Organizational transformation

Because of their success, a major aerospace & defense conglomerate was faced with a mix of disparate products and services, a variety of commercial and defense customers across the world, and a complex international supply chain. Additionally, the organization remained largely rooted in the old European-focused business model. Leadership realized that the model was not configured appropriately to support the growing, global business.

Challenges
The conglomerate defined their challenges and needs in three key areas:

• Get closer to the new customer base and better understand their requirements
• Align products, technologies, capabilities, and services to the emerging demand and their aim of developing "systems of systems"
• Re-configure the internal organization and associated business systems to create a new global business model

Approach
The organization invited A.T. Kearney to assess their customer-facing and marketing capabilities, identify areas for improvement, and develop recommendations for the global organization. A joint team, including A.T. Kearney, examined demand, structure, roles, and capabilities. They benchmarked these areas against best practices in other global aerospace and defense companies and international Ministries of Defence procurement models.

The team’s research and benchmarking led to early recommendations about their growing customer base in areas such as demand assessment, supply processes, knowledge and understanding. However, their key conclusion was that the organization needed to radically re-configure itself to adequately support the challenges of the emerging aerospace and defense market.

They identified three key areas for change:

• The business portfolio, including developing systems-integration capabilities
• The most efficient organizational structure, which could deliver a balanced mix of equipment, spares, services, and systems capabilities
• Processes, practices, and ways of working to support this emerging business and organization model

Results
The team gained board-level agreement for these changes, which put in motion an extensive transformation program. A.T. Kearney developed a series of business model options and facilitated top-level workshops, which determined the optimum structure and high level steps. The organization subsequently adopted these recommendations, which resulted in a successful company-wide transformation program reflected in their leading position in the sector.