FSI Defense is ‘All In On the Defense Side’

Marty Kauchak, Halldale Media Group Editor, and Rick Adams, MS&T Editor, interviewed Dan Davis, President, FSI Defense, a FlightSafety International company, at the I/ITSEC conference.

MS&T: Dan, thanks for taking time to meet with us. Update us, please, on the rebranding and restructuring FSI is undertaking for its defense business.

Dan Davis (DD): FSI Defense – what and why? At that time I arrived here, in November last year, the business unit was called FSSC (FlightSafety Services Corporation). What did that mean? It was confusing. As I looked at our portfolio and what I wanted that portfolio to be, and the more I talked to the team, my initial impression is everyone here was very product-focused – everyone talked to us in terms of the products we are selling. I didn’t hear a lot about the solution we are trying to solve for our customers. I wanted to shift that paradigm from being product-focused to solution-focused for our customers. There were multiple entry points to us for our DoD customers and they were confused: “If I want ‘X,’ do I call you, or your offices in St. Louis, Austin or elsewhere?” We repackaged and rebranded the business. There is one touch point for the customer – the FSI Defense Growth Team. FSI Defense ties the two together – the legacy of FSI and the defense customer we serve.

MS&T: Share with us some of the major milestones on your roadmap for FSI Defense for the next 12 months.

DD: Let me first go back to the last 12 months and then I’ll look forward. In the first 12 months, once I understood what we needed, repacking and realignment, the rebrand was a byproduct of the realignment, and redefined who we are, a true defense company. We were not a bunch of small defense companies trying to sell the customer, but we’re one company, FSI Defense. And we were very focused on realigning the Growth Team. When I say growth, I’m talking not only with business development, but proposals, capture and innovation, and putting it all under one umbrella. We’re getting really focused on not the products we are selling, but what solutions we are helping the customer solve – we’re shifting that paradigm. We brought in new individuals to the BD team, the Growth Team, with very diverse backgrounds. The last 12 months have been focused on getting that Growth Team stood up – getting the right people in the right place, focused on the right solution for customers and building back those customer relationships where we had lost touch with some of them. I found we were waiting for the phone to ring, rather than being out talking. The other thing we focused on was executing the programs we had, with a renewed focus on business we already won – what were the commitments we made to the customer? Did we understand those commitments and are we keeping them?

MS&T: And now you’re looking at the near-term – the next 12 months.

DD: The next 12 months’ focus is a continuation of those things – but getting better at it. The Growth Team is in place and I’m really happy with the BD and Growth teams – second to none of any OEM. We’re turning them loose to do what they do best – work with the customer, understand the potential solutions: what they are looking for, how we can best fit that and bring it back. When looking at what we want to invest in – asking how it shapes what our decisions should be for all of those business development things. At the same time, we have that very intense focus on what we have already done, what we’re about to go win, and how we perform the best!

MS&T: You’ve mentioned your broader FSI heritage; are there any competencies and capabilities you will be taking advantage of from FSI’s civil aviation portfolio?

DD: One of the things is the legacy of training. When you train on the commercial side it is all about efficiency, throughput – getting a good value for it. It’s more than just being proficient; it’s being prepared for anything. How do we make sure we are driving those same lessons learned into the defense side in our training – when we’re working on training contracts. How do we take best practices on the commercial side and develop those on the defense side? That does go both ways. On the commercial side, training is driving that – they are always trying to get better, whereas in the past, sometimes defense may have gotten a little stagnant in certain areas. There are some technologies you saw on the I/ITSEC conference floor at our booth, the Mission Fit for example, commercial offerings that we can adapt into the defense world – these are very easy to carry over to what defense does.

MS&T: An observation – your defense portfolio has previously leaned heavily toward the air transport and mobility market. Your plans to broaden that into fast jets, helos and perhaps UASs?

DD: That’s a great observation and was one of the first things on my list when I came to FSI. We pursued F-18 as a training program – we lost it. It was awarded to the incumbent. We want to break into that. If you look at some of the players we have hired, especially on the BD team, I did not go out and hire any cargo guys or gals. My BD director is a retired F-16 pilot. We just hired another person who is going to cover the US Navy. When I say we are customer-focused and not product-focused, we align ourselves to cover the future needs of the Army, Navy/Marine Corps and Air Force. The F-16 pilot is covered down on Air Force. Our oversight of the Army is led by a former brigade commander with an aviation/helicopter background. Our defense marketing director is an ‘11B’ (infantry and disabled vet). None of these folks came from the sim world or the ‘heavy world.’ We wanted fresh perspectives. Our Navy guy, a former Marine pilot, will cover down on NAVAIR. And our BD lead for growth was a career infantry officer. When I look at us, we are full up on Air Force and the other services, and simulation. If we are going to move into other areas, we need that fresh perspective.

