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Managing Risk in USAF Force Planning THE ARTS This PDF document was made available CHILD POLICY from www.rand.org as a public service of CIVIL JUSTICE the RAND Corporation. EDUCATION ENERGY AND ENVIRONMENT Jump down to document6 HEALTH AND HEALTH CARE INTERNATIONAL AFFAIRS The RAND Corporation is a nonprofit NATIONAL SECURITY research organization providing POPULATION AND AGING PUBLIC SAFETY objective analysis and effective SCIENCE AND TECHNOLOGY solutions that address the challenges SUBSTANCE ABUSE facing the public and private sectors TERRORISM AND HOMELAND SECURITY around the world. TRANSPORTATION AND INFRASTRUCTURE Support RAND WORKFORCE AND WORKPLACE Purchase this document Browse Books & Publications Make a charitable contribution For More Information Visit RAND at www.rand.org Explore RAND Project AIR FORCE View document details Limited Electronic Distribution Rights This document and trademark(s) contained herein are protected by law as indicated in a notice appearing later in this work. This electronic representation of RAND intellectual property is provided for non-commercial use only. Unauthorized posting of RAND PDFs to a non-RAND Web site is prohibited. RAND PDFs are protected under copyright law. Permission is required from RAND to reproduce, or reuse in another form, any of our research documents for commercial use. For information on reprint and linking permissions, please see RAND Permissions. This product is part of the RAND Corporation monograph series. RAND monographs present major research findings that address the challenges facing the public and private sectors. All RAND mono- graphs undergo rigorous peer review to ensure high standards for research quality and objectivity. Managing Risk in USAF Force Planning Frank Camm, Lauren Caston, Alexander C. Hou, Forrest E. Morgan, Alan J. Vick Prepared for the United States Air Force Approved for public release; distribution unlimited PROJECT AIR FORCE The research described in this report was sponsored by the United States Air Force under Contract FA7014-06-C-0001. Further information may be obtained from the Strategic Planning Division, Directorate of Plans, Hq USAF. Library of Congress Cataloging-in-Publication Data Managing risk in USAF force planning / Frank Camm ... [et al.]. p. cm. Includes bibliographical references. ISBN 978-0-8330-4630-7 (pbk. : alk. paper) 1. United States. Air Force—Planning. 2. Risk management—United States. 3. Military planning—United States. I. Camm, Frank A., 1949- II. Title: Managing risk in United States Air Force force planning. UG773.M36 2009 358.4'16840973—dc22 2009016453 The RAND Corporation is a nonprofit research organization providing objective analysis and effective solutions that address the challenges facing the public and private sectors around the world. RAND’s publications do not necessarily reflect the opinions of its research clients and sponsors. R® is a registered trademark. © Copyright 2009 RAND Corporation All rights reserved. No part of this book may be reproduced in any form by any electronic or mechanical means (including photocopying, recording, or information storage and retrieval) without permission in writing from RAND. Published 2009 by the RAND Corporation 1776 Main Street, P.O. Box 2138, Santa Monica, CA 90407-2138 1200 South Hayes Street, Arlington, VA 22202-5050 4570 Fifth Avenue, Suite 600, Pittsburgh, PA 15213-2665 RAND URL: http://www.rand.org To order RAND documents or to obtain additional information, contact Distribution Services: Telephone: (310) 451-7002; Fax: (310) 451-6915; Email: [email protected] Preface The U.S. Department of Defense (DoD) and the military services face a range of challenges in 2008 unlike any in previous history. During the Cold War, only the Soviet Union could threaten fundamental U.S. interests. Today, global terrorism; insurgencies in Iraq and Afghani- stan; continuing unrest elsewhere in the Middle East; nuclear prolif- eration in Korea and Iraq; an unstable, nuclear-armed Pakistan; and uncertainties about Chinese military ambitions and Russia’s future path all present significant threats to U.S. interests. Other threats— yet to be identified—likely lurk over the horizon. Resources to address these threats are limited, requiring national and DoD leaders to make judgments about relative risks and allocate resources accordingly. To address these and related policy issues, RAND Project AIR FORCE conducted a fiscal year 2007 study titled “Managing Risk in the Future Air Force.” The study sought to develop a risk-management process that would help senior U.S. Air Force (USAF) leaders (1) focus planning on the most salient threats, (2) gain greater clarity on the risks associated with alternative courses of action (COAs) across multiple futures, (3) maintain a sense of the