sou · GZB321 · 2011-03-08 00:00:00 — It includes identification and priori- tization of these forces at both the macro-level, through quantitative and qualitative analysis, and at the micro-level including by capturing and aggregating the insight of the diplomats on the ground. This dual focus is critical to the uniquely practical, reality-oriented value that diplomatic institutions can bring to this work. It also includes syste- matic consideration of the intersections of key driving forces and their potential strategic implications. It represents an analytic resource for decision-makers throughout the organiza- tion that facilitates their ability to understand key future-driven issues and make analytically grounded business cases for investment in longer-term priorities. In the absence of such a capability, policy-makers wishing to take on a longer-term strategic issue must either perform trends analysis them- selves with existing resources or contract with other govern- ment agencies or external firms to do so. The result of these foresight transaction costs is a strong set of default bureaucratic incentives to focus on immediate issues that do not require the same degree of systematic analysis at the expense of future-driven priorities. -Scenario-Based Analysis and Planning: Although they have myriad potential forms and applications, scenarios are essen- tially models of potential future operating environments. They can be used to plan for specific potential events, gen- erate new, future-driven strategies, and to assess the strength of current policies with respect to future uncer- tainty. A natural, multi-purpose starting point for insti- tutionalizing this capability involves the development, main- tenance and periodic recreation of a set of contextual plan- ning scenarios. To maximize their value, these should be developed based on input from across the government and beyond it to include experts and professionals from a wide range of domains. They must be designed – as a set – to cap- ture the most strategically relevant aspects of the operating environment in multiple plausible and significant combina- tions. This standing set of planning scenarios will provide a systematic means of both developing and testing strategies, policies and capabilities across a carefully engineered range of potential circumstances to maximize their strategic values and resilience with respect to future uncertainty. This scenario set should be used as a future-driven of an overarching MFA Strategic Plan and a customizable planning methodology for use by units across the MFA and other globally ministries, thereby support- ing the distributed planning capability described below. -Environmental Scanning and Strategic Surprise Analysis: This process involves two key elements. First, it consists of the continuous surveying of the global operating environment using an array of analytic and technology-driven methods to enable the early identification of weak but potentially signi- ficant signals of change (e.g., experimental technology deve- lopments, discontinuous changes in patterns of public opinion, etc.). In addition, it involves the identification and analysis and prioritization of potential strategic surprises (including shocks and discontinuous opportunities) that would be of strategic significance should they occur. The environmental scanning18 process is distinct from driving forces/trends analysis by virtue of its focus on discrete, non- 18 For more on environmental scanning (also often referred to as horizon scanning), see and , Peripheral Vision: Detecting the Weak Signals That or , (: , 2006). linear, discontinuous developments. In this way, environ- mental scanning is critical for minimizing strategic blind spots and failures of imagination. To capture the unique value of implementing this process in a diplomatic insti- tution, it must tap the real-time awareness of diplomats in the field as a vital source. Internal Strategic Assessment: This capability consists of activities rarely included in the mandate of an MFA, but increasingly indispensable to its effectiveness – namely, full-spectrum ana- lysis of national capabilities, strategic position and interests. Its fundamental purpose is to support the orientation of the stra- tegy and policy agenda in terms of the long-term interests of citizens and other national stakeholders. It includes transparent and collaborative analysis of vital national assets, vulnerabilities, opportunities and challenges – both within and outside of govern- ment. These factors have always been the proper orienting points of national or grand strategy. However, the importance for MFAs of cultivating awareness in these areas will become increasingly important in the future because of the overwhelm- ing complexity of balancing national, regional, and global interests in the design and execution of policy. For European states, given the anticipated continuing advance of EU inte- gration, the work of national diplomatic institutions must now include a more granular understanding of and focus on national interests to support economic competitiveness, advance the glo- bal dimensions of domestic strategic issues and – more generally – to be able to identify and manage the international threats and opportunities of specifically national strategic importance. This will be increasingly important in a context in which broader global issues are likely to be increasingly managed by the EU and, in particular, the EEAS.19 Furthermore, this internal aware- ness will be crucial for securing the understanding and support of citizens for the governments foreign policy in general – and the EU project in particular. Contingency Prioritization and Preparedness Planning: The pur- pose of this capability is: (a) to identify the range of stra- tegically significant potential contingencies, including both the potential shocks identified in the foresight process