Chairman and CEO
The Boeing Company
"Global Defense - Vision for the Future"
Defense Export Services Organization
March 05, 2003
Thank you, Alan (Garwood). It is a privilege to share my vision on the future of the global defense industry.
First, I want to thank both Lord Bach and you for leading this timely dialog about defense here in the Churchill Auditorium at Westminister. It was during the darkest days of 1941 that Winston Churchill spoke in his radio broadcast to America.
I'd like to start with what he said, and I quote:
"The destiny of mankind is not decided on material computation. When great causes are on the move in the world ... we learn that we are spirits, not animals, and that something is going on in space and time, and beyond space and time, which, whether we like it or not, spells duty."
Today I want to talk about how we can work together to shape the future of global defense " to fulfill our duty" in a time of great change.
The forcing function for change is the Information Revolution. It will be as disruptive as the Industrial Revolution, which changed civilization dramatically from a rural, agrarian economy to an urban, industrial economy. So we knew we had to change Boeing and started a few years back to transform ourselves. We identified three core competencies: detailed customer knowledge and focus, large-scale systems integration, and a lean enterprise. We moved from being a business that is 80 percent commercial airplanes to a 50-50 split between our commercial airplane and integrated defense business, which gives us better balance as a company.
We also moved to a global strategy by opening strategic offices around the world; by building stronger global partnerships; and by linking with universities everywhere for research and development. For example, in the United Kingdom, we have a great supply chain with annual purchases of about 1.6 billion pounds, and partnerships with three universities, and key industrial partners, including BAE Systems, Rolls-Royce, Smiths, GKN, and Short Brothers, one of our company's original suppliers.
I believe our transformation provides a map for the future of global defense as well. The future I see is about building coalitions and using technology; meeting demands for interoperability and affordability; and focusing on network-enabled capability.
Now I'd like to look at each of these.
First point: Build coalitions and use technology.
Global defense and security will require coalitions. It will require planning and shaping the future together and not in a "leader and or follower" relationship, but as partners. It's about building a strategic global defense based on common vision and architecture.
Our defense customers are on the same path to the future. In the United Kingdom, it is the Ministry of Defense's Strategic Defense Review and its New Chapter. In the United States, it is the U.S. Quadrennial Defense Review and the Joint Vision 2020, as presented by the Joint Chiefs of Staff. These defense documents are blueprints and offer a common vision and purpose. These shared visions suggest we are more similar than different. They underline the importance of transatlantic relationships and the contributions we can make by working together to protect freedom, our security, and an open way of life.
Global defense is also about using technology strategically. It is about the ability to "see first, decide first, and act first." Technology does include advancements in stealth and precision-guided munitions, but most important global defense is about improving how information is shared. Information technology will allow us to build the truly integrated battlespace of the future, and I will talk more about that later. In addition, information technology will dramatically alter how we do business. We can shorten acquisition periods with electronic transactions, with common standards, and by sharing solutions between civil and military sectors.
Global defense gives us the opportunity to work together, to act swiftly, and to do that with ingenuity. We need to rethink our roles, our participation, our missions, and our partnerships, which means flexibility and a willingness to change now for our future. I believe it's our duty.
Second point: Meet demands for interoperability and affordability.
Global defense is about changing with our defense customers to provide greatly improved capabilities quickly and at the right price.
Historically, defense products and services have supported the needs of particular mission areas. That meant singular visions, singular operations, singular architecture, and legacy systems more suited to the Cold War. It was a bottom-up, stovepipe approach. With the Strategic Defense Review and the Quadrennial Defense Review, our customers have embarked on change. The aerospace industry needs to do the same. We need to support capabilities that use technology to meet new threats and challenges. Last year, for example, we formed Boeing Integrated Defense Systems to mirror our customers' changing structures and provide them with integrated, networked solutions and capabilities. Boeing Integrated Defense Systems combines our military aircraft and missiles business and our space and communications business into a single, integrated organization. We took a platform-centric business -- fighter aircraft, bombers, transport aircraft, helicopters, and missiles -- and merged it with a systems integration business that had a wealth of expertise in integrating large-scale systems and high-bandwidth communication. We see Boeing Integrated Defense Systems as an organization that can combine a common architectural approach across service and platform boundaries. The objective is to provide greatly improved interoperability and capability.
