Developing a Blueprint for Success in the UK Defence Innovation Ecosystem

Innovation and Digital Transformation in UK Defence - A Moment Ripe for Strategic Alignment?

Innovation and Digital Transformation has become a strategic priority for the UK MOD. Recognising that military technological superiority is no longer a reality, UK Defence leadership has embraced ‘innovation’ and ‘digital transformation’ as the processes by which the Armed Forces and the Defence and Technology Industrial Base can build and sustain capability advantage as a single actor and as part of the NATO Alliance. Meanwhile, the current government seeks to invest into areas outside of the cash-rich and skills-rich South East to improve productivity and fulfil manifesto promises, and the Prime Minister’s top advisor, Dominic Cummings, is determined that the UK becomes a leader in education, science and technology, and this means fostering new technology hubs across the country.

Additionally, the UK Armed Forces, like its core allies and partners, has shifted towards a more agile, domain-agnostic, digitally-enabled and information-centric concept of operations. This has fostered enthusiasm for working more closely with the UK's innovation ecosystem and adopting user-oriented concept exploration, problem-solving, and digital technology-generation/integration to engender more rapid testing, experimentation and acquisition of new software and digital architectures. By their very nature, multi-domain or ‘system of systems’ military operational constructs require multi-disciplinary thinking and cross-sector ideas generation within the broader UK Defence and industrial ecosystem. Moreover, each of the services are keen to demonstrate that they can tie in to the UK’s wider prosperity agenda, and understanding and articulating UK Defence Innovation policy is a key part of that.

The three ‘traditional’ Defence stakeholders (military, government and industry), then, are confronted with what seems to be a moment ripe for strategic alignment, where each has the opportunity (and desire) to design and execute a coherent, joined-up innovation strategy

Defence Industry is also under new pressures to innovate. Commercial organisations, SMEs and startups, not constrained by rigid, risk-averse and overly-complex defence industrial organisational culture, are developing new technologies with obvious (and less obvious) military applications. Their agile processes enable more agile technology development, and as the UK MOD requests more ‘off the shelf’ capabilities and shifts away from ‘platform-centric’ procurement models, traditional Defence industry is reviewing current business models to see how they might reform and adapt to this new Defence marketplace - one that is far more protean, diverse and digitally astute.

The three ‘traditional’ Defence stakeholders (military, government and industry), then, are confronted with what seems to be a moment ripe for strategic alignment, where each has the opportunity (and desire) to design and execute a coherent, joined-up innovation strategy. This strategy should also be cognisant of those critical stakeholders that lie outside of the traditional Defence system - non-defence industry, venture capital, entrepreneurs and academia.

Crucially, this strategic alignment should not solely focus on the development and adoption of new technologies. Rather, there must be alignment on innovation and transformation in mind-set and behaviours, organisational culture and leadership, process and stakeholder relationships. It cannot just be a case of increasing R&D funds or writing policy. The Defence community must be resolute in its desire to change the way it thinks and the way it works. New technologies can always be developed, but without the right cognitive, cultural, procedural and relational foundations, we won’t see success.

UK Government and the Innovation Ecosystem

The UK Government has taken steps to define an overarching innovation policy. In 2016 it released the Defence Innovation Initiative and subsequently a Defence Innovation Priorities white paper and Defence Technology Framework in 2019. These say the right things: a strategic approach to innovation; tying into military capabilities and concepts; greater engagement with industry and academia; improving accessibility for stakeholders outside of the traditional Defence community. Of course, success of the Government’s innovation policy is made all the  more challenging given the varying echelons of governance that are pertinent to its implementation, not least the ever-expanding and evolving industrial and entrepreneurial complex. Moreover, future policies and plans relating to both UK Defence, for example the upcoming SDSR (likley to be postponed due to the COVID-19 crisis) and British overseas exports, must dovetail with the emerging innovation ecosystem.

