Defence research and development is superbly rich in the challenges of designing highly complex technologically based systems. These present very difficult systems thinking problems that will have to be solved if a systems approach is to be successfully applied to creating and sustaining the military capabilities and forces that the UK will need for the twenty-first century. Beginning with the nature of capability and introducing the concepts of capability engineering and through-life capability management, this paper explores the nature of these challenges from the perspectives of history and the author's experiences in working with colleagues in the UK and Allied defence acquisition communities. In his analysis, he identifies four ‘next great systems thinking challenges’: language, complexity, longevity and agility, overcoming each of which will require innovation in research and the development of new systems engineering and systems thinking practices. Looking further ahead, the author lists some of the emerging problems for defence, where taking a systems thinking approach could be particularly critical for success: demography, skills, education and human factors; security and the complexity of joined-up government; and the pace of technology advance. These are candidates for future next great challenges. Concluding, he notes that systems thinkers in defence are not alone. Complex capability engineering problems can also be found in energy, air and rail transport, complex IT networks, major civil engineering projects, and medicine and health care. Defence can learn a lot from systems thinkers in the civil world, and the civil world can learn a lot from defence.