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KPMG Event Summary (DND, CAF and Strategic Governance)

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Introduction:

In the first event of a four-​part series for the CDA Institute – in collaboration with KPMG – three panelists discussed the Department of National Defence, the Canadian Armed Forces, the joint-​headquarters linking the organizations and the strategic governance framework supporting this relationship. The event was held at KPMG offices in Ottawa and attended by 45 participants.

Responsibility versus Accountability

Throughout the event, continual emphasis was placed on the difference between Military responsibility and Public Service accountability. This was explained in its simplest form through the idea of a left-​brain, right-​brain analogy. The left-​brain (Deputy Minister) works as an analytical force, examining decisions through the public policy framework which can sometimes lead to frictions concerning the option-​space available to meet military imperatives, while the right-​brain (Chief of the Defence Staff or CDS) works as a creative/​intuitive force which can occasionally lead to frictions concerning military options and capabilities that work within the political and policy imperatives. The offices of the Minister, Deputy Minister and CDS, supported by the VCDS – as well as the individuals executing those roles as it relates to the integration of defence – need to complement each other for the business of defence to be successful.

The Deputy Minister, for example, has statutory accountabilities which provide clear imperatives for the effective and responsible execution of the DM office. Even with appropriate delegation instruments in place to support efficient functioning with the complex organization known as Defence, these accountabilities remain regardless of the internal hierarchy. A lack of respect for this accountability, even unintentional, reduces the effectiveness of the organization and in extremis, can act to trigger explicit “red lines” and a serious breakdown in trust. The same is the case for the CDS, who has sole responsibility for the provision of military advice, compromise of which would again represent a breakdown of trust and the close relationship necessary for the effective functioning of Defence. A further complicating factor is the fact that the Minister, unlike the US counterpart, has several non-​Defence related responsibilities that reduces the time and attention that he/​she may devote to the Department and the CAF. This places significant pressure on the MND, DM and CDS for a healthy, functioning relationship as a team, understanding their roles or ‘lanes’ to function effectively based on their respective expertise. Throughout the discussion, emphasis was placed on the understanding and respect for the significant contribution the CDS makes in the advice and decision options that are developed for consideration by the MND and the Government, especially concerning deployed operations. The military advice of the senior serving officer is based on the CAF reputation of operational excellence as well as an understanding that it is the CAF that first must bear the consequences of deployments and must be respected as such when provided.

Ultimately the accountabilities of the Deputy Minister and the responsibilities of the Chief of Defence Staff are hard to achieve without the respect and trust from the other. Doing business independently not only dilutes the effectiveness of each organization, but it also works against the principle of an integrated headquarters.

Strategic Governance

An effective National Defence Headquarters is maintained by key leaders working collegially while respecting each other’s responsibilities. This was the theme echoed whenever communication within or between departments came into play. Strategic governance and the communication down into the organization is critical to its ongoing success, yet this is only possible among an open and transparent relationship between the Minister of Defence, CDS, and Deputy Minister. Potential for orienting the institution better comes from the Minister, the CDS and DM being able to connect on important strategic business decisions under consideration by government.

Ultimately, the organizational accountabilities, responsibilities and mechanisms for strategic governance are shaped to a degree by the personalities of the individual office holders. Consequently, the three principals need to ensure that the Defence structure that doesn’t necessarily fall hostage to their personalities, but is designed to be flexible enough to account for themselves and their successors. Accordingly, the vehicles in which information is shared must be built on the understanding of the accountabilities and responsibilities of these principals. They must also be seen and respected throughout the Defence organization to foster an environment in which cohesion becomes a norm throughout the joint headquarters. Through design flaw, individual personalities or an incomplete understanding within the organization, there is the danger that key critical players are not well informed on issues that touch their accountabilities or responsibilities, delegated or otherwise. Given that the lives of Canadians men and women deployed hang in the balance, confidence that there is a mutual trust and respect for each other’s roles and the way their duties are executed is of paramount importance.

Procurement

During discussion of related topics which could serve as an example to the difficulty of strategic governance in the DND and CAF, procurement and its current issues were a noticeably recurring theme. For several years, despite major changes which have occurred within the procurement domain, there appears to be a genuine lack of public confidence in the effectiveness and efficiencies of the institutions implicated in major military procurements. It was opined that part of the problem may well stem from a relatively low level of understanding of what is a complex environment and how best to navigate through this environment, even within the DND/​CAF community. An example of the difficulty of defence procurement is the level to which cost certainty is expected despite pressures from economic, technological and industrial uncertainties normally spanning several years, if not decades before a capability is brought to fruition.

How to Make Improvements

A notable feature from each speaker’s concluding statements focused on advice to fix major problems associated with strategic governance within the DND and CAF. Ultimately, the governing space within the integrated headquarters is complex; sustained effect and success will only come from more active care within this space. Beyond this active and explicit care, two elements were brought to the table to assist in managing defence: policy foundation and more predictable funding.

In terms of policy foundation – beyond the fact that the Defence Policy Review had yet to be completed and made public, the critical issues to be addressed must be strategic, more so now than had been the case in previous defence policies or statements. Rather than focusing on equipment, it was suggested that a focus on the expectations for performance (Do what? How long? How often? To what effect?) were more appropriate to shaping a more useful response on options for force development, composition and capabilities along with the institutions to support these options.

Regarding public funding, there was a clear sense that a more long-​term and stable method of designating spending for DND was required. The current system of military funding could not be considered efficient or effective given the length of time required for major procurements and the uncertainties that prevail in many domains. In this regard, there was a body of discussion that favored budget planning not based on the annual budget cycle or even the length of parliamentary mandates, but instead on a 35-year cycle. This, buttressed by an enhanced defence research capability, would make for the development of required future capabilities more realistic and credible.

