00:00:03
[Music]
00:00:18
so let me frame it within Boeing a
00:00:20
little bit because I think everyone has
00:00:23
a view of what boing is so you know
00:00:25
first of all Boeing is is um almost a$7
00:00:29
a billion company that's pretty much
00:00:31
divided into two operating units Boeing
00:00:34
commercial aircraft I think which
00:00:35
everybody understands makes 747 Tri 7
00:00:39
and then our government and defense and
00:00:41
civil business is the other side of that
00:00:43
that's Boeing defense space and security
00:00:45
and so I'm on I'm on that side and in
00:00:47
that business we have three sub
00:00:49
operating units an organization that
00:00:52
makes military aircraft called Boeing
00:00:53
military aircraft one that does service
00:00:56
and support called Global support and
00:00:58
services and then the business that I
00:01:00
get to run which is Boeing Network and
00:01:03
Space Systems and we're about 11 billion
00:01:06
in sales 20 some odd thousand people
00:01:10
were in 41 States um and about 12 to 15
00:01:14
uh different different countries and uh
00:01:17
we're located at uh we have five major
00:01:20
operating units um go through that if
00:01:22
you like uh the information security
00:01:26
systems is in Washington DC does border
00:01:29
security site cyber works with the Intel
00:01:32
Community uh a lot of the things that I
00:01:34
think are becoming more and more
00:01:36
important to the defense of the nation
00:01:38
uh I've got an organization called uh
00:01:40
missile defense systems based in
00:01:42
Huntsville Alabama that does the
00:01:44
groundbased midcourse defense Airborne
00:01:46
laser lab a lot of real high-tech
00:01:49
programs associated with intercepting
00:01:52
inbound intercontinental ballistic
00:01:54
missiles and tactical missiles it's
00:01:56
great
00:01:57
organization um I've got another
00:01:59
organization called space exploration uh
00:02:01
based in Houston Texas primary customers
00:02:04
are NASA Johnson Space Center
00:02:06
KSC uh space station program space
00:02:09
shuttle program Aries 1 Aries 5 Al a lot
00:02:14
of the manspace and uh the we call space
00:02:18
science type uh type programs uh new
00:02:21
organization out in Huntington Beach uh
00:02:24
called Network and Tactical
00:02:26
Systems uh the Army's large program
00:02:29
Brigade combat team
00:02:31
modernization uh a network Centric Army
00:02:34
Brigade does a lot of other work uh
00:02:37
related to digital networks comms radios
00:02:40
handheld ground stations satcoms things
00:02:43
like that and then my last operating
00:02:45
unit is in elag gundo California uh
00:02:48
satellite intelligence systems and
00:02:50
that's really our satellite uh design
00:02:52
development manufacturing operations
00:02:54
organization and we make a whole host of
00:02:57
satellites there um us govern government
00:03:00
civil uh weather we also do XM radio
00:03:03
Direct TV
00:03:08
GPS so you know we talked with uh
00:03:10
Michael Eggman about the topic you know
00:03:13
last year was a lot about strategy this
00:03:15
year we want to take strategy into
00:03:17
execution um and I really looked at the
00:03:20
audience and the the individuals who uh
00:03:23
come to this terrific conference and a
00:03:25
lot of uh top tier mbas a lot of Wharton
00:03:28
students and Wharton alumni and I really
00:03:30
want to relate one u u performance and
00:03:35
execution around the development phase
00:03:37
of a program so I'm not going to talk
00:03:39
about science and technology I'm not
00:03:40
going to talk about the production phase
00:03:43
or the support or demill phase I'm going
00:03:45
to focus on development which is
00:03:47
primarily what I do in the network and
00:03:49
space business I'm going to make a
00:03:51
premise that says development programs
00:03:54
are difficult it's why development we're
00:03:57
usually inventing something or creating
00:03:59
something is new we're trying to meet an
00:04:01
emerging requirement we're frankly doing
00:04:04
something that no one's uh ever done
00:04:06
before we're kind of if you will go
00:04:09
going into unknown space so it is it is
00:04:13
