IDS ONE YEAR BIRTHDAY—A BUSINESS TRANSFORMED

After a good first year, IDS team bent on reaching full potential

BY MARC SKLAR


The concepts were simple. The concepts were common sense.

Build an organization that lets you know your customers inside and out, and makes communication with them fast and easy. Take the customers' goals, even anticipate their needs, and present complete solutions.

Empower teammates and give them the tools to turn their tremendous energy, creativity and talent to make those solutions a reality. Work across the organization to tap the best practices, and even tap resources across industry, to bring the best solutions to the market.

Taking those concepts and transforming a 78,000-person, $27 billion operation to make them a reality was an enormous challenge. But, after just one year, Boeing Integrated Defense Systems has made tremendous strides toward those goals.

Boeing formed IDS on July 10, 2002, through the combination of its former Military Aircraft and Missile Systems, and Space and Communications organizations.

"I don't think anybody really knew what to expect," said IDS President and CEO Jim Albaugh. "We wanted to be the premier company to support the transformation of the military, and I think we've done that."

Contract wins and sales growth are the most solid evidence of IDS first-year success. During its first 12 months

• The Future Combat Systems team received U.S. Department of Defense approval and got on contract for the $15 billion systems development and demonstration portion of the FCS program.
  
  
• The U.S. Air Force placed a follow-on order for 60 C-17 Globemaster III transports valued at $9.7 billion.
  
  
• The first Delta IV launch put the Boeing entry in the U.S. Evolved Expendable Launch Vehicle program into service.
  
  
• IDS won the Joint Tactical Radio System Cluster 1 contract.
  
  
• Successful deployment in U.S. military operations led to a $378 million contract for accelerated Joint Direct Attack Munition production.
  
  
• IDS completed the installation of electronic detection and imaging equipment in more than 400 U.S. airports, and training of more than 25,000 Transportation Security Administration employees under tight schedules.
  
  
• Three very young businesses within IDS topped $3 billion annual sales each—Integrated Battlespace, Intelligence and Missile Defense.

As a result, this year IDS sales will exceed that of Boeing Commercial Airplanes. "Obviously, BCA is doing an amazing job contributing to the bottom line in an extremely tough environment," Albaugh said. "But, this shows that we are achieving the companywide balance that is a corporate goal."

A key to the changes has been the customer facing organizations—nine business units within IDS, each dedicated to a specific customer or segment of customers. They are Aerospace Support, Air Force Systems, Army Systems, Homeland Security and Services, Launch and Satellite Systems, Missile Defense Systems, NASA Systems, Naval Systems, and Space and Intelligence Systems.

On July 22, Albaugh announced that Launch and Satellite Systems was being reassigned to three of the other business units to better align with its customers and market realities.

The improvement in "customer service" is getting noticed. "[Customers] have told us that it's about time that somebody recognizes the need to organize around them," Albaugh said.

"Just the fact that they have one point of contact that can reach into our organization and integrate across the enterprise is something that nobody has ever done for them before."

Not only are customers noticing the change, but competitors are looking at replicating the IDS model both in terms of capabilities and organization, Albaugh noted.

Making it all happen are the people of IDS. "Jim Albaugh and the IDS leadership team made a commitment to create an environment where all IDS employees feel valued and engaged," said Wanda Denson-Low, IDS vice president of Human Resources. "The Organizational Effectiveness group was created to help achieve that objective. The OE team brings together responsibility for training and development, diversity, employee engagement and involvement, and employee surveys/ morale, so all these efforts work together to support a positive work environment."

"There is a clear link between our behaviors, actions and decisions as leaders, and the culture of IDS," Albaugh said. "I have challenged each business unit general manager with developing robust plans for their respective business units to ensure that we meet our goals."

To get there, IDS is rolling out three important programs this year. They are Leadership 2003, a mandatory leadership development program for all IDS managers; an action plan that is aligned with the companywide diversity strategy; and the employee engagement and involvement strategy. Leadership 2003 is already under way, the diversity strategy is being rolled out this month, and the employee engagement and involvement strategy will follow soon after.

Albaugh and IDS leadership are also emphasizing the 2003 Ethics Challenge program.

"In the same way that we work with our outside customers, we are committed to delivering on our commitments to the men and women of IDS," Albaugh said. "Nothing has a higher priority for me. We have amazing potential within IDS and we can't afford to waste any of it."

As IDS looks to the next year, next decade and beyond, two organizations that cross all of IDS will play a vital role—Integrated Defense Advanced Systems and Strategic Architecture.

IDeAS develops forward-looking technologies that both meet and anticipate customer needs.

"A big part of our job in IDeAS is to win those near-term programs that are going to move the IDS revenue needle in the 10-year horizon of our long-term business plan," explained Mike Heinz, acting vice president of IDeAS. "But, we also look beyond the horizon at those things that might be revolutionary or displace the products that currently make us a market leader." That way, Heinz said, IDS remains ready to take advantage of the next big market. He cited IDeAS' X-45 Unmanned Combat Air Vehicle and the Canard Rotor/ Wing program as two examples.

Strategic Architecture is where a network-centric operation becomes reality, as it ties together all the assets of the military.

"Basically, our nation and its defending forces have a need to see, evaluate, decide and act faster and more effectively than any potential opposing force that might be advanced against us," explained Carl O'Berry, vice president of Strategic Architecture. Those concepts, O'Berry added, also apply to how teams within IDS work. "We intend to turn Boeing into a network-centric enterprise to continue turning inside the decision loop of our competitors."

Maintaining customer focus is key to maintaining that edge, and to continued growth, said Shep Hill, IDS vice president of Business Development. "Remain close to the customer—through good times and bad. It is a relationship that must transcend any one program," Hill explained. "Be knowledgeable, be credible, be truthful. Develop a relationship of mutual respect both personally and professionally with your customers."

IDS leaders feel they have put the organization in place to support the customer-driven growth and have developed a strategy to capture future work. "With the programs we've won, we have the opportunity to become a $40 billion enterprise by 2007," Albaugh said.

That's 50 percent growth in four years, which is another goal that is simple in concept and will keep the talented IDS team very busy.

marc.a.sklar@boeing.com