Transformation Framework: Application - Developing a Hedgehog Concept

The importance of developing a HC is twofold. First, it provides a central crystalline concept that every aspect of the IC can align to. Second, similar to the deconstruction of CBF, it results in a deep understanding of how the IC delivers value to its customers. Before suggesting how and why we might construct a HC for the IC we list what some of these understanding may be. Notice the parallel to the areas we suggested CBF should investigate.

·?????A complete and correct view of the IC as an enterprise

·?????The performance of the IC in terms of its ultimate customers

·?????An understanding of what is critically important for enterprise outcomes

·?????The enterprise architecture by which the IC should be arranged

·?????The business architecture by which the IC should be arranged

·?????The essential mission and business processes that enable and generate outcomes

·?????The critical roles & profiles necessary for high performance

·?????Core enterprise capabilities necessary to enable the aforementioned

With that in mind we turn towards constructing a HC for the IC. Doing so involves the three aforementioned questions. First, we should determine what it is that we can be the best in the world at. Second, we should determine what drives our economic engine. That is, what outcome would, like customers purchasing a product, result in such delight of policymakers, customers, and consumers to such a degree that they would enthusiastically maintain and grow the IC budget due to its effectiveness and value? Similarly what metric, defined by dollar per ‘X’ describes the collective performance of the IC? Third, we should determine what we deeply passionate about.

Because the IC is appointed a scope of responsibility as an instrument of the federal government, as opposed to being able to choose a market and customer base like a commercial organization, the answer to the first and third questions will likely be similar. That is, we are not able to change our business based on a change in passion among the leadership and our customer base (federal, state, and local government policymakers, customers, and consumers) is relatively static. As such, constructing a HC for the IC can focus on arriving at the best approximation of ‘profit per ‘X’’ vice determining who our customer base is. The latter, whether or not it has been done yet, is relatively straightforward. As an aside, our HC will likely be defined more like the efficiency of capital investment (dollar per ‘X’) since the IC is measured by enterprise outputs to its customer base alone. There is no additional means of translating this to an agnostic financial measurement like stock growth or earnings per share.

With this in mind we briefly propose initial answers to the three HC questions. Each answer centers around the sense that the enterprise outcomes of the IC is to support the national security of the U.S. and its allies and that this outcome is underpinned by the IC’s ability to advise knowingly to such scope, depth, and clarity that it enables decisions that compel global peace and prosperity.

• What are we deeply passionate about? In general, we are passionate about the idea that foreign policy not only protects U.S. national security and interests but that it can create a peaceful and prosperous world. More specifically, we are passionate about our role in providing quality, timely, insightful, fused information that fully enables wise proactive foreign policy and homeland defense decisions.
• What drives your economic engine? The level of decision dominance provided to U.S. foreign-, national-, and state-policy decision-makers.
• What must we be the best in the world at? Providing advance notice and situational understanding of threats to national security.

These may not be precisely the correct answers to these questions. However, developing increasingly precise answers will help lead to a correspondingly specific HC. To that end, we suggest the following HC: “issue clarity per dollar.” Here, the financial consideration represents the denominator of our HC not the numerator. While profit is the goal and the measurement of commercial business, money is merely the means to a different outcome in the government space. That is, money is a capital investment for the IC which, in commercial parlance, constitutes a cost center not a profit center. The value and efficiency of the IC increases as use less and less budget resources to deliver the same value, or deliver steadily more value for the same amount of resources. As such, we should be able to measure a return-on-investment throughout most of the IC and certainly at the enterprise level. It just will be measured in terms of the enterprise output quantified via the HC, not an output minus cost (return) divided by the initial budget resource (investment).

That being said, we can be more specific still about our draft HC, issue-clarity-per-dollar. By issue we are referencing the National Intelligence Priorities Framework, which establishes the analytical priorities of the United States and the IC. While the exact content is of the NIPF classified, it is sufficient to understand it categorizes, decomposes, and prioritizes the United State’s intelligence questions, generally aligned by geographic (e.g. Russia, Iraq), functional (terrorism, proliferation), and other areas (e.g. scientific, economic). Each priority is continuously decomposed until individual questions are discrete enough to be addressed in a relatively straightforward, if not binary, manner.?If developed to full maturity, the NIPF would serve as a sort of market index for the IC. Knowing the issue clarity and the amount of resources used to gain clarity on a particular area, priority, or issue, and the aggregated clarity for the NIPF at large would provide a single enterprise metric for the IC.

An HC of this kind would be similar to Fannie Mae’s profit per risk category. Just as?Fannie Mae found it could not expect the same amount of profit from particular risk classes, which generally corresponded to particular borrower income brackets, the IC would likely realize it requires greater investment in hard target areas or, perhaps, can get very high return-on-investment in issues area it might not have suspected. Using such a central metric allows us to escape programming the IC based primarily on particular organizations and platforms. Rather, we focus on the HC, the crystalline central concept, fundamentally underscoring the most appropriate measure of enterprise performance. As a result, the HC helps gain greater insight regarding the relative performance of different collection and analytical means such that increasingly precise reprogramming, re-architecting, or rationalizing of various capabilities.

