>Regaining Equilibrium

Regaining Equilibrium

How Defense Planning Can Help U.S. Forces Balance Multiple Goals

Perhaps the single greatest complication facing U.S. defense planners today is the multiplicity of conflicting goals. There have always been multiple goals, but the overarching nature of the Soviet threat during the cold war focused defense priorities so pointedly that relatively minor conflicts in planning could be subsumed. The purposes and priorities of military missions today, however, are not nearly so consistent. The United States has used force repeatedly in some regions and prepared for war in others while also multiplying its peacekeeping, peace enforcement, and humanitarian operations worldwide. Another great complication is profound uncertainty about how U.S. forces will have to be used 5 to 20 years from now.

Outlining a coherent new defense strategy has therefore been a high priority. A RAND research team led by Paul Davis has worked with Department of Defense officials to develop (1) a new planning approach that can balance a "portfolio" of different objectives while assuring adaptiveness under uncertainty, (2) a plan to modernize--or "transform"--the force, complete with new methods to identify future needs, and (3) new "scorecard" tools to help defense officials rank priorities and allocate resources.

Defense Planning as Portfolio Management

In 1996, the RAND researchers worked with defense department strategists to shift the planning debate from arguments about how to win two, nearly simultaneous major theater wars to broader deliberations about national security objectives. Since the early 1960s, the department had allocated resources by assessing how many wars the United States needed to be able to win at any given moment, estimating what forces were needed to repel which adversaries, and justifying force levels accordingly. This "threat-based" approach--always suspect because of uncertain conditions of conflict--became plainly inappropriate when the cold war ended. The researchers proposed a new "portfolio-management" approach in which leaders can judge which investment choices will strike a balance among three distinct objectives:

Attempt to create conditions to avoid conflict ("environment shaping").
Develop capabilities to deter and defeat aggression under varied circumstances, not only under specific scenarios ("capabilities-based planning" for "operational adaptiveness").
Assure the nation's ability to change course, adjust forces and strategies, and deal with events as they play out over the years ("strategic adaptiveness").

Ultimately, the Department of Defense chose a quite similar approach and codified it as the well-received "Shape, Respond, and Prepare Now" strategy of the 1997 Quadrennial Defense Review.

Being able to win two simultaneous wars remains a priority, but the researchers consider this just one desirable consequence of a balanced portfolio. Perhaps surprisingly, the largest factor determining the size of U.S. forces today is the need to shape the international security environment to avoid major future wars. U.S. forces have an important role in promoting stability, preventing or limiting conflicts, and discouraging other states from competing militarily with the United States. All of this implies the need for substantial standing forces to back up global interests and to work with allies, requiring both a strong overseas presence and the ability to deploy substantial additional forces to those regions as necessary. With such a force structure, forces can then be used, for example, for peacekeeping, humanitarian efforts, or warfighting--even in simultaneous wars.

Defense planners must balance short-term readiness and operations with long-term modernization in the same way that an individual investor needs to balance short-term consumption with long-term capital investment. To dramatize this point during the formulation of the Quadrennial Defense Review, the researchers described three hypothetical investment strategies:

A business-as-usual portfolio with marginal changes in force structure and modest modernization, based on the implicit assumption that U.S. forces were about right and that normal evolution would be adequate. The researchers argued that this complacent option lacked adaptiveness, failed to prepare for predictable military challenges for which new capabilities would be needed, and depended on consistently generous defense budgets.
An aggressive portfolio of dramatic modernization, one based on the belief that long-term risks outweigh short-term risks. This strategy would build toward a military seen by some as necessary for the era of, say, 20102020, with much smaller but much more technologically advanced forces that could be based in the United States and could respond from a very long range. There would be much less routine engagement.
A compromise portfolio calling for vigorously evolutionary changes in force structure and doctrine while maintaining high levels of overseas presence and international engagement. A key feature was that this strategy would place a high priority on starting the transition to modernized forces--including smaller, more dispersed units; precision weapons; and advanced information and communications systems. Force structure would then evolve in response to lessons learned from experiments with such forces and the unfolding international environment. Funds for modernization would come from reduced infrastructure and from doing more with fewer platforms and people. At the time, this portfolio was provocative, because the services were resisting any reductions of structure.

Discussion of the above strategies helped frame the thinking of senior officials who were quite interested in the long run despite the fact that the time was not ripe for dramatic changes. Their concern found expression in the Quadrennial Defense Review's call to "transform the force," a call later reinforced by a National Defense Panel requested by Congress. Although pessimists complain about the slow pace of change and the chronic underfunding of modernization, all the military services now have ambitious experiments under way to bring about force transformation (see below), and optimists might argue that what is happening may resemble an unfolding of the "compromise portfolio." This portfolio depends, however, on making further investments for the future despite the unremitting expenses of existing operations. This portfolio requires major savings from reducing infrastructure and the number of platforms and personnel per major unit. Such reductions are now universally seen as necessary, and many are in train.

Transforming the Force

Transforming the force will be very difficult. Usually, a revolution in business or military affairs is provoked by a recent debacle, imminent bankruptcy, or some other clear threat. None of these factors characterize the U.S. military today. However, one factor for change does exist: The United States has the world's finest military establishment with a highly professional officer corps schooled in the concept of "learning organizations." There is definitely no shortage of good ideas, initiative, and motivation for change.

