Boeing's culture challenger
It is a familiar challenge in business: large corporation buys small firm with innovative spirit and a perhaps disruptive technology. Their cultures and business models seem incompatible. How do they come together without strangling the reason for the acquisition in the first place?
That question was surely asked when Boeing acquired the Insitu Group on 8 September last year and made the Bingen, Washington company a wholly owned subsidiary.
With Boeing's support since 2002, Insitu has famously adapted the SeaScan unmanned air system from a tuna boat accessory into the ScanEagle, which has essentially invented an operational niche for a small tactical UAS (STUAS) for the US Navy and a Tier II platform for the US Marine Corps.
Now that the STUAS/Tier II contract is in competition - with the Boeing/Insitu Integrator UAS as a leading contender - the question is no longer an academic one. The newly integrated team's competitors will be watching how the combined company is able to defend its perch atop one of the last major new business opportunities for an operational UAS system in the US market for several years.
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LOCAL HERO
Insitu's identity is embedded in its unique location, nestled on the Columbia river gorge in a remote, rural section of southern Washington state.
"When you come there, if you come there on the right day, you'll find it 'dog day', so you'll be attacked by various animals," says Erik Edsall, Insitu's business development manager. "It's a very small, innovative culture, which our engineering staff loves."
Company leaders once thought it would be necessary to transplant the facility to Puget Sound or Silicon Valley to source engineering talent. But Bingen's natural wonders, including its status as a wind-surfing and skiing mecca, created an atmosphere that attracted engineering talent.
Its decision to remain rooted in southern Washington has also yielded other benefits. The local craftsmen who build composite surf boards also became, and remain, the company's original suppliers for the ScanEagle's sleek airframe materials.
Politically, Insitu's remote presence also meant gaining considerable clout with the local delegation to Congress.
"We've also found that because we're located in the least prosperous county in the state of Washington, we get a lot of face-time with the Congressional delegations from the state of Washington and state of Oregon," Edsall says. "It's probably the kind of help and recognition we wouldn't get if we had gotten in line behind Boeing and Microsoft and others in Puget Sound or somewhere else."
Of course, Insitu can now tap Boeing's considerable political power base as well as its more local supporters. But the parent company also provides help in other important areas.
Since the acquisition, Boeing engineering resources have been tapped to control a Scan Eagle in flight from a 737 Wedgetail airborne early warning and control aircraft in at a test range in Australia, Edsall says. Boeing has also provided software algorithms to simulate swarming UAS operations. Boeing engineers also integrated Scan Eagle into the Shadow 200 ground control station.
"We are very clear on the fact that we are part of the Boeing family and we think that's good news for everybody, and our customers in particular," Edsall says.
Only a year ago, it appeared that Boeing/Insitu partnership would fall apart in the months before the acquisition. Insitu executives publicly declared plans to offer the Integrator UAS for the STUAS/Tier II contract without Boeing's help. At that point, other companies began expressing interest in acquiring Insitu, but "Boeing wouldn't let that happen", Edsall says.
Integrating both cultures has not been completely smooth. "I won't try to make it sound too rosy here because it's been challenging," Edsall says.
Preserving Insitu's identity and culture has been a key focus for both firms. Edsall continues to wear a collared shirt with the Insitu logo and he still hands out the same business cards from before the acquisition.
"Boeing didn't only buy the Scan Eagle and Integrator product lines," Edsall says, "it also bought the culture."
