The current debate about how the U.S. military can maintain its technological superiority is dominated by offset strategies — use of an asymmetric advantage to mitigate an adversary’s advantage. The elegance and efficacy of prior offset strategies makes them attractive as a reference point. But given the United States’ current and future strategic circumstances might a hedging strategy be more effective?
Previous offset strategies focused on tightly defined threats, in a small range of locations, against one primary adversary. The Soviet threat was so significant that it required the majority of the attention and resources of the U.S. military, meaning that prior offset strategies, particularly the second one, were by necessity technological superiority strategies. This is not the case today. Additionally, while previous strategies were successful in overcoming their threat of focus, the Department of Defense’s inability to quickly adapt its capabilities to different threats like those in Vietnam or Iraq highlights the danger of concentrating attention and resources.
Today’s offset initiative is intended to address the advantages gained by adversaries employing precision munitions of their own, according to Deputy Secretary of Defense Bob Work. He also speaks of the need to develop multiple offset capabilities for multiple contexts, none providing long-lasting advantage. But other threats and risks from nuclear modernization to lone wolf terrorists, hybrid warfare tactics, violent non-state actors and myriad cyber capabilities can no longer be consigned to “lesser included” status as in previous offset eras. Nor can one claim to know the full scope of national security challenges the United States will face in the coming decades.
Rather than attempting to develop multiple offset strategies, DoD should consciously embrace a hedging technology strategy. A hedging strategy would emphasize an “eggs in many baskets” approach, with a spread of investments over a portfolio of concepts and capabilities useful against a range of threats. In parallel, DoD would prioritize investment in the institutional capacity to adapt, allowing DoD and the services to reallocate resources between capabilities and respond to a fluctuating 21st century threat landscape. This approach would allow DoD to increase its capability diversity by imposing a strategic management framework to do more without trying to do everything.
Capabilities
A hedging strategy would allow DoD to re-establish a high-low mix of capabilities as it did during the Second World War and Cold War. A force comprised of a range of systems from the exquisite, for certain high-end missions, to inexpensive, less advanced capabilities that are nonetheless fit for purpose provides a number of advantages to strategists, planners and commanders alike.
A high-low capability mix would provide greater potential for diverse and creative concepts of operation (CONOPs). A wider array of CONOPs would provide the United States greater scope to derive military advantage from the creativity and education of its personnel rather than the features of its hardware, creating additional uncertainty and confusion for future adversaries.
A greater variety of capability options would also allow planners more scope to tailor force packages for specific missions, balancing capability, cost and risk. These approaches would help avoid the increasingly common scenarios wherein U.S. adversaries know how and with what kit we will operate, allowing the easy development of asymmetric responses or offset strategies of their own. Better still, planners could avoid those scenarios in which we apply cost imposing strategies against ourselves by using exquisite platforms against technologically unsophisticated enemies.
A hedging strategy would still require investment in common, core enablers such as command and control (C2); communications; intelligence, surveillance and reconnaissance (ISR); and cyber. These capabilities would not only prove important regardless of the challenge faced, but provide the backbone for interoperability and a common operating picture that allows diverse force mixtures to continue to operate with cohesion and efficiency in a hedging strategy.
The principles of modularity and variety should also extend to the design of specific platforms. As Chief of Naval Operations Admiral Greenert identified, focusing development on payloads over platforms has the potential to extend the life and reduce the cost of major capital programs. When the characteristics of a platform do not themselves provide a critical capability, services should further embrace utility platforms, as the B-52 became, with long lifespans that can be easily modified and upgraded by swapping payloads to meet the demands of changing missions and technologies. Meanwhile, the flexible payload concept should extend to what are often thought of as smaller platforms, taking a system of systems approach, as DARPA’s System of Systems Integration Technology and Experimentation (SoSITE) program does for air systems. This allows for platforms with short lifespans that can be replaced frequently, incorporating new lessons, concepts and technology with each release. In this way, both platforms and payloads can be optimized for adaptability.
