Bush Says Industry is at Crossroads

COLORADO SPRINGS, Colo. (Apr. 13, 2011) — National Space Symposium Featured Industry Speaker Wes Bush, Northrop Grumman chief executive officer & president, told the audience Tuesday that the space industry is at a crossroads, facing a multi-dimensional threat.

First and foremost, he said, the industry is reaching the limits of customer fatigue for cost and schedule slippage. He quoted a recent GAO report that found that one in three major defense programs had overruns of more than 50 percent and many of these programs were satellite programs. Bush said the cost overruns and schedule delays are very difficult for Congress and space supporters to defend and explain to their constituents — especially in an austere budget environment, when space projects are seen as increasingly risky and more easily countered, and when capabilities for which many non-space substitutes, such as UAVs, are available. He said this combination of increased perception of risk, growth in countermeasures to space systems, increasing availability of non-space substitutes and persistent and chronic cost and schedule slippage makes space project funding very vulnerable. Regardless of the legitimacy of the reasons that have driven these slippages and overruns, Bush said, the high profile of space programs make them tempting targets for cost-cutting, as the rationales for program problems are ultimately lost on both budgeters and the public.

According to Bush, it is quite likely that the space community will defend itself with old, familiar arguments about protecting the industrial base, program funding, evolutionary rather than revolutionary technology development and so on. But in today’s unique environment, he said, these responses will not be sufficient, and resurrecting these talking points will not give the appearance of defensiveness and the lack of any fresh approaches will make projects uninspirational and will increase the difficulty of attracting engineering talent.

Moving forward, Bush said, there are a number of approaches:

• First, he said the industry needs to refocus our innovative skills, strengths, talent and energy on addressing affordability as a core challenge. Traditionally, the space community has treated technical performance as its main challenge, with an array of other requirements and desires forming a second tier of negotiable and non-critical requests. In future, Bush said, affordability must be regarded as essential as technical capability. Affordability is directly related to the challenge of providing space systems, and the industry must be able to reliably deliver cost and schedule excellence as reliably as it now does with technical excellence.
• Another area for future attention Bush mentioned involves the way that the space community addresses the issue of substitutes for capabilities that heretofore had been the sole province of space. Rather than attacking or diminishing these substitutes, he said, the key challenge is to turn rivals into partners. This goes beyond technological synergies and, according to Bush, must address business, acquisition and operational dimensions and drastically improve integration between the ground, air and space domains.

More broadly, Bush said industry and government need to work together to change current buying patterns and reach across some of the arbitrary cultural and organizational structures the industry has created. Bush said stovepiping and the “hermetic sealing” of individual programs must be replaced with better integration, including integration in concepts of operations.

At the core, Bush said, the space industry is driven by innovation, and the challenge going forward is to apply these strengths and competencies to the way the industry interacts as a whole with the broader non-space community. He said the space community needs to learn to be responsive to the needs of the end-users of systems and to those who pay for systems. But, he said, the space community can meet these demands because it can be very candid about the problems that it faces while closely embracing the innovation necessary to address these challenges.