Strategizing for NASA, Part 8: Conclusion

After reading the National Research Council (NRC) report on the future of human spaceflight, “Pathways to Exploration: Rationales and Approaches for a U.S. Program of Human Space Exploration,” I was motivated to explore key questions about strategy. In writing this series, I introduced a sampling of basic elements of strategy that need to be brought to the forefront and discussed:

  • Competitive advantage can erode, even for government monopolies. In part, this is driven by inertia and in part by the changing competitive landscape of an industry as viewed through competitive forces.
  • Enduring, strategic resources exist. These resources are unique, durable, appropriated, non-substitutable, and clearly superior. The most enduring strategic resources contain more of these characteristics than those that are less enduring.
  • Wiring innovation into an organization also requires fundamental restructuring of the organization. Investing in innovation without leadership support, on the periphery, or hoping for spontaneous innovation that somehow percolates into revolutionary products and services, is not a recipe for a successful strategy.
  • Inertial effects and the sense of loss with strategic change are powerful resistive forces to change. They require a concerted effort by leadership to overcome.
  • Reputation and culture can be valuable strategic resources. Those that contain value do not arrive overnight, but instead are cultivated through time and the deliberate nurturing by its leadership.
  • International distance is more than physical distance. Culture, political/administrative, other geographic and economic differences can drive distance between potential international partnership pairs. One must formulate strategy to counteract and mitigate the distance effect in as many dimensions as possible – the more, the better.
  • Strong leadership is needed to evolve strategy with the waves of technological advance; failure to do so leads the organization to obsolescence.

It is my assertion that any meaningful strategy for human spaceflight must address these issues at a minimum, or else face the consequences addressed in each.

Finally, to tie the above together, I’ll make an analogy between a strategic tool as a melody, and the combination of those tools as an orchestral arrangement. My bookshelf is full of melodies, whether it is Christensen’s Disruptive Innovation, or Collins’s Good to Great, each of which offers an insight into what constitutes a successful strategy for an organization. And yes, I find each of them compelling in a way, whether it is the disruptive forces proposed by Christensen, or the name recognition of successful companies with lasting strategies offered by Collins. Yet my key takeaway from writing this series is that not any one tool is sufficient to explain what makes a strategy successful. Instead, it is the richness of the full orchestral arrangement of tools that brings beauty to strategy. A Porter Five Forces analysis can paint the landscape of an industry. An RBV analysis can give an indication as to why certain strategic resources are enduring. A CAGE analysis can indicate the distance effects that must be addressed. And so on. We need them all, in combination, to make the beautiful music of a successful strategy for human spaceflight.

The entire series:
Part 1: The United States Postal Service and the Porter Five Forces
Part 2: Disney and the Resources Based View
Part 3: DARPA, Kodak, and Wiring Innovation
Part 4: The FBI and Transformational Change
Part 5: Veridian and the Role of Reputation and Culture
Part 6: Walmart in China and CAGE Differences
Part 7: Apple and Counteracting the Forces of Technological Obsolescence

Strategizing for NASA, Part 7: Apple and Counteracting the Forces of Technological Obsolescence

The birth, near-death, and comeback of Apple is a topic of interest for a variety of reasons. Whether it is the leadership style of Steve Jobs, or the development of a lock-in model that increases the willingness to pay on the part of consumers, Apple is a rich, fertile ground for exploring a variety of business case studies. Today’s examination of strategy covers none of these. Instead, today’s focus is on technology, its evolution, and the difficulty of keeping pace in today’s world – with Apple as a key example. This examination of technological obsolescence has a direct implication to a future strategy for human spaceflight.

A 2012 case study1 of Apple examined the waves of technology generation that occur with time, and observed how extremely difficult it is to maintain a strategic advantage from generation to generation. Apple succeeded early with one of the first commercially available computers with a graphical user interface targeted for the consumer in the mid-1980’s, then rapidly lost ground to the highly successful Wintel duopoly of the mid-1990’s through early 2000’s. Today, the Wintel duopoly is struggling with the latest wave in computing – mobile – whereas Apple is succeeding with the iPod, iPhone, and iPad. As for the next wave of technology, is wearable computing next? Who will succeed, and who will fail? The answer to that question is tied strategy; the conclusion drawn from the Apple experience is that those who evolve strategy to ride the next wave are more likely to succeed than those who do not.