Development
Just as important for an effective hedging strategy is a focus on how capabilities are developed. Many criticisms of current defense acquisition processes gloss over the difficulty of dealing with the tension between developing systems quicker, cheaper or with greater capabilities. Because a hedging strategy prizes flexibility, it again seeks to spread investment, in this case among the approaches to capabilities. As a result, when choice is necessary, it goes for speed: the ability to rapidly design, prototype and especially evaluate and scale up potential systems. A hedging strategy prioritizes investments in those processes that enable the Department of Defense to delay full-scale production decisions until requirements gain greater fidelity, while at the same time learning from the small-scale batches of prototypes.
These investments begin with the workforce. A Department able to pivot from threat to threat while maintaining long-term flexibility needs employees and organizations that prize new skills. Substantial resources must be devoted to greater access to 21st-century tools and training, especially technologies and concepts that support rapid prototyping, such as additive manufacturing and makerspaces. DoD should also take advantage of the creative potential of its workforce through increased use of creative approaches to achieving objectives — especially for cutting-edge payload and small platform capability. This includes more “hackathons,” “X-prize”-type challenges and crowdsourcing. When designed and incentivized well, these further facilitate collaboration with non-traditional partners and an overall culture of innovation.
Defense industry would also benefit from hedging strategies. More programs would mean healthier competition, more research and development, compelling projects to attract talent, lower technical risk and more predictable revenues. If industry invested in new supporting production lines capable of manufacturing a variety of systems along with the ability to rapidly prototype, switch or scale platforms, it would reduce the risks of competing for government work by positioning it to quickly transition to commercial production as necessary.
To develop more effective acquisition models, industry and DoD could also experiment with responsibility for the development of designs and for systems integration, as well as who owns the means of production and the full design data rights. These could include Hardware as a Service for military platforms, building on existing trends in leasing military aircraft or for additive manufacturing machines and customizable chip foundries, allowing industry to focus on design development — with the design available for purchase outright or on a per use license — while securing critical production lines. A streamlined design-focused model could also open up participation in defense industry to a much wider array of participants.
Alternately, DoD might want to re-enter the businesses of designing systems itself, and of ensuring integration of those manufactured by industry. Whatever the innovation, there remains plenty of scope for industry to adapt to a hedging strategy in ways that make businesses more sustainable and get more systems into production.
Once systems are in production, the Department and industry should focus on building to schedule rather than delaying for optimal capability objectives. Here the Department can steal a page from industries from cars to computers, where products are delivered in year-model tranches — sometimes evolutionary, sometimes revolutionary, but always on time. Instead of meeting specifications of “spirals,” “builds” or “increments,” managers should ruthlessly adhere to cut-off dates to determine what makes it into that year’s model so as not to push back delivery.
This approach won’t work for every program — some systems are near worthless without achieving the specific requirements forgone in the year-model method, yet it’s ideal for platforms with long-running production cycles like aircraft or naval vessels. It also fits the needs of a hedging strategy because such a strategy acknowledges crisis response and the benefits of presence, and a large element of deterrence is derived from standing force structure. Therefore some capabilities — particularly the utility platforms — will be in a state of near constant recapitalization, or modernization, and a good match for the year-model method. Additionally, in applying this method to the development of new systems by bridging the difference between current and desired capabilities through iterative steps, the Department can minimize cost growth from schedule delays and technical risk.
While the United States may “go to war with the army it has,” a hedging strategy’s investments help ensure that its forces both more closely match what’s needed and better adapt as the war evolves.
Reality
As with any strategy, a hedging approach has weaknesses and carries risk. Increasing the breadth of capability options in the U.S. arsenal would mean taking some risk in capacity for each of those options. However, that risk would be mitigated through the use of CONOPs that combine different force packages. Further, the risk may not even materialize if recent studies on the lack of efficiencies for joint fighter programs hold true for other capabilities.
