sou · GZB321 · 2011-03-08 00:00:00 — The absence of this capability can have catastrophic consequences. Inability to Identify and Manage Strategic and Operational Risk: This involves the lack of an institutional process for identifying and managing important risks to the institution, its strategy and its stakeholders. The term risks refers here to the set of pri- marily internal issues that may compromise the ability of the organization to achieve its mission. They are distinct from the strategic shocks discussed above, which refer to major poten- tial events in the external operating environment.12 Risks can include everything from process weaknesses related to the security of IT systems (such as those that made Wikileaks possible notwithstanding massive security investments) to the insufficient hiring of staff with specific language skills likely to be needed in the future. In the private sector, risk management processes are considered central to the leaderships fulfillment of its fiduciary responsibility to stakeholders. In government, it should be given the same level of importance. Inability to Capture, Integrate and Synthesize Organization-wide Knowledge: Diplomacy is a human-driven and knowledge-inten- sive enterprise. Given the global experience, presence and social networks of diplomats, the knowledge resources of MFAs are of significant value even in the context of the global revolution in the availability of knowledge and information. The contexts in which diplomats operate and the observations their training and experience make possible provide a potentially invaluable repository of knowledge not available via open source channels. However, the actual value of this knowledge is greatly limited 11For example, the outbreak of war on the Korean peninsula, the collapse of the regime in , a global flu pandemic, etc. 12The two domains are often closely linked, as in the case of Wikileaks, and therefore should be managed on an integrated basis. by the inability of most MFAs to capture, integrate and make it available. In the current and emerging global operating environ- ment, this weakness represents a growing threat to the very relevance of diplomatic institutions because the insight of relatively isolated individuals, not matter how brilliant, is increasingly trumped by real-time collaboration and the power of collective intelligence. The linkages connecting apparently unrelated issues are becoming increasingly important strate- gically. As a result, the value of a global organizations knowledge is greatly determined by the degree to which it is integrated and accessible for unified analysis. It is no longer sufficient to have brilliant, knowledgeable diplomats around the world without a flexible means of unifying and analyzing that knowledge and making it available to each diplomat wherever they are in real time. Weak Institutional Capacity for Collaborative Planning with : There is a striking lack of innovative, collaborative strategic culture connecting MFAs to each other and to the increasingly important universe of non-state actors. Even multi- lateral institutions, notwithstanding the intrinsically collabora- tive nature of their mandate, too often limit their work to only the most traditional forms of collective decision-making and strategy design. To a large extent, this weakness derives from valid but manageable concerns regarding control and secrecy, and a lack of expertise and experience in applying best practice techniques of collaborative planning (e.g., scenario-based plan- ning, joint solutions experimentation, contingency response rehearsals, etc.) to issues that are over the immediate horizon. Unlike many leading military organizations, which have long convened creative, anticipatory planning and experimentation activities that bring together various coalition partners, MFAs historically have been lacking in this regard. The result is that the global community of states is spending much more time jointly rehearsing for military contingencies (as is absolutely critical) than it is collaboratively and proactively working to anticipate and prevent conflict using these powerful techniques. This same weakness limits the ability of MFAs to engage non- state actors. Their proliferation and growing power has added tremendous complexity to the increasingly central diplomatic challenge of orchestrating the achievement of desired results in Nevertheless, there do not appear to have been significant investments in the ability of MFAs to convene and collaborate with these actors proactively either in the field or at home to cultivate strategic alignment, effective burden-sharing or policy innovation. Insufficiently Actionable Clarity of Strategic Intent: This refers to the gap between having a policy and having a strategy – with the clear priorities for action and investment implicit in the latter. This weakness derives from the fact that while all MFAs have a specified foreign policy, and many have documented high-level strategic objectives, few have translated those into a set of detailed, realistic, prioritized goals and objectives in terms of specific desired outcomes or clear, detailed guidance down to the level of diplomats in the field. The result is a clear incentive for diplomats to either invent their own strategy or – more com- monly – to adopt a defensive and reactive approach, responding to events as they emerge with insufficient clarity regarding what they should be advancing. Just as important, not having a significant degree of documented strategic clarity makes it difficult to align the resources and efforts of partner organizations – whether from within or outside the government. Absence of Rigorous Decision Support Capabilities: Many diplo- matic organizations lack an institutionalized process for pro- decision information to senior policy-makers that is independent and analytically rigorous. The decision