Continuing To Grow

A Note to the Reader

This chapter describes how Saab started a capability development program at the start of the 2010s with the aim of increasing and broadening the capacity for carrying out international business and co-operation programs.

In order to broaden skills, it was decided that the change process should be carried out in a decentralised manner according to the company department involved. As part of this decision, the respective operations managers were to decide themselves how to allocate all of the resources in order to carry out the changes.

In addition, the operations managers had an incentive to ensure that the training and implementation of the results went as smoothly as possible as they were responsible for using the new and changed working procedures.

Background

The Gunder program which ran from the middle until the end of the 2000s was to rationalise, streamline and increase the long-term internal capacity for different types of working procedure.

At the start of this decade, it became clear that it was essential to broaden the knowledge within the organisation when faced with future co-operations and new international business currently under development.

This led to the launch of a capability development program entitled VÄXA (“GROWTH”).

Part of the VÄXA program saw the launch of a number of preliminary studies looking into what was required to further strengthen the capability in order to be even more effective when working in international business and co-operation programs.

Recommended reading

The author recommends the following texts that relate to this story: In chapter Ensuring long-term operations capabilities under the heading Management & control of capability development , under the heading Capability development in an international environment and under the heading Success factors in change processes.

The text refers to the highlighted areas in the journey of change in the aircraft industry

Summary

Aeronautics stood faced with new challenges at the beginning of the 2010s thanks to its expansion on international markets. What this meant was that future business would be specifying new requirements for the organisation.

These modified business prerequisites would necessarily involve strengthening important capabilities. It was also important to be able to manage several large parallel business projects requiring a flexible resource basis. In addition, it also meant additional challenges, many international clients with their new requirements for modifying working styles, systems, etc.

This move towards internationalisation could well involve development and manufacture even outside Sweden, something which would require cooperation with international partners. This resulted in the launch of a capability development program called the VÄXA program.

Description of the contents

  • The focus of the VÄXA program was a strong business relationship which would involve focused effort on cross-functional cooperation with partners and customers –
  • the building up of a commercial focus. All of the subprograms making up VÄXA were to provide results coordinated with the timings for coming business decisions.
  • Within the area of Strategic conditions & resource needs, it became clear that commercial growth was dependent on a small number of major sales. The idea was to improve the working procedure to better manage resource needs.
  • Within the area of Skills & development, the intention was to strengthen the work in order to develop internal skills and the leadership required for international business.
  • Within the area of Cooperation & partners, what was considered most important was to bolster different types of working procedure. This involved developing the capability to cooperate over international borders and to develop a good working procedure for use with partners.
  • Within the area of Business and products, it was decided that there was a need to develop business models which were more appropriate to an internationalised market.
  • Within the framework of the Internationalisation area, the focus was on ensuring that there were sufficient co-workers within all areas of the business required to be effective in an international environment.
  • At the conclusion of the VÄXA program, it was clear that it had been carried out successfully in accordance with the plan.

The VÄXA Program

Aeronautics stood faced with new challenges at the beginning of the 2010s thanks to its expansion on international markets. What this meant was that future business would be specifying new requirements for the organisation.

These modified business prerequisites would necessarily involve strengthening important capabilities. It was also important to be able to manage several large parallel business projects requiring a flexible resource basis. In addition, it also meant additional challenges many international customers with their new requirements for modifying working styles, systems, etc.

This move towards internationalisation could well involve development and manufacture even outside Sweden, something which would require cooperation with international partners. This resulted in the launch of a capability development program called the VÄXA program.

The VÄXA program involved impressive mobilisation across the company in order to ensure engagement. The initiative was implemented and the work was pursued across the line functions. This was one way of ensuring effective implementation and engagement from the entire organisation. It was also important to have good coordination between the initiatives coming from the different line organisations.

The VÄXA program took place between 2012 and 2014.

The aim of the VÄXA program was the improve capabilities within five key areas:

  1. Strategic conditions & resource needs
  2. Skills & leadership
  3. Cooperation & partners
  4. Business & products
  5. Internationalisation

The figure shows the symbols for the overall VÄXA program.

Master plan

The VÄXA program involved the building up of a commercial focus. All of the subprograms making up VÄXA were to provide results coordinated with the timings for coming business decisions.

This meant that the initiatives started should have clear details regarding the activities, deadlines and resource needs and defined according to whether they had some form of connection to specific business requirements or individual business deals.

This meant that it became important to identify the resource needs required in the technical areas and which competence levels were required as a whole. This can be considered with reference to each individual business project. After this, gap analyses were carried out which showed the skills required for each business project.

This work was an important continuation of the training and development which had been going on in the years before.