and other 19 For which, it should be noted, the portfolio of capabilities proposed in this paper is at least equally relevant. potential contingencies identified by other means; (b) to priori- tize these contingencies in terms of potential impact, likelihood and other variables as appropriate; and, (c) to establish, staff and support appropriate teams drawing from relevant units and external partners as appropriate to develop detailed contingency plans for the highest priority events identified. This capability is a vital means of maximizing readiness for the most significant and likely potential future events. In particular, the systematic prioritization of potential strategic surprises makes possible a rational distribution of investments in preparedness. Although this externally oriented capability is distinct from the internally focused risk management capability proposed below, the two must be managed on a unified basis to ensure identification of significant potential linkages and interdependencies, as in the case of the Wikileaks events in which an internal risk made possible a large-scale external contingency. Explicitly identi- fying this linkage would have both raised the priority of the risk and increased the preparedness for the contingency. : This capability involves a systematic, organi- zation-wide process for identifying and prioritizing organizational risks. Risks in this context refer to internal organizational issues that may undermine the ability of the institution to achieve its objectives. They are distinct from strategic surprises, con- tingencies and shocks all of which (for the purposes of this document) refer to external events of large potential conse- quence. Common categories of risk include operational, reputational, financial, and compliance-related risk. Risk man- agement must be applied comprehensively across the organiza- tion to be meaningful. It begins with the identification of potential risks from throughout the organization as syste- matically captured from staff, evaluation and assessment spe- cialists, external experts, as well as from the foresight and other planning processes previously described. The comprehensive inventory of risks thus captured is updated continuously and its contents subjected to ongoing analysis and prioritization in terms of probability and scale of impact. Mitigation plans are then developed for the risks based on the prioritization process, while the most critical risks are brought to the attention of senior leadership. Again, this capability must be managed on an integrated basis with the contingency prioritization and pre- paredness capability proposed above. These anticipation-focused capabilities provide a crucial, future- driven that follow. Their ultimate value is determined by two primary factors. First, they must be conducted systematically, comprehensively and on a sustained basis. Too often these types of activities are conducted on an ad hoc, meth- odologically flimsy basis with the result that they often only rein- force narrow preconceptions of what will matter most in the future. It is by virtue of methodological rigor as well as systematic and comprehensive application that these tools can minimize strategic blind spots, prevent or mitigate crises and yield trans- formative strategic insight. Second, and equally important, they must directly and consistently inform the decision-making process and must not become ends in themselves. Otherwise, they risk becoming only interesting academic exercises of limited practical value. Capability Category 2: Integrated Collective Intelligence The purpose of the capabilities in this category is to harness the power of the collective knowledge, social capital and innovative capacity of the institution and its extended network in support of both policy design and execution. These instruments make it possible to aggregate, integrate and make accessible the MFAs most valuable knowledge assets for use throughout the organiza- tion. They also greatly facilitate the mutual sharing of proprietary knowledge with partners within and outside of government. Taken together, these capabilities can transform the dispersed universe of policy-makers, diplomats in the field and trusted partners into a real-time, living knowledge and innovation network. The following specific capabilities represent this categorys baseline requirements. : This capability con- sists of the detailed analysis of the knowledge resources of the entire ministry and the wider government community, their prioritization in terms of strategic value, and the design and management of the process by which those resources are cap- tured, integrated and made accessible for both internal analysis and real-time mobile access from the field. tutions, there are two immediate implications of the present global information environment in which unprecedented degrees of knowledge are available on an open-source basis. First, it places a premium on the knowledge to which diplomats in the field have access that is not available on an open source basis. Second, it demands sophisticated means of meaningfully processing and making prioritized sense of what is increasingly a continual and overwhelming flood of information. This is the province of the discipline of knowledge management, a well- established best practice in the private sector and increasingly present in government. Its purpose is to maximize the strategic value of an organizations knowledge assets by facilitating the capture, integration, tagging, sharing and visualization of pro- prietary knowledge. For diplomatic institutions, this requires moving toward real-time mobile reporting from the field into globally integrated knowledge databases supported by advanced visualization technologies that allow decision-makers to see and manipulate large amounts of information rapidly. It also requires giving diplomats in the field secure remote