Saturday, March 28, 2015

Rules for successful defence innovation

A while ago I set out what I rather grandly termed ‘Ferguson’s Rules’ for defence industry policy. They were an offshoot of work and study I had been conducting into defence industry innovation; they were stimulated by hitherto unacknowledged similarities between the defence industry landscapes of the UK in the 1930s and Australia in the early 21st century.

The vehicle by which I explored the 1930s was the technical history of aircraft such as the Vickers Supermarine Spitfire and Hawker Hurricane, though I also examined contemporaries such as the Messerschmitt Bf109, North American P-51 Mustang and the trigger for much of the innovation they embodied, Boeing’s ground-breaking Type 247 airliner. What this short diversion showed was that history's lessons are there for the learning: the mistakes we make today are very rarely new and interesting ones. 

Returning to the central theme of my research, product innovation success, I felt it might help to distil some of my findings into some more relatively simple ‘rules’ for defence industry innovators. These are based on the two key features of the successful industry innovator that emerged from my research: Innovator Attributes; and Innovator Behaviours. Naturally the first shapes the second.

Innovator Attributes, as I define the term, are those features of an innovating company or organisation (or an individual) that are intrinsic. That is, they are an organic part of the innovator’s make-up, or which are so embedded in it that they can be changed only slowly, if at all.

Innovator Behaviours are the things the Innovator does: things that can  be learned, changed and even discarded relatively quickly or easily, for example by changing procedures, training staff or recruiting individuals with specific skills or knowledge.

The Attributes that emerged from the research aren’t really a surprise. For a company to become successful at product innovation it needs good leadership, an organisational structure that encourages and sustains cross-functional communication, and a solid core of technical mastery – including a culture that values R&D. It also needs to be outward-looking: aware of what’s happening in the marketplace and sensitive to the needs of its customers.

The Behaviours are an extension of the attributes: they mostly revolve around relationship building and gaining market knowledge, and organising internally to pursue individual opportunities. The two can be condensed into a set of 12 ‘rules’, thus:
  1. Appoint a company leader who’s open to constructive change and keen to innovate
  2. Organise yourself to innovate: an organic (as opposed to a mechanistic) structure enables and encourages cross-functional communications as well as creating conditions for lateral thinking and idea generation
  3. Work towards technical mastery of the domain in which you’re operating: the product, the technology it embodies and the technology and expertise required to build it
  4. Invest in your R&D and prototyping capabilities
  5. Conduct R&D systematically, guided by your market knowledge
  6. Be open to external partnerships and sources of technology and IP
  7. Understand the market in which you’re operating: who the players are (customers as well as rivals, and even suppliers and sub-contractors); why they’re in the market; what’s happening with technology; what else is going to shape the size and behaviour of the market in the future?
  8. Understand your market position and what (if anything) you need, or intend, to do about it
  9. Be systematic in your marketing activities (which includes encouraging lateral thinkers and good ideas!)
  10. Be pro-active in dealing with your customer – both determining his needs and sensitivities, and testing ideas and hypotheses on him
  11. Create a cross-functional team to integrate market and technical knowledge and then develop and deliver the project
  12. Appoint a leader of this team who has REAL authority to drive the project along


There’s one more: if you’re working in the Australian defence industry, and hoping that the ADF will be, or will remain, one of your customers, then you also need to sustain a good relationship with DSTO and be prepared to enter into a teaming or collaboration agreement with the organisation if circumstances require. DSTO isn't necessarily a source of useable IP (though it may become more so), but is a portal through which its partners can learn about the technical knowledge, technology needs and risk appetites of Australia's defence customer.


Each of these rules sits at the apex of a pyramid of activity and expertise. You could drill down endlessly into any one of them and find you’re also drilling into the bedrock of another – for they are mutually supporting and strengthen each other where they overlap.