support processes in MFA's often feature an excessive reliance on ana- lytical resources with partisan interests in a given issue and few standing mechanisms for getting an informed second opinion. They also often lack comprehensive consideration of impli- cations in all relevant areas. There is also often an absence of any systematic process for testing strategies and concepts. For senior leaders, the absence of such a multi-perspective, multi-technique process is a dangerous liability. It is often approximated by having a talented inner circle and supporting staff. But the lack of a rigorous, institutionalized decision support capability leaves the decision process vulnerable to myriad biases, blindspots and arbitrary influences. Inability to Prioritize Comprehensively and : Much resource planning in government agencies is focused primarily on a given years budget increment or – more likely today – decrement. Government institutions rarely con- sider their entire portfolio of investments and resource streams in terms of strategic value. The result is a shallowing out of stra- tegic discretion and the reinforcement of barriers to deep change. The incapacity for prioritization and comprehensive assessment is a fundamental weakness, particularly in times of budgetary austerity, because it makes optimal budget cuts difficult to exe- cute. As a result, too often wholesale budget cuts are applied across an entire institution without regard to the impact on per- formance. Lack of a Capabilities-Based Planning Capacity: The foreign policy options available at every given moment are funda- mentally constrained or enabled by the institutional capabilities or tools that are in place to support them. Capabilities, in this sense, include everything from language skills, secure com- munication technologies, and embassy compounds to domain- specific technical expertise, pre-staged crisis response partner- ships and rapidly deployable micro-embassies. Understanding ones portfolio of capabilities and evolving that portfolio based on future-driven requirements is an institutional discipline that requires long-term commitment. Military organizations have perennially required these processes because technological deve- lopments have always been a primary driver of competitive advantage in the military domain. This required military plan- ners to think systematically about what capabilities they might need in their toolkit to be prepared for the full range of possible future circumstances including the capabilities of their adversaries. The tools of diplomacy, on the other hand, remain- ed fairly stable for centuries. Now, for many reasons including the fact that technological advance has transformed the domains of knowledge and influence, diplomatic institutions must become just as adept at thinking and planning in terms of capabilities as their military counterparts. Thus far, most have not. Lack of Standing Processes for Driving Whole-of-Government Alignment: Strategic coordination of foreign policy design and execution across multiple ministries or departments is most commonly the responsibility of the MFA given its unique res- ponsibility for the totality of the states global interests. Within any given mission/embassy, the strength and effectiveness of this coordination is often primarily a function of the ability of the Ambassador. What is lacking in many MFAs, both at head- quarters and in the field, is a strategic management process that can integrate the input of other ministries to create truly uni- fied, whole-of-government approaches to foreign policy issues. In a global environment in which policy challenges are increas- ingly and intrinsically interdisciplinary,13 it is vital to be able not only to coordinate across ministries, but to integrate effort and resource streams and draw deeply from diverse pools of technical expertise in unified and innovative ways. However, in many MFAs, mature institutional capacity and clear lines of authority for doing so simply do not exist. Weak Linkages Between Goals and Resources: Many organiza- tions require their units to indicate how the components of their budget link to a strategic goal framework, but they rarely require actual analysis and planning to determine what resources are needed to accomplish a given objective. This allows budgets to be presented abstractly in terms of strategic goals, but does not drive strategic budgeting – starting with what needs to be accomplished and then identifying the resources needed to do so. This results in at least three problems. First, it makes it very difficult for leaders to make large-scale trade-offs between stra- tegic priorities based on their respective resource requirements. Second, it provides no means of systematically identifying streams of expenditure that are no longer serving a valuable pur- pose. Third, it does not force those responsible for executing a given strategy to do the rigorous analysis necessary to deter- mine the level of resources they need to accomplish a certain level of performance. 