access to that database. Current best practices in this area are centered on the application of collaborative wiki-based systems that enable knowledge assets to be developed, refined and kept current by the entire network.20 Regardless of the specific approaches taken, the key metric of the value of these systems is how quickly and effectively they generate usable insight for both policy-makers and professionals actively working in the field. Social Capital and : Arguably the most valuable assets of an MFA are the relationships of its diplomats with influential individuals around the world and its knowledge of the patterns and dynamics of power and influence within the global networks that those individuals inhabit. To capture this value, MFAs must cultivate and manage this social capital on a continuous and globally integrated basis. The first step in doing so is to modernize the processes by which outgoing diplomats electronically document the social network knowledge that they have spent years developing and transfer that knowledge to their successors. Second, this invaluable information must be cap- tured and integrated on a global basis for consolidated analysis 20 For an overview of these techniques and their application, see and , Macrowikinomics: Rebooting Business and the World, (: Portfolio Penguin, 2010). at the ministry – including by experts in social network analysis. Given the advances in social network science over the last 20 years and the types of analysis it makes possible, influence – the very currency of diplomacy – can now be modeled in startlingly practical ways given a properly constructed data set. Third, given the explosive growth and political importance of social media, this internal knowledge must be married to sophisticated analysis of the online social environment. It is increasingly possible to observe opinion and interest dynamics in real time with remarkable resolution, but doing so requires both techno- logical and analytic sophistication. Finally, this global social knowledge base must be made securely available to personnel in the field at the appropriate level of classification to enable them to leverage the social capital of the government community in support of their individual efforts. Collaborative Planning and Crowdsourced Innovation: The pur- pose of this capability is to reduce the transaction costs and increase the value of proactively conducting collaborative plan- ning exercises and policy innovation experiments with other national governments, ministries within the government and non-state actors. For diplomatic institutions, exercises of this kind represent a largely unexploited means of driving strategic alignment, trust and capturing strategic insight and operational synergies across organizational boundaries. This capability involves establishing within the institution a reposi- tory of expertise in collaborative planning, crowdsourcing and innovation methodologies. This group21 would have specific and continually deepening experience in applying these techniques to international policy issues requiring anticipatory multi-actor engagement. Their responsibilities would include exposing diplo- mats to the potential uses of these tools and supporting them directly in all aspects of their application. The group would serve as a resource for the entire ministry and other ministries of the government to draw upon as appropriate. The portfolio of meth- odologies would include scenario-based planning, forcing event simulations and joint rehearsals, and crowdsourced innovation and decision-support exercises. Crowdsourcing refers to use of Web 2.0 technologies including information markets, wikis and 21 Most likely staffed by cross-functional professionals supporting the foresight capability, and supported by external consultants as appropriate. collaborative software based on wisdom of crowds models to tap the knowledge of large numbers of individuals in highly targeted ways. The value of the capabilities in this category is centered on the effective aggregation, sharing and collaborative creation of know- ledge and insight across and beyond the organization. Realizing this value hinges directly on: a) the comprehensiveness and time- liness with which these resources are captured and generated; and b) the user-friendliness of the ways in which they are made avail- able to both leadership and professionals in the field. This latter requirement demands that data analysis and visualization tools be made widely available. In addition, these intrinsically distributed collective intelligence capabilities require effective community man- agement to ensure that the network is consistently feeding and using the resources created. Finally, although technological sophisti- cation is vital to the value of these capabilities, they must be man- aged by experienced foreign policy professionals with intimate knowledge of the day-to-day work and knowledge requirements of the institution. This is essential to ensuring the utility of the resulting resources for those they are intended to support. Diplo- matic institutions have long been distinguished by the excellence of their intellectual capacity and knowledge assets. The capabilities in this category are intended to begin the process of reclaiming the value of these attributes in the current technology environment by placing the collective intelligence of the entire organization at the disposal of all of its people in real-time. This capacity will increas- ingly be a defining characteristic of effective 21st century diplo- macy. Capability Category 3: Prioritized Direction Setting and Decision Strategy is fundamentally about choices and trade-offs. The central purpose of the capabilities in this category is to ensure that neces- sary decisions regarding long-term direction and immediate events are made on a timely basis and with the benefit of the best possible insight and a and