Aerospace & Defense Industry Masterclass Insights

Nuno Gonçalves: Hey Mike, how are you doing today?

Mike Reed: Cold, warm, I can't really tell at the moment. How are you going?

Nuno Gonçalves: All good, all good. Didn't do, didn't do snow this, this year, not yet. So maybe, maybe having some fun later,, later this year.,, it's still, it's still very cold. It's been a very cold Boston,, weather,, so far so, but,. But all good., all good on this side. Wonderful., welcome, everybody. I think we are at 11 a. m. here Eastern time and typically it's the time that we used to actually,, allow everybody to come in and have all the different regions and geographies to come in as well., we will be talking about an exciting industry today. , and,,, there will be a lot of insights also coming from Mike and what we're seeing in the industry and some of the specificities of what we are seeing as, not only the trends, but also some of the actions that we're seeing,, happening in,, in,, in the industry.

So welcome back. As I said, this is the Reejig Masterclass., this is where we unbundle work one industry at a time. Today we're focusing on the aerospace and defense industry, which was actually an industry that I needed to go deeper and understand more,, because they're so specific. From a job perspective, but it's exciting as well as another industry to continue to evolve. So,, more to come. And thank you again for joining in and listening in. If you have any questions, let us know. We'll try to incorporate them as we go as well and make it more interactive as possible.,, For this time that we are together., so we are,, here., my name is Ludo Gonçalves. I'm,, heading up WordPress strategy for,, for,, Reejig.

I'm joined here with,, with Mike Reed. Mike, he's our chief product officer., he's one of the co founders of Reejig, one of the masterminds of, building what we jig is today and what we jig will be tomorrow., and he's always a treat as, as,, and those of us that are joining us not for the first time as well. So you will,, I always learn from him and all the insights that he brings. And perspectives as well. So, tune in stay tuned and for the for the data that we he will be sharing is as well. So, It's an industry as that is in in transformation fueled by innovation. It's been that for many years mike, right? It's it's an industry from a robotics perspective and technology perspective that has been always advanced It's not a wide you don't have a hundred and 200 players and multiple players as in any other industries, but you always have very specialized roles and very specialized technology that are that are ultimately transforming and evolving The industry as as well. , so mike welcome to the conversation.

We'll dive in On what everything that is happening, here, and,, there are some really interesting roles that I would love for us to explore,, moving, moving forward. So, let's, let me frame the conversation if we go to the agenda. So, typically what we do,, on our skills master class, that we give you an industry outlook. , what are we talking about from a sizing perspective in the industry? And where are we seeing the industry going in some of the biggest trends one way or the other? As we know, as, Rigig is the company that ultimately is mapping work in the world., we will show you and we'll tell you how do we do these work ontologies and what a work ontology looks for us. How are we creating visibility? on what work is done today and what work will be done in the future.

And of course, how work is being transformed and how one way or the other AI is impacting everything that we do. And these pushing companies to boundaries that they've never experienced before, companies that are transforming themselves to make sure that they supercharge the way that they operate. And they are even In some cases even do work very differently to deliver faster, better, more valuable and with less people, but with more profitability as, as well. But as, we jig is really good in balance. We believe in being very bold and you'll see us talk about being bold and responsible, being very bold on the way that. You transform and understand how you will be doing work in the future, but also on the other side, bringing people with you, right, Mike, where people that we,, people that you need to reskill, giving you visibility of the skills of the future and hopefully allowing you to proactively upskill and reskill your, your people to bring them through your transformation as well.

One of the things that,, and last but not least, we are very big in. Yes, the data, yes, insights, but what do we do with it? Then it's, it's the ultimately the, the part where we say, okay, what are, what, what are the actions? What are the paths for the future? What do you need to do to ultimately be able to. Start acting on some of the data and insights that we are providing Here as well. So that's the plan for today, and we will go as deep as you want us to go and keep it alive in the chat and even if you want to The most both Mike and I on LinkedIn will be able to pick that up as well. So that's the plan for today, Mike. , if we start talking and build,, drilling deeper on the aerospace and defense industry, it's it's,, it's huge.

