COMMENTARY

How investors can play a critical role in national security

The job of national security is daunting. Most of our adversaries don’t have to manage transparency of budget and operations. While threats become increasingly more innovative and agile, our government has to balance being adaptive with being accountable.

Insert a new domain of warfare, as cyber threats proliferate, and what materializes is a fantastically complex mission for our homeland security, defense and intelligence agencies.

The challenge of marshalling finite human and financial resources to act on a burgeoning number of virtual and physical fronts demands enlightened behaviors from government’s industry partners and the investors that support them. 

As the large systems integrators continue to consolidate, investors must innovate. Leading-edge information technologies, applied effectively to meet mission demands, can enable the effective and targeted exploitation of big data, the projection of power in cyberspace and beyond, and efficient resource management, among many other things.

However, innovation in IT is, in itself, no panacea. Technology can be a true enabler when it aligns with the goals of the people who use it and the mission to which they are contributing. Get that wrong and technology can at best be a distraction, and at worst hamper the mission, often at enormous costs that government shouldn’t have to afford.

We see a key role for the investment community in building companies that create capabilities the government really needs at the nexus of people and technology, and not just what they believe government ought to buy. This role centers on what we call Accountable Innovation - a core set of principles applied to inform investment decisions and ensure companies stay mission-focused. These principles relate to the role of investors, the purpose of technologies being invested in, and the ways in which the technologies are developed.

Mission Insight

By helping sustain a diverse technology ecosystem, investors will be aiding the U.S. in maintaining strategic advantage over its adversaries. Doing that effectively requires deep customer intimacy and mission understanding, not least to bridge the gap between what customers need and on what much of the tech industry is working.

Given the plethora of niche technology developers out there, most of whom may never consider working with government, well-informed investors can be the eyes and ears of customers to spot the really great ideas and bring them to market in a manner that adds real value to the mission. That takes both time and money that we, as investors, should be prepared to spend.

End-user Focus

All too often, users play second fiddle to the drive for innovation in the field of IT development and deployment at the expense of solutions that are simple and pragmatic. The consequences of overlooking the user perspective can involve much time and money wasted in delivering solutions that were never likely to work in the first place.

Investors should encourage developers to work closely with customers and end-users who have the bigger picture in mind, to ensure there is mutual understanding of both strategic and tactical goals, and how people need to work to achieve them. Adopting that approach is far more likely to result in valuable and more cost-effective solutions that are true mission-enablers.

Adaptive Culture

The last piece of the Accountable Innovation puzzle is culture. No two agencies work in the same way and no mission is static. Companies providing mission-critical IT and services need to reflect that in the way they work and evolve.

Investors have a key role in encouraging a flexible culture that promotes collaboration, invention and creative thinking to ensure that the capabilities being developed flex with and adapt to the mission of their customers.

That’s far from easy, as it requires constant listening to and learning from customers as to how their challenges are shifting both in scope and scale, and applying that knowledge to develop better solutions. But it’s an essential part of keeping technology honest in the service of national security.

Information technology products and services should always serve as an enabler of better human collaboration and decision making. We believe passionately that human experience and expertise remain critical to the effectiveness of national security operations.

So, when considering IT with a potential national security application, investors ought to be clear about its true value to the work, lives and insights of the people making critical – often life-or-death – decisions.

That means asking some fundamental questions. How has it been developed? Who was involved in the process? How much specialist knowledge and support does it require to use and sustain? How adaptable is it to different agency and mission contexts? And ultimately, will users use it and value it?

Investors are uniquely placed to use the power of investment capital and M&A to build capabilities around the highest-priority mission requirements. In a market environment that is witnessing historic levels of consolidation among the LSIs, investors have a historic opportunity to enhance our nation’s security in an increasingly complex global political environment.

It’s time for a new approach to enabling government success in its national security mission.  We welcome industry and investors to join us in a common pursuit around Accountable Innovation.

About the Author

Gavin Long is managing partner of Acacia Group, owners of Applied Insight and investors in technology companies supporting the U.S. national security mission.

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