flexible portfolio of supporting instru- ments. Achieving this level of performance in decision-making requires the ability: (a) to set and manage clear immediate and long- term priorities and meaningfully specific objectives; (b) to identify and develop the capabilities necessary to achieve those objectives; and, (c) to provide leaders with rigorous, independent analysis and a range of innovative, well-understood alternative solutions. The following specific capabilities represent this categorys baseline requirements. Integrated Policy, Strategy and Resource Plan Development: This capability refers to the design and development of integrated strategy. It is the integration of policy, strategy and resources that most distinguishes this capability from the current planning processes in place in many institutions. To be meaningfully inte- grated, the strategy development process must: (a) begin with and be oriented by the policy priorities of the sitting govern- ment; (b) include in the strategic analysis and priority-setting process both pressing policy issues and the institutions long- term commitments and operational priorities; and, (c) incorpor- ate realistic resource planning at all levels. The full set of potent- ial strategic priorities must be considered and ranked on a unified basis with realistic funding models attached to each pro- posed stream of investments. Only with this degree of inte- gration, and the visibility that it yields into trade-offs, can leaders be expected to make optimal decisions. In addition, to realize the value of the other capabilities proposed in this paper, the plan development process is a critical juncture that must synthesize input from the following sub-processes: -Foresight: The data, analysis and planning methodologies of the foresight capability must inform and support all aspects of the plan development process from policy design to prioritization of investments. This ensures that the strategy is future-driven and can include specifically long-term priori- ties. -Internal Assessment: The findings of this process must the development of strategy to ensure both its enduring legi- timacy and effectiveness. -Distributed Planning: The development of effective distri- buted planning capacity as described below will ensure that the ultimate strategy drives supporting plans and action at the regional, functional and mission levels and that it is informed by systematic input from the field. -Cross-Governmental Integration: For MFAs, the strategy development process must include a unified view of the rele- vant goals, capabilities and resources of the entire govern- ment. This is essential to ensure strategic alignment, optimal use of all available assets, and elimination of unnecessary duplication of effort and investment. Planning: The purpose of this analytic pro- cess is to identify, prioritize and initiate the development of the institutional capabilities (or hardware as opposed to policy soft- ware) that will be of greatest strategic value to the organization in the future. The process begins with the evaluation of the existing portfolio of capabilities against a range of potential future operating environments and challenging potential contingencies to identify potential capability gaps. It then convenes diverse groups of internal and external experts to generate new potent- ial capability concepts. Based on these results and the incorpora- tion of any additional capability requirements identified through other activities, the process then involves developing and pre- senting strategic and resource plans for the identified capabili- ties that demonstrate greatest potential value. (For example, in an MFA, this process would be very likely to identify social media competence and technical capacity as required capabilities for effective public diplomacy in the 21st century.) Once identi- fied, capabilities are then funneled into the investment portfolio management process described below. Decision, Analysis and Program Evaluation Support: This capa- bility includes two broad categories of activity: -Decision and Analytic Support: This is an institutionalized process and repository of expertise for providing inde- pendent analytic advice to MFA leadership as requested on any of the MFAs strategies, ongoing projects (or pro- grams) and investments. To ensure its independence, this capability must be delivered by teams that are not affiliated with any of the organizational units subject to their assess- ment. The centerpiece of this capability is a rigorous analytic methodology for rapidly providing diverse, multi-perspective decision information to the Foreign Minister and other MFA leaders. Its technical expertise should include: social network analysis; science-based root-cause and non-linear conse- quence analysis; financial modeling and analysis; and, tra- ditional capacity in historical, economic and political analysis drawing in particular on the knowledge of experienced diplo- mats. One example of its analytic products would be assess- ments of the potential long-term consequences of various policy alternatives. Its methodological portfolio should include techniques for performing simulated strategic inter- actions, scenario-based robustness testing, and the various tools of large group collective intelligence (e.g., decision markets). As is true for many of the capabilities proposed in this paper, this type of decision support does not require a standing functional unit, but can be created by the integration of distributed analytic capacity from across the government and outside (e.g., the think-tank and NGO communities). -Project/Program Evaluation: This process involves syste- matically ensuring that organizational units, missions and large independent contractors are using comprehensive pro- ject management plans and practices at a specified level of sophistication to ensure the achievement of agreed objec- tives.