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Dave Ryan Sector Vice President & General Manager Civil Systems Division PowerPoint Presentation
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Dave Ryan Sector Vice President & General Manager Civil Systems Division

Dave Ryan Sector Vice President & General Manager Civil Systems Division

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Dave Ryan Sector Vice President & General Manager Civil Systems Division

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  1. Emerging Challenges for a Changing Workforce Dave Ryan Sector Vice President & General Manager Civil Systems Division Northrop Grumman Space Technology August 5, 2008 Time: 8:30am – 9:30am

  2. Northrop Grumman Today • Comprehensive business portfolio to address the defense and government markets • Unparalleled portfolio of advanced technologies • One of top three defense contractors • Leading systems integrator • Largest military shipbuilder • Largest provider of airborne radar and electronic warfare systems • One of three top IT providers to the U.S. Government • One of three major contractors in military and civil space, missile defense • 120,000 employees • 50 states, 25 countries • Headquartered in Los Angeles, CA $32 Billion in 2007 sales 2

  3. Northrop Grumman Corporation System-of-Systems Expertise Spans the Nation’s Defense and Intelligence Communities ElectronicSystems IntegratedSystems Shipbuilding InformationTechnology MissionSystems SpaceTechnology TechnicalServices 3

  4. NGST: Robust Programs in Every Division Advanced Extremely High Frequency (AEHF) Space Tracking & Surveillance System (STSS) ICBM Prime Integration Contract National Polar-orbiting Operational Environmental Satellite System (NPOESS) Military Systems Division(MSD) Kinetic Energy Interceptor MissileSystems Division(MXD) Civil Systems Division(CSD) James Webb Space Telescope (JWST) Technology & EmergingSystemsDivision(T&ESD) National Systems Division(NSD) Lunar Crater Observation & Sensing Satellite (LCROSS) Missile Engineering Center Multiple Restricted Programs Airborne Laser (ABL) 4

  5. Exciting mix of on-going major acquisition developments and new competitive acquisitions. • Provides numerous opportunities to engage in Contracting & Acquisition challenges facing Industry and Government National Polar-orbiting Operational Environmental Satellite System (NPOESS) New Worlds Observer James Webb Space Telescope Global Earth Observation System of Systems (GEOSS) Geostationary Operational Environmental Satellite (GOES)-R Civil Systems Division 5

  6. Changes That Impact Contracting and Acquisition Changing Demographics and Environment • The Aging Workforce • The Loss of Technical Talent • Lack of Youth Interest in Science, Technology, Engineering and Mathematics (STEM) • Fewer Engineers in Colleges and Entering Aerospace Industry • Shrinking Aerospace Workforce and Industry Consolidation 6

  7. US Workforce General Statistics • 43% of the US civilian workforce are eligible to retire in the next decade • Fortune 500 expect to lose 50% of senior managers in the next 5 years • By 2015 there will be a 15% decline in 35-55yr olds, while demand increases 25% • In the next 10 years, 10 million jobs will open up for professionals, executives, technicians Aerospace Industry Workforce Mirrors the U.S. Population Source: I4CP Institute for Corporate Productivity 7

  8. U.S. Employee Population • U.S. Population Overall (2005 Data*) • Nexters (Millennials, Gen Y): 26.1% • 1980-2000 • Generation Xers: 17.6% • 1960-1980 • Baby Boomers: 25.6% • 1943-1960 • Veterans (Traditionalists): 14.9% • 1922-1943 • U.S. Workforce Overall (2005 Data in Millions) • Nexters (Millennials, Gen Y): Just starting • Generation Xers: 60M • Baby Boomers: 76M • Veterans (Traditionalists): 27M Competition for the Best People is Intensifying *Approximate % 8

  9. Nominal Industry Population by Age Group Large Segment of Experienced Workforce Ready to Retire 9

  10. Nominal Industry Population by Years of Service Growing Pool of Young Workforce Requiring Training/Leadership 10

  11. Index # of Programs # of Programs # of Personnel # of Personnel Observed Government Management Challenge Dramatic Demographic and Environment Shift for Government 11

  12. Changing Industry & Government Demographics • Hiring has brought young, inexperienced employees into the work force. • New viewpoints, motivations, values, work ethic, communication modes, etc. • The combined affects on both Industry and the Government has made it absolutely critical for us to retain our experienced employees • Available to train younger staff and provide program leadership • Critical to the retention and development of these new employees Critical to Retain experienced and Younger Employees 12

  13. Challenge to Contracting & Acquisition Community • By working together and recognizing the changing workforce demographics and environment: • We can ensure a strong industrial base, • Strong acquisition and contracting community and • Keep the nation's civil and military services at the forefront of technology • More critical now than ever for Industry & Government to: • Work collaboratively -- listen and learn from each other, respect and share lessons learned with counterparts • Take the time to educate counterparts through joint training, seminars, conferences, etc. • Recognize and understand common objectives and Industry & Government needs to create “win-win” solutions Opportune Time for Collaboration and Innovation 13

  14. Initiate a Joint Human Capital Strategy • Managing Talent — Both Government and Industry ensure a robust pipeline of current and future Contracting & Acquisition talent • Developing Leaders — Both Government and Industry train effective leaders at all levels to understand Government and Industry needs & expectations • Optimizing Work-Life — Both Government and Industry create flexible work options to help employees better meet both work and personal needs • STEM Support for K-12 Education -- Both Government and Industry encourage Science, Technology, Engineering and Math programs, that will help ensure a future, competitive workforce • Foster Community Relationships -- Both Government and Industry must support education and community outreach activities Attract, Develop and Retain The Best Talent to Ensure Continued U.S. Superiority 14

  15. Contract Fee Structures Aligned with the Current Environment • Support shift from CPAF to CPIF/AF fee structures • Driven by GAO, Congressional and Public Pressures • Objective contract fee determinations based on defined criteria • Changing demographics support the move to greater use objective fee criteria • As Younger Population Learns & Matures with Experience • Continue Subjective Fee Criteria as appropriate for Feedback on Management Priorities & Concerns Better Linkage Between Risks, Incentives, Performance and Returns 15

  16. Nominal Hybrid Fee Structure Example- Major System Development • Award Fee 1.5% Subj • Cost Incentive Fee 2.5% Obj • Schedule Incentive Fee 3.5% Obj • Technical Incentive Fee 3.0% Obj • Fixed Fee 3.0% Obj • Total Fee 13.5% Combo of Objective and Subjective Works to Incentivize Complex System Developments

  17. Summary • Contracting and Acquisition Communities of Industry and Government need to focus on preparing younger people for future employment and leadership positions • We have the same challenges – Dramatic changes in our workforce and acquisition environment • We have the same objectives – Continued strong program execution and U.S. superiority We Need To Work Together For Our Common Success 17