Defence has a complex accountability system that has evolved over many years. It has its strengths and weaknesses, however Defence has reached a point in its evolution where there is a strong case to redesign its accountability system.In discussing the 'Decision-making and strategic direction setting' the report comments that -
Current arrangements are under stress and their failure damages Defence. This stress is manifested in poor outcomes for Defence. Recent examples include: delivery failures for capability projects; non-compliance with AusTender reporting; poor or inappropriate procurement decision-making; poor outcomes in pay for Special Forces and a lack of cost consciousness in the management of day-to-day activity. Current accountability arrangements also constrain leadership capability and management capacity by reducing the ability of decision makers to exercise strategic control over the construction and implementation of decisions. In addition, the context of a capped budget and reducing contingency provision increases the level of risk that accrues from ineffective management and consequently raises the bar substantially for effective Defence strategic management and decision-making.
Defence will need to be more agile, more efficient, and more effective. In practice this means that leaders need to make and implement better decisions faster and with more assurance. ...
To support Defence build a high quality accountability system, this report -• Examines what is meant by accountability, what kind of organisational and individual characteristics this implies and the components of accountability in the specific Defence context
• Summarises the lessons of the past and analyses the current issues Defence is facing across each component of accountability
• Identifies the opportunities to build higher quality accountability systems
• Describes the approach required from Defence’s senior leaders to capture the opportunities on offer.
Defence requires an effective and efficient decision-making system which can translate strategic purpose into action effectively and efficiently. The ability to provide enterprise-wide strategic direction and exercise strategic control are critical for Defence. There are too many committees in Defence, which create diffused and confused accountability and their operation is often characterised by poor procedures.As in the late Kingdom of Kakania, one cannot have too many committees, too many agendas, too much gold braid and too little meaningful analysis.
Decision-making and accountability systems need to ensure that Defence functions as a single, integrated enterprise, and that accountability systems function as a force for organisational cohesion. Defence decision-making lacks the framework of clear priorities and direction which would flow from an enterprise level corporate plan. Defence can achieve stronger decisionmaking and strategic direction setting in three ways:• Redefining committee structures and processes. Defence needs committee structures and processes that reinforce the concept that committees are only advisory to accountable decision makers. This can be achieved by- Having fewer, smaller committees with individual ownership focussed on supporting decision makers’ accountability. We specifically outline a streamlined structure and processes for top-level committees• Instituting an enterprise-wide corporate plan to provide strategic direction, trade-off and agree priorities and set outcomes to be delivered by each Group and Service across Defence. In creating this plan, the Simplified Defence Business Model (SDBM) provides a point of departure around which to articulate Defence’s outcomes. The corporate planning process will also form the foundation for a more robust quarterly review mechanism across Defence
- Putting in place sunset clauses for existing subordinate committees and mandating clear rules for (re-)establishing them, resulting in a radically reduced number of committees
- Establishing more robust procedures uniformly across committees (e.g., ensuring committee agendas are structured around decisions; establishing formal mechanisms for making commitments; having more robust recording and follow-up).
• Establishing mechanisms for increasing contestability of key decisions (eg red teams) in a nonadversarial way to improve the quality of decision-making by formalising and institutionalising contestability for key decisions.
The report goes on to discuss the 'Vertical chain of personal accountability', commenting that -
Considerable work on the mechanisms of vertical accountability has been done in the past although many of the core mechanisms (eg Charters and Organisational Performance Agreements (OPAs)) have fallen into abeyance. Accountability for delivery needs to be assigned clearly to named individuals and, where there is joint accountability for delivery of an outcome, a clear articulation of who does what to deliver the outcome.In terms of 'horizontal accountability' -
Defence needs to establish a framework in which it can hold its personnel accountable for delivery of outcomes and can achieve a stronger chain of personal accountability in two ways:• Using the outputs of the enterprisewide corporate plan to cascade SMART outcome-based measures down each Group/Service and enshrining them in simplified business performance documentation aligned precisely with individual performance agreements and the enterprise-wide corporate plan
• Undertaking rigorous performance management (business and individual). Business performance conversations must take a new shape, focused on addressing the root causes of shortfalls against numeric (SMART) targets and addressing them. Individual performance management will similarly benefit from greater rigour and differentiation with more robust application of rewards and sanctions for consistent out- or underperformance of outcome delivery.
Much work has been done on the mechanisms to manage horizontal accountability across Defence and recent improvements in Materiel Sustainment Agreements (MSAs) and Customer Supplier Agreements (CSAs) have enhanced their effectiveness. The SDBM provides a good foundation for increased clarity and accountability. Despite much work in recent years, the capability development process continues to suffer from delivery shortfalls related to poor accountability. The reality of much greater scrutiny and the prevailing environment of a capped budget make resolution of these issues essential for the credibility of Defence and the delivery of its outcomes.What about the people? In referring to 'Culture and skills' the report indicates that -
Defence can improve horizontal accountability in two ways:• Continue to tighten Service Level Agreements (SLAs) to reinforce partnership outcomes. Defence can ensure greater responsibility for shared outcomes with an appropriate balance between customer/supplier type arrangements and partnership agreements
• Strengthen accountability for wholelife cost and delivery of capability. Defence can improve its capability outcomes by progressively tightening the boundary conditions around the capability development process, improving top-down incentives for better capability delivery in an environment of capped budgets and extension of the current use of integrated project teams (and project team leaders) across the
end-to-end capability development process.
To effect significant improvements in accountability, changes to the mechanisms of accountability are necessary but insufficient. To make changes in accountability ‘stick’, Defence needs to address underlying culture and skills issues in four areas:• Embedding the use of outcomes-based language across the organisation
• Implementing a new model for personal skills development to improve skills
• Continuing reform of risk management practices- Defence needs to define its risk appetite across all areas of the enterprise• Using review forums and other interactions to role model new behaviours.
- Defence should develop a ‘near miss’ register to proactively identify and problem solve risks.