The reimagining of Defence problem-solving and acquisition requires new cognitive and cultural models inside the British Armed Forces and the broader Defence community. This starts with more Socratic introspection: Defence simply asking “how do we think and why do we think in this way?”

However, outside of policy announcements and funding, the MOD must truly enact change across mind-set and behaviours, organisational culture and leadership, process and stakeholder relationships. This is particularly critical in the context of capability acquisition and sustainment: from requirements generation and contracting, to programme management and delivery.

This should start with a focus on human capital and leadership – encouraging diversity of thought with diversity of people. This isn’t just about broadening the Defence church to include more women, BAME or LGBTQ individuals (although this is crucial), but, rather, reaching out to the so-called ‘misfits and weirdos’ from other intellectual and commercial disciplines who will likely view the most pressing Defence challenges through a different lens. In other words, the development of an Defence acquisition and sustainment counter-culture, made up of diverse individuals that can operate with agility in and amongst the UK’s innovation ecosystem itself, focusing on:

• Developing networks and relationships with non-traditional defence industry and SMEs, academia and entrepreneurs
• Building a knowledge base of technologies and emerging requirements and communicating this across the ecosystem
• Reviewing requirements generation and working with the end user (customer) and industry (supplier) to build a common lexicon around operational need, problem solving, requirements generation and technology development

It’s also apparent that there is a lack of training in terms of what innovation and digital transformation means and the process of innovation itself - how we move from ideation to innovation to implementation. UK Defence acquisition is closely entwined with traditional Defence industry and the relationships are commonly contractual in nature. Engagement with commercial stakeholders, SMEs and entrepreneurs has been, until now, severely limited, and it’s imperative that the UK’s innovation ecosystem is built upon more collaborative, partnership-oriented relationships. This means that UK Defence acquisition should position itself as both a broker and a willing student, able to both reach beyond the traditional defence primes and offer opportunities for co-industrial innovation relationships, as well as make efforts to understand and, ideally, shape the direction of industrial and academic innovation strategies, processes and R&D.

UK Defence acquisition should position itself as both a broker and a willing student, able to both reach beyond the traditional defence primes and offer opportunities for co-industrial innovation relationships, as well as make efforts to understand and, ideally, shape the direction of industrial and academic innovation strategies, processes and R&D.

Of course this requires consensus, within and across each of the stakeholders in the innovation ecosystem, but, crucially, strategic investment plans and the direction of technological innovation in the UK should be informed by the Armed Forces’ long-term vision of future force development, encompassing how they fight, what they fight with and who they are (this is how the U.S. Army designed their 2019 Modernization Strategy).

Innovation at the Intersection of Force Design, Concepts of Operation, and Capability Development

The reimagining of Defence problem-solving and acquisition requires new cognitive and cultural models inside the British Armed Forces and the broader Defence community. This starts with more Socratic introspection: Defence simply asking “how do we think and why do we think in this way?”. Building on that understanding, the widespread adoption of Design and Systems Thinking and the strategic alignment of these problem-solving methodologies could bring about more innovative technology experimentation and adoption. Both of these models could enable the Armed Forces to start thinking about force design and capability development in more innovative ways:

• Breaking out of  traditional capability requirement constructs and imagining, instead, realities and technologies that don’t yet exist
• Working collaboratively, across sectors, and utilising different intellectual disciplines to define problem sets
• Moving away from thinking about the future force as three individual services, each with individual material needs, and instead working towards an understanding about how the Armed Forces interacts with and shapes the future multi-domain, multiscale military system (one that is underpinned by and ‘fit for’ the Digital Age)

We may well see these novel approaches to complex problem-solving rolled out inside Government. Dominic Cummings’ lengthy think piece on ‘Odyssean Education’ (a concept developed by Nobel prize-winning physicist Murray Gell Mann) highlights the need to synthesize a range of intellectual disciplines so that we might tackle some of our biggest, most complex problems. In the context of Defence, then, we’re not just talking about the convergence of effects across a multi-domain battlespace, but, rather the convergence of knowledge and ideas across sectors and the Services.