What ever our precise HC becomes we must stick to what we are best at. Since we have a largely directed scope, we can increasingly focus on becoming efficient in the means by which we deliver value. In this regard the U.S. historic choice of technology as the foundation of its intelligence collection and military combat platforms, seems to have served us relatively well. To that end, collection, mission-related, and corporate technology and information technology are all capabilities the IC will need to retain supremacy in for the IC to continue accelerate its HC. The difference in the context of a GTG transformation is that the HC provides the understanding that the technology is working relative to what is most important. It keeps us from focusing on the technology itself and on the outcome that it delivers and the degree to which it truly accelerates the HC. To that end if something less expensive could provide the same issue clarity, other technologies would provide limited or no value.

Similarly, there may be issues in which clarity simply cannot be provided with the predominant means used by the IC. In this situation we would need to become world-class performers in a currently undeveloped capability. One example of this is HUMINT. With the rise of a terrorist threat that was less easily tracked with sophisticated technology, the IC realized and pursued a substantially larger HUMINT capability. Here the point is not the shift in policy or that what HUMINT capability we had was not professional and effective. Rather, with regard to a HC for the IC, HUMINT represents something that became so important to the underlying enterprise mission outcome that it was a competency we had to expand in order for the IC to provide issue clarity in particular areas.

Finally, one thing that is critical to the creation of the IC’s HC is The Council. Like its role in CBF, The Council serves as an indispensible consigliore. As previously described it should be comprised of executives, internal and external to the IC, with a common interest in making a GTG transformation. In addition, their varying functional expertise is particularly important in forming a HC. Any Council should be comprised of members representing each mission and business area. Council members can also provide additional benefit by speeding the creation of the HC by going through the cycle as often as possible, and not publicize the existence of the group.

One other inference, which was alluded to in our L5L recommendations, is important. If the IC is to transform, the DNI’s responsibilities should be shaped such that he or she can lead the enterprise and its transformation vice serve as an in-person representative to key customers like the President, White House, and Cabinet members. This is not to downplay an important role. Rather, the dramatic improvement of the IC’s long-term performance is more important that having the community’s chief executive personally presenting daily intelligence information and assessments. While such an analytical role can be delegated to someone with the appropriate strengths, talent, and experience, an effective and timely transformation should inherently lead by an enterprise’s chief executive. Turning their attention elsewhere slows the transformation.

Interlude: The Confronted Facts, the Hedgehog Concept, and Rationalizing of the IC

???????????Confronting brutal facts and developing a HC can have a power effect on the IC. A holistic enterprise and business architecture baseline (CBF) provides an understanding of what is, what is duplicated, what can be improved, and what is manifestly broken. A HC tells us what the future enterprise and business architecture and processes should be aligned to. With these two the IC can design an enterprise based on the HC re-architecting, or at least rationalizing, the community based on an enterprise performance outcome rather than any number of things it may currently be organized upon.

This is not to suggest the IC is all together poorly organized. Merely that rationalizing the current organizational structure based on a more timeless, and more widely understood, enterprise intelligence process would help improve performance. Though many agencies would likely stay essentially the same, they would be so because of, not in spite of, the HC. That is, organizations would become stewards of portions of the overall enterprise, mission, and business architecture, pragmatically assigned areas of responsibility based on the necessary exchange of business-to-business exchanges underpinning an enterprise outcome, not because of the relative effectiveness of their congressional liaison or other efforts.

Alternatively, agencies, centers, or organizations might wholly own certain functions due to the uniqueness of a particular enterprise outcome or because an individual organization had become so proficient in one area that they had been chosen to execute a function for the entire community. Again, even though such an arrangement would result in no net organizational change, it would reflect a performance-based organizational design. A community arranged in such a manner would mean a more disciplined and effective enterprise, designed, executed, and measured based on its ability to meet the needs of its customer base rather than as a constellation of loosely affiliated, wholly-owned subsidiary organizations with no consistent systematic approach to its mission and business functions.

???????????Again, performance is our goal, not restructuring per se. As such, the adoption or dissolution of certain functions is not our primary concern. Rationalization of the IC based on a proper and precise HC is merely a means to an end. First, the components of the IC ought be mutually exclusive and completely exhaustive, efficiently delivering an orchestrated performance, such that its internal parts deliver high performance to the enterprise’s external customers. As such, the agency or organization that provides a product or service should be less important than the quality and cost of each. If this becomes the pervasive focus in the IC agencies may cease to exist as we know them. That is, the IC would become characterized – rationalized – based on the services each component provides. With that in mind, we suggest the elemental activities that comprise the IC’s enterprise intelligence process is relatively straightforward: identify customer need, task, collect, process, exploit, analyze, production, dissemination, and outcome evaluation.

One caveat regarding this model does exist. Even a single enterprise intelligence process will continue to have, parallel ‘threads’. That is, the enterprise intelligence process will be replicated in slightly different ways in each ‘INTs’ – IMINT, SIGINT, HUMINT, MASINT, OSINT. This is the underlying for our earlier supposition that many of the agencies would continue to exist as they currently do. Since steps Task through Produce would be different for each INT, traditionally corresponding agencies would continue as Centers-of-Excellence, holding responsibility for all that did or did not happen in that INT, in that portion of the enterprise intelligence process. Though the net change might be small to the casual observer, and to an average employee, the significance would be in rationalizing the IC based on the internal and external services it must provide in order to deliver an enterprise outcome, rather than re-architecting, or reorganizing the community per se. At its ultimate maturity, this might result in the IC delivering a consistent set of services delivered with grace and forethought to specific customer segments, rather than forcing policymakers, customers, and consumers to wade through a host of inputs in order to get what they need from the community.