Introduction:

In the first event of a four-​part series for the CDA Institute – in collaboration with KPMG – three panelists discussed the Department of National Defence, the Canadian Armed Forces, the joint-​headquarters linking the organizations and the strategic governance framework supporting this relationship. The event was held at KPMG offices in Ottawa and attended by 45 participants.

Responsibility versus Accountability

Throughout the event, continual emphasis was placed on the difference between Military responsibility and Public Service accountability. This was explained in its simplest form through the idea of a left-​brain, right-​brain analogy. The left-​brain (Deputy Minister) works as an analytical force, examining decisions through the public policy framework which can sometimes lead to frictions concerning the option-​space available to meet military imperatives, while the right-​brain (Chief of the Defence Staff or CDS) works as a creative/​intuitive force which can occasionally lead to frictions concerning military options and capabilities that work within the political and policy imperatives. The offices of the Minister, Deputy Minister and CDS, supported by the VCDS – as well as the individuals executing those roles as it relates to the integration of defence – need to complement each other for the business of defence to be successful.

The Deputy Minister, for example, has statutory accountabilities which provide clear imperatives for the effective and responsible execution of the DM office. Even with appropriate delegation instruments in place to support efficient functioning with the complex organization known as Defence, these accountabilities remain regardless of the internal hierarchy. A lack of respect for this accountability, even unintentional, reduces the effectiveness of the organization and in extremis, can act to trigger explicit “red lines” and a serious breakdown in trust. The same is the case for the CDS, who has sole responsibility for the provision of military advice, compromise of which would again represent a breakdown of trust and the close relationship necessary for the effective functioning of Defence. A further complicating factor is the fact that the Minister, unlike the US counterpart, has several non-​Defence related responsibilities that reduces the time and attention that he/​she may devote to the Department and the CAF. This places significant pressure on the MND, DM and CDS for a healthy, functioning relationship as a team, understanding their roles or ‘lanes’ to function effectively based on their respective expertise. Throughout the discussion, emphasis was placed on the understanding and respect for the significant contribution the CDS makes in the advice and decision options that are developed for consideration by the MND and the Government, especially concerning deployed operations. The military advice of the senior serving officer is based on the CAF reputation of operational excellence as well as an understanding that it is the CAF that first must bear the consequences of deployments and must be respected as such when provided.

Ultimately the accountabilities of the Deputy Minister and the responsibilities of the Chief of Defence Staff are hard to achieve without the respect and trust from the other. Doing business independently not only dilutes the effectiveness of each organization, but it also works against the principle of an integrated headquarters.

Strategic Governance

An effective National Defence Headquarters is maintained by key leaders working collegially while respecting each other’s responsibilities. This was the theme echoed whenever communication within or between departments came into play. Strategic governance and the communication down into the organization is critical to its ongoing success, yet this is only possible among an open and transparent relationship between the Minister of Defence, CDS, and Deputy Minister. Potential for orienting the institution better comes from the Minister, the CDS and DM being able to connect on important strategic business decisions under consideration by government.

Ultimately, the organizational accountabilities, responsibilities and mechanisms for strategic governance are shaped to a degree by the personalities of the individual office holders. Consequently, the three principals need to ensure that the Defence structure that doesn’t necessarily fall hostage to their personalities, but is designed to be flexible enough to account for themselves and their successors. Accordingly, the vehicles in which information is shared must be built on the understanding of the accountabilities and responsibilities of these principals. They must also be seen and respected throughout the Defence organization to foster an environment in which cohesion becomes a norm throughout the joint headquarters. Through design flaw, individual personalities or an incomplete understanding within the organization, there is the danger that key critical players are not well informed on issues that touch their accountabilities or responsibilities, delegated or otherwise. Given that the lives of Canadians men and women deployed hang in the balance, confidence that there is a mutual trust and respect for each other’s roles and the way their duties are executed is of paramount importance.

Procurement

During discussion of related topics which could serve as an example to the difficulty of strategic governance in the DND and CAF, procurement and its current issues were a noticeably recurring theme. For several years, despite major changes which have occurred within the procurement domain, there appears to be a genuine lack of public confidence in the effectiveness and efficiencies of the institutions implicated in major military procurements. It was opined that part of the problem may well stem from a relatively low level of understanding of what is a complex environment and how best to navigate through this environment, even within the DND/​CAF community. An example of the difficulty of defence procurement is the level to which cost certainty is expected despite pressures from economic, technological and industrial uncertainties normally spanning several years, if not decades before a capability is brought to fruition.

How to Make Improvements

A notable feature from each speaker’s concluding statements focused on advice to fix major problems associated with strategic governance within the DND and CAF. Ultimately, the governing space within the integrated headquarters is complex; sustained effect and success will only come from more active care within this space. Beyond this active and explicit care, two elements were brought to the table to assist in managing defence: policy foundation and more predictable funding.

In terms of policy foundation – beyond the fact that the Defence Policy Review had yet to be completed and made public, the critical issues to be addressed must be strategic, more so now than had been the case in previous defence policies or statements. Rather than focusing on equipment, it was suggested that a focus on the expectations for performance (Do what? How long? How often? To what effect?) were more appropriate to shaping a more useful response on options for force development, composition and capabilities along with the institutions to support these options.

Regarding public funding, there was a clear sense that a more long-​term and stable method of designating spending for DND was required. The current system of military funding could not be considered efficient or effective given the length of time required for major procurements and the uncertainties that prevail in many domains. In this regard, there was a body of discussion that favored budget planning not based on the annual budget cycle or even the length of parliamentary mandates, but instead on a 35-year cycle. This, buttressed by an enhanced defence research capability, would make for the development of required future capabilities more realistic and credible.

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