Strategy and Innovation – the US Military approach

Recently, I learnt more about the strategic and innovation arm of the US Military,  the Defence Advanced Research Projects Agency (DARPA), (http://www.darpa.mil/) as I was reading through some articles and books on strategy to understand how different organisations approach strategy.

 Introduction

Putting aside the political and moral debate and discussions around whether one thinks the United States military does more good or harm, we must acknowledge the fact that they are an excellently run organisation with the logistical, operational and strategic frameworks that have kept them in peak condition. DARPA (founded in 1958) is an important component and arm of the United States military. Its stated aims are to achieve radical technological innovation to support national security.

DARPA’s original mission, inspired by the Soviet Union beating the United States into space with Sputnik, was to prevent technological surprise. This mission has evolved over time. Today, DARPA’s mission is all about, “Creating and Preventing Strategic Surprise.”

 

Some of the things which the DARPA has been responsible for:

  • ballistic missile defence
  • stealth technology
  • GPS (which was preceded by a DARPA system called ‘Transit’)
  • speech recognition
  • the Internet
  • unmanned land and air vehicles and nanotechnology.
  • the M-16

In short, the DARPA has been responsible for some of the most fundamental technological and innovative changes the world has seen in the modern era.

 

The challenge which DARPA sets out to solve through their strategy:

“A basic challenge for any military research organization is matching military problems with technological opportunities, including the new operational concepts those technologies make possible. Parts of this challenge are extremely difficult because: (1) some military problems have no easy or obvious technical solutions; and (2) some emerging technologies may have far-reaching military consequences that are still unclear. DARPA focuses its investments on this “DARPA-hard” niche – a set of technical challenges that, if solved, will be of enormous benefit to U.S. national security, even if the risk of technical failure is high.”

 

How DARPA solves this challenge

To attack this challenge, DARPA focuses on projects the military services see as too risky or too removed from their current missions. It tries to imagine what commanders will want in the future rather than what they are calling for today, but it restricts the work to that conducted by very talented people with good ideas.

DARPA’s strategy is more than a general direction. It includes specific policies that guide its everyday actions.

For example, to maintain an entrepreneurial atmosphere and the flow of new ideas, DARPA hires program managers for only 4 to 6 years because the best way to foster new ideas is to bring in new people with fresh outlooks. This also prevents empire building and ensures that people remain focused on innovation. Furthermore, since program managers are not at DARPA for a career, they are willing to pursue high-risk technical ideas even if there is a reasonable chance the idea will fail. Essentially, the downside to their careers as a result of an innovative idea that did not work out remains limited while the upside remains unrestrained! This model also ensures that new program managers will be willing to challenge the idea and work of predecessors.  

Furthermore, DARPA has a very limited investment in overhead and physical facilities to prevent entrenched interests from thwarting progress in new directions. These policies helped to address the impediments to innovation and helps remove self-interests and prevents legacy effects on projects.

 

Why DARPA works as a concept

DARPA’s business processes reflect this in a straightforward way: bring in expert, entrepreneurial program managers; empower them; protect them from red tape; and quickly make decisions about starting, continuing, or stopping research projects.

DARPA’s decision-making process is informal, flexible, and yet highly effective because it focuses on making decisions on specific technical proposals based on the factors discussed above.

There are two reasons for this. DARPA is a small, flat organization rich in military technological expertise. There is just one porous management layer (the Office Directors) between the program managers and the Director. With about 120 technical personnel, it is easy to make decisions. This management style is essential to keeping DARPA entrepreneurial, flexible and bold.

DARPA’s management philosophy is to pursue fast, flexible, and informal cycles of “think, propose, discuss, decide, and revise.” This approach may not be possible for most larger government agencies, but it has worked well for DARPA.

