Leading Program Portfolio through Disruption Known as the Year 2020

Wes Kremer, President of Raytheon Missiles and Defense, opened Aviation Week’s Program Excellence core sessions for the annual DefenseChain Conference in an interview with Aviation Week’s Carole Rickard Hedden. His introduction provided the foundation for the annual Program Management Roundtable.

Carole:                        Our next speaker is here at the invitation of the program excellence evaluation team. We knew as we rolled toward this program, our lead off speaker for program management needed to be someone who had been in the fire of executing extremely complex programs under pressure from customers, as well as the market environment in general. Wes Kremer, President of Raytheon Missiles & Defense, fits that description perfectly. He's responsible for a broad portfolio of programs —air and missile defense, precision weapons, radars, command and control systems, and advanced technologies.Prior to becoming president of Raytheon Missiles & Defense, Wes was president of Raytheon's Integrated Defense Systems business.

Wes, your team at Raytheon Missile and Defense has gone through a lot in these past seven months. Integration of two major corporations, Raytheon and United Technologies Corp., plus the combination of two major legacy Raytheon businesses. Your program teams have hit the highest production numbers in history. You've seen intense pressure from the [U.S.] Defense Department on innovation in terms of hypersonics, all while considering more than 30,000 people, as you balance their needs in light of the Black Lives Matter movement and a pandemic. Which were the toughest of these challenges to tackle Wes?

Wesley Kremer:          Certainly 2020 has been an exciting year and we knew coming into the year with the consolidation and the merger and all of the things going on, that it was going to be a challenging year. But as you said, when you throw all of those other things on top of it, the COVID-19 pandemic and the social injustice issues that we're dealing with, it really complicates that.

The thing about being a program manager is you can rest assured that no two days will be the same. And despite what you come in and plan to do in the morning, in the office you can usually expect that there will be something to disrupt your day.

                                   And so I look at this as being a program manager on steroids. We had to adapt to the situations that we've had. And we've been able to successfully do that.

Looking in the rearview mirror, which is always easy to do, I think that one of the things was really getting people settled in to the work from home. We looked at that and I thought, along with with what most companies thought, "Hey, this is a temporary thing. And we'll do it for a few weeks." Originally it was a two-week shutdown. And then maybe it looked like it was stretching out and it was six weeks or it would be a couple of months, but I think we all underestimated how long this was going to go on.

                                    Clearly we had VPN set up and we had the basics, but getting people set up to work from home is a challenge, and getting them all the right equipment. And oh, by the way, it's not just an equipment issue.

I think the other thing that we learned is that every employee and every family has their unique set of situations, whether it's worrying about caring for parents or elderly people, whether it's having someone in your family that's more vulnerable, whether it's dealing with college kids that are now home and competing for bandwidth, or whether it's helping kids at all levels from elementary school to junior high, to high school. Everyone has different needs and feel this differently as we go through that.

                                    So one of the things that we've been really focused on is stressing with our supervisors is you have to be empathetic to what's going on with your employee base, but you also have to be flexible. We have to find ways to use technology, to create flexible work arrangements so that everyone can accomplish all of those things in this very demanding and stressful environment.

Carole:                        Increasing production at volume is difficult in the easiest of times, and you've been doing it in some pretty complicated times. Can you talk a little bit about how the organization was able to move into a higher gear and get things done?

Wesley Kremer:          Clearly, we were on a path to ramping up on a lot of our major production programs when all of this started and it certainly didn't make it any easier. One of the first things was really working with our supply base. It was actually incredible [that] of the over 10,000 suppliers we have worldwide that we were able to whittle it down to literally just a few hundred suppliers that had situations where they had work stoppages or were on a critical path impacting us.

                                   The other aspect—and I give a lot of credit to the OSD (Office of the Secretary of Defense) and to senior acquisition executives in the DOD in that they gave PCOs  (program contract officers) the ability to make decisions and to issue contract mods—one, to keep workers safe in the industrial base; but two, to expedite things in the industrial base.

And a simple [example] is source inspections. It's very common on complex parts to have someone from both the government and from the prime contractor to go out to our suppliers and to perform a task or witness a test for source inspection. And that was one of the first things that we were able to say, "Hey, let's use technology. We can now take digital photographs. We can do Zoom. We can do two-way communication, two-way video. We quickly found out there were ways that we could be more efficient and not only recover and keep pace, but we could actually accelerate.