predictable right that cost schedule are
00:04:17
um are going to be a challenge to manage
00:04:20
and I want to get that premise out
00:04:23
because I think there's an expectation
00:04:24
today that you can do development on a
00:04:27
schedule um and their implication ations
00:04:30
onto the contract type a lot of emphasis
00:04:33
within DOD to move development to fixed
00:04:35
price I'm going to kind of suggest maybe
00:04:37
that's not the right way to do
00:04:39
development and how we share risk
00:04:41
between the customer the government um
00:04:44
and the contractor and then hopefully to
00:04:47
make it interesting U I've got sort of a
00:04:50
you know top 10 sign posts so if you
00:04:53
have a development program and you're
00:04:56
trying to assess how your program is
00:04:57
doing I'm going to go through sort of 10
00:04:59
lead indicators that you've got some
00:05:01
performance and execution problems on
00:05:03
the program and then the last couple
00:05:06
slides is really to talk about okay so
00:05:08
you you've got a development program
00:05:10
you've got some challenges and cost
00:05:12
schedule or technical uh what can you do
00:05:14
about it and they're really you know you
00:05:16
know three major areas it's kind of a
00:05:18
people uh oriented area there's an area
00:05:21
around managing uh the
00:05:23
Baseline um and U working if you will uh
00:05:28
with the customer and then the third
00:05:30
area that I'll emphasize is frankly
00:05:33
constant reviews and a lot of managing
00:05:35
of detail and paying attention to both
00:05:39
the the big and large aspects of the
00:05:41
program but all of the smaller things in
00:05:43
a program that go together to create
00:05:48
success and so I've been doing this a
00:05:50
long time this is probably my fourth
00:05:52
decade that I've been in the defense
00:05:55
industry uh I always like to say well
00:05:57
boy this is a n this is an inflection
00:05:59
this year is the inflection point and I
00:06:02
think what I've come to understand is
00:06:03
that every year is an inflection point
00:06:05
and from you know when I was young I was
00:06:08
in high school it was sort of a cold war
00:06:11
environment uh and that created a
00:06:13
certain threat which drove large
00:06:16
platforms we all used to call the fold a
00:06:18
gap scenario I think what has evolved
00:06:21
now over time is frankly a change in the
00:06:24
threat so we we went from kind of a
00:06:27
bipolar U uh a globe to where it's just
00:06:30
this uh multi- uh faceted threat very
00:06:35
asymmetric that has occurred at the same
00:06:38
time within the United States we've run
00:06:40
into some very significant budget
00:06:42
problems so we had a a trillion and a
00:06:45
half budget deficit last year we've got
00:06:47
other priorities like uh education and
00:06:50
health care which are going to drive the
00:06:52
budget and so what we're seeing in this
00:06:55
shift the shift this time is away from
00:06:58
some of these large Market key aat 1D
00:07:01
programs into a lot smaller programs and
00:07:05
a shift away from very large higher risk
00:07:09
expensive platforms to smaller
00:07:12
developments um things like you know
00:07:15
cyber uh uh Network some smaller
00:07:19
satellites and what it's done for us is
00:07:22
it created new markets and new
00:07:25
adjacencies white space that we can
00:07:27
address within the the products and
00:07:30
capabilities I have with the network
00:07:31
space that we we wouldn't have been able
00:07:34
to address had it been just business as
00:07:36
usual so we actually find it a pretty
00:07:38
exciting time and where uh in the past
00:07:41
we might have spent uh a considerable
00:07:44
amount of our talent on program
00:07:47
execution and production we've now uh in
00:07:50
the process of Shifting that Talent into
00:07:53
uh Market identification and Market
00:07:55
development and writing proposals and
00:07:58
helping to shape business opport unities
00:08:00
so that we can continue to win business
00:08:02
and
00:08:05
grow so we we we've created sort of a
00:08:09
new word in this uh in this decade
00:08:11
called cyber right and and you know