The needs with regard to the business operations and requirements were coordinated to come up with a master plan for the VÄXA program. We defined the necessary initiatives in order to face these challenges and then compared these with the requirements with regard to the amended resources and skills.

The VÄXA program master plan was divided into a number of project plans with initiatives linked to business transactions. It also contained a type of ‘dynamic model’ which showed the initiatives affected when the content of a transaction or schedule changed. The master plan also defined the necessary use of resources for each initiative which was linked to the quarter in which the work was carried out.

Strategic Conditions & Resource Needs

Growth on the military market for fighter aircraft systems is entirely dependent on a small number of large events and contracts which require excellent reaction capabilities if and when they occur.

Within the area of Strategic conditions & resource needs, it became clear that commercial growth was dependent on a small number of major sales. The idea was to improve the working procedure to better manage resource needs. It was essential to have the required overview and input with regard to resource needs on a short-term and medium-term basis from all ongoing transactions and campaigns.

In addition, solid knowledge regarding the current capabilities within business operations with regard to skills, resources, working procedures, tools, etc. was needed in order to fulfil the requirements of future business deals.

It was interesting to develop resource analyses and qualitative assessment of seniority for each skills area within the entire organisation in the fields of skills retention and provision that each operational area is responsible for. This was meant to offer a better basis for assessing which position each operation occupied within the overall value chain and therefore in turn streamline resource allocation for each activity.

The aim was also to lay the groundwork for a cross-functional forum at a level between the overall organisation and the company management.

In order to modify the strategic work with resource management, a number of activities were started in which different types of strategic focus decisions could be continuously addressed. Routines were modified so as to bring meeting objectives and capability development into sync.

Using the results from the aforementioned strategic focus decisions should have a large impact on the ongoing work in evaluating business deals. In this way, it was possible to improve the work by carrying out gap analyses in order to evaluate what was possible and to compare this with what the actual requirement was. This allowed good control over the resources and/or the capability gap.

This was then followed by a survey of earlier evaluations of the production rates for different products and carried out evaluations of future requirements in order to specify the resources and skills needed.

There was also an overall need for evaluating a strategic direction for all central capabilities within technology and production. With the help of these surveys, it was possible to lay the basis for evaluating possibilities and directions for future international business and cooperation with both global and local partners.

Skills & Leadership

The capability to maintain and develop skills is essential for businesses in such an advanced sector as the development and manufacture of fighter aircraft systems.

Within the area of Skills & development, the intention was to strengthen the work in order to develop internal skills and the leadership required for international business.

It was essential to gain an overview of the skills required and to evaluate the number and type of resources needed. It was especially important to evaluate the need for technology leaders.

Carrying out these actions will show the requirements that future deals will have on the type of resource needed based on technical skill, seniority and leadership. What was also significant was to evaluate which technical areas were central for future partnerships with regard to both the size and number of resources which would be required in the future.

It became clear that the increased requirements for business, technology and operations capabilities would lead to new requirements within the areas of recruitment and skills development in the technical disciplines.

In terms, this would mean a greater need for more technical leaders. One general aim was to increase technical skills amongst a wider proportion of the skill in order to fulfil the needs for coming business deals.

Skills provision

Work was started on finding a new structure and leadership within technological training. This meant that a new training board was set up which could coordinate the activities for critical resource needs. The result was to steer educational initiatives towards the most critical technical skills and to launch new training programs the development engineers. In order to provide support for this increased focus on training and development, a series of the most knowledgeable senior engineers were identified who could deliver training and become ‘technical mentors’.

Recruitment and training activities included both development and production. In order to successfully cope with the coming requirements due to increased production speeds, it became important to ensure the short-term and long-term skills provision based on the age structure of the production staff employed at the time.

Leadership with an international focus

Dealing with large international and parallel business activities is a challenge for any leadership role. It requires excellent employee focus and a broad overview, but also the capability of maximising performance based on the international requirements which result from this type of business. In order to cover this need, we concentrated on training several leaders who could react based on the overall goals by leading, steering and developing the business and employees in an international environment.

In order to ensure training and development complied with future defined requirements, it was necessary to create clear career path. This would make it possible to ensure complete employee skills transfer with both ‘technically broad and deep’ career paths. This would involve reviewing the training programs in place of the time such as, for example, ‘broadly-skilled engineers’ and the training provided within the framework of Saab’s skills ladder.

Cooperation & Partners

When Saab started to evaluate the focus for future working procedures at the beginning of the 2010s, it became clear that the company would need to cooperate much more broadly with external partners. This would involve modifying working procedures, methods and tools but would also require changes within information structures and within knowledge transfer.

