From Strategy to Execution: Accelerating the Third Offset

June 9, 2016

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Going from science fiction to reality is the dream of many an engineer or inventor who has envisioned a flying-car commute or teleportation to the beach. It’s not usually the domain of practical defense policy wonks. But that’s what makes the Defense Department’s third offset strategy different. The so-named quest for conventional military deterrence against China and Russia through the Pentagon’s use of game-changing technology now has a bureaucratic brand inside the Beltway. The third offset also has a budget, some $18 billion, to spend on fulfilling a vision of a future in which electromagnetic railguns shoot down hundreds of incoming cruise missiles, lasers slice through enemy warships, and robotic wingmen fly in first on the deadliest missions.

Deputy Defense Secretary Robert Work said during a recent discussion at the Atlantic Council, “The third offset is simple. At its core AI and autonomy will lead to a new era of human-machine collaboration.”

This beguilingly simple premise, however, lacks a broadly understood plan to execute this vision. Absent crystal-clear orders from on high and with plenty of the usual reasons for inaction, over-cautiousness is likely to prevail. Yet for the bolder members of America’s private sector, this is a moment of great opportunity to shape the next generation of military innovation.

It is time for a new model for government-industry collaboration, risk assessment, and strategic vision that can enable the kinds of ambitious military capabilities the United States must aspire to lead in the 21st Century.


New Roles for a Changing Mission

As the third offset transitions from policy to execution, its supporters now face the challenge of taking the conversation from the Pentagon’s E-ring to corporate boardrooms and innovation centers across America before the clock winds down on the Obama administration. For the next administration to carry on with the third offset, an important legacy will be the private sector’s understanding of the importance of prototyping, open innovation, and next generation manufacturing methods. This reinvigorated defense industrial base now is in the position to reimagine and reinvent their existing technologies and platforms in new and novel ways, a key third offset objective.

The question is not whether industry should lead or follow, but how Silicon Valley (and innovative centers around the country), the aerospace and defense contractor community, and the military can work together in new ways. One thing is certain: the traditional, grindingly slow way of doing business will not work. Speed is essential, and this requires breaking with status quo in defense procurement. Neither company executives nor the Pentagon can afford to wait for a request for information to be released and then go through months, if not years, of arms-length back and forth before a capability is ever fielded. The third offset’s core technologies are developing too quickly for this to be a viable solution.

Some observers have proposed overhauling the Federal Acquisition Regulation (FAR) as one way to speed up cutting-edge development efforts. Yet postponing progress until acquisition reform efforts trudge forward cannot be the solution. While Senate leaders are seriously debating changes to key government procurement regulations, it is not yet clear where those efforts will lead. The reality is, however, that it may not even be necessary to reform current processes to allow fresh approaches to industry-military cooperation to flourish.

All of this indicates that now is the time for a new, yet pragmatic, collaboration model that accelerates development and fielding of third offset capabilities. A new way of doing business will no doubt require changes in thinking — and not always easy ones — for both DoD and companies. Intellectual property rights and cost-sharing arrangements, for example, are two thorny issues that need urgent attention.

But change could produce clear benefits. With deeper and more extensive industry engagement sooner rather than later, the U.S. military will be much closer to benefiting from the creative synergies that the third offset demands. The business community will gain deeper insight into tomorrow’s military challenges. At the same time, leadership in third offset technology areas will generate new revenue streams and potentially enduring competitive advantage.

Engage, Align, and Experiment

This new government-industry collaboration model should be rooted in ongoing dialogue that identifies and addresses mission and technology gaps. Yes, there will be limits to what can be said and when discussions can happen. However, even broad conversations are better than none at all. The network effect is real and nurturing new relationships will help ensure that the proper investments are made, the right capabilities are prioritized, and the biggest risks are mitigated.

To start, the military and industrial base must engage in more widespread, ongoing conversations with the goal of simply opening the lines of communication about the third offset as well as what technological opportunities are on the horizon. From CEOs and the Office of the Secretary of Defense to business development directors and program managers, there is no initial conversation too big or small to be had. But that alone ultimately is not enough.

Beyond initial outreach, the military has to be willing to listen and share specific, tangible insights into its mission and technology gaps. Industry needs to respond by rapidly bringing ideas about how to develop new, breakthrough capabilities rooted in human-machine collaboration and expand on those that already exist. Based on these exchanges, acquisition officials will be better positioned to drive new rapid prototyping or fielding initiatives, as well as funded development programs. There are certainly success stories about similar initiatives, but they have too often been the exception rather than the norm.