13 The most obvious example is climate change policy, which plays out at the intersection of foreign, environmental, energy and security policy. Inadequate Results-Based Performance Measurement and Accountability: Diplomatic outcomes are notoriously difficult to measure. Nevertheless, this has led too often to the abandon- ment of any rigorous effort to measure outcomes and assign corresponding accountability for results. The lack of effective performance measurement and accountability significantly weakens the ability of any organization to improve perform- ance, reward and reinvest in excellence, and refine strategy. Capacity in the Field: Diplo- macy is a fundamentally distributed enterprise. Its strategic management requires a process that is both top-down and bottom-up. The bottom-up dimension in the field (at the regional or mission level as appropriate) requires capacity in the form of dedicated time, training and access to expertise in stra- tegy development. Insufficient capacity in the field forces already overloaded diplomats to take on an additional responsi- bility for which they have generally not been trained and for which meaningful time is rarely available. The result is often weak plans at the regional and/or mission levels – created hastily and without effective processes or supporting analysis. In addi- tion, this lack of effective distributed strategic management capacity severely limits execution and follow-through on the ground. In this way, it represents for the Foreign Minister a direct loss of strategic and operational control. Inconsistent Ability to Requests: One of the most important and widely acknowledged results of the relative weakness of many MFA strategic planning processes is that it makes it difficult to develop compelling, ana- lytically grounded business cases for additional investment. In some countries, the process by which the MFA makes a budget request is almost entirely internal to the government. In others, it involves significant direct interaction with the legislative branch. But in all cases, the for securing new resources for essential purposes hinges fundamentally on the ability: a) to demonstrate that all dimensions of the requested investment have been analyzed and compared to alternatives; b) to present a rigorous, realistic plan that maximizes the likelihood of accomp- lishing the intended objective; and, c) to make it possible for decision-makers to track progress and recalibrate effort as needed. This is another discipline at which military organiza- tions excel for a host of reasons and at which diplomatic institutions are notoriously weak. That there is often a cor- responding divergence in resource availability is therefore not surprising. These weaknesses and capability gaps by no means can be said to apply to all MFAs and are not included here based on analysis of the planning processes within the Swedish MFA. Instead, the list represents a set of common issues that have emerged from inter- views and work with various MFAs over a number of years. To the extent they do apply, however, they result in a significant diminish- ment of the potential effectiveness of diplomatic institutions. In particular, they naturally lead to: An Event-Driven Orientation: A predominantly tactical and reactive rather than proactive approach to policy development and diplomatic action Unpreparedness: A need to reinvent the wheel at the begin- ning of each new, unanticipated crisis Lost Leverage and Opportunities: A tendency to focus on threats to the exclusion of opportunities and difficulty in accessing the knowledge of the entire organization and the distributed net- work of partners to identify all potential sources of leverage Confusion in the Field: Insufficiently precise strategic clarity empowerment and independent action Accelerating Obsolescence of Capabilities: A portfolio of insti- tutional instruments that often lags current best practice standards by several generations Weakened Impact: Challenges in concentrating effort and investment to achieve decisive, enduring results caused by an insufficient institutional ability to prioritize strategically and the absence of strong, inclusive processes for joint planning and collaboration Chronic Underfunding and Understaffing: An insufficient ability to make persuasive cases for resources Worst of all, the nature of this particular nexus of problems is that it multiplies over time. As less and less attention is paid to long- range issues and long-term investments, the planning functions responsible for those aspects of foreign policy become progress- ively weaker and less influential – ultimately becoming primarily a bureaucratic box to be checked. The result can be an institution in which major decisions about strategy and investment are often solely the outcome of internal bureaucratic competition14 to the exclusion of an intelligent, independent and continuous assessment of what is the best long-term interest of the country considering all possible courses of action. The ultimate consequence for statecraft is diminished effectiveness, efficiency and influence. V.Building an Engine of Strategic Anticipation, Prioritization and Execution: Given the array of weaknesses just discussed and their conse- quences, what should be done? First, despite the importance of these systemic weaknesses, the guiding intent for creating an effective strategic management process should not be simply to address current failings. The design should be driven instead by the objective of a creating a truly transformative, even disruptive stra- tegic capacity. Well-designed institutional machinery can be a powerful source of strategic advantage. For diplomatic institutions, the capabilities proposed here represent a potential force multi- plier – strengthening their ability to anticipate and understand change, align effort and investment, and generate innovative approaches both to addressing the issues at hand and to advancing the long-term interests of the state. To realize this potential, these capabilities must be forged into a practical, day-to-day process – not an internal think-tank or speechwriting shop. The process must directly address the undeniable centrality of events dear boy15 in the practice of statecraft by maximizing preparedness for such events on a rigorously prioritized basis, even as it supports the ongoing design and execution of the states grand strategy. Designed with this forward-oriented intent, the process can become an engine of improved performance, foreign policy innovation, institutional evo- 14This competition is of course necessary and healthy to an extent, but invariably benefits from strong supporting processes. 