Opinion: SADI Positioning – It’s Not Luck

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The business book Author Eliyahu M Goldratt has a range of fast-paced action business novels. The novel format is used to bring to life a real world lived experience of the Goldratt business processes. A lot of people know about “The Goal”, and can reference that the goal of a business is to make money. The range of novels assist in overcoming the barriers to making money.

The novel with the most relevance to the current thoughts on the positioning of the Aerospace, Maritime and Defence industry grouping is the book, “It’s Not Luck”. This novel presents the Goldratt Thinking Process that help answer the questions essential to achieving focused business improvement. Key questions to be asked are: 1. What to Change; 2. Why Change; 3. What to Change into; and 4. How to Cause the Change.

The Aerospace, Maritime and Defence industries are complex domains. The key with complex domains and problems is to try and identify the root cause(s) of the complexity and/or problems. Preparing a cause-effect tree helps pinpoint the root cause(s) of most of the problems, gaps or plain undesirable effects.

The starting point is to acknowledge the problems, gaps or undesirable effects. A starting point for me is the following list taken from defence related parliamentary presentations and defence sector articles from the last few years.

A starting list of 11 issues for the South African defence industry is: 1.) Local defence force does not buy the latest local products; 2.) Predominantly older designs (limited development of new systems); 3.) Limited market strength of locally owned defence companies; 4.) Loss of skilled resources; 5.) Lack of support from local government in promoting the sector products; 6.) Regulatory restrictions; 7.) Competing in a highly competitive sector; 8.) Pressure to come up with new ideas at affordable prices; 9.) Time to market; 10.) Financial support for securing orders; and 11.) Push for export focus (>85% export quota).

Adding a few conditions, all 11 issues can be connected by means of if-then cause-effect relations. The following image can be read from the bottom by means of adding “if” to the lower statement at the beginning of an arrow and “then” at the end of the arrow. If there are more than one arrow end points read “if” and “if”, “then”.

There are two pinch points visible from the analysis; 1.) Push for Export Focus and 2.) Support from Local Government in Promoting the Sector Products. This is backed up by three doom loops that will kill the defence industry if not solved. There is an export focused financial support doom loop. Then there is the government support for the SADI export focus doom loop. A worrying doom loop that seems to be playing out at Denel Dynamics is where SADI needs to retain skilled resources to implement technology.

The SA Defence Industry core problem that can be applied across the aerospace, maritime and defence sectors can be formulated as the common objective where SADI needs to “Supply export focused innovative products with government promoting and financing support assistance”.

For those of you that have managed to get this far I hope that you will be stating this is logical, or this is our lived experience.

The challenge is that the core problem has at least one critical conflict. Finding and resolving conflict is the reason for analysing problems, gaps and undesirable effects.

In order to meet the common objective of supplying export focused innovative products with government promoting and financing support assistance, there is a requirement that SADI with government needs to roll out innovative products focused on export market needs. In order to achieve this outcome SADI must then focus on understanding the needs of the targeted foreign based operators.

At the same time:
In order to meet the common objective of supplying export focused innovative products with government promoting and financing support assistance, there is a requirement that SADI with government needs to promote and finance products deployed by the SANDF to gain international acceptance. In order to achieve this outcome SADI must then focus on supplying solutions to SANDF needs.

A new future can be plotted if the conflict of the outcomes can be resolved.

By thinking about the assumptions that enforce the existence of a conflict, we should be able to resolve any conflict by evaporating it with the power of our thinking. Are there assumptions behind the logical connections that are supporting the conflict? If these can be resolved then an elegant solution can be derived.

Here are two assumptions that I think can be challenged. Firstly, is local different from the developing nations of the export focus. Secondly, and very contentiously would be to question the assumption of whether certain sovereign and strategic local capability has to be state owned, or could it be just state investment.

The aim is not to take a compromise position. Think the problem through. Align the head and the heart in terms of what is really possible. SADI there is an opportunity to find a solution that is convenient, fit and comes at the right time.

It’s not luck.



Written by James Kerr, Orion Consulting CC, which provides Market Entry Strategy and Bid & Proposal services to the Aerospace & Defence related industry and assists international SME mission system product suppliers to gain traction in South Africa. Kerr has assisted various companies to enter, or expand footprint in, the defence industry with air, land and naval systems. He also served as a navigator, and completed an engineering degree, while in the South African Air Force for 13 years.