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Understanding the limits of a nation’s ability to build and deploy mission-ready armed forces is a fundamental element of national security. The determination of optimal defence (military) capabilities to be developed and maintained, along with the associated states of readiness, is the major challenge to defence planners. Those involved in security and defence policymaking and planning processes usually stress the importance of keeping a state’s military capabilities ready. While they generally agree that every function of the defence enterprise should directly or indirectly support the formation of a mission-ready military now or in the future, their views on what readiness is, and therefore, how to manage it and use it as a resource management and performance measurement tool, often diverge. In this article, the use of readiness as a defence performance indicator has been discussed, and a performance framework for a major force program has been proposed as well. Despite its shortcomings, it is very important to include the “readiness level” as an output indicator in the defence program structure of the Ministry of Defence. The target readiness levels of the military units should also be specified in the defence strategy and planning documents, as well as procurement objectives and descriptions of acceptable risk. Evaluation of the performance of managers at all levels should be directly related to the achievement of the specified (planned) levels of readiness or to the contribution to the achievement of the latter. The Ministry of Defence is only successful to the extent that it produces one primary output: military capability - organized, equipped, trained, and sustained mission-ready defence forces that can be verified and confirmed by using readiness assessment methods. Therefore, military readiness should be of great importance to the Ministry of Defence, the Government, and the Parliament of a state as a key factor in determining defence funding needs when debating on defence budget issues.