persistent uncertainties associated with any policy choice, and (4) effectively communicate their necessar- ily subjective judgments about risk to key audiences: USAF personnel, the Office of the Secretary of Defense (OSD), and Congress. This research should be of interest to planners and leaders in the services, combatant commands, and DoD, as well as the broader defense community. iii iv Managing Risk in USAF Force Planning The research reported here was sponsored by the Associate Direc- tor of Strategic Planning, Headquarters United States Air Force, and conducted within the Strategy and Doctrine Program of RAND Proj- ect AIR FORCE. RAND Project AIR FORCE RAND Project AIR FORCE (PAF), a division of the RAND Cor- poration, is the U.S. Air Force’s federally funded research and devel- opment center for studies and analyses. PAF provides the Air Force with independent analyses of policy alternatives affecting the devel- opment, employment, combat readiness, and support of current and future aerospace forces. Research is conducted in four programs: Force Modernization and Employment; Manpower, Personnel, and Train- ing; Resource Management; and Strategy and Doctrine. Additional information about PAF is available on our Web site: http://www.rand.org/paf. Contents Preface ............................................................................. iii Figures ............................................................................. ix Tables .............................................................................. xi Summary .........................................................................xiii Acknowledgments ............................................................. xxv Abbreviations ..................................................................xxvii CHaptER ONE Introduction ....................................................................... 1 Background ......................................................................... 1 The Policy Problem ................................................................ 3 Purpose of This Monograph ...................................................... 4 Organization ........................................................................ 5 CHaptER TWO An Analytic Framework and Risk Scorecard to Support Strategic Force Planning ............................................................... 7 Insights from a Simple Tree Diagram ........................................... 8 The Air Force Capability Review and Risk Assessment ......................14 A Basic Framework for Risk Assessment Relevant to Strategic Force Planning .......................................................................18 Step 1: Define Generic Potential Threats Relevant to the Planning Horizon .................................................................... 20 Step 2: Define Packages of Policies, Resources, and Capabilities to Apply over the Planning Horizon ........................................21 Step 3: Compare Capabilities and Capacities Supplied in Each Package Against Those Demanded to Address Each Threat ......... 22 v vi Managing Risk in USAF Force Planning Step 4: By Package and Threat, Assess the Probability and Magnitude of Bad Outcomes for U.S. National Interests ............ 23 Step 5: Define Each Future in Terms of the Set of Threats Relevant to the Planning Horizon ..................................................25 Step 6: Assess the Levels of Capacity Required to Service Each Future ...................................................................... 26 Step 7: Assess Level of Risk to U.S. Interests for Each Package in Each Future ................................................................ 28 Step 8: Choose Preferred Package .............................................31 Summary of the Analytic Framework ..........................................32 An Indentured Risk Scorecard ..................................................33 Using the Scorecard to Choose a Preferred Package of Policies and Resources ......................................................................37 Eliciting and Refining Subjective Beliefs .....................................37 Comparing Alternative Policy Packages ..................................... 38 Communicate the Justification for the Policy Package Chosen ...........39 Can the Air Force Do This? A Historical Illustration ..................... 40 How This Framework and Scorecard Address Our Core Concerns ....... 42 Give Decisionmakers a More Visceral Sense of the Persistent Presence of Uncertainty and Its Implications for Policy Decisions ................................................................... 42 Filter and Aggregate the “Parade of Terribles” So That Decisionmakers Can Focus on Planning on the Most Salient Threats
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