One. Two. Three. Get ready to exhale – hopefully. Simulation and training companies and their home nations are, in most instances, emerging from nothing less than a disruptive 24+-month era, ready to embrace a ‘new norm.’ Group Editor Marty Kauchak profiles business practices as we shift from pandemic to endemic.
In response to genuine concern about the health and welfare of their workforces, and “nudged” by government mandates, companies revamped factory production floors and processes, relocated administrative and other personnel from their corporate workplace to home, and developed technology workarounds to support virtual meetings within and external to their organizations. And that was for starters. On the other side of the contract ledger, defense customers cancelled or rescheduled exercises and other training events supported by industry teams, and developed alternative ways to meet contractual milestones virtually, when program teams were not authorized or were unable to travel – and undertook other responses to continue operating.
Herein are some representative insights on how the S&T industry operated through the pandemic. The corporate datum points should serve as lessons for defense learning enterprise leaders, enabling them to ask: is our organization ready for the next disruptive event?
Alternatives to F2F
Companies report that one of the major impacts of this era on their business models, of course, was the reduction of face-to-face interaction within and outside their organizations, due to government-mandated quarantines and travel restrictions, and their leaders’ concerns for workforce health and welfare. S&T firms and their government customers met this challenge with resiliency, as they completed interactions virtually through enhanced technologies and, when feasible, in person – but masked and observing social-distancing protocols. Of importance, some of these adjustments have migrated into current business models and acquisition processes, certain to remain in place after the pandemic evolves to an endemic.
Åsa Thegström, Head of Saab’s Training & Simulation business unit, summarized her portfolio’s evolution during the recent two years, recalling, “Many aspects of our business have been affected by Covid-19, leaving no choice but to find solutions and new ways of working.” While Saab has continued to deliver its training services despite the pandemic, to both existing and new customers, the executive emphasized, “The challenge was finding a way of maintaining this, despite being impacted on a multinational scale by the pandemic.”
Thegström then focused on more specific era challenges.
While one prominent event, the Swedish Defense Force’s AURORA 20 exercise, was postponed due to the pandemic, she pointed out other “national exercises have mainly been executed in accordance with plans and supported by Saab staff on-site at more than 20 sites around the world.”
And then there was the very broad leadership responsibility of maintaining Saab’s “presence” – to complete contract milestones and participate in heretofore live meetings and conferences, in their new virtual formats. On cue, the S&T business leader presented one lesson learned, with some of the outcomes certain to carry over into the post-Covid era.
“Technology has also been the savior in the delivery of training solutions,” and, where Saab’s customers haven’t been able to attend face-to-face, “videos and virtual technologies have been invaluable. For example, we have frequently done functional acceptance tests together with the customer via video/Skype, etc. Another example is providing videos to demonstrate new capabilities, and also participating at several exhibitions and conferences virtually instead of live. This adapted way of interacting has been used to replace traditional methods for communicating during preparation phases as well as during acceptance tests.”
Similarly, Peter Hitchcock, Thales Vice President for Training & Simulation, told MS&T the main impact of this era has been the reduction in face-to-face meetings with customers and industry partners. “Although this gradually improved in 2021, it was not until I/ITSEC in December that we were able to meet in person for the first time in 18 months.”
Beyond in-person meetings, highly secure VPN (virtual private network) solutions allowed some of Thales’s development environments to be accessed from home, giving the company fallback options, “and we implemented Microsoft Teams as a parallel collaborative tool in addition to our existing Cisco Jabber and audioconference solutions to give us extra capacity and redundancy. As people progressively returned to work, we also ensured our on-site catering offer stayed open!”
In addition to strengthening its virtual meeting capabilities, Thales, as part of a global group, made many other adjustments to comply with corporate policies as well as the legal rules in force in its home countries during the period. The first challenge was logistical, to obtain personal protective equipment/cleaning material. “Thales headquarter team did a great job – I remember when they confirmed within weeks of the pandemic declaration that we had secured 11 million masks and dedicated charter flights started arriving from Asia with everything that we needed to equip our teams. We reconfigured our sites with one-way systems; 2m [6.6ft] distance markings and removed chairs/desks to ensure spacing. Teams were split into shifts and alternating on/off site presence to create ‘bubbles,’ ensuring that we could manage work that could not be done remotely and which we could not afford to stop.”
