Balancing risk and reward in the quest for the best capability

When we talk about seeking to acquire the ‘best’ capability, how much risk is too much risk?

The ADF’s E-7A Wedgetail airborne early warning and control platform, for instance, is said to be one of the most advanced air battlespace management capabilities in the world, and the envy of other countries.

But this sort of developmental acquisition would not provide an appropriate template for the LAND 400 Phase 2 competition.

That is according to Major General Gus McLachlan, who offers a valuable insight into the combat reconnaissance vehicle (CRV) shortlisting decision in an interview with Australian Defence Business Review, published in this edition to coincide with the LAND FORCES 2016 exhibition.

“I would describe the E-7 AEW&C as an aircraft that was at the more developmental, aspirational end, but the payoff has been superb,” said the Army’s Head of Modernisation and Strategic Planning.

“And so that is one of those things where the ADF leaned forward, understood the risk, but achieved I think the best capability of its type in the world.

“When you look at ground armoured vehicles, does Australia have the capacity or the need to be at the absolute leading edge of capability when armies much bigger than us, some of which have got plenty of resources, are doing developmental work? In that case, the answer is: no, we do not.”

CRV designs based on capabilities that are already in service are being evaluated for LAND 400 Phase 2, and with the Phase 3 Infantry Fighting Vehicle the plan is to minimise developmental risk by procuring mature technologies with a growth path.

However, this does not mean that Army is failing to answer Prime Minister Malcolm Turnbull’s call for innovation.

The trick, it seems, is knowing when to take a risk.

Army Innovation Day is a fast-tracked nomination, selection, demonstration and assessment process that is used to bring innovative equipment, tools or enabling systems to the attention of capability specialists and decision-makers.

This year, Army is focusing in particular on novel capability options to enable manned-unmanned teaming.

It is important to note that the Innovation Day process is not only about introducing innovative technologies; it is also a chance to test-drive innovative acquisition strategies.

And it is a two-way street: while Army has an opportunity to refine its understanding of the potential of emerging technologies, industry learns more about Army’s priorities going forward.

Delivering the Army component of the Integrated Investment Program certainly represents a heavy workload, but this task will no doubt present plenty of opportunities for innovative thinking.

At the same time, adopting a prudent approach to risk on a case-by-case basis will help Army deliver its part of the Defence investment portfolio, and should enable all concerned to realise the best capability.