TMI has contributed to numerous Opportunity Creation efforts that span the life cycle from pre-acquisition through the operations and support phase in collaboration with both system primes and technology-based product companies. The insights presented in this “Opportunity Creation” post—the first of a two-part series—highlight the experience of our principals, several of which have managed Advanced Programs Departments for A&D contractors.
The definition of Opportunity Creation (OC) is self-evident. In this discussion it applies to capturing business where the customer may not have recognized and/or defined the need, solution, and means of acquiring the solution. OC’s scope of activity goes beyond just matching need with capability and involves the activities discussed in the examples presented below.
This Winning Insights post discusses the importance of OC as a source of needed war fighter capability; OC as a source of revenue; and the need for speed to deploy a capability sooner.
Increasing Source of New Business. The urgency for Opportunity Creation has never been greater than in today’s environment. It is the “heady and value-added” element of the Aerospace and Defense (A&D) business. Agility and Innovation by Technology Entrepreneurs has become increasingly important in the U.S. response to emerging and accelerating threats. Because the projected DOD budget will not satisfy the growth goals of the A&D industry and investment accounts are being re-allocated as OSD reshapes the modernization budget, we all have seen—
– Fewer new starts, which are often delayed.
– Existing production programs that are subject to annual cutbacks.
– Developments paced by fixed levels of annual funding and protracted schedules.
– Fewer ‘edge out” opportunities.
Thus, due to an increased competition for revenue, existing programs are being “targeted” by competitors as predatory takeaways and innovative disruptions. Whether helping to create a new start you can win, protecting and keeping a core program sold, or effecting an innovative disruption, OC is of increasing strategic importance.
The Need for Speed. The 2009 Weapon System Acquisition Reform Act’s objective of reducing risk going into EMD has extended the Technology Development (TD) phase. The combination of protracted (TD and EMD) development and constrained funding delays achieving Initial Operational Capability. Meanwhile, needs continue to emerge and technology keeps advancing.
And now the world market provides adversaries with access to new technology almost as soon as the U.S. Military. These adversaries are not constrained by a burdensome acquisition process. Hence, the technology gap between the U.S. and its adversaries has narrowed. Unfortunately, in many mission areas, the historical U.S. technology lead of a decade or more has shrunk to just a few years or less. While at the same time, the U.S. acquisition process time (program start to IOC) has increased in the past several decades from a few years to a decade or more (for major programs).
This timeline incompatibility prompts a need for speed that can be exploited as opportunity. Contractors can and will create opportunities if they possess four key attributes: (1) an operational vision in their products’ mission areas; (2) enabling technology and technical entrepreneurs; (3) agility in an Advanced Programs culture free of the bureaucratic and process churn; and (4) a willingness to invest and the patience to risk false starts.
Since WW II numerous monumental OCs have occurred. Chosen from of dozens of examples, we describe six major Opportunity Creation efforts and their paths to success:
1. Skunk Works’ innovative application of stealth and supersonic aerodynamics conceived and won the competition for the A-12 (later named the SR-71 Blackbird). Skunk Works’ later investment in applying stealth helped to shape and win DARPA’s Have Blue Prototype competition, leading directly to the F-117 Stealth fighter.
2. Northrop’s application of curved surface stealth technology, demonstrated on DARPA’s TACIT BLUE Demonstrator aircraft built by Northrop, was a key enabler to shaping and winning the Advanced Technology Bomber that later became the B-2.