Another important point is that a hedging strategy might not reduce the price tag of any one particular system. Yet, in aggregate, it may save money by decreasing funds lost on systems that spend many years in the development pipeline only to be cancelled with few platforms delivered, like the $6.9 billion spent on the Army’s Comanche helicopter. Additionally, a capability is more cost-effective if it is available from the time it is needed. A hedging strategy therefore enables leaders to cut programs that stagger on, zombie-like, for lack of alternatives, and to turn to ready prototypes when faced with a new challenge.
In theory, DoD already hedges through portfolio management and capability-based analyses across the range of military operations. Increasingly though, DoD creates a capability monoculture arising from the belief that the Pentagon can only focus on one major effort at a time (incidentally the main argument for focusing primarily on an offset strategy). This has led to a paradigm where the Department makes huge bets on single multi-role platforms that are then expected to address an unrealistic breadth of contingencies. The F-35 currently represents 25 percent of the total DoD procurement budget, a huge opportunity cost in terms of alternative options that might have been developed over the past 20 years.
A true hedging strategy is likely unachievable today despite its technical and financial feasibility. Governance and organizational structures, planning and acquisition processes and institutional cultures all favor addressing well-defined, long-term initiatives. But overcoming such obstacles in support of national security objectives is not insurmountable and can be addressed with strong leadership. This means empowering people to make changes financially, bureaucratically and contractually.
Regardless of the specific framework, the United States must be able to actively pursue multiple military-technical strategies simultaneously if it wishes to maintain technical superiority deep into the 21st century. The variety of threats, technologies, operating environments and partners the United States must address demands it, not to mention the rate of change among those factors. Whether DoD pursues a hedging strategy or some other approach it must acknowledge its capacity to do more than one thing at a time and develop that ability as a matter of urgency.
Ben FitzGerald is the director of the Technology and National Security Program at the Center for a New American Security. He co-directs the “Beyond Offset” initiative at CNAS.
Scott Cheney-Peters is a surface warfare officer in the U.S. Navy Reserve, founder and president of the Center for International Maritime Security (CIMSEC), and a member of the Truman National Security Project’s Defense Council. The views above are the author’s alone and do not necessarily reflect those of the Department of Defense or Navy.
Aaron Hull 
Edmund Rochford 
strategicservice 
Mark Zivin 
B-Sabre 
bobbymike 
Mr. FitzGerald/Mr. Cheney-Peters:
As an active researcher of the risks of the third offset strategy, I appreciate your imperical and analytical (vice the typical affiliation-based) approach to offering an alternative approach.
One aspect of your ‘hedging’ strategy that I believe is a part of the current (pre-offset) DoD acquisition strategy is the ‘incremental modernization’ approach – buy less, more often. This achieves precisely some of the effects you note – more modern equipment (on the average) at a cost in the same order of magnitude as the big-buy approach that fields the same standard of equipmetn across the force over a period of 3-7 years (after a 5-12 year procurement lead time).
There is an offsetting cost to this approach (which I understand your position to support) that neither the current modernization strategy nor your article addresses. That is, the additional cost and complexity of training, operating and supporting/sustaining multiple standards/variants of each weapon system simultaneously. Every unique part, component, tool, manual, or training program of instruction for each variant of each system will have to be cataloged, provisioned (initial issue of support materiel)and entered into operations and support documentation.
As a result, supply support activities will be required to stock a greater number of lines of stock – each presumably at a lower density of fill – increasing the procurement, transportation, and stock keeping costs. With a greater diversity of system standards (each at lower density) the stockage depth of each line will be less. This increases the risk of a requirement not being met from stock, a delay in fulfillment and therefore a degradation of operational readiness. Alternately, command-directed stockage levels to mitigate this impact would increase inventory carrying costs.
Complexity and the opportunity for error is also increasaed among those providing maintenance support to the systems. This could be somewhat mitigated by standardizing within a given unit. However, there is a disconnect between the personnel assignment and materiel release/transfer systems such that a maintainer (or an operator for that matter) trained at one duty assignment on a given standard for the equipment may be re-assigned after the new equipment training for the new standard has been completed. Furthermore, above the Brigade level, sustainment/support is frequently conducted on an area basis, supporting anyone in or passing through the area of support – introducing the opportunity to support multiple standards of the same equipment from a single source of support.