Contract Slips and Quarantines
While companies had a laser-like focus to protect workforces, add and strengthen virtual meeting capabilities and complete other activities, it’s significant to note businesses were still able to increase or sustain their market shares in a volatile, uncertain defense business climate. Indeed, in the US, defense organizations strived to maintain continuity with existing S&T programs and preview future requirements as witnessed at NTSA’s June 2021 Training & Simulation Industry Symposium in Orlando.
Of significance, Thegström reported Saab managed to continue to sign new contracts throughout the last 24 or so months. “In 2020, one of the most significant being the Combat Training Centre (CTC) contracts with the US Army Training Command for training at NATO centers in Europe. In addition to this, long-term support contracts with Finland and Norway were secured, giving them all the capability to continue multinational training with NATO and other coalition partners.”
And during 2021 the business increased strongly with Saab signing three major CTC contracts, “which showcases Saab’s market leading position as a global supplier of Land Forces Live Training support and capabilities. The Netherlands Army, the Polish Armed Forces and the US Marine Corps will all be equipped with training solutions that are interoperable with NATO and other allies while ensuring they get the most realistic and state-of-the-art training available on the market.” The industry veteran concluded, “By working effectively, and based on our strong portfolio, we have been extremely successful on the market despite the pandemic. Saab’s Training and Simulation business is more robust today than ever before.”
Thales’s Hitchcock noted, “In terms of the business operations, it has been remarkable how well this held up. I am particularly proud of our customer service teams based on military bases in Europe and Australia who have maintained an uninterrupted service since the pandemic hit in 2020,” and added, “Our customers have adapted well and whilst there were initially delays in processing orders during 2020, in 2021 we have booked all the orders that we expected during the year. In some cases, annual support contracts were wrapped up into multi-year orders to relieve pressure on the procurement systems.”
The community expert also provided several other vital, specific points on the pandemic’s impact on his portfolio, first noting, for Thales’s S&T projects in development, “we generally had to reschedule a number of acceptance tests by mutual agreement with our customers where attendance in person has been difficult, but we ran at over 90 percent on time delivery on all development milestones, averaged across four countries, during all of 2021. So, whilst there was an impact it was contained well!”
And more to point, the industry veteran said 2021 “was a normal year for us in orders and sales. 2020 saw on average six months of slip in new business so some things that we were expecting in late 2020 were reforecast in 2021 and happened when we expected. In 2020 and 2021, we were still travelling overseas to perform site acceptance tests, surveys and commissioning although frequently with a two-weeks quarantine period before starting work and two weeks of quarantine for the team on return.” He concluded, “It is fair to say that from about September 2020 we were living the ‘new normal’ with a lot of effort but following the rollout of vaccines by mid-2021 the additional overhead on the business became a lot easier to manage.”
Thales and Saab’s experiences on meeting contract milestones, for acceptance tests and other events, during pandemic-like eras, should be a topic of discussion between industry and defense organization teams during the earliest parts of the program acquisition process – future industry days and follow-on requests for information and proposal processes.
Planning for Disruption
These two companies worked through the diverse, unforeseen challenges of the Covid-19 pandemic period, and have emerged with their organizations intact and on sound fiscal footing. As other companies throughout the industry also prepare for a new, yet-to-be determined post-pandemic “norm,” it is more than appropriate for leaders to consider how their businesses will adapt to the next major disruptive event, be it pandemic, war or other, manmade or natural in origin. Of little surprise, community companies continue to bolster their IT capabilities to better support future, off-site work requirements.
Elsewhere, there are also opportunities to address other parts of the acquisition process that would be at risk during a disruptive event. Some of these include support for lower-tier materiel and other content suppliers, as well as revisiting with the defense customer, during government-hosted industry days and the run-up to contract awards, how certain contract milestones would be completed when face-to-face and on-site validation is not possible.