We're talking about almost a trillion,,, 985 billion in sales. It's 11. 1 percent increase from previous years. I think maybe because of some of the socioeconomic Okay. Changes that we've been seeing in the past years. Mike, I would love to have your thoughts here, but 11. 1 percent increase. It's not something that you see in every single industry, right?

Mike Reed: Particularly that size. It's a, it's not an around dollars, is it?, but I guess we see a whole lot of,, tensions globally. , but also I think we're at a transformational point in the aerospace industry to where it's looking. To sustainability, and I think we'll spend a bit of time today talking about the maintenance aspect of it, but really shifting in both of these industries, aerospace and defense to design for maintenance, so that there's rather than the big ticket sale being. Where the revenue is being led from looking for after sales and maintenance MRO significant revenue streams for the Manufacturers in these industries aerospace defense as you said dominated by a small number of large players Defence, we do see some niche,,, suppliers emerging, particularly in terms of delivery systems,, but again, in terms of the size of the overall workforce, the skills that we're looking for,, really a small number of large players delivering across the globe.

Nuno Gonçalves: Yeah, and it's highly specialized roles, right? So you, you have, it's a combination between also on one side manufacturing and, and being in robotics, but also on the other side, highly specialized roles from a technology perspective, right?, is it fair to say that it's actually, it's actually being transformed on both sides, right? Both on the technology. Side and also on on the manufacturing which is which a double play which is which is very interesting to see Especially when we're seeing this 11. 1 increase., it's, it's a it's a also particular And I don't know how this impacts the industry, but it's also particularly on the fact that there's a lot of what, and that's the last part there where you see defense contractors projected to see record cash flows 52 billion dollars by 2026.

So it's from a there's there's there's the corporations But then there's these contractors all these contractors that are doing work, again specialized contractors on some of these pieces as well that, it's also an interesting, singularity of this of this industry as, as, as well. So it's,, it's interesting to see.

Mike Reed: Yeah. I mean, pulling a couple of threads there, all of those numbers in the main block are all going up., both the, the sales, the, the broadest general spend in the market, in the defense space, as well as defense specific defense contractors., all going up., I'm going to jump ahead., but that, that bottom line

Nuno Gonçalves: and

Mike Reed: what it talks about a 5. 2 percent growth to 2024.

Nuno Gonçalves: Yeah.

Mike Reed: Interestingly in the, in the US spend, it's pretty much leveled for 2025. So the US defense budget for 2025 is leveled off. I don't under, under a new,, under,, under new leadership,, would be interesting to see how the 2025 budget is expected to deliver an increased level of service for the same. So we know that there's a general cost cutting,, initiative across,, US federal and US spend., but it is interesting,, under the new government to see that they're effectively capped spending for 2025. It's the first. Well, but not reducing, right?

Nuno Gonçalves: Yeah, but not reducing because everything in everything else we're seeing heavy reductions and in some cases, even eliminations, right? So maybe, maybe in this case,,, stabilizing the investment means actually continuing to invest as well,, in one way or the other. So really, really, really good stuff., but if Sun bites big industry, huge growth will continue to grow as we're seeing one way or the other. It's very specialized roles that will ultimately be very exposed from a robotics perspective, but also from a technology perspective, which ultimately means it's, it's a great playground for companies that want to transform themselves. And it's a great playground for us to actually understand what are the trends of the future based on the evolution of work as, as, as well.

So this is, this is good stuff. Mike, the connection

Mike Reed: between defense and research. academic research, research in general reflects an industry that typically thrives on innovation. It's looking for advantage,, both in the outputs and products, but also in process., so I think that's, that really talks to an industry that is built on change, built for change, deep connections to research and staying in front of the curve, in front of your normal commercial industries. But yeah, really one that's used, used to being in transformation.

Nuno Gonçalves: And you said to be in front of the curve. So I would imagine,, I think that's maybe true for most of the industry is probably even more here., the velocity, the speed of innovation and the speed to market as well., Would it be fair to say that this is a big differentiator also for this industry, Mike?