In considering waves of technology evolution and human spaceflight, there are numerous examples to explore. One such example is the Mission Control Center complex in Houston. Built in the mid-1960’s, it contained state-of-the-art command, control, and computational capabilities for its time, and remained near the forefront of those capabilities for almost 30 years. That’s how advanced it was for its time. But times have changed. Instead of leading, most of the capabilities available today in it and other similar Government-provided command, control, and computational facilities often lag the current “state-of-the-art.” This is due to a variety of causes: large fixed cost investments constrained by tight budgets, lengthy procurement cycles, and general bureaucracy. (An example of the latter is compliance with Section 516 of the Consolidated and Further Continuing Appropriations Act, 2013, Public Law 113-6, which prohibits the purchase of information technology from any firms with ties to China.) The change of position relative to technology in this example is not due to any fault of the dedicated workers. Instead, it’s a sign that it is extremely difficult to keep pace with the rapid advancement of technology and waves of technological obsolescence under the current strategic framework.

The key point is this: it is critical for an organization to recognize that whatever constitutes strategic advantage will eventually change. Strategy, to remain successful and relevant, must evolve with the waves of technological advance. Applied to human spaceflight at NASA, it is fair to assert that leaders must lead the way for evolving the human spaceflight strategy at NASA to push it to the technological forefront. Failure to develop a strategic direction to counteract the forces of technological obsolescence may lead to obsolescence of the organization itself.

Next Time: Conclusion

Previous entries in this series:
Part 1: The United States Postal Service and the Porter Five Forces
Part 2: Disney and the Resources Based View
Part 3: DARPA, Kodak, and Wiring Innovation
Part 4: The FBI and Transformational Change
Part 5: Veridian and the Role of Reputation and Culture
Part 6: Walmart in China and CAGE Differences


1Rossano, P. & Yoffie, D. (August 14, 2012). Apple, Inc. in 2012. HBS 9-712-490. Boston, MA: Harvard Business School.

Strategizing for NASA, Part 6: Walmart in China and CAGE Distance

With saturation in the United States market achieved in the 1990’s, Walmart began an aggressive international expansion, targeting China as one of its top priorities to fuel continued growth in the company. Due to its past success, Walmart brought its same Every Day Low Prices strategy to the Chinese market. Yet Walmart has discovered the hard way that its EDLP strategy does not align with the typical Chinese consumer – the flaw was in thinking that the Chinese consumer would be similar to an American consumer in the pursuit of low prices and larger bulk items1. After opening only about 400 stores in China over 20 years, Walmart continues to struggle with its China strategy today2.

Because a future strategy for human spaceflight likely will entail some degree of international cooperation, there is a lesson to be learned from Walmart’s struggles in China. The key lesson is that in any successful strategy involving international partnerships, the strategy must address the following four CAGE dimensions and the degree of difference (“distance”) in the partner pair3:

  • Cultural – Differences in languages, ethnicities, religions, and social norms
  • Administrative – Absence of colonial ties and shared monetary or political associations; political hostility; and differences in government policies
  • Geographic – Physical remoteness; lack of a common border; size of country; differences in transportation and communication networks; differences in climate
  • Economic – Differences in consumer incomes, and differences in cost and quality of resources, infrastructure, and information

Understanding the existence of CAGE distance leads to the insight as to why Walmart is struggling in China. It also leads to the insight as to why most of the United States’ partnerships in space have gravitated towards Canada and European countries – the CAGE distance is small due to common languages, similar government policies, common sizes, close proximity, and similar qualities of resources and economic outcomes. It doesn’t mean that one should only target those countries that are “most like us” for partnerships.  It does mean that strategy must take CAGE distance into account, or else the strategy will end up facing a dire situation similar to Walmart in China.

It is noteworthy to talk about Russia separately. In many respects, Russia is quite far from the United States from a CAGE standpoint – different languages, no colonial ties or shared monetary associations, political associations ranging from hostility to lukewarm, physical remoteness, and large differences in consumer incomes. Clearly, CAGE distance posed a challenge when Russia joined the International Space Station Program in the 1990’s.

