Hunn Review: 30 September 2002
Chapter 7 (continued)
Co-operative and joint arrangements for New Zealand Defence
Shared, Prime and Sole Roles and Responsibilities for the Secretary's and CDF
- I believe that a new approach to defining responsibility and accountability as between the Secretary and the CDF would serve the Government's interests better than the present organisational separation.
In order to attain jointness and cooperation, it is first necessary to be clear as to the processes that lead from the formulation of Government national security and defence policies to effective military operations and evaluating and accounting for defence performance. These are the defining points in the defence management cycle. Everything else is in place to ensure Ministers are able to make the best possible decisions within the limit of available resources so that when required they can give effect to New Zealand's national interest through the deployment of NZDF units and personnel appropriately trained and equipped to perform the missions expected of them. - Strategic management and planning processes through which the Defence Organisation should work are critical to organisational responsibilities, capacity and structure. They define what the Defence Organisation needs to do to meet Government's performance expectations. From an understanding of what processes are needed to deliver results, the question of the most appropriate roles and responsibilities for the Secretary and the CDF, as well as other senior defence executives, and how best to structure the Defence Organisation to carry out these processes, can be addressed.
- I have examined the Government's performance expectations of the Defence Organisation, most particularly those relating to providing strategic direction; preparing and developing joint force packages; providing high quality advice that supports Government decision-making; effective and efficient direction, planning, management and accounting for Defence's resources; being a good employer; and maintaining high standards of professionalism, including ethical behaviour. I have also examined the nature of management and planning challenges, both those that are particular to Defence and those that are faced by other public and private sector organisations.
- Many of Defence's high-level activities are cyclical and iterative rather than sequential, so that one needs to be careful in depicting them as a neat linear progression. Moreover, within many processes, there are a number of specific sub-processes. With these provisos in mind, I have attempted to provide a simplified outline of Defence's strategic management processes in order to see more clearly how structures might be erected to manage them and where responsibility should lie for performing them. These macro-processes are listed in Table 1 and Figure 2 overleaf. A more detailed definition of each step is given at Annex H):
- I have attempted to capture in the Table above and in Annex H all of the processes which support the two objectives of good policy decisions and good operations. In doing so, three points are apparent:
- the dominant and continuous role that must be played by the Minister and his Cabinet colleagues to give effect to the system;
Table 1: Defence Strategic Management and Planning Processes
| Step | Process |
|---|---|
| 1 | Formulate/Update National Security Policy and Strategy (Political Direction/Decision Point) |
| 2 | Formulate/Update Defence Policies and Strategies (Political Direction/Decision Point) |
| 3 | Conduct Strategic Environment Information Gathering and Analysis |
| 4 | Develop Policy/Strategy Security Scenarios and Guidelines |
| 5 | Formulate International Defence Relations Policy/Strategies at Government level |
| 6 | Formulate International Defence Relations Policy/Strategies at the Military level |
| 7 | Analyse and set Military Capability Requirements and Joint Future Capability vision |
| 8 | Analyse Military Capability Gaps, Test Options and Refine Solutions |
| 9 | Advise on Policy Effectiveness of Proposed Military Outputs and Capability Solutions |
| 10 | Endorse Proposed Military Output Levels and Capability Solutions "Political Direction/Decision Point) |
| 11 | Draft Long-Term Development and Output Resource and Action Plans |
| 12 | Make Decisions on Defence Plans (Political Direction/Decision Point) |
| 13 | Prepare Defence Organisation Annual/Multi-Year Budget Estimates |
| 14 | Gather Acquisition Information and Prepare Acquisition Proposals |
| 15 | Make Decisions on Annual Multi/Year Budgets (Political Direction/Decision Point) |
| 16 | Make Decisions on Capability Acquisition Proposals (Political Direction/Decision Point) |
| 17 | Purchase Equipment |
| 18 | Support, Supply and Maintain Military Capabilities |
| 19 | Commission into Service Purchased Equipment |
| 20 | Generate Defence Organisation Outputs |
| 21 | Recommend Options for Military Responses to Security Crises |
| 22 | Make Decisions on Responses to Security Crises (Political Direction/Decision Point) |
| 23 | Conduct Military Operations in accordance with Government direction |
| 24 | Evaluate Defence Organisation Output Results and Management Efficiency |
| 25 | Evaluate Defence Organisation Contributions to National Security Outcomes |
| 26 | Account for Defence Organisation Financial Expenditure Results |
| 27 | Provide Political Direction in response to Defence Organisation Performance Results |
Figure 2: Recommended Defence Strategic Management and Planning Processes and Responsibilities
View text equivalent of above image.
