Defence

Feature

Changes in Defence

At the recent Senior Leadership Group (SLG) Summit, the Secretary and Chief of Defence Force (CDF) announced a series of initiatives, including changes to organisational structure, outcome–output structure, business processes and accountabilities, cultural change and renewal, and productivity. Martin Dunn and Janine Hall provide an overview of the proposed changes.

In order to understand the recommended changes for Defence, we should first look at the past. Prior to the Defence Efficiency Review (DER) in 1997, Defence was structured around eight programs, with the relevant resources to be able to report on each program. While the DER had several positive features, it also led to an increase in the number of groups. Since the DER, a number of efforts (such as the Kinnaird Review and the Flood Review) have been made to restructure but none has addressed the overall efficiency and effectiveness of Defence as an organisation. There is clearly a need to address how Defence operates broadly in order to make Defence a more responsive and better coordinated organisation.

During his speech at the SLG Summit, the Secretary of Defence, Ric Smith, gave an insight into his reasons for implementing change in Defence:

"In a sense, we're trying to wind back some of the inefficiency that's crept into our structure over a number of years. We also want to set ourselves up for a range of other enhancements; [from] the way our finances are allocated, to how our planning processes work, and of the culture within Defence, particularly in Canberra. At this stage, we've defined only the broad parameters of what we need to change. As is often the case, the devil will be in the detail and we'll have to do a good deal of further work to define that."

Why change?

Defence continues to be unwieldy despite the changes that have been occurring over the years since the reform process was introduced in the mid 1990s. The challenges that need to be addressed are the systemic issues that still occur in this very large and complex organisation.

"The aim is to improve the way we work," said Secretary of Defence, Ric Smith, at the SLG Summit this year. "We want to ensure that we are working in a more closely integrated way."

New structure

The most visible measures relate to structure to allow each Group to be accountable with its own leadership, reporting and administrative overheads and to be able to overcome the difficulties with accountability and lines of responsibility.

The main structural change will be to consolidate the Headquarters functions within a new entity, the Australian Defence Headquarters (ADHQ), which comprises:

• Joint Operations Command (JOC);
• Vice Chief of the Defence Force (VCDF);
• Strategy;
• Capability Development Group (CDG);
• Chief Finance Officer (CFO) Groups;
• Coordination and Public Affairs (CPA) Division; and
• policy areas of Defence Personnel Executive (DPE).

This change will eliminate the difficulties that have occurred with the erosion of a headquarters capability.

In addition there will be a consolidation of the Corporate Support functions within the Defence Support Group (DSG), which will comprise Corporate Services and Infrastructure Group (CSIG), Chief Information Officer (CIO) and the service delivery parts of DPE, including the Health Services Division. There will be some consolidation of corporate support functions within the two new groups.

A Defence Coordination Centre (DCC) is to be established within ADHQ to provide the following functions:

• integrating information from a variety of sources (media, intelligence, Parliament, Defence and whole of government) to be disseminated to Defence leadership;
• identifying issues that require reactive and proactive management.;
• identifying key issues – management stakeholders in Defence; and
• coordinating ADHQ and Defence-wide responses and acting as the conduit for agreed and authorised Defence responses to Government and the public domain.

Defence will thus reorganise into eight groups instead of the current 15 groups. These will consist of:

• ADHQ;
• Navy;
• Army;
• Air Force;
• DSG;
• Intelligence and Security;
• Defence Science and Technology Organisation (DSTO); and
• Defence Material Organisation (DMO) as a prescribed agency.

What next?

The new organisational structure will have three Outcomes and eight Output Groups, pending agreement by the Department of Finance and Administration. Such a structure better aligns internal and external accountabilities and addresses a number of practical problems with the present structure.

These organisational changes will provide an opportunity to establish clearer responsibilities and accountabilities, and to eliminate most of the complex attribution of cost that limits the utility of the current structure.

The first step towards overall change is, as outlined above, structural reform. The next steps will involve looking at cultural change and productivity across Defence. It must be recognised that changes to culture and productivity are important to support a more professional, integrated and innovative way of working.

In his address at the SLG Summit, the CDF said: "We are also looking at complementary changes to our business procedures. In broad they can be described as initiatives designed to promote Defence-wide perspective."

The changes are being developed currently, and will continue throughout 2006. Some aspects such as the DCC and DBIB will be in place before 1 July 2006. The structural changes will be implemented from 1 July 2006.

A more detailed description of the changes for Defence in 2006 can be found in Defgram 82/2006 and on the COSADHA/HCPA website.

Martin Dunn is Acting Assistant Secretary, Corporate Governance and Renewal Branch.

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