MS&T: And you have a unique background for this position.

DD: Yes, I am a former Army artillery officer and I did 15 years with Lockheed Martin. Artillery is perfect for sims – you don’t have to go out to a range and lob 155 artillery shells over the horizon – you can do that in a computer model.

While FSI Defense's business leans heavily toward the air transport and mobility market, it is eyeing to retain that business as well as pursue new fast jet and other platform opportunities. Image credit: FSI Defense.

MS&T: What legacy US defense programs are you eying to capture as a recompete or as new business?

DD: Bombers. We’re chasing the USAF B-52. They have a whole upgrade so the aircraft can continue on, but the sims are ready for a refresh. The aircraft have been modified so many times the sims simply can’t keep up – they have to start fresh. The C-17 is a program we’re supporting for Boeing. This is a legacy aircraft that is not going anywhere for a very long time. This is a platform we are very, very committed to, and we are going to further develop our capabilities and chase this market. We’re also following the US Army’s Flight School XXI program, looking to revamp the US Army’s CH-47 Chinook legacy platform which needs an upgrade, and for the Lakota it’s the same thing. The Army is going to keep these platforms around for a long time. We want to make sure the training can keep up using the right devices.

MS&T: And similarly – what about new US DoD programs?

DD: Let’s start with US Air Force’s KC-46. We’re super-focused on performing well on that one – and we understand where the Air Force is going. If they had all the 46s they requested, they would have only half of the ones they really need. We’re also very focused on new programs for the US Army and for maritime use. There are other training programs that come out all the time. I wouldn’t call all of them ‘new.’ Most of them are recompetes, but there is still a lot of activity happening in the Army and on the maritime side. We have new folks in place who are only focused on looking at that customer need. And we know and appreciate these are not 12-month sales – they have long cycles and long developments and take time to work.

MS&T: As recent as the last live I/ITSEC (2019), the FSI military team reminded us it was still primarily focused on the US defense market. Will that market emphasis change at FSI Defense?

DD: I’ve been asked by our corporate team: what’s our international focus? My first answer has been and remains: we’ll take care of what we have at home. There’s enough on our plate to allow us to solve what we have already won. There’s enough new business to go chase right now domestically. And to follow up, and the KC-46 is a great example, there will be a foreign military sale soon after. Following that natural progression in the FMS market is how we’ll pursue that. There are also a few things on the international side that don’t scare me off but make me take notice. First, are the Covid restrictions with travel and other things. While we’re doing things in Norway and the UK, Covid restrictions are certainly a consideration. And unless it is not FMS, and you’re talking direct commercial sales, that latter process can be extremely difficult if you are not playing by the Federal Acquisition Regulations.

MS&T: How are VR/AR/XR, AI and other emerging technologies being integrated into your portfolio?

DD: All of those technologies represent a lot of players in the market. One of things we look at is should we do that organically or should we acquire that. That is the future, and we are asking where do we go with that, how do we go solve that. The Air Force talks about three big things at major conferences: they want it affordable, they want it available, and they want more pilots to use it. Getting into VR and AI, where we can give them a much lower-cost device that can put more pilots through and put it in the hands of more trainees – that is certainly where this is going. Full-motion devices are never going to go away; they will always have a niche. We have to get on the bandwagon for AI, VR and other technologies if we’re going to solve the other problems of connectivity, connecting simulators to the battlefield, and others.

MS&T: As one follow-up, discuss FSI Defense’s intentions or plans to acquire a company with these capabilities.

DD: We’re always open to partners who bring good value and technology to our solutions.

MS&T: What’s the current split between FSI’s commercial and military business?

DD: Our commercial business has been around 70 years and has an impressive market share. I think over time we want to rival that and ultimately exceed it.

MS&T: And your plans to balance those market shares?

DD: We have a desire to flip it on its head – I tell my boss that all the time. We’re not really a start-up; we’re still playing from behind. When you look at CAE’s buyout of L3 Link, and them teaming up and how big CAE is now, it widens the gap between numbers 1 and 2. We can’t control that; we focus on what we do and we’re aware of what is going on in the marketplace. It also opens up part of the previous L3 training business to us. We’re all in on the defense side!

MS&T: Anything else to add?

DD: I just want to reemphasize our commitment in shifting from the product focus where we were selling devices, machines and other articles, to where we are selling solutions. We are using that new paradigm in our growth and business development, and in our internal research and development – how we spend those dollars – and letting those customer objectives drive our decisions and image.