Category 2 Strategic Planning

(1)

MFC Cat 2 Strat Planning- 1

Rick Hall

Vice President, Strategic Planning

Category 2

Strategic Planning

Missiles and Fire Control

Growth

Growth Sustainment

Sustainment

Profitability

Mission

To Provide Superior Systems and Advanced

Technologies that Protect Our Warfighters

Our Business is Not the

Objective … it is the Result.

Performance is Our Objective

Fundamental

Business Principle

Strategic Tenets

Plan

Contract Award

Execute

Tier I – Business Process

Strategic Management Framework

Missiles and Fire Control

Strategic Planning & Execution System

(SPES)

• End-to-End Planning &

Execution: Years

 Days

• Quarterly Strategy

Reviews

• Monthly Enterprise

Leadership Council (ELC)

Meetings

• Highly Instrumented:

–

20 Strategic Metrics

–

87 Operational

Metrics

Closed-Loop System to Plan and Deliver Results

• Process Enables Flow-down of Employee Commitments

(2)

Missiles and Fire Control

SPES Organizational Implementation

• Enterprise-level Strategy & Planning

• Top-down Strategic Guidance

• Resource Allocation

• Portfolio Shaping / Management

• LOB Strategy / Planning

• Bottom-up Product Line Strategy /

Planning

• Resource Requirements

• Program Execution  LOB P&L

• Strategy & BD Lead

– Strategic Plan

– Long Range Plan

– Investment Resource Allocation

– Capture Process

• Each Function

– Develops Functional Strategies & Plans

– Supports Program Execution

MFC AMD FC TM/CMS Strategy & Business Development Technical

Ops Operations Quality Finance

Human Resources Legal

TS LMUK

Lines of Business (LOB)

Functions

Missiles and Fire Control

Strategic Planning & Execution System

Prepare Company

Strategic Plan

>10-year Horizon

Develop Long

Range Plan

3-Year Horizon

Plan & Allocate

Resources Annual

Capture the Business

Annual

Plan the

Program

Design the

Product

Acquire

the

Material

Fabricate

the

Product

Support

the

Product

Months/Weeks/Days

Plan

Execute

Contract

Deliverables

Award

Quality

Facilities

Finance

Human

Resources

Award

Missiles and Fire Control

Strategic Planning & Execution System

Develop Long Range Plan

MFC Long Range Plan

Plan & Allocate Resources

Assess and

Forecast

Financials

Prepare Company Strategic Plan

Perform

Situational

Assessment

Develop

Business

Strategy

MFC Strategic Plan

Plan the Program

Deliverables

Closed Loop Iterative Processes

Identify

Risks and

Opportunities

Proposal

Costs

R&D /

Tech

Investment

Capital

Expenses

Capture the Business

Market Development & Opportunity Qualification Phase 1 Pursuit Qualification Phase 2 Pre‐Proposal Phase 3 Proposal Development Phase 4 Post‐Proposal

Phase 5 ProposalProducts AWARD

Cost Manpower Performance Measures

Design the Product

Requirements Design Verification & Validation

Acquire the Material

Requirements Solicit & Evaluate Bids Manage the Supply Chain

Fabricate the Product

Manufacturing Technologies & Processes Build the Product

Support the Product

Support System Requirements Deliver the Product Provide Operational Support AWARD Proposal Products

Plan

Execute

Contract

Deliverables

Quality

Facilities

Finance

Human Resources

Provide Improvements and Spirals Contract Performance

(3)

Missiles and Fire Control

Strategic Planning & Execution System

Market Dynamics

• Customer Analyses

• Market & Competitor Research

• Market Forecasts & Analysis

Business Posture Analyses

• Growth Indices

– Market Risk Factors

• Sustainment Indices

– Backlog Health

– Engineering Base

• Profitability Indices

– Market-derived Guidelines

– Product Line Life Cycle Implications

MFC Market Penetration Analysis

MFC Firm Backlog Composition

Prepare Company Strategic Plan

Perform

Situational

Assessment

Develop

Business

Strategy

Plan

Missiles and Fire Control

Strategic Planning & Execution System

Strategic Plan

• Environmental Assessment

• Market Forecast and

Position

• Enterprise Strategy

• LOB Strategies

• Risk Analysis

• 10-Year Plan / Roadmaps

Prepare Company Strategic Plan

Perform

Situational

Assessment

Develop

Business

Strategy

Plan

Functional

Segments

• Technical

• Operational

• Talent

• Communications

Strategic Plan

LRP

Strategic

Investment

Funds

Technology

Investment

Plan

Program

Operating

Plans

ELC

Missiles and Fire Control

Business Health Metrics

Strategic Planning & Execution System

Three-Year Business Plan

• Orders, Sales, EBIT, Cash, ROIC

• Investment Affordability

• Discreet Business Objectives Set

• Risks & Opportunities

Business Base Forecast

• By Segment

• By Line of Business

• Domestic vs. International

• Sole Source vs. Follow-on

• Production vs. Development

Develop Long Range Plan

MFC Long Range Plan

Assess and

Forecast

Financials

Identify

Risks and

Opportunities

Current Year Assessment

• Current Year Performance

– Financials

– Company Objectives

• Path to Closure

(4)

