Integrated Defence: A Lesson for CEOs

I was at an event last night led by some of the people behind the UK government's Strategic Defence Review. If you haven't read it yet, I urge you to do so. If you’re a CEO, you’re no longer outside the blast radius. You're in it.

The review redefines what war - and therefore operational risk - looks like. The battlefield is now hybrid: drones, cyberattacks, economic interference, supply chains, IP theft and AI-powered sabotage.

You need only to look to yesterday's story of China hoovering mines and Belgium stockpiling precious metals to understand global trade is at the forefront of economic war. To control someone's supply chain is easier than launching physical attacks.

The review aims to align the government narrative to the shift in warfare.

The CEO Lessons

There are three:

Firstly, the review is the first of its kind in 25 years. UK defence has been left to fester and the review defibrillates it into not only government strategy, but industry and society as whole.

It repositions defence as a national operating system, linking an updated, integrated military with industrial resilience, innovation and economic growth.

It's digital transformation, Jim, but not as we know it. The scale - if the vision is realised - could be the largest public-private partnership yet seen in the UK.

Secondly, this means larges waves of investment in innovation are to be expected from private and public sectors. Startups play an important part. City investors and private equity houses are currently being schooled by those behind the review in how they should plan.

There are opportunities to align with this agenda.

Thirdly, the review marks a cultural and operating model reset: peacetime cycles are over. The review calls for defence innovation to run on faster 'wartime timelines', delivered in months, not years. It calls for whole-of-society resilience, with private industry treated not as suppliers, but as strategic assets.

This will be not only something to learn from, but perhaps something you as a CEO can teach on. Here's why.

The Challenge

One of the toughest and most relatable challenges to CEOs posed by the review is in the third point - cultural change to drive a new operating model ... at speed.

As many of us know, the majority of digital transformations fail. What's become clearer is they fail when they don't include people or take account of the cultural environment - which often cannot change so leaders have to find new workarounds.

Failure to address this leads to succession of the siloes - precisely what the review aims to break. Ignoring culture is often attributed to traditional leadership styles - top-down, linear, hierarchical models that fail to balance emotional intelligence in the equation. This style of leadership has worked in the past for the military, but to de-silo it and connect it to industry will take a different approach.

From a cultural perspective, this will be very hard to achieve. How many times have you heard Peter Druker's "Culture eats strategy for breakfast." People-led transformations have a much higher rate of success, but traditionally leaders have felt these are too soft.

In this regard, business can teach defence exactly where transformations fail. They have lost vast amounts of time, billions of dollars and investor confidence over failed transformation and technology strategies that culture has rejected like an antibody to a virus.

The review is a brilliant piece of work. It's a much-needed focus for the UK to get around a common problem and solve it together. The big question is after so much time, whether government, MOD and business thinking can integrate at speed - not from a technology perspective, but a cultural one.

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The City CIO Club

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Have a great day

Dan

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