutionary steps.

To be blunt and with so much funding earmarked for the CAF’s future capabilities, the risk of the DIA failing is unthinkable.