Mike Reed: Absolutely. Yeah, absolutely. And it's driving some of the transformation in the workforce. The digital twinning scenarios,, simulations, augmented reality, the, some of the workforce requirements now are really what reflect that drive.

Nuno Gonçalves: This is so, this is so cool. It's, it's really interesting., you often see more,, industries that are exposed more from a go to market perspective or industries that are more exposed more from supply chain perspective, manufacturing perspective. Here you actually have a little bit of everything., which, which, which is an interesting place to be as well. And, and even a more reason for you to actually reflect on what we need to do to,, for your,, commercial advantage and competitive advantage,, with, with, with other,, your competitors as well. So really good. Let's have a look at what, what some of the CEOs of the, of these industries are actually saying,, as well. And we have here the CEO of hair boss and very interestingly there.

Three different angles, but I that are complimentary. One on one, say one angle. You say you see from Airbus,, challenges on, on delivery targets and supply chain as well. And, and, and I'm assuming,, everything around the tariffs and all the, what we've been seeing since the beginning of the year is, is impacting this. We had this conversation around the automotive,, that this is ultimately giving more pressure because. There's so much complexity on some of the supply chains right with some parts being done in one side and some parts being done on the other side and need to assemble on the third place. that if you actually have to pay tariffs,,, in every single one of those border transitions, then the cost actually implodes,, as well, which, which ultimately is pushing for a more simplified supply, supply chain that,, that I think the CEO of Airbus was, is, is mentioning their,, CEO Safran,, talking about talent skills.

The labor shortages as well., and I would assume here not only because of where some of the places where they have their manufacturing and supply chain, but also given some of the evolution on technology and the new skills and the net new skills that are arriving also to these to this industry as well. We see also the co founder of Anderson Horowitz that is talking about the more of the robotics piece, which is something that I know you love, which is even another dimension, right? As we said, this industry brings together this the robotics and the automation and everything in one in one single place. And the reality is that It also gives the possibility to start imagining how to do work differently, how to do transportation differently, how to do defense differently as well., and from a robotics and technology view.

So it's, it's,, if we step back, Mike, big industry. Complex in many different angles and dimensions and CEOs having to deal with the usual things talent shortages and skill shortages, but on the other side and the supply chain. But on the other side, this pressure from for innovation and acceleration as well. So how do we how do how do we and all of us that are in these industries are able to understand what needs to be done in every single one of these organizations. It's it's It will be an amazing,,,, process and, and journey,, for,, to lead some of the investment as, as well.

Mike Reed: Yeah, absolutely. It was interesting when we were scanning the public reporting from, from these organizations. And I think the,, the CEO of Safran makes interesting points because they're all related to inputs. The shortage of labor just means it's more expensive., raw materials availability, more expensive. higher energy prices all of these things are inputs that are getting more expensive the and it's easy to focus on defense because that's That feels a pressing need, but the other side of this is the aerospace industry,, and recognizing that the changes there in order to support sustainability,, and cost effectiveness in a, in a, in a maintainable fleet. It means they're designing them to be maintained, designing the platforms, the, the, the plane, the aircraft differently, but they're also looking at a different, completely different commercial model because now rather than selling a big ticket plane, they might be leasing a plane by the hour.

So you're only leasing the plane for the time it's in the air and under a different commercial model. That impacts the whole way it's being delivered. So the pressure is to do everything differently, to deliver a different product, but not just the product experience, the users of your plane, of your aircraft, want to have that experience ongoing. They want to continue to have an experience. So how do we continue to deliver features to the users of aircraft? These are, these are not small investments. These are big ticket items, as, as, as we often say, unless you're in the aircraft industry. Your most expensive people are most in expensive assets. So your people, well, we're talking about the aircraft industry now.

So this is the scenario where the people now serving what is significantly expensive investment for many of the customers, but it really is. It's transisting. The whole commercial model is transitioning.

