Northrop Grumman has a remarkable history that includes developing the B2 Bomber, the EA6-B Prowler, satellites, the new Gerald R. Ford super carrier, and the history-making Apollo lunar module. It is an enormous enterprise with over 130,000 employees and a tough challenge…their principal customer, the US Government, plans to cut $500 billion in spending over the next decade. Beyond budget cuts, projects are becoming smaller and shorter, and the number of competitors that can play in the ‘smaller and shorter’ space is much greater.
Moving to process focus
I’ve had the pleasure of working with Northrop Grumman’s Aerospace Sector, made up of 23,000 people from the merger of several companies that each had their own way of doing business. Bringing together all of this into one cohesive group required a clever approach. People, process and systems need to be aligned in a way that only a true process focus can achieve, considering that they make aircraft, SEAL Team prototypes, spacecraft and more. The approach they’ve taken is an exceptionally smart one based on creating and maintaining (the key word is ‘maintaining’) nine defined operating models.
The nine operating models they’ve developed allow for specialization within reasonable boundaries of standardization. Each model has specified ownership that allows for best practices to be ‘built in’, like the way to create a rapid prototype that allows for speed but still aligns with corporate structures like Global Supply Chain for contracting compliance purposes. This capability means that all 134,000 people in the enterprise can have the same understanding of things that should be standard while having the flexibility to be exceptionally good at specialized ways of doing business…the best of both worlds. This kind of flexibility is remarkable in a company this size.
Making it work
Sitting atop these governed models is a system that allows for the entire spiderweb of communication to be managed through automation. Without the automation part, keeping such a system running and current would be an overwhelming task. For one, their technology stack allows them to manage multiple process, governance and compliance hierarchies at the same time…they can link their governance structure directly to their value chain activities with an overlay of compliance requirements. This may sound like the Holy Grail, but it is reality for Northrop Grumman.
If you’d like to read for yourself, see the Northrop Grumman Case Study in this month’s BPTrends Magazine.