                                   I think it was a great partnership, not only with our suppliers, but with our DOD customers and looking at how do we turn lemons into lemonade? How do we take advantage of COVID-19 and technology, so that we can make things happen faster? Critical design reviews, things like that. Especially in our classified areas, we were able to do classified VTCs rather than have people traveling. And it actually made the meeting shorter when you take out the travel time. And so we're able to actually accelerate programs.

Carole:                        Do you think that that'll be possible after this is... Let's say it's 18 months from now, do you think we'll hold on to these lessons learned?

Wesley Kremer:          Well, I sure hope so. And I will tell you in my conversations with senior leaders in the Pentagon, they're 100% in alignment. There are certainly things that we're all anxious to going back to doing, the face-to-face communications at certain levels. And there's things like that, that the discussions, the generation of ideas, those are things that we need to be able to be face-to-face to do some of that.

                                    But there's a lot of things that we've learned out of COVID that we're more efficient at. And we want to make sure that we capture those going forward and that we don't revert back to some of the slower practices that we had that really had been built over decades of experience. And this allowed us just to really accelerate that pace.

When we look at the threat that we face today, the acquisition process has to go faster. And there were some things that a crisis brings out the best in everyone. And I think we had a true partnership here to look for opportunities across the industry, to be able to go faster.

Carole:                       Could you give me a little bit of insight into what you consider the most important things that need to occur next year in 2021, in terms of your business, the programs and the people who work with you?

Wesley Kremer:          I think no one knows what the new normal is going to be in the end. I use that term because I don't think we're ever going to return to the old, and I certainly hope that we're not going to stay where we are today on this operating model.

So as we were talking, we have to figure out what that new normal is or that new hybrid model is. How many people are going to come back into the workplace? I'll tell you that across Raytheon Technologies, right now, we have about 40% of our employees that come in every day and work in the factories or the classified areas. We have about 10% of our employees, mostly on the software side of things, that come in once or twice a week, mostly to upload and download the big files. It's not as efficient to do over the VPN.

                                   So that leaves about 50% of our workforce that is working from home almost exclusively.

Again, there are some challenges to that, and I don't think that that will be the new normal, but certainly some number, whether it's 25%, 30% of our employees. And I think I speak that this isn't just Raytheon Technologies—across the defense industry [people] are probably going to be able to work from home long term. And that has big implications on our real estate footprint.

We are actively moving forward with things to create more of hoteling spaces, where an employee doesn't have a dedicated office, but they either share it with a few people or have an online reservation system to sign up, because certainly there'll be opportunities where all of our employees at certain times will come in, whether it's for team meetings or customer meetings or things like that. But we really don't need all of those dedicated offices. And so that's something that I see as this is going to be a benefit that comes out of this.

Carole:                         What do you think is going to be new, that is going to challenge our supply chain to keep up with Raytheon Missiles & Defense?

Wesley Kremer:          I think we're going to continue to see probably some consolidation within our supply chain. Some of our suppliers that were largely commercial and only a small amount of defense may want to get to a more balanced thing. The ones that were totally commercial it's been really hard on them.

I think the other thing is, hopefully, we'll continue to see the acceleration and going fast. And you see that driven by our DOD customers.

Hypersonics is a perfect example of that, where the view is that we're being outpaced by our adversaries and we're playing catch up. In order to do that, not only do we have to use technology as we've always done to drive us and to be able to leapfrog, but one of the things that we see, especially in the DOD acquisition process is just that the acquisition process itself must accelerate.

                                   And I think that one of the things that we have seen under COVID is that there are ways that we can go faster. There are inefficiencies that are built in, and whether it's, like I mentioned earlier, source inspections, whether it's contract terms of how we do things, the very formal structure around a series of reviews, there are ways that we can go faster. And I hope that as we get to this new normal, that together between industry and DOD, we'll figure out ways that we can streamline the acquisition process and create something that will allow us to ensure that we not only keep pace with, but that we outpace our adversaries in technology development.

