AUKUS, Nokia, Theranos & Dennis Richardson

Dennis Richardson has been asked by Defence Minister Richard Marles to review “governance” at the Australian Submarine Agency tasked with building AUKUS submarines because a Public Service staff census has revealed very significant problems within the Agency with staff morale and internal communications.

But, is he up to the task?

Richardson has very wide experience in the government bureaucracy but none in economics or business. If he did he might recognise that the basic problem is probably that many staff members have morale problems because of concerns about the high-tech product – ie the production of AUKUS submarines in Adelaide! This would not be an unusual combination.

For example, such a connection was evident at Nokia about 20 years ago when the operating systems for mobile phones moved from device-centric to platform-based such as the new Apple smart-phones. Bad product led to bad management and people left, which in turn hindered recognition of the fundamental problem. Demand for Nokia phones plummeted! Another more recent example was Theranos where it slowly dawned on staff that the Edison high-tech blood-testing machine was fake. In both cases, many people – both inside and outside the organizations – refused to recognise that the basic cause of staff dissatisfaction was a flawed product.

Publicly, British journalist and historian Max Hasting reported in September that “a British defence insider” said to him: “I don’t think our UK submarine sector is remotely capable of delivering what the Australians want on time, on cost or to standard.” Former Foreign Minister, Alexander Downer, has called building nuclear submarines in Adelaide – his home-town – a “fairy-tale”. In addition, all the hidden signs are that AUKUS is a dud product with knowledgeable people admitting this among themselves but reluctant to be the first to loudly proclaim that the “emperor has no clothes”.

What will Richardson conclude about AUKUS? Is he even capable of recognising the basic problem is a rotten product? Or, will he ignore problems like many did at Nokia and Theranos?

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