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The Ten Rules for Agile in Aerospace and Defense

June 29, 2018 By Matt Hasik , and Jerome Rein

Agile product development has migrated from its origins in software to many other industries. Yet if the applications are becoming wide-ranging, the benefits remain consistent: companies that apply agile enjoy faster design cycles, a greater focus on customers, and self-directed and empowered teams that are more responsive to market demands.  

For aerospace and defense OEMs, applying agile to hardware development can lead to quantifiable gains:

  • 30% to 50% reductions in time to market for milestones such as prototype development and first flight
  • 30% to 50% reductions in nonrecurring costs, due to shorter development cycles
  • 30% to 50% reductions in recurring costs, due to more innovative thinking by agile teams
  • Products that are more aligned with customer expectations, including capabilities, cost of ownership, and reliability—leading to improved commercial success for OEMs

Beyond these benefits, agile can help aerospace and defense (A&D) companies develop new ways of working and addressing challenges, laying the groundwork for a broader cultural change needed to keep pace in the market.

What Agile Is—and Isn’t

Thus far, some A&D companies have successfully implemented agile, but they are in the minority. Others have struggled to implement the approach—or resisted deploying it widely. Limiting its adoption are cultural resistance and fears that it could disrupt well-established development and engineering processes needed to maintain safety and quality standards. 

Particularly in process-intensive industries such as A&D, agile has been reduced to merely conducting sprints, and minimum viable products (MVPs) can be seen as out of sync with complex development requirements. Cherry-picking certain concepts significantly undermines the power of agile methods, and should be avoided. Agile does not mean “doing the same as usual, more quickly.” 

At a high level, agile is a simple, powerful concept made up of four tenets: customer focus, an orientation toward outputs, adaptability, and empowered teams. Yet it is not a one-size-fits-all method that guarantees results. The real value is attained only through a comprehensive approach that boosts collaboration and unconventional thinking. 

To be clear, manufacturers have a decades-long track record of established engineering and design processes, and we do not suggest that they scrap those. Rather, we at BCG believe that agile can be adapted to improve existing processes and cultures—in line with the unique needs of each organization and project. Based on our experience with real-world applications across A&D companies, the benefits can be transformative.

The Ten Rules for Agile in Aerospace and Defense

There are 10 key principles that help A&D leadership teams understand and begin to implement agile.

1. Aim for Breakthrough Results, but Explain the “Why”

Agile is a new way of working that offers the potential for breakthrough results. But success requires that company leaders communicate a clear case for change, articulating the explicit challenges facing an organization, why traditional engineering approaches may not be sufficient, and how agile will help overcome those challenges.

A company should focus on how new agile methods will help it meet big expectations on a tight timeline and budget—and thus ensure that the organization can survive.

Agile in Practice

For example, a company could face a significant threat from a disruptive new entrant. Its executive team may know that traditional, legacy approaches to product development will take too long and cost too much. Their message should focus on how new agile methods will help the company meet big expectations on a tight timeline and budget—and thus ensure that the organization can survive amid market pressures and threats from new challengers.

2. Focus on Principles and Be Flexible with Processes

Most A&D organizations focus heavily on process, and for good reason. They organize projects around a timeline and linear sequence of steps, and their teams are averse to making changes or rethinking decisions once downstream. 

Agile, by contrast, requires operating principles for a specific program or project—a “true North”—and it lets team members determine the best path for how to get there. By focusing on principles, OEMs can begin to push teams to think and work in new ways.

Agile in Practice

For example, a project leader could establish a set of team principles centered on flexibility and adaptation to strike the best compromises in design. In this way, rather than scrapping processes, A&D companies can apply agile principles to create a more innovative mindset while still relying on strict processes for the applications where they work best—such as safety and quality.

3. Put the Right Leaders in Place

Selecting a program leader is critical to the success of the overall effort. Leaders must possess sufficient technical credentials to oversee product development, sufficient experience in the company’s established ways of doing things, and the maturity to recognize the limitations of those methods. 

Leaders also require tremendous intellectual curiosity and the capacity for managing teams. They must constantly challenge the team to uncover, discover, and achieve. And, critically, leaders need to be able to step back and connect with senior subject matter experts (SMEs), executives, and customers in a balanced way.

Agile in Practice

Practically speaking, a leader with this unique combination of skills may not exist in the organization. However, companies can still select a person who has characteristics that best complement those of key executives, SMEs, and team members.

4. Engage Customers in Design

Customer input regarding product requirements—and early feedback on design iterations—is critically important. 

External advisors can be more objective and are removed from internal politics. And they often have a natural, two-fold incentive to participate. First, they get a chance to share their extensive operational knowledge with the OEM to help develop a product that they would buy. Second, many external advisors find it fun and engaging to provide feedback that ultimately improves the product. 

Of course, when dealing with complex physical products, achieving this kind of customer engagement can be a bit more challenging. But, if needed, there are alternative ways for companies to realize this goal.

Ideally, A&D companies can create an external advisory panel of current or potential new customers to engage with a product team during development.

