OPERATING RULES
Based upon methods learned by Stavatti leadership while engaged in DoD sponsored RTD&E programs and participating in the Special Access Environment, the following twenty Operating Rules for Stavatti Corporation were developed and written. Borrowing heavily from personal experience, the experience and wisdom of former and current industry participants, the factors behind the historical success of the aerospace industry, and intimate knowledge of the Skunk Works®/Phantom Works® approach, these twenty principles address program management, corporate structure and organization, documentation, the Stavatti-customer relationship, quality control, evaluation, and security. These timeless principles are fundamental to the Stavatti process. The Stavatti Operating Principles are applied in all Stavatti operations on a regular basis.
1) The Stavatti President and Chief Executive Officer must be delegated complete control of the corporation, in all aspects. The President must serve as program manager for all Stavatti programs, maintaining total authority in terms of creativity, specifications, design, technical, finance, schedule, qualification, production, sales, marketing, employment and operational matters. It is essential that the President has the ability and authority not only to serve as a corporate leader and chief engineer, but can implement quick decisions that forward the strategic goals of the corporation. The Factory is the President‘s Office.
2) Stavatti programs should be pursued on a commercial basis, employing commercial business practices. Programs must ultimately serve as corporate initiatives which satisfy direct or perceived customer needs and requirements. Stavatti is responsible for creating and marketing previously unknown products to the customer, rather than relying upon the customer to specify and establish a contract requirement. All Stavatti programs are marketed through Direct Commercial Sales (DCS), although a Foreign Military Sales (FMS) component may exist, particularly when it is necessary to facilitate customer procurement financing or to safeguard systems or aspects of products critical to nation security.
3) Stavatti must provide the customer with a clear understanding of the per unit flyaway and total system-in-service lifetime cost associated with every system offered to the customer. Furthermore, Stavatti must establish a pricing structure for all goods that is consistent, regardless of customer, location or date, to incorporate only those adjustments necessitated by inflation. Stavatti will refrain from high pressure sales practices at all times. In conducting programs, there must be a monthly cost review addressing not only what has been committed to a program, but also the projected costs spanning until the programs perceived conclusion. Don’t allow the books to be ninety days late. Responsible management must operate within available resources.
4) The number of individuals associated with a program or project must be restricted in a brutal manner. A small number of talented individuals, including a combination of both generalists and specialists (amounting to 10% to 20% of the traditional systems) must be employed. In the event a customer is intimately participating in a program, Stavatti must establish strong, yet minute, program offices for each program. Both the customer and Stavatti must maintain similar authority. It must be remembered that bureaucracy creates unnecessary work and must be fiercely controlled.
5) Stavatti must maintain a distinct strategic vision that forwards both the science and industry of aerospace defense. The corporation must remain focused upon the design, manufacture, integration and operation of manned, fixed wing military and commercial aircraft, expendable and reusable launch vehicles and related systems. Stavatti must be driven by an internal motivation to create the future of aerospace, rather than succumb to mere industry participation.
6) Stavatti aerospace defense programs must provide for the strategic and tactical survival of all potential customers regardless of customer needs as specified. If necessary, during a state of armed conflict, Stavatti will provide a means by which allied customers in a condition of dire need may procure and/or acquire essential Stavatti weapon systems at significantly reduced cost. The defense industry is not about revenues, but winning wars and saving lives.
7) A very simple document and drawing release system must be implemented, benefiting from a high degree of flexibility for addressing changes. This system permits early work by engineering and production offices and provides for schedule recovery in the event that technical risks result in catastrophic failures.
8) There must be a minimum of required reports and documentation, both on corporate, operations and engineering levels. Briefings, specifications, program reviews and business operating manuals must be reduced to the minimum levels as possible to reduce unnecessary overhead and associated cost. Critical work, however, must be documented thoroughly and the customer must always be provided with ample information as requested. Responsible management does not require massive technical and information systems.