To make the most of these interactions, the next step is to align capability needs and proactively make the right technology investments. Industry has to take a hard look at internal, as well as external, capability gaps. This means recognizing when the best sources for new technologies may lie elsewhere and developing the capability to identify, access, and apply them to the military problems at hand.

Speed will be a competitive discriminator, and as much as possible it will be important to rapidly prototype and demonstrate new technologies to stretch the bounds of what is considered possible. The military, in turn, must be able to show that there is a pathway to an eventual program or sustained funding stream. It cannot be an option to spend years in the lab or simply holding out hope for a funded program of record.

As noted, companies will need to find partners, especially for commercially driven, rapidly evolving technologies like artificial intelligence and machine learning. This is where Silicon Valley, with its wealth of intellectual capital, has a role to play. Universities and federally-funded research and development centers also offer valuable insights. By engaging directly with the defense industry, these institutions can experiment with new technologies — like cognitive electronic warfare systems or swarming drones — in ways that wouldn’t be possible by working with government alone.

Creating A New Normal  

Of all the advantages the third offset strategy is meant to provide, the potential to disrupt status quo processes and unproductive caution may be the most important. But it faces two major hurdles: a new presidential administration that may start with a blank-sheet approach to thinking about the future of war and the acquisition system’s “Valley of Death” where good ideas waste away into nothingness.

In the absence of a large-scale development program, defined guidelines, or pressing operational requirements, decision-makers will be tempted by caution and delay. That is understandable, but both industry and the military must be willing to embrace experimentation for this new engagement model to succeed. As technology leaders in Silicon Valley and others have demonstrated, “failing fast” is critical to ensuring that game-changing technologies are fielded as rapidly as possible. This is an historic opportunity to make real defense technologies that were once out of reach for America’s leading minds, but in spite of the moment at hand it remains all too easy to let it pass by.


Joshua Pavluk is a Principal at Avascent, a management and strategy consulting firm serving clients across the aerospace and defense sector. His commentary has appeared in TechCrunch, VentureBeat, and National Defense. Twitter: @jcpavluk

August Cole is writer-in-residence at Avascent. He is the co-author of Ghost Fleet: A Novel of the Next World War and a former defense industry reporter for The Wall Street Journal. He also directs The Art of the Future Project at the Atlantic Council, where he is a non-resident senior fellow.

Image: DoD photo by Air Force Senior Master Sgt. Adrian Cadiz


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2 thoughts on “From Strategy to Execution: Accelerating the Third Offset

  1. This plays well within the Beltway, but implementation is always sticky. We’ve been down this road in various forms before. It works very well when leveraging commercial technology, or fairly straightforward modifications thereof, without dictating how the product is built and maintained, and few or no restrictions on re-integrating development into commercial applications. In such cases, the government is just another market customer, often with a large enough market share to influence the direction of basic research.

    It also works well if the government funds/conducts basic research and passes it on to industry, who employs it to develop products for both commercial and government customers, again with few restrictions. The U.S. aeronautical industry worked like this from the up through the ’50s — NACA and select universities conducted research and made the results freely available to industry, who applied them to all their products, both commercial and military.

    Both of those models require the government accept being non-exclusive users of a subject technology, accepting proprietary solutions in some things, more flexibility on delivered performance, and giving up the right to dictate where, how, and who builds components and finished systems. It may also mean accepting a lower service lifespan, and a lower level of standardization across a large force, as industry is free to abandon obsolete product lines.

    Control means funding what you want control of — since we usually want to control all aspects, we end up funding everything, which brings in larger amounts of Congressional oversight…Congress gets impatient with failure, rapid or otherwise. But this is also why we’re still waiting to accept a new tanker based on an aircraft already in operational service with three other countries.

  2. I have no issue with accelerating new strategy i have yet to learn what strategy we are accelerating. So far 3rd offset is nothing more than a fancy name for hardware development without a defined operational requirement.

    Strategy is land air, MAD, propertional response, etc. So far neither Bob Wok or Mr. Carter have truly articulated a new strategy for closing and destroying the enemy. Form what I can tell they are looking to fast track weapons that might have a purpose in order to attack head long into A2D defenses. Basically a retread of existing strategy with some new tools to apply.

    Why when our potential foes have been able to go to school on our strategy since we first validated and demonstrated it in action during the first gulf war. Do we believe bolting on some new high tech gadgets will allow us to remain stagnant and just effectively add PEDs to our existing strategy and not truly show vision of new thinking.

    Once again Pentagon and Politician marketing obscuring the need for real reform and real National Defense policy. It like 3 card Monty look over here so you don’t see how badly we are cutting and slashing over here. Maybe some day we will have a journalist class that can see throw the smoke and identify the misdirection.