March 2006 
Volume 04, Issue 10 
Integrated Defense Systems

Listen, know, adapt, thrive Listen, know, adapt, thrive

IDS reorganization reflects customer needs


"It's not about numbers. Numbers don't tell you if you can get the job done.... Capabilities, being (able) to generate operational effects on the battle space—that's what it's about." — U.S. Principal Under Secretary of Defense for Policy Ryan Henry

"To help us more effectively address future evolving requirements for capability-driven solutions, we will be reorganizing around capabilities... helping us to better serve our customer and compete and capture new business." — Jim Albaugh, Integrated Defense Systems president and CEO.

If the two quotes above seem in sync, there's a reason: They are. The first describes the capabilities focus outlined in the latest U.S. Department of Defense Quadrennial Defense Review (see box below "What's the QDR"); the second explains the prime reason why Integrated Defense Systems recently reorganized.

Reorg reflects leadership, customer focus areas

The recent Integrated Defense Systems reorganization reflects how the business is following the "focus areas" laid out for 2006 by Jim Albaugh, IDS president and CEO. In particular, the changes tie into the leadership and customer focus areas. In addition to the reorganization, IDS has selected four focus areas for 2006 designed to significantly improve execution and productivity. (These are program management best practices, systems engineering, cost structure, and supplier management and quality.)

"We in IDS leadership want to make sure we provide our team with the best structure for them to execute and provide our customers the best solutions as efficiently and effectively as we can," said Albaugh. "These changes streamline our ability to offer the capabilities-driven solutions the customer is demanding and will let us respond rapidly as their needs transform."

And, "leadership" does not just come from the top. The new organization will encourage all teammates to show leadership by sharing best practices, working across the enterprise, and developing better ways of doing their jobs—all of which will enhance IDS competitiveness in an increasingly tough market.

It's no surprise that IDS is closely tracking the goals and objectives of its largest customer. The entire idea behind the formation of IDS in 2002 was to ensure an organization that had deep customer knowledge and could always provide the best products, services, support and solutions.

The original IDS structure of "customer- facing organizations" helped create a foundation that this new organization can take to the next level. By talking with the customers and listening carefully to their description of their evolving needs, IDS teammates saw the need to shift to a stronger capabilities focus.

The shift is a next logical step in the evolution of IDS and of the DoD's transformation. IDS sprouted from the merging of great platforms, like the F/A-18 Super Hornet, the AH-64D Apache Longbow and C-17 Globemaster III, with the networking capabilities of programs like Missile Defense and Future Combat Systems.

Understanding that great hardware without networked knowledge, or its reverse, was limiting both sides led to the internal merger of the Military Aircraft and Missile Systems and Space and Communications business units. Once those groups had melded to work on unified solutions for the customer, the next move was to see how they could best deliver the end result the customer wanted—or, in other words, to focus on capabilities.

Listen, know, adapt, thrive "The new organization focuses IDS and Boeing resources on where our customers and markets are going while maintaining ease of access for and to customers," said Shep Hill, IDS vice president, Business Development.

IDS' new structure includes three primary businesses:

  • Precision Engagement and Mobility Systems, led by John Lockard.
  • Network and Space Systems, led by Roger Krone.
  • Support Systems, led by Pat Finneran.

There is also a new Advanced Systems unit, headed by George Muellner, that will continue to work on advanced technologies with Phantom Works. And finally, Business Development's role has expanded to ensure customer alignment across the enterprise.

The changes come at a critical time as many analysts forecast restrained U.S. defense budgets. "The units in IDS are set up to have stronger functional discipline and focus on execution, because that becomes even more important in a moderating environment," said James McNerney, Boeing chairman, president and CEO.

Listen, know, adapt, thrive Along with execution, the other basics of IDS' business plan, including improving productivity and driving down costs, remain key to achieving success.

"Realignment is not about mission change or a significant displacement in the work we already are doing," Finneran told teammates in Support Services. "It's about making improvements and course adjustments, things you already do very well. It's about preparing us for the future."

Finneran's comments reflect how IDS leadership sees transformation as an unending process of improvement. It is a feeling shared by the customer as well. As Defense Secretary Donald Rumsfeld said when describing the QDR, "It's best understood as a waypoint along a continuum of change that began some years past and will continue for some years hence."

What's the QDR?

Every four years, U.S. law requires the Department of Defense conduct a major review of "national defense strategy, force structure, force modernization plans, infrastructure, budget plan, and other elements of the defense program and policies." The aim: to establish a defense program for the coming two decades. The DoD's findings are spelled out in the Quadrennial Defense Review. The most recent QDR was released last month and includes a number of shifts in areas the Defense Department will emphasize. Those shifts include moving

  • From threat-based planning to capabilities-based planning.
  • From 20th century processes to 21st century integrated approaches.
  • From a focus on kinetics to a focus on effects.
  • From a peacetime tempo to a wartime sense of urgency.
  • From a time of reasonable predictability to an era of surprise and uncertainty.
  • From single-focused threats to multiple, complex challenges.
  • From nation-state threats to decentralized network threats from non-state enemies.
  • From static defense and garrison forces to mobile, expeditionary operations.
  • From "one size fits all" deterrence to tailored deterrence for rogue powers, terrorist networks and near-term competitors.


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