Nuno Gonçalves: It's very particular in the industry, and it's,, the more I,, dig deeper on the industry, the more exciting it is, because I think it actually, in some cases, ultimately multiplies,, the, some of the, some of the,, challenges that others in other companies and other industries have as well. , we haven't touched much on cybersecurity. And we'd love to have your perspective here because,, if there's a place where we want to have, want to make sure that it is safe is when we're up in the air,,, but if we're seeing some of the advancements of technology and chat GPTs and, and, and coding and, and everything accelerating here, so I'm, I'm assuming it's accelerating on those that actually want to put things at risk and those that want to defense from those, those risks. , but still,, the speed of, of, of, of how this is all is evolving,, will be, will be important as, as well.

And even the skills there are now,

Mike Reed: right? Yeah. Significant evolution. It's interesting in all of these, all of these skills,, masterclasses, the models want to tell us what we already know. There's a lot of opportunity in the enterprise administration side of the industry, just the business as usual stuff, because it's just a reasonable amount of repetitive stuff. And something that also comes out in almost every circumstances, cyber security, it's, it's going to be the cost of doing business going forward, aerospace and defense, even more so., so, so again, I'm surprised I'm not giving away the end of the story, but cyber security will, will emerge as one of the areas of demand focus post in terms of investment. To be bold, but also to make sure that you're retaining the people who have an understanding and equipping them to operate in this space.

It's also the area where it's hardest, it's been hardest to get line of sight into what's different about the roles there. Because again, as I said, these industries, defense industries are so closely linked to research that they're in front of the bleeding edge of cyber security. So, so these are, this is, these are the areas that are setting what will be the standard in. What would have been five years time, 10 years time, but it's likely to be 18 months, the velocity that AI and cyber security.

Nuno Gonçalves: Yeah. And to your point, so it's, I think it's a great segue to the next slide where we actually talk about the bold piece that you were talking about, right? Because it's in some industries, bold might be, might mean let's do this faster. Let's do this much faster. Let's be very bold. So which means much faster, which much less, which much more efficient and less duplication, for example, in some industries, this might be, let's completely shape and reshape the way that we do work, and if we're seeing,, so many different dimensions in these, in this industry, I'm actually very curious to see how bold these organizations will be, because in some cases they are known to be very,, less, more conservative,,, Industries because again, it's it's it's it's a it's around safety.

It's around making sure it's it's also around sustainability, which is great. But how bold will they be to actually start doing work differently? The same way that some innovators are saying,, let's let's completely shift the way that transportation as a whole, for example, in the air, for example. , it will be really interesting to understand what will be those shifts here, but what Reejigs and for those that are that are tuning,, listening in what Reejig is really big is and one of the things that is I think one of the biggest purposes of Reejig is to make sure that we are bold and responsible, which, which sometimes seem to be being polar opposites, but I don't see them as polar opposites. I actually see them a little bit of, of the, the, the, the, the correlated,, responsible,, innovation one way or the other.

So on one side, be very bold on. on how we do work and how we'll re transform and re imagine work, but on the other side, creating that line of sight of what that will mean for the future, what that will mean for your talent, to understand what are the skills that you need today, but also what are the skills that you need in the future, to understand what are the skills that probably you won't need in the future as well, Mike, because we've been always focusing on. What do we need for the future? But there it's equally important to understand those that we don't need as well so that we can actually stop investing on some of those skills, right? But that's where I think rigid brings a differentiation here.

It's yes, being bold, giving you visibility of work. But also this visibility of work will allow you to have visibility on the skills that you need, the skills that you're going to need. And for me, very important because,, in the past decade, we've been working at all industry, working on,, technology that shows career paths for our employees and so on and so forth, that we are not being irresponsible. To the point that we're driving our employees to paths and to jobs that will not exist in the future. So how can we have those insights and be able to guide our organization to be very bold, but also our, our human capital, our employees to actually be able to upskill and reskill in the right directions as well.