15Per famous reply to the question of what represented the greatest challenge for a statesman. lution and ultimately of enhanced national adaptability with respect to the global forces of change. Creating this process does not require a massive effort or investment. In many cases, it involves refining capacities that are already in place. Many of the required raw materials, particularly in terms of intellectual talent and global networks of relationships, are present in abundance within most diplomatic institutions. What is required is first to build a set of core capabilities, and second to link them together in a process that is minimally burdensome and maximally relevant to actual decisions. The required capabilities can be framed in terms of 4 broad categories: 1.Anticipation, Orientation and Preparedness 3.Prioritized Direction Setting and Decision Support 4.Alignment and Assessment of Action and Investment In their integrated form, these categories represent a continuous cycle of analysis, action and learning. This adaptive cycle begins and ends with awareness – first of the operating environment and the long-term interests of citizens within it, and finally of the out- comes of specific policy approaches and the ways in which they can be improved. The first two layers of the process create a founda- tion of both anticipatory and immediate, real-time knowledge. The third layer institutionalizes the process of translating this know- ledge into effective decision-making and priority-setting. Finally, in the fourth layer, the process extends to drive aligned execution and ensure follow-through on the decisions taken. Crucially, the fourth layer also includes the feedback loop allowing the insti- tution to assess and learn from the results of the actions taken systematically. These linkages from the foresight and knowledge management processes to the core decision and execution pro- cesses of the organization are crucial to the ultimate value of the whole. The following sections outline the baseline components of each of these overarching categories. Taken together, they are intended to represent in effect a checklist16 of the planning capabilities that a 21st century diplomatic institution requires to be effective in the current and emerging global operating environment. 16 For a treatment of the remarkable power of checklists, see Atul Gawandes recent book entitled The Checklist Manifesto: How to Get Things . Capability Category 1: Anticipation, Orientation and Prepared- ness The purpose of the capabilities in this category is to maximize the extent to which the decisions of leadership are informed by priori- tized awareness of the current and future and operating environ- ment and the long-term interests of citizens in that environment. They are centered on providing specifically future-driven insight into both opportunities and threats – as well as the evolving national interest. Their common premise is that while the future cannot be predicted, its uncertainty can and must be analytically managed – even leveraged where possible. As argued in a recent essay regarding the popular revolt in , the very essence of rigorous strategic thinking is to devise such...scenario[s] and to think through the best responses to them, preferably two or three moves ahead of actual or potential adver- saries. It is only by doing these thingsranking priorities and gaming scenariosthat a coherent foreign policy can be made.17 Indeed, foresight instruments can drive a more proactive approach to policy design and execution that maximizes leverage by enabling action early in the evolution of an issue – when relatively small actions can have maximum effect. Capabilities of this kind are often owned and led by military and intelligence organizations and focused exclusively on threats. However, effective statecraft in the 21st century crucially requires the ability to identify, innovatively create, and seize strategic opportunities in addition to managing threats. For this reason among others, MFAs are particularly well- suited to leading this work on behalf of the government. The follow- ing specific capabilities represent this categorys baseline require- ments. Systematic Strategic Foresight: An effective MFA strategic management process must be oriented and supported by syste- matic, analytical and creative strategic foresight. Foresight is a growth industry for consultants, think-tanks and academic institutions and features a proliferating universe of methodo- logies, but the core of the discipline is straightforward. It con- sists of techniques for analyzing, prioritizing and facilitating the use of the most relevant characteristics of the future operating environment. It is also plays a vital role in challenging and 17 Wanted: A Grand Strategy for , , February 14, 2011. expanding existing mental models. The scope of such a capabil- ity must include the emerging engines, levers and pre-conditions of change as well as the range of plausible potential future operating contexts that they imply. It also must continuously analyze the range of potential strategic surprises or shocks. To be made maximally useful and avoid the risk of excessive abstraction or generality, foresight must be led by professionals within the institution who intimately understand the nature of its work and mission. Nevertheless, this internal capability can draw heavily on the work of external academic institutions, think-tanks and other organizations as appropriate to ensure intellectual breadth. For MFAs, the foresight capability also must include the direct participation of representatives from all globally government ministries to maximize compre- hensiveness of insight and diversity of perspective. The follow- ing specific disciplines are essential: -Driving Forces/Trends Analysis: This process involves the systematic identification, tracking and prioritization of key forces, trends and micro-level drivers shaping the future ope- rating environment.