In the context of Defence, then, we’re not just talking about the convergence of effects across a multi-domain battlespace, but, rather the convergence of knowledge and ideas across sectors and the Services

Defence Industry’s Pathway to Digital Technology Thought Leadership

Cummings also notes that the challenge with developing and applying new technologies is not the technology itself but the "management and operational ideas" that underpin the process from ideation to innovation to application. This issue seems to be a prevalent one in industry and deserves the most attention when thinking about how industry can maintain an active role in the UK’s innovation ecosystem - as empowered digital thought leaders and valued intellectual partners.

Notwithstanding the need to keep pace with technological innovations occurring in the commercial and start up space, Defence Industry must retain the confidence and trust of the UK MOD and military end users by building up a knowledge-base in digital technologies and their applications in a military context, conveying an understanding of the core problems/operational concepts shaping military requirements, and offering its customers an effective framework through which to test and experiment with ideas and new technologies.

Organisationally, traditional Defence industry is not vastly different from the UK MOD. Oft described as risk-averse and even monolithic, both are vast, complex organisms with myriad departments that compete for budget and status. This means that opportunities for cross-functional collaboration are more limited, and adapting to new Government policy/commercial interests vis-à-vis digital transformation/innovation is a significant challenge when:

1. There isn’t a common internal understanding of long-term business objectives and how ‘innovation’ or ‘digital transformation’ aligns with that objective
2. There isn’t a common internal understanding of UK HMG/Armed Forces commercial interests/operational needs and how these might inform company decision-making/strategizing
3. There isn’t a common internal framework from which to approach ideation, problem-solving and technology development
4. There is organisational inexperience or hesitance to partner with SMEs and start-ups, hindered further by a perceived lack of incentives from Government to do so or difficulty in sourcing and building new relationships with said companies (COVID-19 will make networking in this way even more of a challenge)

Building the Right Internal Culture, Developing the Right External Relationships

So how does industry overcome some of these challenges? It could start with setting out a long-term vision for the business as a whole - this might encompass a desire to move into new markets or regions, or perhaps a brand shift or the building of relationships with new customers - and then developing a common language by which to articulate how ‘innovation’ and/or digital transformation slots into this vision. The company strategy cannot be innovation for innovation’s sake; innovation underpins and informs the process by which the company executes its overarching strategy and this needs to be communicated via a common lexicon across sales, marketing, engineering, strategy, etc.

Although there might be eye rolls at the prospect of ‘thinking about thinking’, it can be an important part of a company’s innovation process. Similarly, industry must start thinking about their products as fitting into a wider, integrated digital technology suite, rather than developing them in silos

Secondly, is vital that this strategy aligns with, or at least is mindful of UK HMG, MOD and Armed Forces innovation/digital transformation policy and objectives. From the perspective of business development, sales and marketing, it is imperative that industry can mirror, in part, the language of their customers and demonstrate a solid understanding of how the interests of their customers align with their strategy. This is not to say that industry should only ‘follow’ the lead of their customers - industry must be seen as the technology leaders - however its vital that  senior decision-makers inside industry are keeping these interests front of mind as they think about the direction of their R&D investments, external partnerships and, crucially, process and ideation methodology.

Defence industry must consider how they build and sustain effective partnerships with the other key innovation stakeholders. The partnership should be built on a shared strategic goal for technology development, as well as a shared language and approach

As outlined above, starting from the point of ‘what do we think, and why do we think in this way’ can engender collaborative, creative approaches to designing a methodology or framework for ideation, problem-solving and technology development. Although there might be eye rolls at the prospect of ‘thinking about thinking’, it can be an important part of a company’s innovation process. Similarly with the Armed Forces, industry must start thinking about their products as fitting into a wider, integrated digital technology suite, rather than developing them in silos. By taking this approach, too, different departments can work together and the cross-fertilisation of ideas and technology development can occur as part of a new company-wide culture, potentially bringing about more testing and experimentation with new and legacy software and systems.  