Agile in Practice

Ideally, A&D companies can create an external advisory panel of current or potential new customers to engage with a product team during development. Alternatively, they can use an internal proxy, such as a marketing or business development executive. They can even create a “virtual airline,” to better understand customer needs and market realities.

5. Create the Right Physical Work Space

Agile requires that teams collaborate directly, through spontaneous face-to-face conversations, rather than scheduled meetings, and use key methods such as sprint-planning sessions and retrospectives. 

To encourage this kind of collaboration, most A&D organizations need to evolve away from traditional office space—which divides people up through cubicles—to create open work environments that encourage collaboration. The physical layout sends a powerful and visible signal to the team and its partners, suppliers, internal and external visitors each day: this is different.

Agile in Practice

For example, an OEM might consider putting its aircraft design team in a hangar, without cubicles, enabling them to build prototypes and tear down competing products right in their workspace. Regardless of the actual space—whether it’s a hangar, a garage, or a sophisticated design complex—proximity to the challenge, and to coworkers, spurs innovative thinking.

6. Deploy Iterative Cycles to Move Toward an MVP—and Beyond

Rather than trying to develop a perfect product, agile teams should aim to get a “good enough” or MVP version into the hands of customers. They refine that MVP based on customer feedback. This is tricky in A&D, where products are highly complex and subject to strict safety, quality, and reliability standards. An aircraft is not the same as an app. 

Yet A&D companies can still adapt this philosophy. Not all project phases culminate in a “product” that is sent to manufacturing or delivered to an external customer.

Companies can use sprint cycles to develop MVPs for interim work products and objectives, particularly during early conceptual phases.

Agile in Practice

Instead, companies can use sprint cycles to develop MVPs for interim work products and objectives, particularly during early conceptual phases, when teams should view each other as internal customers. 

Sprints can be structured around either a time limit or milestone, depending on the task at hand. For example, time limits may be better for a sprint aimed at developing a high-level concept—when a MVP is actually preferable—to avoid spending weeks studying and perfecting a design. Alternately, when a team needs to finalize important details tied to factors such as structural integrity or flight safety, leaders may choose to set a project milestone, rather than a timeline. 

Notably, the MVP concept works best when pursuing an ambitious goal that is difficult to achieve–possibly one that has never been realized before. Simply telling a team to take an MVP approach to its next nacelle design tweak may not yield the desired effect.

7. Create Cross-functional Teams That Have Clear Accountability

Agile requires a different way of working, and leaders need to assemble the right team—one with a mix of skills, backgrounds, and experience. For example, an OEM seeking to reduce costs on a particular system by 50% cannot look solely to procurement.

Agile in Practice

Rather, leaders must field a cross-functional team possessing expertise such as design-to-cost, new manufacturing methods, alternate supply, and creative contracts. And all team members—from engineering to finance—should be aligned in their program reporting structure and be accountable to the team and the program. This approach will build cohesion and focus on end results while minimizing the potential for internal conflict.

8. Assign Talent for the Duration of the Project

Team members should not divide their time and attention across multiple projects or teams.

Dedicated teams have greater accountability for delivering results.

Agile in Practice

They should be staffed on full-time assignments for the duration of the project. This approach creates a unity of purpose and emphasizes the team’s objectives over individual or functional goals. Dedicated teams have greater accountability for delivering results.

9. Fail Fast and Learn Continuously

Agile demands that teams experiment while evaluating new ideas. Failure is inevitable; in fact it’s a necessary and important part of the agile mindset. 

Senior leaders must create the right incentives and culture to encourage experimentation, accept failures, and treat them as a learning opportunity and a critical step in the team’s journey. A disciplined retrospective at the end of each sprint is critical to realizing this goal.

Agile in Practice

For example, a team seeking to reduce manufacturing costs on a part will likely need to look at several prototypes to understand how specific design elements affect manufacturing time, costs, and complexity. Even though many—or even most—individual prototypes may ultimately fail, understanding how and why they fail can help lead to a solution. 

The faster the team is able to work through these prototypes—that is, the faster it can fail—the more ground it can cover in understanding the art of the possible.

10. Emphasize Quality and Safety

Some teams may have concerns about whether speed during product development jeopardizes quality and safety requirements. To be clear, adopting agile methods for A&D engineering does not mean setting aside those standards. On the contrary, agile relies on strong discipline and state-of-the-art technical know-how. 

What agile does mean is that interim working products may purposefully fall short of requirements in order to experiment with new designs and methods and ultimately get to the desired end point.

Agile in Practice

Practically speaking, companies can use a blend of approaches. They can use agile to guide the majority of the work while also conducting formal reviews at key stages to confirm that safety, regulatory compliance, and related requirements are being met.

Agile at Work in A&D

A&D OEMs do not need to scrap their accumulated wisdom regarding product development and engineering to embrace agile. But the sooner they embark on the journey to adapt agile methods to complement their hard-earned know-how, the more competitive they will be. Furthermore, an added benefit from this kind of transformation is the enhanced ability to attract and retain top engineering talent—and thus outpace other organizations on the cutting edge of technology.

The Ten Rules for Agile in Aerospace and Defense