“You bet on the Patriots in 2007 and, by gosh, in 2037 you’re still going to bet on the Patriots. And eventually you just go bankrupt, you lose all your money,” Stephens, a past critic of Pentagon innovation efforts, said at a Defense News-hosted roundtable in November.
“The reality is that the decisions that we’re making today … are actually the riskiest possible decisions. It’s not that we’re doing the safe things,” he added. “It’s actually less risky to take the more contrarian positions.”
That was Trae Stephens being quoted in Defense News. Here is James Schlesinger recognizing the same problem back in 1964:
… with greater centralization it may become imperative to simplify the task of choosing, and one tempting route to simplification is to neglect uncertainties…
It is likely to foster the exploration of relatively “safe” or “conservative” proposals and a neglect of radical ideas, hedging against contingencies (where the gains are highly uncertain), and long-range planning (where uncertainties abound)….
This kind of “safe” bias in proposals may lead, of course, to highly “unsafe” gambles, as some of the contingencies do in fact materialize.
Safe proposals looked to avoid uncertainty rather than to resolve it. Here is a response from industry on risk aversion:
National Defense Industrial Association CEO Hawk Carlisle, a former Air Force general, says Congress’ emphasis on accountability in its oversight of Pentagon acquisitions has been well-intentioned, but it’s also created a disincentive for taking risks.
“All they do is go back and go: ‘We spent an extra hundred thousand dollars on something that didn’t pan out. What do you think? And that’s taxpayer money.’ ”
Here is Defense Innovation Board Executive Director Josh Marcuse, and he’s pretty on the money:
“A factory that shifts risk to the war fighter: That is what we have,” Marcuse said. “We do not have risk reduction. We have risk displacement. The status quo is a system that is not reducing risk, it is actually multiplying risk everywhere you look.”
“Whereas if the Defense Innovation Unit wants to do something iterative and experimental at speed and buy down the risk of a failure and fail small and inexpensively quickly, that’s held for maximum accountability, you have hearings for that,” Marcuse said. “That’s nuts.”
“We said it’s OK to fail, you just have to fail very slowly, you have to fail very expensively and you have to fail with a high degree of documentation.”
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