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LeanandAgileAcquisitionandSystemsEngineering

A Paradigm Whose Time Has ComeRex B. Reagan • David F. Rico

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oday’sU.S.DepartmentofDe-fenseacquisitionsystemisfacedwithhistoricallyunprecedentedandseeminglyinsurmountablechallengesthatareleadingtocost and schedule overruns,poor technical performance,reduceddeliveryorderquanti-

TReagan is a retired Navy commander and senior managing consultant with IBM. He holds a master’s degree in financial management from American University and is a graduate of the Naval War College. Rico has been a DoD engineer for 25 years, performs technology readiness assessments, teaches doctoral courses at the George Washington University in systems engi-neering, and has written numerous books and articles on agile methods.

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cadenceandvariabilityarecontrolledwithiterativedevel-opment;fastfeedback,valuestreammapping,customerpull,continuousimprovement,reductionofwaste,andthepursuitofperfectionareachievedbyrespondingtochangeandusingflexibletechnologies.

The Old Versus the Emerging NewCountertoleanandagileprinciplesaretraditionalmethodsbasedonscientificmanagementpioneeredbyAdamSmithandFrederickTaylorintheBritishandAmericanindustrialrevolutionsofthe1800sand1900s.Keyideasemergingfromthisparadigmweredivisionoflabor,specialization,timeandmotion,Ganttcharts,massproduction,hierar-chicalorganizations,andmostotherprinciplesassociatedwith20thcenturymanufacturing.Thebasicnotionbehindtraditionalmethodsisthatallsystemrequirementscanandshouldbedocumented;workbreakdownstructuresshouldbecarefullyconstructed;allactivitiesshouldbedefinedandscheduled;costandeffortshouldbeestimated;andme-ticulouslydetailedprojectplansshouldbetrackedusingearnedvaluemanagementtocontrolprogramswithina5-or10-percentlevelofprecision.Aftertechnology-intensivesys-temsstartedbecomingtoocomplexinthe1960s,theterms“managementcrisis”and“softwarecrisis”werecoined,andmanypeoplebeganapplyingprinciplesofmanufacturingasameansofcontrollingprojectscope,time,andcost.

WhiletheproponentsofTaylorismattemptedtocontrolchaoswithscientificmanagementprinciples,othersbegantorediscoverthejob-shoppracticesofhighlycreativeandinnovativeartisans,mathematicians,andscientistsusedthroughouttheages.Althoughmanagementscholarshadalreadydiscoveredinthe1970sthatincrementalplanningwassuperiortolong-termstrategicplanning,itwasn’tuntilthe1990sthattraditionalmanufacturingparadigmsweredeemedinappropriateformanagingtheacquisitionofcom-plextechnology-intensivesystems.Thebasicnotionbehindmodernideasisthatinductivethinkingisbetterthanreduc-tionism,chaoscan’tbecontrolled,planningshouldbedonealittlebitatatime,planningshouldbeparticipativewithkeystakeholders,productsshouldbebuiltinsmallerchunks,andprojectsshouldbefrequentlyreplannedtodynamicallyadapttoconstantlychangingmarketconditions.

Forthelastcentury,managementscholarshavebeencriti-callyanalyzingtheglobalimpactsofTayloristicprinciplesonenterprisesandindustrialcompetitiveness.Theygraduallycametotherealizationthatstandardizationwasgood,butsowasindividualcreativity;hierarchicalcommandandcontrol

ties,andoutrightprogramfailure.Modernweaponshavebecomeenormouslycomplexinternetworkedsystemsofsystems,technologyisevolvingatanincreasingrate,andcurrentacquisitionpracticesmaybeexacerbatingpoorpro-gramperformance.

Leanandagileacquisitionandsystemsengineeringpracticesareemergingtohelpovercomethechallengesofrapidlyfieldingcomplexnewsystemsinthefaceofdynamicanduncertainmarketconditionsandeverincreasingmilitaryandintelligencethreatsinordertosatisfyenterpriseandmissionneedstoday.

Leanandagileacquisitionandsystemsengineeringasweknowittodayisarelativelynewparadigmformanaginghigh-risk,time-sensitive,researchanddevelopment-ori-entednewproductdevelopmentprojects.Itseemstobetheidealmodelformodern,post-industrialinformationageknowledgeworkers.Inreality,however,ithasalongandrichhistoryandlineage.ItstenetscanbetracedbacktoRomanInfantryTactics,LeonardodaVinci,Michelangelo,SirIsaacNewton,andtheprinciplesofexperimentationusedbyLouisPasteurinthe1800sandThomasEdisonintheearly1900s.DoDalsouseditsbasictenetstodevelopex-perimentalaircraftthroughoutthe20thcentury.Buttoday,theartandscienceofleanandagileprincipleshavereachedsophisticatednewheights.Thefundamentaltheoryunderlyingtheprinciplesisthatmodernsystemsarecomplex,notwell-understood,sub-jecttodynamicandunstablemarketconditions,technology-intensive,andconstantlychanging.

