Wednesday, May 30, 2012

Lessons for Business from Defense & Security Planning.. (1/2)

This is a two part topic. In first part we explore the underlying similarity in a business environment and a nation's Defense and Security environment. Then we look at evolution in Defense & Security Planning and understand Capabilities based planning approach. 

The application of Capabilities based planning in business environment will be dealt in second post on the same topic.


The business environment has become more dynamic and unpredictable with time. Some would claim that the complexity is increasing exponentially. Planning is a big challenge in such a rapidly changing and volatile environment. The starting point of conventional corporate planning is directed towards specific threats emanating from a competitor, substitute product etc. or directed with a specific objective to capture a given market share or enter new segment. But rapid changes in external conditions like govt. policy, regulations, consumer behavior, social turmoil, economic turmoil, vagaries of nature etc., often render even the best-laid plans ineffective. Maybe its time to rethink the current Paradigm of our approach to planning.

In search for new paradigms, let’s shift our focus from business to other areas which share the same unpredictability and dynamism. One such area is that of national defense and security which comprise of military, homeland security, intelligence etc. This is an area, different from business world but with far more uncertainty, sudden changes and perils. Hence, defense planning is a good candidate to search for new paradigms.

Evolution in Defense & Security Planning

Defense strategy and planning itself has evolved over time.  Earlier, defense planning was threat based. The threat could be a specific nation or specific terrorist organization or a specific channel (air, sea or water). With time, defense environment has become complex, the variables and volatility has increased manifold. Lack of and asymmetric intelligence adds further complexity. A country can no longer predict with confidence the source, time and extent of the threats. Threats can emanate from a change of government in other countries, from social tensions which fuel terrorism, shifting alliances, conflict over resources, new weapons development etc. 9/11 is a typical example of such unpredictable threat which led to a totally new approach to defense planning called capability based planning. 

Capability Based Planning for Defense & Security

Under capability based planning, the focus is not on identifying the threats but building capabilities to respond to any threat. This marks a tectonic shift in defense planning where uncertainty has been acknowledged as the fundamental driver. And best way to address uncertainty is to build on-demand, flexible, adaptable and robust capabilities which can generate a speedy and appropriate response in face of a threat. The key part of planning process is to identify various scenarios of attack. It doesn’t matter who attacks. What matters is how you may be attacked; by crippling your food supply, by attacking the energy supply, by online virus, by a proxy war etc.. These scenarios are analyzed and actions are listed that need to be taken to neutralize them. The actions are prioritized which is followed by identification of capabilities and their levels required to perform those actions. The identified capabilities and their levels have to be further studied in terms of investment requirement. This is a sort of portfolio management of capabilities which is required in face of limited resources that a nation has for investment in defense.

Applying Capability Based Planning to Business World

This would be covered in next post. So stay tuned....

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