Missiles and Fire Control

Strategic Planning & Execution System

Plan & Allocate Resources

• Strategic Investment Funds

– Independent R&D

– Bid & Proposals

– CAPEX

• Direct Linkage to Strategic Plans

& Roadmaps

• IRAD Evaluation Tool Supports

Prioritization

– 18 Weighted Factors

Plan & Allocate Resources

Proposal

Costs

R&D /

Tech

Investment

Capital

Expenses

Qualitative Model for IRAD Strategic Value

Systematically Quantify Value of IRADs to MFC

Customer Value Probability of Success Business Value

Customer Gap Customer Priority Customer Utility Customer Relationship Technical Reach Product Development Strategy Technology Competitiveness Cost Comptetiveness Customer Pull for MFC Product / Application

Market Reach Intellectual Property

Relevance to Strategic Plan ROI Dependent Orders Near Term ROI Dependent Orders

Far Term ROI Benefiting Orders

Near Term ROI Benefiting Orders

Far Term Urgency

End Product/Application

Missiles and Fire Control

Strategic Planning & Execution System

Phase 1

• Customer Analysis

• Competitive

Analysis

• Initial Business

Case

Phase 2

• Position to Win /

Price to Win

Analysis

• Competitive

Reviews

Phase 3

• Independent

Strategy

Reviews

Phase 4

• Proposal

Development

• Pricing IAW

Strat Guidance

Phase 5

• Win-Loss

and Lessons

Learned

New Business Pipeline Management

• IT-Based Tracking System

• Monthly review of metrics

• Opportunities by phase, by value

• Movement through the pipeline

• Win-Loss Report

• Orders Campaign Management

• Ties to Strategic Health Metrics of the Enterprise

Capture the Business

Market Development & Opportunity Qualification Phase 1 Pursuit Qualification Phase 2 Pre‐Proposal Phase 3 Proposal Development Phase 4 Post‐Proposal

Phase 5 ProposalProducts AWARD

Missiles and Fire Control

Cycles of Learning & Improvement

• Example 1: Atrophy Index

–

Situational Assessment identified negative

forecast trend in engineering base

• Served Market Conditions

• Product Portfolio Life Cycle Shift to

Production

–

Strategic Response

• Created new index for Engineering Base

• Developed Strategies / Actions to

Accelerate Growth of new development

engineering base

–

Results

• Expanded Customer Base for New R&D

• Pursued and Captured New

Development in Adjacent Markets

Growth

Growth Sustainment

Sustainment

Profitability

Strategic Tenets

Development Engineering

Atrophy Risk Assessment

Development Engineering

Atrophy Risk Assessment

(5)

Missiles and Fire Control

Cycles of Learning & Improvement

• Example 2: Limited Growth in Core

–

Situational Assessment of Market

and Business Posture

–

Strategic Response

• Core Competencies Assessment

• Adjacent Markets Identified

• G-S-P Bias Shift to Growth

• Strategic Plans / Resourcing

–

Results

• Market Aperture Doubled

• Successful Entry in New Markets

and International Expansion

• Growth Trajectory Continues

Growth

Growth Sustainment

Sustainment

Profitability

Strategic Tenets

MFC Market Forecast

Missiles and Fire Control

Strategic Value Paradigm Trends

~1997

~1999 - 2002

2003 - 2005

2010

-Management Framework Delivers Excellent Results

Growth Growth

Sustainment Sustainment

Profitability

Profitability ProfitabilityProfitability Profitability Profitability

Profitability

Profitability ProfitabilityProfitability Sustainment

Sustainment SustainmentSustainment SustainmentSustainment SustainmentSustainment Growth

Growth GrowthGrowth GrowthGrowth

Growth Growth

2006 - 2009

1.0 10.0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

ROI

Cash

EBIT

Orders

Sales

Margin

Better

Missiles and Fire Control

Summary

• Tightly integrated, continuous process

involving senior leadership, line of business

management and functional department

management

• Analytical, metrics-driven strategy

development and implementation

• Strategy integrally coupled to operational

planning, resource allocation, new business

capture and program execution