And that's the intersection. And again, for those that know us really well,, we the end game for us is this zero wasted potential. We have all of us tremendous potential in our organization. Can we steer the talent that we have to make sure that they upskill themselves and get ready to the jobs of tomorrow as well? So this requires a new workforce strategy. It requires data. It requires insights and requires you to actually understand what is right for your company. And then ultimately,, Put the right course of action to be able to bring your organization to where it needs to be as well I ultimately,, I love this balance. I think it's very mutual I think it's it's the right thing to do and not one can live without the other one more idea,,, mike from my perspective

Mike Reed: Yeah, absolutely. The incentive to take the investment in your human capital and maximize it by giving them the toolkit to continue to be valuable is clear for all industries. Defense and aerospace also have that added barrier of entry. So, so it's, it is harder to get people in the door. Because of security and certification requirements. So that investment in your people is even more valuable because it's harder to replace because this barrier exists. So I think more than any other organization, understanding what your people are capable of and what those adjacencies mean. How can I take the current skill set and upskill them in ones that they are likely to be successful in because those skills are adjacent or the tasks are adjacent.

Nuno Gonçalves: And, and, and,, listen, as you, as you talk about this, it's, it's, For me, I, it's the chills a little bit because ultimately I've, I've been a chief,,, my path, right. I've been, I've been very connected to people development, skills development, and I've done the whole nine yards,, academies, universities, learning portfolios, big learning portfolios, and,, leadership, functional, all of that. And one of my biggest,, frustrations was only always to really,, I was being asked to develop skills, but I didn't know whether those were the right skills to develop or not. And to whom and how much and why. And, and, and what are the, so the, the having this ability to actually be able to create clarity of the if then scenario.

It's always what I say., if we do, if we're doing this from an organization perspective, here's the huge impact on an individual. Perspective this feeds and for me as a as someone that has been very focused on development of skills these feeds everybody that is that is that is Working on this with the purpose of if we actually build those skills people will be better People will be delivering better and in more sustainable jobs in the future. I think it's a huge message and purpose for all the teams that are also doing a lot of the A lot of the upskilling in the organizations as well.

Mike Reed: Absolutely. Absolutely

Nuno Gonçalves: So, so here's how,, if we go to the next slide, we, so it's, it's, it's,, this is a journey, right? This is not, we were talking about a complex thing is actually re imagining the future from an organizational perspective and from an individual perspective. So there, there's, there's no simple, Oh, we do one thing and we have everything,, figured out. So this is a journey. So it depends on where you are and what do you have in your organization. There are things that are common things that are might not be, but three buckets that are at the highest level, very high level that are. Very important in your journey. First, focus on your work. How do you do work today? How do you think you're going to do work tomorrow?

Right? We have a very traditional and some companies have very traditional ways of doing work, very sequential, very siloed based,, and with typically a lot of duplication with a lot of bureaucracy and so on and so forth. So the question is, how do you then reinvent Your workforce, if you need to do it, how do you do that? And that's where Bridging is bringing,, for me, the biggest, one of the biggest added values to the, to the industry is that we actually help you bring the clarity of where you are in your workforce, what work is done today in your organization, in your industry. But then we start highlighting you and surfacing some of the duplications that you have, some of the roles that are more exposed to AI, and you start understanding, okay, listen, if there are more,, if there's duplication, let's remove duplication.

So that's almost Well hanging fruit. But then if you if you're seeing a huge impact as we are seeing in this industry from a technology perspective from a supply chain perspective, what are those roles that will be more impacted by AI? And when we say impacted doesn't mean negatively impacted. What are the roles that will be more supercharged by AI, for example, right? So if you do not have the ability to be able to do that, You need to equip yourself to be able to do that because if you don't do that, then you won't, you're not, you don't create the foundations one way. So reinvent your workforce. Here's your first step. Understanding where you are, understanding where you need to go, and then, and then putting all the actions there, and we'll give you a little bit more details.

And then Once you have that, that, that information from a, from a job perspective, from a work perspective, how does that impact your, your, your people? What,, what are the skills that they have and what are the skills that they need to have moving forward? That's the moving work to worker that you see over there. And then, and then how do we train, read,, retain, of course, and retain, reskill our., our,, workforce one, one way or the other. And that might mean learning that might be mobility. That might mean so many different things, new gigs and so on and so forth. But if we do it with the purpose of everything that we were able to identify so far as, as, as well. Three clear dimensions, and we'll give you a little bit more,,, information as, as we move forward.