Carole:                        So Wes, one of the things that I know we covered in last year's conference and program management round table was the heightened investment that your organization put on digitalization. Are you ahead of the game right now, or do you see a need for additional technologies as you move forward?

Wesley Kremer:          Well, I think I probably speak for a lot of industry when we view that. We have pockets of excellence and what we're really seeing now is the drive to bring all of those things together. I think you look at any organization and you see things going on in the engineering world to create digital models and to integrate those models. We see things in the IT world about the digital workspace and the work from home environment. How do we go straight from a digital model into printing something with an additive manufacturing process?

                                   And what we're really seeing now is the integration of all of those across all of the disciplines, including the financial models, the cost model, and the sustainment or support model, that a true digital thread is going to be integrating all of those.

And of course, one of the big challenges and the discussion topics going on right now is, who owns that environment? Or how do we share in that environment? How do we have both industry and government working in that same environment? Because if we can all share the same tools and see the same things, then it allows you to streamline a lot of that process.

                                   So there's clearly a long ways to go in this area, but I think the vision is being laid out. And it's very clear where the department of defense wants to go on this. We see this not only at OSD level, but across all of the services. And now we're working that next level of detail of what's that actually going to look like, and the real hard part, which is now realizing that vision and getting all of those things, to talk to each other and to get all the right tools in place and clearly a secure environment in which to do that.

Carole:                        I know that your organization is a fairly tight knit group, and you've had to put all of these different cultures together, while hiring people in the midst of a pandemic. How are you making the Raytheon Missile & Defense culture stick as they come on board?

Wesley Kremer:          When I think about what keeps me awake at night, that's certainly one of the things that goes through my mind all the time is, are we building the right culture for what we need going forward? One of the things that we did at Raytheon Missiles & Defense is, we made the decision early on that we were going to continue our summer intern program. We brought a board just over 500 interns that actually worked across our various locations this summer. And let me tell you, not only our talent acquisition team, but engineering facilities, everybody had to work really hard to put together a program so that we could onboard everybody and make sure that they had their computer on day one and that they were tied in virtually.

                                   We had a lot of learning from that and we did not do it 100% virtual. We did a lot of the extracurricular events virtual to avoid community exposure, but we actually put safety protocols in place.

We had our summer interns shadow someone in the physical workspace environment, not necessarily every day, but at least part of the time.

                                   But I still have people today that haven't, in-person, met all of their team. And I can tell you at the Raytheon Technologies leadership team that I have not met all of my counterparts on that team in a physical presence, we've done it through Zoom. Zoom is certainly better than just a straight telecon, but it isn't the perfect solution. That’s something I think about a lot — how do we maintain that corporate culture? What is that new culture for the new normal?

Carole:                        Later today more than 100 program and project managers will meet. What would you tell them is the most important job they have, and maybe there's two or three jobs, but what is the most important job that they have as you go forward?

Wesley Kremer:          Well, something that I tell my program managers all the time is that leadership really does matter. What you do as a leader makes a difference. And in the defense industry, at the end of the day, we have different functions, but the people that everyone turns to on a program team is the program manager. You are the frontline leader and what you say, what you do, and the attitude that you bring to work every day or over that Zoom call, actually makes a difference.

                                   And the other thing I would say is that our job as program managers, and I have a soft spot in my heart because I spent most of my career in program management, is that not only can you make a difference. With every challenge, there's always an opportunity. And your job as a program manager is to take all of this chaos, reassure the troops, reassure your teams, that you have a plan and that you'll get through it together and then look for those opportunities.

How can we do things? I use the source inspection. I mean, that's something we've been working on for years. How how do we cut down or eliminate source inspection? How do we do that remotely? And we use the crisis to actually make that a way of life. So I'm sure at every program level on every program team, there's ideas out there that will allow us to get better.

                                    The final thing I would add for program managers is there's no substitute for open and frequent communication. In times of crisis and in times of uncertainty, what people want to know more than anything is they want to know that someone cares, that someone's listening to their individual concerns, that someone's still listening to their ideas and that someone's looking out for not only what's best for them, but what's best for the team, the company and the program.

And that's where program managers that are good at communicating, they're open and transparent in their communications, have great relations with our customers, all of those things hold true. And in fact, in a situation like this, I would say they're even more important than they are in just everyday management of a program.