9) The specifications and requirements applied to a program must be agreed to in advance of program initiation or contracting. The Program Manager is ultimately responsible for definition of all specifications and requirements relating to a specific program. All Stavatti products must be developed to meet and/or exceed their specifications and design requirements as established in the original product requirements. Requirements and specifications are not to be altered to compensate for Stavatti‘s inability to meet specific design goals, rather Stavatti must pursue only those requirements that are within a reasonable degree of development and production capability from the onset of a program.
10) Stavatti must assume complete responsibility in attaining acceptable vendor bids and establishing subcontractors and subcontractor relationships for all programs. Commercial bid practices must be used rather than military methods. It is essential to have the freedom to use the best talent available within available resources. Stavatti must establish a tried and true subcontractor base. Maintaining consistent subcontractors produces greater cost savings than selecting new subcontractors on the basis of short-run cost savings alone.
11) The quality control and inspection systems employed by Stavatti must exceed existing military standards as employed by USAF and USN (including MIL-Q-9858, MIL-I- 45208A and MIL-STD-45662) and international quality control standards (QSO/ISO 9001/9002) and Malcolm Baldrige criteria. Stavatti must be ultimately responsible for all quality control, although it is essential that basic inspection responsibility is placed upon vendors and subcontractors alike. Do not duplicate inspection, and recall that quality resides not in inspection, but in design and responsible operations.
12) Stavatti must continually undertake new programs and develop new products that exceed and thwart the capabilities of previously developed products. Stavatti must continually work toward reducing the overall time and cost associated with new product development and must employ new innovations in technology and analytical modeling to increase the volume of good data associated with all testing and modeling. Stavatti is in the pursuit of Good Products supported by Good Data.
13) Stavatti must fund programs as corporate initiatives with internal funds and/or funds provided by equity investors/strategic business partners. Stavatti does not accept design, development or management contracts, but concentrates only upon the pursuit of programs which will result in a manufacturable product. Stavatti is permitted to accept grants from external sources and/or service customer funded contracts to forward completion of a program. Licenses, rights and royalties associated with Stavatti programs must remain property of Stavatti Corporation or the body which funds the program. Stavatti may obtain bank loans to assist in financing programs, although it is critical that the funds necessary to complete a program, or distinct program phases, are available prior to program initiation. Rational management requires knowledge of, and freedom to use, all resources committed.
14) Stavatti is responsible for the testing, evaluation and qualification of a product, especially all product flight testing. Stavatti must test the product in all stages, lest the corporation will rapidly loose competency in designing other vehicles. This is critical if new technology and risks are to be accommodated in a rational manner.
16) Access by outsiders, Communists and religious cultists to Stavatti programs, program offices, facilities and personnel must be strictly controlled. Appropriate security measures must be utilized, especially with regard to special access and company-proprietary programs. Security is the Program Manager’s responsibility, even if no program security demands are made, hence providing cost avoidance. Note that a Classified program must not cost more than 15% to 25% over the cost of an equivalent Non-Classified program.
17) As only a limited number of very good people will be employed in engineering, management and production areas, a means must be provided to reward good performance based upon pay, rather than by the number of personnel involved. Responsible management does not permit the growth of bureaucracies.
19) Stavatti and Stavatti customers must demonstrate a willingness to accept risk. Stavatti must focus on the ability to rapidly field a new product or capability, while delivering new breakthroughs in technology. Stavatti must employ detailed and accurate theoretical and modeling practices in all new designs, culminating in the creation of service prototypes for ultimate design validation. Stavatti must maintain an extraordinary level of production flexibility enabling both low rate/low quantity and war-emergency surge production. Stavatti must maintain a balance between civilian and military production programs such that the business end of the corporation thrives in both times of peace and war. Stavatti must employ specialized management techniques which are accepted by the industry and must maintain tight security at facilities and program offices alike.
20) Stavatti must limit the bureaucracy associated with the corporation at all costs. Stavatti does not acknowledge internal business politics and corporate manners. Every Stavatti executive and employee is responsible for pleasing the customer and addressing their needs. Every executive and employee should be aware of current Stavatti non-classified, on-going programs, as well as the programs of the competition. Success hinges not upon management, manufacturing or marketing, but a balance of all three.