If we go to the next slide, and I think this is a brilliant,, insight,, that Rigi had probably two and a half years ago, is that ultimately what gets automated are not the skills, it's the work, what change, what if we need to understand them? The impact on skills. We first need to understand the impact on work, and that's why we built this work ontologies. These 23 industry specific work ontologies that maps jobs, tasks and skills job have tasks, right? AI automates the tasks again, not the skills, but the correlation,, needs to happen. And we need to understand what are the skills that for the task that we will do in the future as well. And of course, people have skills. So how do we bring all of that together?

In a way that we understand work and then we understand the impact on skills is something that we are focusing on., you'll see that being translated on our ontology. And if you go to the next slide or the next couple of slides will give you a little bit of visibility of what an ontology looks. Right? So remember, we said that ontology is ultimately a system, an ecosystem in that Correlates different information. This work, ontology, correlates jobs, correlates tasks and correlates skills as well. So you can understand always and, and understand what, what skills are needed to do, which tasks, what's, what tasks are needed to do, which jobs and so on and so forth. So this is one of the, this is a web extract of a work ontology that we do for., again for every single industry, which means that we have this these details information for every single job as well That will give you a list of tasks that are included on those on those jobs that will give you a list of skills Here we divide the skills between general human and technical skills as well But not in isolation not all these are the tasks and these are the skills No, no is here if you double click on your task, you understand what are the skills that are associated to to that task which is Which is amazing and ultimately very valuable for us is that we need all to understand that there's no one to one relationship between tasks and skills, right? , there's a one to three or one to five, meaning for each task that you have, and sometimes every each subtask that you have, you'll require three or five skills one way or the other.

That's, that's the power of the ontology. It gives you the correlation between all of these data as, as well.

Mike Reed: Yeah. And looking, looking towards the future, looking towards automation and AI, there's not a one to one mapping there either. So that the tasks that you are doing today and the tasks that are being done today in aerospace defense and in all industries are not necessarily the tasks as they will be done by automation or AI. If you're just automating the way humans are working at the moment, you might get faster. But the, the opportunity at the moment is as much to leverage AI to be doing, to be generating the outputs in a different way as it is to just automate the things that humans are doing and have an agent that does it the same way. So it's not so much about a one to one mapping between here is the way this work is being done at the moment.

And find a way of doing that same process in an automated fashion. While that is a step on the journey, it's what's, what's possible in using AI to do this in a different way or to, to execute with more value.

Nuno Gonçalves: I think, I think you're, so you're bringing a dimension that is, I think is very valuable, which is the maturity curve, right? You, you might be a more traditional company and let's, let's, let's be transparent. So there are companies that have been., very successful in the past 100 years and 150 years, right? And there's a recipe for success. And ultimately those companies are established companies that say,, we've been, we've been earning a lot of money and a lot of success with this recipe. So sometimes it's harder for them to actually just reimagine completely the work and say,, let's, let's do this completely different. So would that be, would there be a world where we say, listen, yes, we are very well established and successful.

Can we at least, at least a first step. Towards our evolution and transformation do whatever we do, we do it faster and better with less duplication, more efficient way and so on so forth and then eventually go to say, Okay, hold on once we get there and we get our feet wet with A. I. And understand what does this mean from an A. I., digital war in prison, so on so forth so that then the companies reinvent themselves. Or do you reckon that,, companies that will exist tomorrow will be those that will be very bold from the get go. They will need to you. completely transform themselves where they are right now if they want to survive in the future. What's what's your take, Mike?

Mike Reed: Yeah, I think,, I think there's, I can't think of an industry that will not demand transformation from the companies within in order to survive. And some of those will be at the front end of the curve. Some of them will be at the back end of the curve in aerospace and defense. , defense, particularly there is a, there is a very solid foundation of research and innovation,, significant investment in standing up effectively organizations which are in that greenfield space, which are looking to solve differently and looking to understand how, how increased knowledge can be applied to deliver better outcomes. So more than, more than most industries, there's already a foundation, an established foundation in,, the industry to support that.