To help close the cultural and geographic distance, NASA pursued various techniques. For example, NASA personnel learned the Russian language and spent extended periods of time in Russia, permitting the building of personal relationships that help to close the cultural gap – both of which continue today.  (Similarly, English is pretty universal with the younger generation on the Russian side.)  NASA invested in infrastructure in Moscow for its personnel – toll-free calling lines and dedicated high-speed internet lines – which help to close the geographic distance gap, both by putting NASA personnel in proximity with their Russian counterparts, as well as to keep the ties to home quite close. (And vice versa – Russia has a presence in the control centers here.)  These techniques have helped to reduce the distance in two of the four CAGE dimensions.

As for the other two dimensions, the results are more of a mixed bag. Economic advancement in Russia over the last 20 years has made some improvement in the economic gap, but not enough to achieve parity. Russia is today where the United States was in 1950 from a GDP per capita standpoint4. Mounting tensions in Ukraine are driving a further wedge in administrative distance, as the two countries posture around politically motivated sanctions. Administrative and economic distance remain the biggest hurdles to overcome in the current United States-Russian partnership in human spaceflight.

An ambitious future human spaceflight strategy that seeks to expand international partnerships even further, such as with China, needs to be carefully formulated and adjusted with the four drivers of distance – cultural, administrative, geographic, and economic – for it to be successful. Although there are some successful examples to follow from the United States and Russia experience, any other potential partnership must take into account the unique differences inherent in each partner pair. To fail to heed those differences in formulating strategy will be to repeat the mistakes of Walmart in China, perhaps with much more dire results to the future of human spaceflight.

Next time: Apple and counteracting the forces of technological obsolescence.


Previous entries in this series:
Part 1: The United States Postal Service and the Porter Five Forces
Part 2: Disney and the Resources Based View
Part 3: DARPA, Kodak, and Wiring Innovation
Part 4: The FBI and Transformational Change
Part 5: Veridian and the Role of Reputation and Culture


1Farhoomand, A. (2006). Walmart Stores: “Every Day Low Prices” in China.  Reprint 06/297. Hong Kong: The Asia Case Research Centre, The University of Hong Kong.

2Trefis Team. (April 2, 2014). Challenges Wal-Mart Faces In Mexico And China. Forbes. Retrieved from

3Ghemawat, P. (September 2001). Distance Still Matters: The Hard Reality of Global Expansion. Reprint ROIO8K. Boston, MA: Harvard Business School.

4Adomanis, M. (April 26, 2013). Economically, Russia Is Roughly Where the United States Was In The 1950’s. Forbes. Retrieved from


Strategizing for NASA, Part 5: Veridian and the Role of Reputation and Culture

A case study1 of a former company called Veridian shows that reputation and culture when treated as strategic resources can be critical for developing and maintaining a competitive edge. Yet culture can have its darker side, as we in the space business know all too well: culture was a contributing factor to both the Challenger2 and Columbia3 accidents. How is it that reputation and culture can be regarded as strategic resources, rather than as obstacles to overcome in strategy?

Veridian points the way. According to the CEO of Veridian, David Langstaff, the leadership team built a culture on values, promoting “why we choose to do the things we do.” By emphasizing values-based leadership, this strategy brought to the forefront the longer-term interests of Veridian’s customers, employees, suppliers, and shareholders. Such an approach does not arrive overnight or by decree. In the case of Veridian, it required time, nurturing and conscious cultivation by its leaders as the company evolved in pursuit of new business opportunities. From its roots as a company of former rocket scientists to a solutions business, Veridian’s leadership placed a premium on its value proposition and held true to it throughout its existence, even after numerous acquisitions and mergers. As a result, reputation and culture became a competitive advantage for Veridian.

Looking inside NASA, I’ll talk about one human spaceflight organization with a reputation and culture that is familiar to many: the Flight Operations Directorate (FOD), home of the astronaut corps, Mission Control, and the men and women who plan, train, and fly in NASA’s human spaceflight vehicles. FOD’s reputation is as a can-do organization, built upon the legacy of its Apollo forbearers such as Gene Kranz of Apollo 13 fame, and through the astronaut corps who are the rock stars of human spaceflight. The culture of FOD was built over fifty years, where the “steely-eyed” men and women of FOD dealt and lived daily with “numbers that can kill people.” To this day, each person in FOD recognizes that decisions – or lack thereof – can have ultimate consequences.