- the breaking down of the defence system into clearly definable steps (as long as this is not taken to absurdly detailed lengths) enables accountabilities to be clarified even in an organisation where the overall responsibility is shared; and
- the need for both the Secretary and CDF to be engaged in certain key processes across the cycle so that shared responsibility is inevitable if the best result is to be produced.
- There are some defence strategic management processes where single-line accountability has proven to be the most effective and rational arrangement, for example, in aligning all aspects of financial and resource management with responsibility for outputs. However, there are other areas, where to achieve the Government's performance expectations - for example of timely, balanced and frank advice that encompasses both civilian and military contributions - it is desirable to move beyond the "one-size-fits-all" limitations of single-line accountability and to consider an approach which makes room for combined military and civilian responsibility and accountability for specific functions. As noted above, flexible concepts of over-lapping responsibilities are increasingly used in high performing organisations to ensure co-ordinated whole-of-organisation results, full ownership of internal decisions, improved information sharing, and to resolve the negative effects of vertical hierarchies.
- To achieve this, I am suggesting the adoption of the British and Canadian ideas of "shared" and "prime" responsibility and accountability for the Secretary and the CDF for some of Defence's strategic management processes. This would complement single-line accountability where this is seen to be essential.
- The concept of "shared" responsibility and accountability recognises situations where results are best achieved when undertaken on an equal basis by at least two principal agents. The function and the performance expectations must still be defined but the designated principals would be responsible collectively for working together to co-ordinate inputs and manage tasks. Both principals would be equally accountable for results, as they would have shared authority over resources and actions to achieve them.
- The concept of "prime" responsibility and accountability recognises processes where there is a logical prime area of activity for generating results, with inputs being required from other staffs. In this case, while the process itself would be collegial, one person would assume the lead role and be responsible and accountable for managing inputs from those areas of the Defence Organisation affected by process decisions and results. Prime responsibility and accountability is seen as going well beyond the normal expectations of consultation and requiring the full involvement of all parties.
- These concepts of responsibility fit under the broader notion of a strategic partnership arrangement between the Secretary and the CDF, and their respective agencies, where the Secretary and the CDF would share overall responsibility and accountability for all the strategic management processes undertaken by civilian and military professionals (whether they were configured in one organisation or in two as at present).
- Particular processes where sole, prime and shared accountability and responsibility are appropriate for CDF and the Secretary, are outlined and elaborated on in Annex H and summarised in Table 2 and 3 below:
Table 2: Secretary of Defence High-Level Sole, Prime and Shared Responsibilities
Sole |
Prime |
Shared |
|---|---|---|
|
|
|
Table 3: Chief of Defence Force High-Level Sole, Prime and Shared Responsibilities
Sole |
Prime |
Shared |
|---|---|---|
|
|
|
- It is my assessment that to achieve jointness and cooperation the inflexible application of single-line accountability must be set to one side in favour of shared, prime and sole responsibilities in a strategic partnership concept. This concept is needed to align the roles and responsibilities of the Secretary and the CDF to the defence outcomes desired by Government, demonstrate the dominant and continuous role of the Minister and the Cabinet; and develop effective working relationships between the CDF and the Secretary, so that all relevant inputs of information and knowledge are made to strategic management and advice to Government.
- I am aware that since the reforms of the mid-eighties, the doctrine of accountability has evolved in the NZ Public Service that it is essential to ensure one individual is ultimately responsible for a department of State and is accountable to the Minister for it. This is seen to give the greatest incentive to Chief Executives to accept personal responsibility for their own actions and advice and for those of their staff (who are in turn accountable to their CE). The question is whether single-line accountability is the most appropriate form in situations where shared responsibility is the most effective way of delivering the results sought by the Minister.