What's really interesting is, is, look, as that, as that transition, both in the nature of the outputs of these industries, but also the way the work's being done, what's really interesting is to, to watch for those threads of, of adjacency and commonality so that we can leverage the skills that the workforce have and effectively amplify the value of those,. In the new environment, and it's moving, as you said, a couple of slides ago, velocity is key here, the jobs that were, that were locked down and stable 15, 15 years ago as a, as effectively a career for life, maybe transition and change every 18 months. Now, that's, that's the change in the nature of work.

Nuno Gonçalves: Yeah, I think it's, it's,, it makes a tremendous amount of sense,,, Mike,, if we, if you have the insights and visibility of work, then you'll at least be able to start understanding what could be possible, the realm of possibilities, right? And that's where these details of tasks will, will give you that realm of possibilities. These details of the skills will give you that and then because you can see in the small lightning bolts as To the people that are with us here It's where we understand that there is more exposure and opportunity also for automation what you're going to do about it If you go to the next slide, for example And it just blows up some of the information that we have here because we are operating at the level of the task which for me is In my brain is the unit of work, right?

Tasks and subtasks are the unit of work because we go to this unit of work. This atom with this We are able to understand task by task and subtasks by subtasks What is the level of exposure to ai but we also are because we map this throughout the organization We are also able to understand what our tasks and subtasks that are being repeated in many parts of the organization and there You can make a decision on whether this duplication makes sense because it's your organizational design that says,, it needs to be done in two different places or where you actually need to simplify and actually start centralizing some of those tasks as well. So if you start giving you this, this information on task and potential and metrics and so on and so forth, you start understanding where you need to go to actually improve yourself and transform yourself, which, which I think has been a brilliant story with many of the companies that we work with.

Of course, you need to understand that implementation of AI and new digital workers and so on and so forth, changing the way that you operate will require time and requires time for you to adjust and your organization to adjust. But it's not only about building digital workers, it's also about re skilling human workers and, and maybe re skilling also some digital workers so that they continue to do some of the work that you need to do as well. So, These four dimensions for us are sitting on top of the great data that we have. Because if again, if we have the data on unit of work on the task and sub task and the data on skills, if we can start inferring what's what? What is the exposure and what we can do, how technology can help us, how digital workers can help us to supercharging to do faster and better.

Some of those work, then some of that work. Then we start understanding what is the realm of possibilities and then up to us to understand, how fast we want to transform or not.

Mike Reed: Absolutely.

Nuno Gonçalves: We transition to the next slide. So this is this typically and if you if you joining us for the first time, you haven't seen this. But if you join us, we always try to give you a perspective of from a not only evolving perspective, but a split of types of roles that we that exist in this industry. So 40 percent as we said before, around manufacturing and maintenance and Yammer. Oh, specialist and, that you were talking about, but also a lot of data, a lot of engineering as well. There's no So, No, no surprise in the airbus and the buying and so on, so forth, and, and roughly a little bit over a third of,, of the, of the, of the workforce. That is everything else, right? But a significant, almost 40%., it's, it's, it's almost half of it around man,, manufacturing and maintenance and still 15%,,, on engineering as, as well. , reshaping, as we said,, and we were talking about this earlier,, AI and automation reshaping,, this industry,, but also the robotics as well.

There's a few things, and we'll be focusing on a couple of roles that I think are so very, very interesting right now,, that talks about what you were mentioning earlier today, which is this predictive maintenance, right? We don't want planes to actually be doing maintenance while they're flying, so how can we Anticipate this maintenance as well, which is something that is that is critical in the work. And then these digital twins that we'll talk a little bit about this, which is the the replica of environments in real life environments that ultimately allows you to understand what can happen and prevent some of the risks as well. So, if you don't have anything specifically in this. In this slide.