Embracing HMG Innovation Hubs

Looking outward, traditional defence industry must consider how they might build and sustain effective partnerships with the other key innovation stakeholders in Defence: government, military and non-traditional defence industry. Concerning government, as stated above, the partnership should be built around a shared strategic goal around technology development, as well as a shared language and approach. Industry needs to demonstrate a willingness to partner with the Government’s innovation hubs (JHub, DASA, UKDSC, BIS, MOD Innovation, etc.) and help to support their initiatives. This might take the form of a ‘Government Innovation Representative’ inside the company, a known official (who is not your archetypal ‘defence industry’ professional aka a misfit, a weirdo) who can build relationships with key personnel and maintain a line of communication around technology development needs, upcoming competitions etc. This will go a long way in creating more partnership and less contractual-based relationships.

User-Focused Problem Solving and Tech Design

Concerning the Armed Forces, it is critical that industry shifts towards a user-focused problem-solving methodology for technology development. This means creating outlets for collaboration between engineers, developers etc. and military end users, plus individuals who focus on thinking frameworks i.e. design or systems thinking and multi-disciplinary professionals i.e. from science, the liberal arts. Industry (and the military!) need to understand the problem that they are trying to solve and, given the increasing complexity of digital technologies, it’s imperative that the end user and the solution-provider work together in partnership so that there is a shared understanding about how to approach future force design and the varying applications of technology within that design. This could be achieved by a series of creative workshops and problem-setting/solving interactions between industry and military end users, whereby, through an iterative process, ideas and technologies can be tested quickly and then results fed back when needed (DASA and the UKDSC are already doing this via new competitions and cross-sector innovation programmes).

SMEs, Start-Ups and Venture Confidence

Finally, Defence industry must look at establishing new, partnership-based relationships with companies outside of the traditional Defence community and, specifically, SMEs and start-ups that are often developing some of the most transformational digital technologies. Certainly, this is what government wants to see from the major defence primes, as they are crucial for scaling and logistical support.

There’s a lot of enthusiasm about what impact SMEs and start-ups can have on new capability development. However, in reality, this impact has not reached its potential. Based on discussions with UK and U.S. SMEs over the past year, there seem to be a number of common gripes:

• A lack of awareness about upcoming commercial opportunities
• A lack of understanding about how to engage with the Defence community
• The lexicon is confusing and tribal
• Leadership changes too often so relationships are short-lived
• Regulations are complex and certain security requirements are too restrictive

Regarding SME’s relationship with traditional defence industry, one core concern seems to be that of ‘innovation tourism’, where defence companies are unable to articulate their objectives relating to SME they seek to work with, and end up sampling technologies without fully embracing their potential and creating a more meaningful, long-lasting partnership.

The issue is primarily a cultural one. As aforementioned, an internal lack of experience or misgivings about partnering with a smaller technology developer can hinder effective partnerships. Return on investment might be difficult to predict, personalities or processes might clash or expectations might not be aligned. Crucially, then, senior decision-makers at departmental and company levels need to be fully prepared to get behind these projects and communicate internally that they are part and parcel of the innovation strategy itself - being prepared to collaborate, to take risk.

Finally, industry must empower someone internally to build up a network of SMEs, start ups and entrepreneurs and even provide opportunities for engagement workshops, mentoring, or even ‘defence 101s’. This could form part of a wider ‘horizon scanning’ role whereby new technologies, new companies etc. are monitored and, ideally, the company’s organisational structure will be agile enough to engage where appropriate. Information about ‘the market’ and the ‘tech space’ can be fed back to the company and help to shape and inform the evolving digital transformation/innovation strategy, and, armed with this information, companies can support government and the Armed Forces by providing useful insights into the innovation ecosystem, thereby being seen as the digitally-empowered technology leader they want and need to be.