The Veridian example shows that such a reputation and culture developed over time and with careful nurturing by leadership can become a strategic resource that provides a competitive advantage, when it is built upon the foundation of “why we choose to do the things we do.” Likewise, any strategy for human spaceflight to be successful must recognize that reputation and culture can be a powerful strategic resource if treated properly. Such a treatment must resist the temptation to use reputation and culture as a justification to pursue business as usual, under the premise that “we’ve always been successful doing things the way we do.” Our own experiences in human spaceflight show the fallacy of that argument. The example of Veridian shows that the “why’s” rather than the “what’s” are critical to overcoming organizational inertia and providing a competitive advantage. A future human spaceflight strategy would be wise to heed that.

Next time: Walmart in China and the strategic impacts of cultural, administrative, geographic, and economic differences.

Previous entries in this series:
Part 1: The United States Postal Service and the Porter Five Forces
Part 2: Disney and the Resources Based View
Part 3: DARPA, Kodak, and Wiring Innovation
Part 4: The FBI and Transformational Change


1Elias, J., Khurana, R., & Poldony, J. (October 16, 2006). Veridian: Putting a Value on Values. HBS 9-406-028. Boston, MA: Harvard Business School.

2Vaughan, D. (1996). The Challenger Launch Decision: Risky Technology, Culture, and Deviance at NASA. Chicago: University of Chicago Press.

3Columbia Accident Investigation Board. (August 2003). Report Volume I. Washington, DC: Government Printing Office.


Strategizing for NASA, Part 4: The FBI and Transformational Change

In response to the terrorist attacks on the World Trade Center on September 11, 2001, the Federal Bureau of Investigation (FBI) began a strategic transformation from a law-enforcement to a threat-focused intelligence agency. A case study1 of the progress in the transformation at the FBI shows how strategic resources propelled by inertia, along with the psychology of loss, can get in the way of executing a transformational strategy. The FBI is still coping with the transformation a decade later, struggling with a shift in emphasis from reactive response by field agents to predictive threat assessments by analysts.

In some sense, the transformation at the FBI loosely resembles the strategic change in human spaceflight at NASA. Under the new strategy for NASA proposed as part of the fiscal year 2011 President’s budget, NASA was directed to discontinue development of the Constellation program (an in-house led program consisting of rockets, capsules, and landers to return humans to the moon) and instead focus its energies on the development of “game-changing technologies” for deep space exploration with no need for a firm destination or mission. This strategy would transform NASA from a destination and mission agency to a technological development agency. This is as big of a shift in strategy and strategic resources as that faced by the FBI over a decade ago.

Drawing parallels from the FBI case, it is clear why human spaceflight is struggling with a transformative change in strategy. Inertia in strategic resources within NASA and Congress, amplified by the sense of loss with the cancellation of the Constellation program, worked as a resistive force to the new strategic direction for human spaceflight. The result of the resistance is clear: the Congress adjusted the strategy and directed NASA to develop a next generation heavy lift rocket called the Space Launch System and a crew capsule called Orion, and the Executive Office shifted policy to direct NASA towards its next deep space human spaceflight mission – an asteroid by 2025. This strategic line still relies upon old business models built around large programs and large operations infrastructures with high fixed costs and low flight rates. To say that this approach is continuing the status quo is putting it lightly, and one could reasonably conclude that this is an outright counteraction to the attempted transformative change in strategy for human spaceflight.

Yet on the flip side, one could point at the commercial cargo and crew programs, where NASA is investing in several commercial companies to provide US domestic space transportation services as examples of transformative change that is actually happening in human spaceflight. Although these are not complete replacements for the activities that a technological development agency would undertake, they are aspects of completely new business models that have the potential to alter how the US accesses space. Recalling from Transactional, Transitional, and Transformative Change that transformative change is complex in number and unpredictable in outcomes, the commercial crew and cargo programs are examples of steps for enacting transformative change in human spaceflight.

Therefore, we have a “glass is half empty / glass is half full” situation, depending on the narrative you wish to support. One could conclude that the new strategic direction for NASA was counteracted due to the inertial forces and sense of loss within the strategic resources, which the leadership failed to account for. One could also rightfully conclude the opposite – that the strategic change in human spaceflight is actually underway and will require a lot more time, perhaps several decades if the FBI example is any indicator. It will be messy, frustrating and expensive to overcome the inertial forces and sense of loss when the status quo is challenged. It may result in something different than the “technological development agency” outcome originally envisioned in 2011.

