Boeing Frontiers
April 2003
Volume 01, Issue 11
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Integrated Defense Systems

IDS merges ... with its future

With the organization now nine months old, what are the long-term strategies to help IDS invent the future?


It's well known that nine months ago Boeing CEO and Chairman Phil Condit announced the creation of an integrated defense business that brought together world-class platform builders and expert large-scale systems integrators. It is also widely recognized that the Integrated Defense Systems organization is structured to provide customers with a one-face, one-place approach to the best integrated solutions imaginable.

So IDS is in place and ready to go. But what's next? How about strategically aligning 78,000 women and men so they can perform like a well-oiled machine (or a well-wired network, as the case may be)?

"Strategy," as IDS President and CEO Jim Albaugh recently explained to leaders from across the enterprise, "is about understanding the enduring needs of our customers and providing them value-added solutions to meet their requirements." Albaugh was speaking to approximately 900 leaders gathered in Los Angeles for the inaugural IDS Senior Leadership Team meeting.

"It also means understanding the art of using existing and emerging technologies to provide the customer with ways of improving the capabilities of existing products or delivering new solutions altogether," Albaugh continued.

Albaugh opened the leadership meeting with high expectations.

"My intention is that we all leave this meeting with a common understanding of where IDS is headed and how we are going to get there." Albaugh said. "As a leadership team we must take personal responsibility for ensuring that every member of the IDS organization also shares in this vision."

Albaugh saw the meeting as an invaluable opportunity for the team to come together and achieve alignment on objectives, the IDS culture, leadership expectations, IDS strategy and business plans. Just as important to Albaugh as coming together on objectives and strategies, was simply coming together.

In his remarks to the leadership team, Albaugh went on to say that he believes that the leadership for the nine Business Units demonstrated three key characteristics for success: in-depth customer knowledge, business acumen and, maybe most importantly, a strong commitment to working together. "It's the role of all leaders to work to create an environment where all employees feel valued, included and engaged," Albaugh continued. "We need to set clear goals and priorities, holding each other accountable; reward the doers; develop and attract good people; know ourselves, our team and our business; deal honestly with issues; and encourage diversity. And, when I use the word 'diversity,' I mean it in all senses of the word, most importantly in terms of diversity of thought."

And when it comes to diversity of thought, there is no shortage at IDS, where seven heritage companies (Boeing, North American Rockwell, McDonnell Douglas, Hughes' Space & Communications, Autometric, SVS and Conquest) converge to create a single organization—a group that is electric with diversified brain waves. But harnessing that vast resource and getting its women and men to execute as one organization is the IDS challenge—one Albaugh personally relishes.

"For our employees, an organization like IDS brings tremendous opportunity," said Albaugh. "This new structure encourages employees to think a little more broadly about their work and how what we do across the business is interrelated. We have some of the most talented people in the industry working on our programs and products, and we're going to continue to tap into this talent through our process councils, strategic business councils and enterprise capability centers, which will facilitate horizontal integration."

Leadership Councils focus power of IDS

There are two major leadership councils for IDS—the Strategic Business Council (SBC), which focuses on anticipating market needs, developing and integrating strategies, and allocating investment resources to grow the business; and the Enterprise Integration Board (EIB), which is focused on improving the execution of IDS businesses.

Shep Hill, IDS vice president of Business Development, leads the SBC with participation from the business unit general managers and selected others. The SBC is tasked with creating strategies around the seven key markets that have been identified based on internal capabilities, growth opportunities and customer input, and for allocating resources for future growth and development. These markets include Integrated Battlespace, Mobility, Precision Engagement, Homeland Security, Missile Defense, Launch and Orbital Systems, and Sustainment. Sub-councils are actively working to address individual market issues. Because the SBC will have visibility across all of the markets, it will play a significant role in ensuring that IDS operates as an integrated, agile organization that delivers capability-driven solutions to Boeing customers.

The EIB and the functional councils work together to form an integrated execution plan to meet the businesses needs. Thad Sandford, IDS vice president of Engineering, leads the council with participation from business unit general managers and functional leaders. The EIB is composed of the functional vice presidents. Their goal is to improve processes and efficiency, optimize assets across the organization, and develop employees through support and career-enhancing opportunities.

Aerospace Support • Air Force Systems • Army Systems • Homeland Security and Services • Launch and Satellite Systems Missile Defense Systems • NASA Systems • Naval Systems • Space and Intelligence Systems


This means, for example, identifying that work being performed at Advanced Information Systems—Maryland Operations (formerly Conquest and now part of the Space & Intelligence Systems business unit) may have applications for the Homeland Security & Services business. It is the role of the Strategic Business Council sub-councils (see sidebar) to ensure that this sharing of knowledge and capabilities occurs—and that new opportunities for growing the business are identified, reviewed and executed. With planned revenues of $27 billion for 2003, this is an important mission.

But growing the business isn't enough, Albaugh has stated. "We must have profitable growth" by operating with customer focus, leadership, technical and business excellence, he said. "I've talked to employees throughout IDS about our seven key markets and how we want to help our customers shape these markets and expand into new areas. As Phil [Condit] has said, we must listen carefully to the customer and work to shape the future. We don't want to be a company that sits back and waits for the customer to throw proposals out there. We want to work with our customers, really understand what their enduring needs are and craft solutions for them." Taking this proactive approach, with a focus on leadership, strategy and employee engagement, will help IDS deliver the double-digit profit margins the organization is aiming for by mid-decade.

The organization also needs to have the right strategies in place that focus on the capabilities of the business. "Our strategies have to be more than just evolving the products that have made us successful in the past," Albaugh said to IDS leaders. "They have to be capabilities-driven solutions to our customer needs. Our job is to make obsolete the products that we have now, because if we don't somebody else will.

"We have a strategy of providing solutions that bring together the best of industry, not just the best of Boeing, and if that means going and getting a product built by someone else and integrating that into our solution set, we need to do that.

"That doesn't mean that we're not going to continue building platforms. What we're trying to do is leverage the capabilities of both—the design and production of fighter aircraft, bombers, transport aircraft, helicopters and missiles with the ability to integrate very complex, large-scale systems— and deliver to our customers platforms and weapons systems that offer perfect, real-time situational awareness through access to networks. In other words, the networks can make the platforms that we build have greater operational capabilities. It's not either-or—it's both.

It's also important that IDS be lean in the design and production of everything it does. "But probably the most important component of growing this business is the people that we have," Albaugh stated. "As leaders, we really want to make a difference in maximizing their effectiveness and satisfaction through engagement, empowerment, development and education."

In addition to hearing directly from several IDS senior leaders, the meeting gave attendees a chance to interact with each other as they took part in various breakout sessions and panel discussions—focusing on different aspects of the business.

"We have the right organization, we have the right strategies and we have the focus on execution that we need to be successful," Albaugh said in closing out the meeting. "What will set us apart from our competition is our ability to capitalize on the diversity of thought that exists within IDS. We have brought together people who are leaders in platforms and the leaders in system-of-systems integration. It's not about one or the other; it's about both. It will be our ability to work together, to leverage our strengths, to know our customers, to be honest about our challenges, to embrace change, and to operate with strong business acumen that will ensure our success."


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