Commanders will also have to manage the variations in capability of the units under their operational control.
So, while this approach offers some potential benefits through horizontal technology insertion, it also increases the complexity and opportunity for error in operations and support.
Interesting article, but I am concerned by what I see as an American bias to find a tech solution (or rather a tech only solution). This is an interesting strategy for investment in new technologies. It seems to be missing key ideas in addressing rapidly standing up and training units that can operate and maintain the new systems (in fact the people are a critical portion of any system), while also failing to describe how to rapidly set up a logistics supply chain. I can speak from my own experience as a reservist that pre-deployment training exposed us in only the briefest way to a handful of systems (several of which were not available downrange), while it failed to train us on critical systems that were in use by our mission, failed to train us on the current threat/TTPs, and failed to train us on the language/culture (which was perhaps the most critical, as we never had to operate in a firefight, but we had to deal with local nationals daily).
I think you’re right on the money. Fielding capabilities isn’t just about developing the systems, it’s about ensuring the logistics supply chain is there to support it, in terms of both personnel and materials. This is an incredibly complicated process and grows more complicated as capabilities become more reliant on technology. The main problem is that while our warfighting systems have grown more complex on a linear scale, the logistics supply chain needed grows exponentially more complex. I personally believe we are at or near the point where we are fielding or attempting to field systems which will prove to be unsustainably complex, where the logistics chains to maintain said systems have become so tangled that fielding them in a shooting war will yield results which are actually less impressive than those of less capable but also less complex systems.
The bottom line is that we can only have so much of a “force multiplier advantage” – the next generation fighter will only be able to destroy so much enemy material. If the cost to benefit ratio falls too low – if the enemy can produce more cheap fighters at cost than we are able to destroy with our exquisite fighters at the same or greater cost – the system has failed, and we will fail.
This makes perfect sense given the threats we face. But isn’t the real question here: what is the incentive for the MI complex to change? And what is a path to making that change happen?
I’ve been watching the Army’s (and the joint services’) progress with Future Vertical Lift (FVL) for awhile, and that program is haunted by the ghosts of FCS, Comanche and F-35 (which is a neat trick as it’s still alive). Part of the problem is the timeline – initial operational capability for the first member of the family is mid 2030’s! That’s like the US Army sitting down the day after Armistice Day in 1918 and trying to figure out what sort of tank they are going to need for the next war! Given what they knew at the time, they would hav guessed wrong….
A couple of things the article says resonates with respect to FVL – buying small lots and doing more playing/hacking.
1) In order to determine how effective high-speed VTOL is, the Army (and Marines) ought to buy a small number of Sikorsky S-97 Raiders (enough to field a scout/attack company or so) and then play the hell out of them. Take them to every exercise you can find, ride ’em hard and put them up wet. Find out what they bring to the battlefield, and if its worth the investment.
2) Make better use of things like the Virtual Battlefield System, and create models of the various proposed FVL systems, and turn them loose in both structured and free-play game scenarios. In fact, they ought to release some of them as mods to the Arma wargame program, which is the commercial version of VBS. Some of the Arma clans are incredibly dedicated, inventive and innovative – I suggest you go to Youtube and look at some of the various “Shacktac” clan videos. I guarantee you that they’ll find new and innovative ways to use them….and to counter them.
I think this strategy takes a real commitment, meaning real dollars in decent amounts, for an aggressive prototype all the way to test program for all services. This should also be fully integrated with real investments of defense industry R&D dollars.
Recently I watch a Boeing video of a test of the ground launched, using MLRS solid rocket, SDB. This looks like it could be a real interesting capability fully funded by Saab and Boeing.
For lack of a better way to say it scientists and engineers should have the chance to come up with ‘interesting’ weapon system ideas and actually have the resources to build and test the systems and show their military/warfighter efficacy to the relevant services rather than it end up a paper study gathering dust.