The lesson here is that inertial effects and the sense of loss with strategic change are powerful resistive forces. A successful strategic direction must take these into account and realize that a lengthy, concerted, and continuous effort by the leadership, rather than “change by proclamation”, is vital to success.

Next time: Veridian and the role of reputation and culture in strategy

Previous entries in this series:
Part 1: The United States Postal Service and the Porter Five Forces
Part 2: Disney and the Resources Based View
Part 3: DARPA, Kodak, and Wiring Innovation

1Gulati, R., Rivkin, J., & Roberto, M. (March 9, 2010). Federal Bureau of Investigation, 2007. HBS 9-710-451. Boston, MA: Harvard Business School.


Strategizing for NASA, Part 3: DARPA, Kodak, and Wiring Innovation

DARPA is a wonderful example of an organization designed for innovation and creating value. The Defense Advanced Research Projects Agency (DARPA) is an agency of the United States Department of Defense responsible for the development of new technologies for use by the United States military. DARPA has funded the development of the Global Positioning System (GPS), stealth capability, unmanned vehicles – and where would we be without the ARPANET? You wouldn’t be reading this in all likelihood.

How is DARPA designed for innovation and creating value? Case studies1 of DARPA at the Naval Postgraduate School conclude that wiring innovation directly into the DNA of an organization is a tremendous engine of value. Here are examples of how DARPA is wired to innovate:

  • Through its organizational structure – DARPA only has about 100-ish full-time employees organized in a very flat reporting structure
  • Through shortened tenure of its project managers – the average length of a project, and hence a project manager at DARPA, is four years
  • Through challenges and incentives – DARPA uses a variety of prizes and competitions as incentives to produce results

Contrast that against human spaceflight at NASA. Most of NASA’s current human spaceflight projects and programs are extremely long, crossing the boundaries of multiple Presidential administrations, with large organizational structures spread across the country. I can’t help but wonder if the tendency for such a structure is to exacerbate the inertial effects of an organization – leading it to play it safe and perpetuate the status quo – rather than innovate. DARPA shows that quicker turnover of projects and programs and leaner organizations provide a greater engine for innovation.

In thinking further about how innovation is wired into an organization, I also wonder about innovation efforts that are on the organizational periphery, or are relegated to the “grass-roots.” Does such an approach heighten the likelihood that innovation efforts will be ignored in the daily routine of the big programs and projects? I think so.

As a case in point, I offer Kodak. Although Kodak invested in research and development, it failed to exploit its discoveries such as in digital imaging, partly out of fear of what those new discoveries would mean to its core film business. The failure at Kodak highlights the critical need to figure out how to move forward with innovations while maintaining the core business, and readying those innovations to become the “new” core business.

Think about how such an approach at NASA might revolutionize human spaceflight.

For instance, put an “innovation office” in key organizations as part of the formal organizational structure, reporting to the director of that organization. Give the innovation office access to resources and “grand challenges” from the director to create innovative approaches that drastically reduce cost or greatly improve performance in the products and services of that organization. Each of these challenges could be turned into a short-duration project and run from the innovation office with managers whose tenure lasts for the duration of the project. Recognizing that many, perhaps even most, of the projects will fail is to be expected, even applauded. But for those that succeed, they might displace the old way of doing business, and serve as the engine of new ideas.

It seems to me that wiring innovation into the organizational structure of human spaceflight within NASA is worth a conversation for creating a meaningful, sustainable strategy for human spaceflight.

Next time: The FBI and Transformational Change

Previous entries in this series:
Part 1: The United States Postal Service and the Porter Five Forces
Part 2: Disney and the Resources Based View

1See Dew, Nicholas, “The ‘As’ in DARPA: Advanced or Applied?”



Strategizing for NASA, Part 2: Disney and the Resources Based View

Disney and a Resources Based View (RBV) analysis illustrate the conditions under which organization-specific resources provide a sustained competitive advantage.  Specifically, Disney through its beloved character Mickey Mouse shows that an organization can sustain a competitive advantage if it has available to it resources that are inimitable (unique), durable, appropriated to where the organization captures most of the value, non-substitutable (can’t be trumped by another resource), and are clearly superior.  Disney has all of these with Mickey Mouse.