Acommonmythisthatleanthinkingischaracterizedbyautomationandeliminationofwaste.However,deeperex-aminationrevealstwomajorpillars:continuousimprove-mentandrespectforpeople.Researchershavefurtherrefineditspillarsintosixprinciples:letcustomersdefinevalue,mapthevaluestream,makevalueflowcontinuously,pullvalue,pursueperfection,andrespectpeople.Othersexpressitintermsofeightprinciples:takeaneconomicview,managequeuesize,exploitvariability,reducebatchsize,managework-in-process,controlcadence,usefastfeedback,anddecentralizecontrol.It’snowalittleeasiertoseetheintersectionofleanandagileprinciples:definition,prioritization,andvaluationofrequirementsisperformedbycustomercollaboration;decentralizationandrespectforpeopleisachievedbyempoweringteamstomakedecisions;batchsize,queuesize,andwork-in-processareloweredand

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Lean and Agile and DoDAcommonlyaskedquestionis,“DoestheuseofleanandagilesystemsengineeringimprovetheperformanceofmajoracquisitionswithintheU.S.DepartmentofDefense?”Itisbasicallyanewproductdevelopmentapproachforcreatinginnovativesystemsinthe21stcentury.Ifthetwopillarsofleanthinkingarecontinuousimprovementandrespectforpeople,thenitsfivepillarsare:(1)intensivecustomercollab-orationandinteractioninsteadofcontractnegotiation,(2)smallhigh-performancemulti-disciplinaryteamsinsteadofbureaucraticprocesses,(3)iterativedevelopmentofwork-ingoperationalsystemsandtechnologydemonstrationsinsteadofamountainofdocumentation,(4)respondingtochangingcustomerneeds,marketconditions,andmilitarythreatsinsteadofusingearnedvaluemanagementtotrackanobsoleteprogramplanuntilallofthemoneyisspent,and(5)usingpowerful,high-level,flexible,andadaptivetech-nologiesinsteadofbuildingeverysystemonecircuitboardandonelineofcodeatatime.

AfundamentalissueisthatDoDacquiressomeofthemostcomplexsystemsinthehistoryofworld,allrequirementscannotbeknowninadvance,andcustomerrequirementsalwayschangebeforetheinkdriesonthepaper.Inaddition,technologyisadvancingandsoareourenemies’capabili-ties.Thus,leanandagilesystemsengineeringisbasicallyafour-stepprocessof:• Identifyingandprioritizingcustomerneedssuchashigh-levelenterpriseandmissiongoals,objectives,andcapabilities

• Decomposingthehighest-prioritycustomerneedsintomanageablechunksthataretechnologicallyfeasibleandimplementableinashorttimeframe

• Designing,implementing,andevaluatingworkingop-erationalsystemsincludingtechnologydemonstrationsthatsatisfyhighprioritycustomerneeds

• Rinsingandrepeatingtheprocessofscanningtheenvi-ronment,assessingcurrenttechnologies,analyzingnewthreats,identifyingnewandemergingenterpriseandmissioncustomerneeds;andre-prioritizing,re-planning,andre-allocatingresources.

Afteraprotractedperiodofbureaucratization,leanandagileprinciplesstartedmakingacomebackwithintheU.S.DoDintheveryendofthe20thcentury.Asadirectresultofthesystemsandsoftwareengineeringmovementsofthe1990s,“evolutionaryacquisition”sprangintoactioninthePenta-gon,U.S.AirForce,andU.S.Navyin1999.DoD5000firstmentionedevolutionaryacquisitionin2000.Then-under

structuresweregood,butflatterorganizationswerebetter;andmassproductionpush-systemsweregood,butflexiblepull-systemstoreacttoshiftingmarketneedswereevenbetter.Theyalsorealizedthatlong-termstrategic,opera-tional,andprojectplanningweregood;butlighter-weightandmoreflexibleplanningwasbetter.Zero-defectqualityprogramsandcostefficiencyweregood;butmarketeffec-tiveness,customersatisfaction,andprofitabilitywereevenbetter.TheirturningpointwastheadventoftheOilShockofthe1970s,whenscholarsrealizedthatTaylorismwasinsuf-ficientinspiteofitsoverlystructuredandinfinitelydetailedstrategicplans,repletewithallofitsscientificmanagementtrappings.

DoD,however,washeadedintheoppositedirectiontobe-comelessleanandagile.Fromthe1950sto1970s,DoDhadusedleanandagileprinciplestousherinthejetageandtorapidlyevolveexperimentalaircraftsuchasX-15,SR-71,U-2,F-111,F-117,andmanyothers.Inspiteofthesesuccesses,theprinciplesusedtodevelopexperimentalaircraftthroughouttheearlyjetageandColdWarwerenotdeemedsuitablefortheacquisitionofproductionaircraftasitpertainedtoengineering,manufacturing,production,deployment,opera-tions,andsupport.