 

How DARPA identifies projects or programmes to work on:

 DARPA achieves this through a number of ways and channels:

  • Specific assignments from the Secretary of Defense or relevant directors within DARPA
  • Requests for help from the Service Secretaries and Chiefs, Joint Staff, and military commanders;
  • Discussions with senior military leaders on “What are the things that keep you awake at night?”;
  • Research into recent military operations to find situations where U.S. forces have limited capabilities and few good ideas;
  • Discussions with various US government, defence and intelligence agencies including the CIA and the NSA;
  • Visits to US Army exercises or experiments.

 

How DARPA decides whether a programme is the right one

DARPA’s projects are often guided by a series of simple questions to provide a ‘sense-check’ as to whether the projects and delivery is indeed the right one. These questions include:

  • What is the program trying to do?
  • How is it done now and what are the limitations?
  • What is truly novel in the approach that will remove those limitations and improve performance? By how much?
  • If successful, what difference will it make?
  • What are the interim technical milestones required to prove the hypothesis?
  • What is the transition strategy?
  • How much will it cost?
  • Are the programmatic details clear?

 

Conclusion 

Some of the ideas highlighted above may seem basic and simple, but simple ideas done right are what leave lasting changes on the world. It also gives us a clue into how organisations should consider their strategic thinking and processes as they evolve into much larger organisations. As small organisations who are leaders in innovation grow, they become large and complete and in the process lose the spirit of creativity and entrepreneurship which made them what they were.

Apple and Steve Job’s first great revival

We often hear of the brilliance of Steve Jobs as he developed the iPod and then the iPhone and iPads, but little mention is made of his turnaround of Apple back in the late 90s. This coincided with the rise of the dominance of Windows.

Many commentators even suggested that Apple should allow themselves to be bought over by IBM, Motorola, Sony or HP!

In 1997, Apple was tottering down the path towards bankruptcy. This was when Steve Jobs took over as CEO again but investors were still bearish about Apple’s chances of any real transformation and were pressing for them to present themselves as attractive targets to IBM or Sony (in the event the IBM move had anti-competitive issues and challenges from the US regulators).

So what did Jobs do?

Secure immediate financing

The genius of Steve was to talk Bill Gates into providing US$150 million to pump some much needed liquidity back into Apple’s operations. He did this by showing Apple’s non-threatening position (at the time) to Microsoft and also explain to them how Apple’s survival will help Microsoft’s battles with the Department of Justice on an monopoly-charge.

Cut the product range and scale back Apple’s inventory

He removed the printer and peripherals department and also cut the number of desktop models (from fifteen to just one). He also reduced the scale of software development and engineering. He also shifted the manufacturing (of a much leaner product range and line) to Taiwan and cut inventory by 80%.

Control product distribution

He also cut over 80% of his existing national retailers and also focused on selling directly to customers through an enhanced website. He later did the same with applications and software through the App Store. The idea was simple – sell a simpler product range through a simpler range of outlets / retailers.

Take things one major leap at a time

Initially, all Jobs wanted to do was to ensure the survival (or going concern) of Apple. Sell a simplified product range through a limited range of sales outlets (both Apple’s Website and the limited retailers). He felt this would help apply pressure on the cash bleed that Apple was suffering from.

Once that was secured, he fixed his OS and had the Mac G3s. He waited before he decided to push on with the revolutionizing how people listened to music through the iPod and iTunes.

He then waited again before embarking on the iPhone and taking on the existing big boys of Nokia, BlackBerry, Sony, Motorola etc and redefined the phone industry.

Next came the iPad and the buttressing of the App Store. This redefined how people bought apps, both for portable devices as well as their laptops and desktops.

 

What did this mean for Apple and Steve Jobs?

Jobs focused on the most pressing matters of the day when he took over: survival. Once Apple’s survival was guaranteed, he then reached out to a niche market of fashionable consumers who became his strongest brand advocates. From there, he launched one big thing after another. This transformed the world of computing and personal electronics.

This is meant to be a very brief overview of how Apple took the steps needed to first survive and then subsequently thrive and then flourish in the technology world! Hope it is helpful!