Think about it for a minute.  Mickey Mouse is very unique – children recognize Mickey Mouse even in a silhouette form.  Mickey Mouse as a character dates back to his first appearance in Steamboat Willie in 1928, nearly 90 years ago.  Mickey Mouse doesn’t go on strike, do drugs, or otherwise create employment strife.  There is only one Mickey Mouse, and nothing else comes close to representing what Mickey represents for Disney.  Even with a very superficial RBV analysis I just did, it is clear that Mickey Mouse represents a tremendous competitive advantage for Disney.

What about NASA?  Candidate enduring strategic resources are its facilities and workforce, created in the high-stakes crucible of the race to the moon during the 1960’s.  These resources, assembled during Mercury, Gemini and Apollo, were leveraged afterwards to the Space Shuttle and the International Space Station.  An RBV analysis leads to the following observations:

  1. For most of the last fifty years, it was difficult for others to imitate the facilities and workforce of NASA simply due to the unforgiving nature, demands, and opportunities afforded by pioneering human spaceflight to the moon and reusable spacecraft to low Earth orbit.  This implies a degree of past inimitability of these resources.  However, this inimitability is being challenged today by other governments (such as the recent Chinese mission to land a rover on the moon) and soon by commercial firms who will provide routine access to low Earth orbit within the next few years.
  2. People at NASA spend 40, even 50 years in their careers, pointing to the durability of the workforce.  In 2009, the average age of a NASA employee was 50 with 25 years of service.  Many of the facilities built at the dawn of the space race are still in service today.  Therefore, both of these resources have proven durability.
  3. From an appropriability standpoint, NASA captures much of the value provided by these resources.  Many of NASA’s employees can get higher-paying jobs in other industries.  As a former NASA administrator told me, “People self-select into NASA because they believe in its mission.”  However, many of the new, emerging commercial human spaceflight companies are drawing similar, dedicated talent, and thus are capturing much of the value of their respective workforces in a similar way.   Regarding facilities, NASA is providing its facilities to commercial firms on a cost reimbursable basis, so this permits NASA to continue to capture the value from the facilities, even if they are being under-utilized by NASA itself.  On the flip side where commercial space firms choose to use NASA facilities instead of building their own, this permits them to obtain value from those facilities without having to invest in high fixed costs for development of similar facilities.  This means they are capturing more value from that arrangement than they would otherwise.  Overall, I offer these resources are providing less of a distinctive edge today for NASA from an appropriability standpoint.
  4. What about substitutability?  In principle, the building blocks of these resources have always been obtainable elsewhere.  Military space is a potential source for these resources, and NASA has always relied heavily upon contracting from the aerospace industry.  Therefore, NASA’s workforce and facilities are substitutable.
  5. Whose resources are clearly better?  Critics will point out that NASA has managed to kill seventeen of its astronauts despite its workforce and facilities, whereas commercial resources have yet to be proven.  Until proven otherwise, NASA’s are better, although it may be challenged soon.

Therefore, RBV analysis of NASA’s workforce and facilities leads me to point to (2) durability and (5) clearly being superior, along with (1) inimitability and (3) appropriability as explaining why NASA had a sustained competitive advantage.  Unfortunately, the analysis reveals some erosion in the latter two, and perhaps a challenge soon to superiority.  Therefore, a future strategy for NASA’s human spaceflight must take into account a way to restore the inimitability and appropriability of key strategic resources, along with ways to maintain the durability and providing clear superiority, for the strategy to be enduring.  Figuring out a way to make them non-substitutable will help, too.

Next time:  DARPA, Kodak, and what happens when innovation is wired (or not) into an organization.

Previous entries in this series:
Part 1: The United States Postal Service and the Porter Five Forces

Strategizing for NASA, Part 1: The United States Postal Service and the Porter Five Forces

In June 2014, the National Research Council (NRC) released its report on the future of human spaceflight, “Pathways to Exploration: Rationales and Approaches for a U.S. Program of Human Space Exploration.”  At its heart is a question of strategy – what should it be to move forward with a meaningful and successful path?  In contemplating the way forward, some very basic elements of strategy need to be brought to the forefront and discussed.  Over the next few postings, I’ll share some of the elements of strategy that caught my eye in recent studies, and how they might apply to NASA.  Most of these elements arise from case studies of other entities in the public and private sectors that faced questions of strategy.  Some were successful – others not.  There is something to learn in each case, and it is my goal to show how these lessons apply to NASA.

