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Overview
In a rapidly evolving business environment, many successful
companies have transformed themselves by reexamining their
core missions and competencies and exploiting innovation in
nontraditional ways. General Electric still manufactures products
but now identifies itself as a services company. Wal-Mart
has become the premier retailer by capitalizing on its logistics
and support systems. These two giants and other companies have
realized that they can become more profitable by exploiting new
regions of the business landscape.
Applying this business model to national defense, the innovation
landscape can be said to have three regions: products
(airplanes, tanks, ships), processes (integrated systems), and
retrofits of legacy systems. While the Department of Defense
(DOD) is not a commercial enterprise, nor can it change its
critical missions as a private firm might do, it, too, operates in
a dynamic environment and should be in a continual process of
transformation to adjust to and exploit change. Achieving the
right balance of effort in these three regions will pay handsome
dividends.
Until recently, DOD has invested most heavily in region
one, the acquisition of new hardware based on new technologies.
Already expensive to acquire, new hardware is even costlier
because of its added complexity and need for extensive contractor
support. To increase value realized from defense investments,
the authors recommend shifting some resources to regions two
and three. Creating a framework for exploiting process and retrofit
innovation would provide significant increases in capabilities
while facilitating successful integration of new product technologies
into the existing infrastructure.
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