Within the area of Cooperation & partners, what was considered most important was to bolster different types of working procedure. This involved developing the capability to cooperate over international borders and to develop a good working procedure for use with partners. This in turn meant concentrating on producing the required method packages for partnerships. The decision was made to come up with a common partnership process which specified clear responsibilities within the organisation. It also became important to increase knowledge transfer between the different operational areas.

Investigations were carried out into whether there were specific international role requirements, standards, training and certificates which had to be fulfilled in order to work in an international environment. One of the initiatives involved setting up a new governance model which included processes, methods and tools to lead the partnership.

In business environments involving increased cooperation with partners and a higher degree of internationalisation, information structures need to be defined and directly applicable depending on the type of partnership and the partner in question. With this in mind, it was important to adapt interface and information security with regard to the information to be transferred. It was particularly important to ensure that the information was handled correctly from a trade secrets perspective. To ensure effective information transfer when working with partners, an overview was created to explain how to manage any work involving knowledge transfer to them.

One of the activities which was very extensive was the creation of a method package for future partnership processes. Working procedures involving routines, organisation and the allocation of roles in order to identify, contract and manage partners. The result was an effective cross-functional working procedure for partnership management.

Business and Products

For several decades now Saab has mainly lived by the agreements it had with the Swedish Defence Materiel Administration (FMV). The working procedures used within Saab have been influenced greatly by this relationship as a company has very much been formed by the best practices which are part of this agreement.For several decades now Saab has mainly lived by the agreements it had with the Swedish Defence Materiel Administration (FMV). The working procedures used within Saab have been influenced greatly by this relationship as a company has very much been formed by the best practices which are part of this agreement.

Within the area of Business and products, it was decided that there was a need to develop business models which were made more appropriate to an internationalised market.

This meant a number of initiatives had to be carried out in order to ensure success in handling after-sales, portfolio management and the definition of new contract types.

Improving work with the product portfolio involved continued focus on long-term growth in turnover and profitability. Specifically, different initiatives were set up in order to strengthen additional services and maintenance concepts. Initiatives were also carried out to align the products and portfolio with technical planning, research and development programs in order to evaluate the needs for investment in research and technical development.

At that time, there was an increased focus on different types of environmental issues. It was important to come up with a working procedure so that Saab could build ‘aviation industrial ecological systems’ in customer countries.

For a few years now, customers have also been interested in purchasing such skills so that they can build up their own aircraft industries within their countries of origin. This interest has come in various forms and with different degrees of scope and complexity. It was important to ensure that we had sufficient skills available within the respective business areas in order to establish the aircraft industries in those countries in conjunction with local partners.

As Saab had previously worked for a long time in different sectors in international business and had run a large number of research projects, the idea was to build on this experience. Specifically, this would involve making use of the experience the company had gained regarding business models involving partnerships.

Examples of the experience gained are explained in the section entitled “A Journey of Change in the Aircraft Industry” which explains our participation in the development of the Neuron technology demonstrator, and the project involving the development and delivery of the Gripen aircraft to South Africa.

The framework of the Business and products area also covered the processes involved in winning and implementing business operations.

Internationalisation

Increased international partnership means that Saab’s employees need to know how to work in an international environment. This also requires that the organisation has employees with a positive outlook towards working in other countries. Future business opportunities will involve sending employees abroad.

Within the framework of the Internationalisation area, the focus was on ensuring that there were sufficient co-workers within all areas of the business required to be effective in an international environment.

For this reason, a number of activities were started in order to communicate, explain and market the different possibilities involved in international work. The aim of these activities was to ensure a good process in overseas assignments which included the entire chain before, during and after the task.

One of the most important activities involved in ensuring employees’ cultural awareness during international tasks. This might involve how to deal with other cultures or dealing with security issues, but also covers working practices in different countries, etc. activities were also carried out in order to define what needs there were with regard to language or cultural training.

Final Result

At the conclusion of the VÄXA program, it was clear that it had been carried out successfully in accordance with the plan. Some of the main success factors were the fact that all of the activities within the program were established with each line authority that would be responsible for the result early on in the program (during the preliminary studies). This setup ensured that there were clear recipients who actually wanted to be recipients and meant that there was a high level of commitment for the VÄXA program.

Driving a change project requires perseverance and patience. Employees react in different ways when faced with change; some become inspired by the change, whereas others prove to be very resistant to change, mainly as a result of insecurity when faced with new situations.

Change projects have to be handled in a different way to technical development projects. In the case of technical development projects, those involved are often engineers with a clear image of what needs to be done and a willingness to deliver.

Change projects outside the technical sphere require a different focus, however. In this type of project, communication is essential in order to drive cross-functional capability development successfully. It is absolutely essential to create and stick to communication plans throughout the entire lifetime of the change project.

The author´s reflections