First of all, I’ll start with the United States Postal Service (USPS), which is an independent agency of the United States federal government that provides postal service.  The USPS once had a monopoly by law for the delivery of parcels and packages within the United States.  An analysis of the USPS situation via the Porter Five Forces shows the erosion of competitive advantage that can occur even for government monopolies that ignore the landscape of change around them.  Similar to the USPS situation, NASA had a “competitive advantage” as a United States government monopolist, and with time that competitive advantage eroded.  The morphing of the human spaceflight industry from government-dominated in the twentieth century into a commercial industry for the twenty-first century can be analyzed using the same Porter Five Forces analysis:

  1. Historically, internal rivalry in human spaceflight has been within the domain of governments competing for “soft power” advantages.  With the emergence of multiple commercial firms, this rivalry will shift from soft power to economic rivalry.  Both lead to a high degree of rivalry and an unfavorable force to the industry.
  2. For human spaceflight, barriers to entry that were once sky high (forgive the pun) are slowly coming down. Although capital requirements remain high, the advancement of technology, and various state and federal government policies to license and invest in the commercial space industry, are helping to drive down the barriers for new entrants. This poses an unfavorable force to incumbents within the industry.
  3. Consolidations in the aerospace industry, a major supplier, have shifted power slightly from the human spaceflight industry to suppliers over the last fifty years.  The emerging nature of the commercial side of the industry, driving new kinds of relationships with new suppliers, counteracts the consolidation trend somewhat.  Therefore, the industry is probably in a neutral position today regarding supplier power.
  4. Similarly, buyer power for human spaceflight capabilities has shifted slightly away from the industry.  In the past, governments were self-serviced buyers based on national policies with essentially no price sensitivity.  Today, governments remain as potential customers with some degree of price sensitivity due to budget constraints, although governments are not as price sensitive as non-government buyers.  Hence, this is probably a neutral position for the industry today.
  5. The threat of substitutes is high.  From a government standpoint, it can choose to develop its own human spaceflight services if commercial ventures fail. Likewise, commercial firms threaten government-provided capabilities.

The lesson from the USPS case is that monopolies within the government can lose their competitive edge if they attempt to coast on the momentum of the past, while the landscape of the industry changes underneath them.  That happened in package delivery for USPS, and is happening today in human spaceflight for NASA.  I also offer from the Porter Five Forces analysis that human spaceflight as an industry is unfavorable, indicating the tremendous strategic challenge for anyone wishing to compete in that space.

Next time: Disney and the Resources Based View

“Stupid Space Tricks” Meets “Innovation the NASA Way”

In a recent blog post, Dr. Paul Spudis discusses the state of human spaceflight policy implementation – the Asteroid Retrieval Mission, and the human Mars flyby formerly known as Inspiration Mars – which he likens to “stupid space tricks:”

Viewers of the David Letterman Show (before it went to pot) probably remember a running gag where people would bring their pets to perform a variety of silly or dumb acts for the amusement of the audience. Letterman called this segment “Stupid Pet Tricks.” Although each particular trick was silly, the pet owners sincerely believed that their pets were gifted and were proud to showcase their animals’ various abilities. In fact, the whole exercise allowed the host and audience to smirk knowingly at the owners’ pride in their pets’ seemingly “human” abilities. This bit of low comedy has now been adapted as the central principle of our federal civil space program. The object now seems to be who can come up with the silliest idea for a human spaceflight mission. And boy, is the competition for that title fierce!

Elsewhere on The Space Review, Jeff Foust reviews the book, Innovation the NASA Way, by Ron Pyle. In the review, Foust notes the following:

The NASA of today, Pyle acknowledges, is different from the one that landed humans on the Moon 45 years ago: “it has grown up (some would assert that it has grown old).” Yet, he argues it’s still an innovative agency, in part because it’s able to harness what he considers to be three key elements of any such organization: creating bold plans, perform daring execution of those plans, and support a passionate workforce. The message of Innovation the NASA Way is that other companies and organizations can enjoy similar success by following those core tenets of innovation. It may even be a good reminder for NASA itself.

Is it any wonder why we are struggling with charting a course for human spaceflight?


A few weeks ago I walked the stage at the Naval Postgraduate School in Monterey, CA after completing the requirements for the school’s Executive MBA program.


Now that I’m returning to full-time duty status at NASA’s Johnson Space Center, it’s time to find my newest challenge.  I’ll share how that goes here on LeadingSpace.