Main Story: Group Genius More: Creative Domains
For the workers at the Arnold Engineering and Development Center (AEDC) in Tullahoma, Tennessee, the Cold War's end brought little reason for celebration. The federal facility, which tests aerospace systems, saw its budget slashed in the post-Cold-War build-down; worse, its main customer — the U.S. Air Force — also had less money to spend on testing.
Outside consultants offered little hope. As the 1990s began, many AEDC managers were ready to accept their fate, convinced they should shrink their operations voluntarily and prepare to fade away gracefully. Not the commanding officer, Col. Bill Rutley. Instead, Rutley brought in MGT and, after several DesignShops, concluded that the best course was to expand operations — dramatically.
Was such a move possible? In the first phase, Rutley's management team "scanned" the entire AEDC operation. They assessed the center's strengths: a world-class wind tunnel, a collection of sophisticated, expensive testing equipment, and a team of highly skilled personnel. Their conclusion: AEDC had the right stuff to compete outside the military sphere and in the thriving commercial aerospace industry. There were, however, obstacles: low morale, bureaucratic fatalism, and most significant, a pricing clause in AEDC's authorizing legislation making it nearly impossible to vie competitively for nonmilitary customers. The DesignShop's key recommendation: change the legislation.
The next question was how to justify such a move to the U.S. Congress. Rutley and his team discovered that Europe's Airbus was becoming surprisingly well positioned to take aerospace business from American companies - the kind of development Congress might respond to. AEDC also compared the demand for testing facilities with testing capacity in the United States, and found a serious gap. If AEDC could price its services competitively, there would be enough demand for the center to expand its testing operations substantially.
Next, team members built what the Taylors call a "value web," a diverse network that included AEDC's suppliers, various military customers, as well as commercial giants like Boeing, NASA, and McDonnell Douglas. Then they convened value-web meetings, some including officials from rival firms. From the meetings, AEDC learned what testing services commercial clients would need, and potential clients gained reassurance on issues such as test-data security.
Finally, with the help of a powerful political network created by the value web, AEDC began lobbying Congress. It took less than 18 months to amend the limiting law — a remarkably short time for a process that involved both the defense bureaucracy and Congress. Among AEDC's first "outside" projects: testing engines for the Boeing 777. Because of AEDC's superior testing, the FAA certified the 777 to fly overseas two years early, a significant competitive boost for U.S. airline manufacturers.
As important as the new business is the new sense of control and confidence that the AEDC management team can now apply to other projects. Rutley, who is careful to point out that he's not speaking for the Air Force, thinks there is a larger lesson from the MGT approach. "You either design your future," he says, "or you can just let it fall on you."
A version of this article appeared in the October/November 1997 issue of Fast Company magazine.