00:08:14
cyber is really speaks to the
00:08:16
infrastructure of computers and networks
00:08:19
and applications that allow us to move
00:08:22
information um and with a proliferation
00:08:25
and frankly our our society now is more
00:08:27
and more dependent upon
00:08:30
the networks and the access right that
00:08:32
that gives us all the information right
00:08:35
anytime uh you have a growth in a
00:08:38
technology like that you also open up
00:08:40
vulnerabilities vulnerabilities to
00:08:42
threat people who don't share your
00:08:44
ideals people who would like to attack
00:08:47
the United States who would like to
00:08:49
attack you know the countries that we
00:08:51
associate with and because of the
00:08:53
dependence on this cyber infrastructure
00:08:57
we are seeing a a proliferation of
00:08:59
attacks both from Nation States from
00:09:02
non-government organizations and frankly
00:09:05
from casual hackers uh so as we have
00:09:08
developed these networks we've also
00:09:11
developed a suite of defenses and uh you
00:09:14
know at Boeing we have a very large
00:09:16
proprietary Network that we use just to
00:09:18
operate the business of Bowen you know
00:09:20
we have over 500,000 IP addresses uh we
00:09:24
have multiple terabytes of data uh we
00:09:26
are as much a target for Boeing right uh
00:09:30
as the Department of Defense so we all
00:09:33
have had to create defenses and there's
00:09:35
a whole Suite of things that we've done
00:09:37
between firewalls and fast switching uh
00:09:40
packet inspection and a lot of
00:09:42
techniques that we use internally to
00:09:44
protect our Network and then we have
00:09:46
productized these and then uh moved them
00:09:49
out into our customer base where we do
00:09:52
uh Network management for various
00:09:54
customers your specific question and you
00:09:57
picked out a couple threats I think
00:09:59
those are are well known you know there
00:10:01
was a Cyber attack um around the Russian
00:10:04
invasion of Georgia I think that one is
00:10:06
has been uh well known there have been
00:10:09
some on Wall Street relative to to
00:10:11
banking I think those have also been
00:10:13
well known and your answer was your
00:10:15
question was sort of absolute can we
00:10:17
ever 100% uh protect the network and and
00:10:21
I would tell you that the Cyber threat
00:10:23
feels more like the IED threat which is
00:10:26
uh given any defined threat we we can
00:10:29
build a counter to that threat so if if
00:10:32
we know that they're going to you know
00:10:33
hack in through a firewall using a
00:10:36
certain techniques it's easy to build a
00:10:40
a firewall blocker that stops that
00:10:43
threat right and we do that and and
00:10:45
frankly our cyber defenses is a very
00:10:49
active very responsive uh type of
00:10:51
Defense but what we're seeing is this
00:10:55
very adaptive responsive reactive threat
00:10:59
and I would describe what's going on now
00:11:02
is it's a
00:11:04
Continuum where we've we strive to
00:11:07
create a balance where we went on the
00:11:10
balance side so we have to forever be
00:11:13
staying one step ahead of the threat
00:11:15
creating new defenses new firewalls uh
00:11:19
new visibility tools into the network
00:11:21
because fixing today's threat's not
00:11:24
going to be good enough and the reaction
00:11:26
time that we're seeing uh in that Global
00:11:30
threat is hours and days and weeks and
00:11:33
that's exciting for us because we get to
00:11:36
hire really smart college graduates in
00:11:39
computer science and and uh uh uh
00:11:43
Computer Engineering and we bring them
00:11:45
into Boeing we work with customers they
00:11:47
get to do real exciting work on on an
00:11:50
hourly daily weekly basis their you know
00:11:54
their uh excitement about coming to work
00:11:56
for us is real high and then we get to
00:11:58
protect
00:11:59
the networks of the Nations so uh never
00:12:02
an absolute uh we have the technology
00:12:05
and the capability though to to defend
00:12:08
the cyberspace that we need as a country
00:12:10
to operate um but uh we will always need
00:12:14
to be staying ahead of the threat