- The concept of single-line accountability works best in comparatively small organisations with few, stable and uncomplicated results, that are not dependent upon multiple contributors, that have few information sources and only a limited number of uses for information. In my judgement, the Defence Organisation's strategic management processes - sometimes involving as many as five or six viewpoints - do not permit the rigid application of single-line responsibilities and accountabilities.
- There is a strong consensus that the concept has contributed to artificial divisions in the Defence Organisation. Some senior managers under both the CDF and the Secretary have used single-line accountability to enforce their exclusive control over particular processes and results. Value-adding inputs from other parts of the Organisation have been excluded. "Territorial preserves" have been reinforced. At the same time, as I noted in Chapter Six, because of the manner in which functions and responsibilities have been distributed between the two parts of Defence, in some cases senior managers have been made accountable for processes and results with little or no responsibility for the critical inputs upon which processes and results depend.
- While there appear to be few good reasons for retaining single-line accountability across the board, and many for moving to a strategic partnership concept of accountability where this is likely to produce the best results, there may be concerns about the extent to which this latter concept might become a precedent for other Government departments. The needs of each department should be considered on their own merits. I would suggest that Defence is unique in requiring an organisational framework headed by two professional leaders, one administrative, the other technical.
- Should this continue to be an issue, however, I have examined the possibility of using the strategic management processes I have outlined in Table 1 above to define more clearly single-line accountabilities as between CDF and the Secretary. While a division along these lines does better define the roles and responsibilities than is currently the case, it avoids the real issue. It is my view that the goal should not be to draw a clearer line of difference between the two Defence Organisations, but rather one of working out better ways for all parts of the Defence Organisation to work effectively to meet Government's expectations. Nonetheless I have set out a single-line accountability model at Annex K should this be needed.
A Strategic Planning and Management Process System
- To support the Secretary and the CDF in their policy and strategic management responsibilities, there is an urgent need for an appropriate Defence Planning System. Current disagreements may become moot if my recommendations for a future Defence Organisation are accepted. It is noted that there have been a number of checks and examinations of the planning system as it has evolved over the years - the latest being undertaken as the first activity of the DPS project launched in July 2001. The table of processes outlined above, (and expanded upon in Annex H) could serve as a macro-level outline of the strategic management and planning processes for the Defence Organisation. These processes should be taken into account by any DPS project reactivated following the completion of this review, in moving to finalise the planning arrangements, through which an enhanced Defence Organisation can work. If it is decided to proceed in this manner, I would strongly urge that a three-month time limit should be placed on the completion of the DPS.
New Integrated, Joint Strategic-Level Policy and Management Structures for the Defence Organisation
- As I have stressed, the time has come to move towards a more integrated Defence Organisation. Other organisations aspiring to high performance both in the private and public sector have already eliminated unnecessary internal vertical boundaries. Similarly, other defence establishments are moving to integrate civilian and military advice, and strategic management processes, and develop joint structures for military advice and management.
- An integrated, joint structure is also needed to support the shared and prime responsibilities and accountabilities being suggested as the optimal accountability arrangements for the Defence Organisation. Such a structure is an essential foundation for directing the culture and attitudes within Defence away from the current emphasis on patch protection and exclusion. It is important that such a structure builds on the distinctive skills and experiences that both civilian and military staffs bring to the formulation of Defence policy advice and Defence strategic-level management. The Minister needs to receive free, frank, timely, and highly informed professional advice from both his military and civilian advisers. The intention of a new structure would not be to blend military and civilian advice so that it became indistinguishable, but rather to ensure that a full range of military and civilian advice was made available to the Minister.
- In recommending changes to management structures, I have been guided by my findings that have identified a need to:
- improve substantially information sharing and eliminate boundaries and their supporting cultures that impede strategic management;
- develop a Defence-wide vision of the purpose and direction of the organisation and sustain this into the future; and
- build and sustain professionalism in key functions such as defence policy, equipment acquisitions, strategic human resources, knowledge management and information technology, and resource management.
- There are many options for achieving an effective level of civilian-military integration and jointness. One that is matched to the governance structures and strategic management processes outlined in this review has been developed as an example of how this might look. Some other options have been considered but they raise a requirement for immediate legislative change, have significant shortcomings, or could not achieve the goals set by the Government for a revitalised defence system. Some of these alternatives are outlined in Annex L.