Inthelate1950s,DoDplannerscametobelievethatthekeytosuccessfulweaponsystemswastoapplyrigidmanufac-turingprinciplestoacquisitionandsystemsengineering.Amyriadofstandards,tools,andpracticesgraduallyreplacedresearch-orientedparadigms:Cost/SchedulePerformanceCriteria,MIL-STD-1521[concerning system design review],DoD-STD-2167[specifying software documentation deliv-erables],MIL-STD-498[establishing “uniform requirements for software development and documentation],EarnedValueManagement,andDoD5000Series.Thesewereonlythetipofanicebergofthousandsoflower-levelstandardsmak-ingupwhatcametobeknownasthedefenseacquisitionsystem.

WhiletheU.S.DoDwasbusilyslowingdownitsacquisitionsbasedonTayloristicprinciples,otherswerenot.Thenotionofiterativedevelopmentemergedin1975,incrementalde-velopmentin1976,evolutionarydevelopmentin1978,andspiraldevelopmentin1986.Theparadigmsofoverlappingdevelopment,simultaneousengineering,andconcurrentengineeringalsoemergedby1990.Evenagilemethodsforinformationtechnologyprojectsgainedtractionaround1999.Alloftheseemergingparadigmsrancounter-intuitivetoTayloristicmega-standards.

A common myth is that lean thinking is characterized by automation and elimination of waste. However, deeper examination reveals two

major pillars: continuous improvement and respect for people.

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secretaryofdefenseforacquisition,technologyandlogisticsE.C.AldridgeJr.wrotetheEvolutionaryAcquisitionandSpi-ralDevelopmentPolicyin2002.DoD5000Seriesdirectlyincorporatedevolutionaryacquisitionin2003.Numerousacquisitionarticles,researchreports,academicstudies,andthefirsttextbooksemergedtodealwithevolutionaryacqui-sition.However,mostwerecritical—cautionarytalesofthedangers,pitfalls,andperilsofusingevolutionaryprinciplesfromthe1970sonlarge-scaleprograms.

Crisisisacatalystforchange,andDoDhascertainlybeenacommunityincrisissinceSept.11,2001.Ourenemieswereinsidethegates,andDoDquicklyandsuccessfullyrespondedwithleanandagileprinciplesinstitutedattheenterpriseleveltorolloutnewcapabilitiestothewarfighterin30,60,and90-dayincrements—andsometimesevenindays.TheU.S.Armyusedleanandagileprinciplestocom-pleteelementsofitsGroundMobileRadioprogramontimeandwithinbudget.TheU.S.AirForceisusingthemtocom-pletesubsystemsfortheF-22andF-35,aswellasbringtheMC-12Wfromconcepttooperationinaslittleastwoyears.Defensecontractorsarestandardizingtheiroperationsusingtheprinciples.AslateasFebruary2010,ArmyGenDavidH.Petraeuscalledfor“adaptive,responsive,andspeedyacquisitions”because“theenemythattheUnitedStatesisfightingisunlikeanyenemyfoughtinthepast,demonstrat-ingdifferenttactics,techniques,andproceduresfromthosefoundinconventionalwarfare.”

Leanandagileacquisitionandsystemsengineeringisheretostay.Thetraditionalprocessofamassingamountainofdocumentationtoacquireasingleweaponsystemoveraperiodofdecadesisobsolete.TheU.S.defenseacquisitionsystemhasbeenimproved,withitsoverallreductioninsizeandcomplexity,introductionofevolutionaryconceptssuchasincrementsandspirals,andfocusonimprovingoverallacquisitionperformance.However,thereisalongwaytogointermsoftheprioritizationandvaluationofmissionneeds;reductionofbatch,increment,andspiralsizes;useofsmallerhigher-performingprojectteams;developmentoflightweight,flexible,andnear-termstrategicplanningandprogrammanagementapproaches;andexploitationofcom-mercializedtechnologiesinsteadofbuildingeachweaponsystemonecircuitboardandonelineofcodeatatime.

NowisthetimefortheDefenseDepartmenttoinstitutional-izeleanandagileprinciplestohelpovercomethechallengesofrapidlyfieldingcomplexnewsystemsinthefaceofdy-namicanduncertainmarketconditions,theexponentialrateoftechnologicalchange,everincreasingmilitarythreats,andinsurmountablerisks,inordertosatisfyemergingenterpriseandmissionneedstoday.

The authors welcome comments and questions. Reagan can be reached at rbreagan@us.ibm.com and Rico at dave1@davidfrico.com.

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