Adrian Holt is Head of Defence at Capita Consulting and a mentor to a range of start-ups. He is a retired Royal Air Force Officer having served for more than 24 years.
Capita is a consulting, digital services and software business, delivering innovative solutions and simplifying the connections between businesses and customers, governments and citizens. The company is one of our industry partners in the ISST Innovation Ecosystem.
The role of industry in the broad security and defence innovation ecosystem is a subject close to my heart. Throughout my career I’ve seen the good, the bad and the ugly when it comes to defence procurement, and I know that we can, and we must, do better.
The fact that over the past 10-15 years, something like a 25-year technology advantage in some areas had been squandered, suggests that the ugly has sometimes outweighed the good. I’m hoping that by encouraging this discussion as a community, we can identify the problems and find solutions.
So, what is the ‘bad’ or ‘ugly’, and what is the ‘ecosystem’?
I define the ecosystem as the sum of efforts of government, industry and start-ups contributing to defence and security, with academia playing an essential role feeding directly in to all three of these.
During my career in the RAF I was in the position of using, supporting or buying platforms, and as Stephen Covey said, “We see the world not as it is, but as we are”. So what does bad look like from my perspective? There are three points which I think were far from ideal:
- Highly complex and detailed project and capability plans which quickly become unmanageable.
Plans are of course essential, but in my career I have seen many become too complex, unmanageable, and unrealistic. This causes those in charge of delivering the plans to spend all of their time planning and not enough in delivering, so milestones inevitably get missed. I personally spent 18 months of a tour managing a plan that I knew was never going to get executed simply as it was too complicated and continually slipped because everyone was moving around trying to manage the plan rather than execute.
When the overly complex plans fail, we then end up in a situation where everyone is trying to hold everyone else accountable, whether that’s industry holding government to account or vice versa. It gets incredibly difficult adversarial and expensive to change anything, and we end up stuck with capability plans which are so long and enduring that the solutions are obsolete before even being delivered.
- Competition rules and commercial processes which allow the big players to catch-up at the expense of first mover innovators.
The glacial pace of procurement in defence means that a start-up that has an innovation on the shelf can be overtaken by industry primes in the time it takes to complete the commercial cycle. The primes can use the time to create an offer from scratch. Then their size, structure and experience allows them to navigate the bureaucracy and finance systems of the customer more efficiently, whereas start-ups often just don’t have the capacity for this.
- Barriers to design thinking.
Whilst this is not as obvious as the first two problems, this one I think is very important. Sometimes, industry tries to keep itself in between the start-up solution provider and the government client, probably to keep an eye on potential profit opportunities or increases in scope. I have personally seen this leave one start-up badly damaged when they were unable to fix delivery client problems due to them being contractually bound to only conduct work dictated by the prime. This reduced quality, increased cost reduced trust and irrevocably tarnished the start-up’s reputation.
A more beneficial relationship would be for the start-up and the end user to be working closely together at the front line, where the problem exists. It would be a much healthier relationship and would have benefited all parties in the long term.
Erosion of trust
Where these problems occur, they seem to arise from an erosion of trust which then necessitates bureaucratic and adversarial conditions in the complex and expensive procurement process. This isn’t the optimum situation for any party, but I’d argue that the start-ups and the people on the front line pay the largest price.
So what can we do about this?
I have seen some great examples of how we can overcome these challenges from my experience working with the jHub which I helped establish in late 2017.
The jHUb was the initiative of General Sir Christopher Deverell, created to help the then Joint Forces Command become more ambidextrous, that is able to explore new opportunities whilst simultaneously benefiting from the investments it had already made.
It was a radical departure from what I’d seen in a nearly quarter of a century through my career. A key objective of this was to become a better partner for start-ups. The idea was to help them understand how to work with government, to help government understand them and to help both parties over some of the hurdles.
jHUbs value proposition is to connect world-class technology and talent to users in the defence sector. They do this by funding and accelerating pilots, with successful ideas getting access to an innovation committee who can make strategic investment decisions. It reduces a lot of the burden from early-stage innovators.
But beyond this we tried to build a system to actively encourage early-stage businesses to work with Defence, by showing that we’d not only reduced the burden, but that we also understood the problems they’d face.
We didn’t get everything right but we did make a difference. Through a network of partners we managed to deliver 18 projects in our first 18 months, which was unheard of in traditional defence timelines.
New challenges and solutions
That being said, I still lost a number of deals with promising start-ups because they simply weren’t able to engage with government traditional procurement processes which are paperwork heavy, long and drawn out. New challenges emerged like how to help them over regulatory hurdles such as explosives handling, helping them through security clearance and getting them access to X listed facilities. Business support was also important; many start-ups don’t have the business experience to get themselves into shape to do business with entities of the scale and complexity of government.
So how do we fix the remainder? I personally think industry is front and centre in this.
First, we need to help start-ups navigate the Valley of Death by providing services that they find genuinely useful, such as business support, or resources to help them scale for when they do land a contract with government. We can provide them facilities or spaces in the right places, such as access to X-listed facilities if needed. We can help them in getting security clearance so that they can expand the types of contracts they can accept. We can provide them with connections to help them make more compelling offers on tenders.
We’re all in this together
Most importantly, we need to see that our fortunes are inextricably linked and recognise this in the agreements we make. We need to move towards mutually beneficial contracts between government, big business and start-ups and aim for win-win outcomes. It is no good if one party signs a contract which is financially beneficial for them in the short term at everyone else’s cost. It simply adds to the erosion of trust.
We also need to take more risk against the contracts we sign and be more agile in their delivery. We need to avoid adversarial adherence to unrealistic schedules.
We can consider leaving holes in our contracts so that either SMEs or Forces personnel can move into those spaces and they’re not so reliant on Primes. And if necessary, we should sometimes look to take the hit on margins to enable a deal to get done.
My hypothesis is that if we do all these things then we will gain mutual and collective benefit through the return business we get, and from the trust we’ve developed with the government and with start-ups.
Finally, we need to aim for genuine collaboration. I can’t think of a better example of that than the ISST Innovation Ecosystem. In a fast-moving world, it will be exceedingly rare to find the answer inside the room, and so new spaces and forums are needed. Even when we own the technology our clients need, we might be better off partnering with others to deliver it in the most beneficial way. And it’s through organisations like the ISST that we can enable this to happen.