In 1998, the RAND researchers recommended leveraging this factor explicitly. A key to transformation, they advised, would be for the Secretary of Defense to identify "operational challenges" that would drive innovation. One challenge is for U.S. forces to be able to quickly halt and defeat attacks on friendly countries despite the enemy's providing minimal warning and using missiles, weapons of mass destruction, mines, and highly lethal conventional weapons. This challenge is motivated by recognizing that such attacks are highly plausible with commercially available technology and clever tactics; such attacks would allow second-rate adversaries to create great difficulties for U.S. forces.

The Secretary of Defense, according to the suggested strategy, would designate high officials to oversee planning to meet the key challenges. The challenges would be decomposed, with subordinate objectives, such as theater missile defense, defined; responsibilities assigned; and joint procedures established to ensure integration and effectiveness in stressful circumstances. A high degree of competition would be encouraged from the services to identify the best ways to accomplish new missions. That is, needs would be established top-down, but solutions would be generated bottom-up--the model for success in modern American organizations.

Much has been accomplished in beginning the transformation process. For example, U.S. Atlantic Command has been chartered as the lead organization for forward-looking joint experiments. All the services are heavily involved--with the air force experimenting with air expeditionary forces, the marines developing a new doctrine for urban warfare, the navy pursuing missile-defense and strike options centered around new information networks, and the army exploring a rapidly deployable strike force. What is still needed, however, is more architectural coherence and integration at the joint level, including high-confidence joint capabilities under very stressful circumstances. The tendency to accept mere coordination among the services is not enough.

Dealing with such problems will require many new weapons and platforms often discussed under the rubric of the "Revolution in Military Affairs": aircraft with much greater range, unmanned combat aerial vehicles, relatively stealthy surface ships operated with smaller crews, lighter and faster combat vehicles, new short-takeoff-and-landing aircraft, and various precision weapons. Most of these will prove important, but the RAND researchers contend that the most important changes will be organizational developments driven by information technology. These involve integrating the forces with globally netted command, control, communications, reconnaissance, surveillance, tracking, and targeting systems that will allow smaller, dispersed forces to synchronize their operations.

The Department of Defense also needs to strengthen its ability to study and choose among future concepts of operation. Future operations will be very different from classical ones, and large-scale joint experiments probably will be sparse and highly constrained. As a result, successful transformation will require extensive use of analysis, models, and simulations radically different from those of the past. Furthermore, analysis must be done at many levels of detail and from many perspectives, using everything from simple spreadsheets to complex simulations going down to the level of individual tanks and ships. The analyses must also cover a huge "scenario space" of possible contexts. The RAND researchers have been at the forefront in developing and illustrating such multifaceted analytic methods.

Ranking Defense Priorities

Other methods are needed to make immediate budgetary choices. An important contribution toward this end has been the development of the DynaRank scorecard system. DynaRank is a Microsoft Excel^® workbook available for Macintosh and IBM-compatible computers. Created by RAND researcher Richard Hillestad, DynaRank scorecards can help joint commanders align resources with national goals. The scorecards rank defense programs by their cost-effectiveness in supporting each of the three pillars of the new defense strategy: "shape, respond, and prepare now."

Particularly important is that DynaRank users can experiment with different assumptions, such as the importance of particular missions or the need for particular capabilities, and then see immediately how the rankings change. In this way, the scorecards can provide a rationale for difficult choices and even a basis for consensus, because--despite arguments about assumptions--users can "see" that some programs stand out as valuable and cost-effective across a wide range of assumptions. RAND researchers hope the DynaRank methodology or something similar will help embed national priorities into the routine operations of the department.

The figure shows a typical scorecard. The rows represent defense options, which can be either individual programs--such as long-range, long-endurance, stealthy unmanned aerial vehicles for surveillance and targeting--or program packages, such as an "allied package" of equipment and units needed to defend allied forces in crisis. The columns would contain measures of each program's effectiveness for shaping the environment, responding to a diversity of scenarios, and preparing now for a variety of potential challenges. On the right side of the scorecard, there are columns for each option's composite effectiveness, cost, and cost-effectiveness. In a computerized spreadsheet, DynaRank reorders the options in descending order of cost-effectiveness so that the top option shown buys the most for the money spent.

This "top-level" scorecard results from detailed scorecards for each objective. For example, the scores for "major theater wars" could result from a subordinate scorecard that ranks each program or package by its contribution to fighting specified wars in Southwest Asia and Northeast Asia and to fighting two simultaneous wars. The composite score for all these scenarios then would feed into the top-level scorecard.

Of course, the rankings depend on, among other assumptions, the relative weights assigned to the "shape, respond, and prepare now" components of the strategy. Just as private investors must balance their portfolios with judgments about near-term and future needs, and about investments in "likely" needs versus insurance against possible needs, so, too, must defense planners balance their portfolio. As a result, three different perspectives might attribute greatest weight to three separate pillars of the overall defense strategy, producing very different rankings of defense programs. A final scorecard would list the rankings of all three perspectives side by side, revealing any programs that rank relatively high across all three perspectives. In this way, the final scorecard could demonstrate which defense programs depend more on personal judgments and which programs prove robust across a reasonable range of perspectives on competing national goals.

In summary, defense planning in the new era entails balancing multiple objectives, planning for operational and strategic adaptiveness, engendering a vigorous transformation of the force, and allocating resources to match national goals. RAND has been working closely with key officials on all of these matters and on the analytic methods needed to support related planning.