Global defense is also about affordability and making every pound, dollar, and euro count. In the past, the defense industry has put enormous resources and intelligence into each new generation of platform -- whether airplane, tank, or ship. In the future, we can realize tremendous cost savings by putting more of the intelligence at a higher level. That means a network that connects individual platforms together with a robust network, linking key capabilities and enabling force multipliers.
Let me share an example of how one can breathe new life into an old platform and do it in a highly affordable way. Last year marked the 50th anniversary of the first flight of the B-52. Developed as an intercontinental bomber with nuclear strike capability, this aircraft platform was transformed into a GPS-aided precision bomber, data-linked to soldiers equipped with laser range-finders to strike against enemy forces hiding in caves in Afghanistan. Now, who would have thought the B-52 could be used for precision close-air support!
Being able to bring legacy platforms into an effective integrated battlespace multiplies their effectiveness.
Third point: Focus on network-enabled capability.
The Information Revolution is allowing us to move quickly into a network-enabled realm. This capability and intelligent networks will allow for better, faster decision-making. In a network-enabled world, for example, organizational structures will look different. In addition, status will be available quickly and broadly, and responses more structured and prioritized.
Network-enabled capability also will allow us to imagine a very different kind of defense. A network-enabled environment where:
Space-based, airborne, and sensors and robust communication systems allow us to know, with precision, where everything is on earth and in the air;
Each person has true situational awareness;
People collect and share data as allies; turn that data into information; and turn the information into knowledge to allow decision making in real-time.
So, in the future, we will maximize our ability to acquire, process, and disseminate information. We will be able to get information directly to the people who need it to do a job, who need it to make decisions on the spot, who can turn it into knowledge in order to create the ultimate high ground. A network-enabled battlespace will allow defense forces, which once operated separately, to operate together so that the best use of assets is achieved, independent of military service lines.
To do that on a global scale, and to do it affordably, we will have to bring the best in the industry together to meet the requirement, to work together as partners to shape the future. We will have to integrate legacy platforms with new technology platforms, such as B-52s, Tornados, and F/A-18s with unmanned aerial vehicles and satellites. These new-technology platforms, with appropriate payloads and data links, have the potential to become real game-changers, particularly in a network-enabled environment.
Global defense in the future will also have profound effects on organization.
How we are structured as institutions has deep roots; e.g., if you go back to Alexander the Great, Julius Caesar, and Genghis Khan, you can see that their organizations were hierarchical in nature so they could communicate with 20,000 or 50,000 people regularly. I believe the network-enabled world will move us away from the traditional, hierarchical, historical model. The future is about a top-down, joint approach: joint military visions and strategy; joint concept of operations; joint integrated architecture platforms and systems, all working together. This all-encompassing connectivity has huge potential. It can apply to almost any complex system you can imagine from the battlespace of the future to an air traffic management system.
The impacts of the Information Revolution will, indeed, be profound. The 21st century will require all elements of power -- economic, diplomatic, financial, legal, defense, and intelligence -- to cooperate, collaborate, and communicate seamlessly and globally. The future demands it. It demands us to rethink our activities. It demands us to put that thinking into action, because we cannot afford "not to hold" the ultimate high ground of information superiority.
I believe we have a rare chance to focus, as never before, so we can maintain the international peace and security we all desire. We can start by creating the vision of the future: a vision with the right concepts, the right capabilities, and the right forces; a vision that takes advantage of the Information Revolution. This symposium in the Churchill Auditorium is a great step in that direction. I believe it's our duty.
Thank you very much.