IDS Taking the space & defense business to the next level

It's been a little more than five months since Boeing announced the creation of Integrated Defense Systems. In that time, IDS President and CEO Jim Albaugh and his leadership team have worked on building a highly integrated, matrix organization designed to provide customers with market-driven solutions that offer an edge over the competition. Albaugh recently talked with Boeing Frontiers about how things are going.

Q: You've had the chance to talk with many employees and customer representatives about the future of IDS. What has emerged from these discussions?

A: Over the past five months I've met with more than 10,000 employees from across the country; spent countless hours with our customers; and talked to Wall Street analysts, elected officials and government appointees about the strength of the IDS organization. In all of these forums the excitement about IDS is very real and very strong. I think our employees are energized about what this means to the future of the organization and the business. They see this move as a reflection of Boeing's commitment to broadening its business portfolio and recognize that by bringing together our world-class expertise as builders of platforms and integrators of large-scale systems, we're wellpositioned for future growth. While there are still some questions about the implementation of the new organization, everyone really seems to want to do all that they can to make IDS successful.

Our customers are very supportive of what we're trying to accomplish and see this as an opportunity for Boeing to help them address the transformational needs of the military. At the same time, they are watching us very closely to make sure that we stay focused on our existing programs and continue to make flawless execution a top priority.

Since we made the announcement back in July, we've been holding monthly leadership team meetings to ensure the successful realignment of the new organization and a shared vision throughout the group. We've made tremendous progress in these meetings, and we are aligned in our commitment to [Boeing Chairman and CEO] Phil Condit's goal—which is to focus on customers, employees and shareholder value and develop a clear set of market-shaping strategies.

Q: Q: You've talked about how IDS brings together a premier network systems team from the former Space and Communications business unit with a premier platform team from the former Military Aircraft and Missile Systems business unit. How do you see those teams working together?

A: What we are 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, largescale systems like the International Space Station and missile defense—and deliver to our customers platforms and weapon systems that offer perfect, real-time situational awareness through access to networks.

There are exciting possibilities. Take the F/A-18E/F Super Hornet, for example. How do you make that aircraft part of a network so that it works effectively with a Global Hawk or Predator [unmanned vehicle]? Or how can the people in Anaheim [Calif.] who make the seeker for the PAC-3 missile work with the team in St. Charles [Mo.] or St. Louis to build better weapon systems? The aircraft and weapon systems that can best be tuned into a network are the ones that become huge force multipliers.

We've already demonstrated how this can be done, and how the ability to plug into a network can breathe new life into a platform. Look at the B-52. In Afghanistan, it was being used as a GPS-aided precision bomber to perform close air support for troops on the ground. No one ever thought that the B-52 would be used in this way—not even five years ago.

What we are trying to do is collect data, turn the data into information, turn the information into knowledge and communicate it to the people who need it, when they need it. The key is to effectively manage data and utilize information to increase knowledge, which then aids the decision-making process. Any platform can play if it can generate data, plug into a network and affect a mission.

Our diversity of programs and expertise, along with the varied experiences and backgrounds of our employees, are really what will drive our innovation. As we put these two former [business units] together, I expect people to look at problems differently, to have great debates about possible alternatives and to generate new solutions for our customers.

Q: You've talked with employees about how the creation of IDS fulfills a business strategy that Condit developed for Boeing several years ago. Is that strategy paying off?

A: When we put IDS together, it really drove home the point that we have a robust $25-billion-a-year space and defense business that has synergy with and complements the commercial airplane business in Puget Sound. I think the investor community is starting to recognize this balanced portfolio of products and services. Regardless, we still have much work to do to execute on programs, to continue to improve competitiveness and to capture future growth opportunities.

Q: You've also talked about how the creation of IDS is intended to meet the needs of a changing business environment. What will happen to IDS as that environment changes?

A: Well, few things are perfect or timeless. It used to be that our customers' needs were centered around platforms. Now, they are centered around network solutions—and that's why we formed IDS. We have helped shape our customers' thinking relative to network-centric warfare and what a network can do. We are seeing an information revolution that will have as much impact on the battlespace as the industrial revolution had on business in the early 19th century. But if the market or our customer goes in a different direction, we will have to change as well. If we don't, we'll risk being left behind.

That's one of the reasons why the leadership team and I have worked hard to structure IDS as a virtual organization that combines consistency of approach with flexibility and creativity. The consistency of approach helps to assure our customers that we're all moving forward together with a shared vision and goals. The flexibility and creativity allows us to adjust to changes in our customers' needs, to understand trends ahead of time and to help shape the markets in which we operate. As Phil Condit has said, "market shaping is a capability that will keep Boeing the world's leading aerospace manufacturer in the 21st century."