3. Science and Applied Technology, Inc. (SAT) successfully created the dual mode seeker to solve a capability gap and used the Small Business Innovative Research (SBIR) acquisition method to leverage its position as a small business. A small start-up company, SAT focused on the decades old capability gap of Anti-Radiation Homing (ARH) missiles. Enemy Integrated Air Defense Systems’ (IADS) radars would simply shut down to avoid being engaged by single mode ARH missiles (e.g., AGM-88 HARM and AGM-122 SIDEARM.). SAT started on the path to creating a dual-mode seeker to solve the capability gap with a $49,000 Small Business Innovative Research (SBIR) Phase I study. This was parlayed into a $750,000 SBIR Phase II contract focused on prototyping components for an anti-radar seeker with an active millimeter wave radar terminal seeker. The next phase (Advanced Technology Demonstration (ATD)) required customer funding. The Navy did not have funds for it. SAT subsequently coordinated multiple Congressional plus-ups of $150M over the next 5 years to fund ATD efforts and demonstrate the dual mode seeker technology to solve HARM deficiencies highlighted in Desert Storm 1 and Operation Allied Force. Using evidence from their successful ATD efforts, SAT worked with OSD’s Advanced Concept Technology Demonstration (ACTD) Office and the Navy to effect a successful 3-year ACTD program (Quick Bolt) for the AARGM dual mode seeker. Multiple successful test firings of the missile prompted the USN to cancel Raytheon’s HARM Block VI/PNU upgrade program. Also, the NAVY made AARGM an ACAT 1-C program and proceeded into EMD. In sum, technical innovation, demonstrated performance and persistence in obtaining funding paid off. SAT was acquired by ATK and AARGM today is a multi-billion-dollar program with USN, Italian Air Force, and other FMS customers.
4. An innovative disruption of the F/A-18 AAS-38 Targeting FLIR’s upgrade plan occurred with Hughes’ application of its third generation staring Focal Plan Arrays. The forthcoming fleet introduction of the Joint Stand Off Weapon (JSOW), with its greater “reach” (launch range), required the “eyes” (detection range) to target it. Thus, the need for an Advanced Technology FLIR for the F/A-18E/F was created and the resulting competition was won by Hughes. User “pull” and awareness of what newer technology could provide would not have created the opportunity on its own. An orchestrated Opportunity Creation Plan prompted and exploited user pull, in concert with technology push (validation demos), and a DTUPC (one half that of AAS-38 C) became a self-reinforcing process that created the need and won the competition.
5. Lockheed Missiles and Fire Control’s innovative lateral edge out, via DARPA, of their JASSM (Joint Air to Surface Standoff Missile APG-158) resulted in a “sole source” award of LRASM for deployment on the USAF B-1B and the Navy’s F/A-18 E/F as the solution to the anti-ship capability gap, Offensive Anti-Surface Weapon Increment 1. This a classic example of company initiative and investment to fill a mission capability gap (anti-surface warfare in denied access environments) with the enabling capability of LRASM’s standoff range and survivability.
6. Numerous foreign companies have taken advantage of the US DoD’s Foreign Comparative Test (FCT) program to field operational weapons directly with U.S. forces (in particular, with U.S. Special Forces) by demonstrating mature, off-the-shelf systems that could meet existing U.S. needs. Some examples include Saab’s shoulder-fired weapons such as the disposable AT4 tank killer and M3 Carl Gustav recoilless rifle and related family of ammunition, which met specific needs of the U.S. Special Forces (initially) and expanded into the Services (Army/Marines) to provide off-the-shelf capabilities that far exceeded what U.S. companies could provide with existing or developmental products at the time. This was possible through innovation and company investment, and a focus on the “alternative” acquisition methods within DoD, which facilitated the OC. Additional examples of foreign companies partnering successfully with U.S. companies will be discussed in Opportunity Creation Part II.
Effective Opportunity Creation is an enterprise effort led by technical entrepreneurs with budget to use enterprise-wide talent in an orchestrated plan to accomplish the success. Technical entrepreneurs have challenging and exciting tasks. Historically, every company has benefitted from their efforts. Additionally, Advanced Programs have been a “well spring” for talented managers who advance to leadership positions in their Business Units.
Our winning insights series will continue next month with Opportunity Creation Part II, which will discuss—
– Necessary and opportunity unique sufficient conditions for success and the associated best practices in the context of additional major Opportunity Creation examples.
– Impediments to OC realization in both A&D companies and government.
– OSD’s Acquisition System circumvention approaches (e.g., ATDs, ACTDs, FCTs, Rapid Development and Integration Facility, Collaboration Forum of USAF and SOCOM (RATPAC), and many others) to advance the development and accelerate fielding.