On the face of it, organising a company around its customer base is not terribly radical, but it is surprising just how few businesses actually do just that, especially in the defence and aerospace world.
Understanding the shifting demands of those customers is part of the battle. Most in the government-determined defence sector can be excused for treading cautiously as they try to evolve their operating strategies in line with an uncertain and ever-fickle customer base.
But most agree on the challenges for prime contractors - high development costs, defence spending visibility, new forms of customer contact and contract, pressure to reduce lifecycle costs and guarantee through-life product reliability and maintainability as well as meeting delivery schedules to cost.
British Aerospace's proposed new structure looks a fairly radical response and could even be the saving grace for global defence and aerospace restructuring, still dogged by cultural barriers. Avoiding the "bolt-on" merger approach of its US rivals and opting to rearrange the group around its 11 big defence programmes is a bold step. And the raft of "virtual" pan-company business "functions" to guarantee the right resource, technology, manufacturing capability and skill is on tap for each programme is BAe's "new age" management approach to eliminating outdated structures premised on departmental managers, functional boundaries and a "my budget, my staff" mentality. The "in" words are project management, partnerships and pooled resource.
Arguably, this will be more management intensive than traditional structures and more risky as a result. The challenge will be to transcend old thinking and work practice and create a culture of flexibility and acceptance of responsibility at all levels. The implications for the workforce are potentially huge and there will be more questions than answers for those on the shopfloor about their futures as "virtual" working across projects kicks in. The good project managers will make up future BAe boards.
A virtual global company is in the making as is a long-overdue revolution in thinking about how to secure the expertise of Europe's next aerospace and defence system designers.
Source: Flight International