I would love to actually to spend some time on the next slide as well on the roles as well. But anything that you want to highlight their Mike on the previous one.

Mike Reed: No, I think the magic is going to be the data. So I'll jump into that. We've called that a couple of the areas that we're going to focus on.

Nuno Gonçalves: Yeah, and this one's and I'll transition to Mike in a little bit because he's Double click and deep, deep dive on the data and these roles. But as I was learning about this industry and studying about this industry, one, one in particular actually jumped out, which is this digital twin simulator engineer, which I haven't seen before, right? I had to go and, and, and, and look it up and really understand what, why is this one of the roles that have more AI and automation potential? But if you, again, if you're joining us from a different industry, this digital twin simulation engineer is. Ultimately, an engineer that actually creates and duplicates real time scenarios and real time,, environments. , and ultimately trying to understand what will be the reaction of, whatever they have from a product perspective in these simulation environments as well.

One, beautiful for me because,, I love digital and, and gaming and, and all of that, right? But it's, it's, it's something that also is being very powered by AI and very powered by, by technology and, and, and all even I'm assuming also. , everything around the evolution of of the semiconductor industry as well and space and processing numbers and so on and so forth. We've talked about this cybersecurity analyst again. If there is an industry that is that is that is most needed and,, would be this one. And it's one that is has high exposure to,, benefit from A. I. And automation and so on. And then, of course, The predictive maintenance that we've mentioned before as well. So three roles that we've identified that we wanted to talk here today, Mike, and I'll let you drive the rest of the,, of the folks that are with us on some of the particularities of these roles.

Mike Reed: Cool. Cool. Let's go. , predictive maintenance., so MRO, MRO, I think across a number of industries as maintenance, repair and operations,, often, often that sits in the realm of the end customer, but this is, this is seen as a, a significant and a significantly growing. Part of the industry., maintenance engineering was historically an afterthought, was ensuring that they delivered on the commitment, but it's really, as I said, fundamental to a commercial change in,, in the,, looking to after sales, looking to MRO is a significant and growing revenue stream. And that's not just about keeping the plane in the air, it's also making sure that plane is the best plane it can be. So it's delivering, delivering the up, the upgrades to the platform and delivering the upgrades to the system.

They're going to make sure that it not only is it continuing to perform as the, as the base requirement, but it's delivering the expectations on the customer, whether it's a defense customer or whether it's your aerospace customers. , predictive maintenance. Common across industries with a large capital footprint,, leverages historic data to understand how can, how can we optimize the maintenance window? How can we ensure that we're getting to the component before it fails?, with the. One of the biggest transitions in A& D has been this design for maintenance, a huge focus on design for maintenance so that they can minimize the amount of stuff, the duplications,, on platform, because of the confidence they haven't been able to understand and maintain it before it gets to the value condition, not just Replacing up to six months, but replacing it when the iot systems when the monitoring systems are detecting these particular elements of motion,, significant, significant commercial and operating benefits in the order of 60 percent by using Some source and it's going to, it's going to differ across industries that translates to a bottom line cost, bottom line benefit in the ROI margin.

So per fleet significant, and this is just an industry standard number across fleet size. So it's going to vary depending on whether it's a military or commercial, whether it's fleet or passenger., these are also anticipated to increase. Headcount. So this is not an area where an individual is able to do more,, requiring less individuals for the same scope of work because not only are they doing more, but they're also servicing and delivering more. So there is an expected increase in this workforce. So this is a, this is a net gain in terms of a particular role. Some of these roles, particularly around the modeling to understand and interpret the historic data so that it can support predictive maintenance,, are reasonably rapid to introduce.

They're not, they're not the three month timeframes, but you should expect to have., an implementation up and running and delivering value within a couple of quarters from the start of the process. Digital twin that you mentioned,, sits hand in hand with this. So, so once upon a time, digital twin was really an asset management tool to understand where things were. But now this is fundamental to the whole of the work, the, the work streams through, through A& D. It's about design. It's about design for maintenance. It's about the manufacturer and the fabrication. It's about the delivery. It's the operation and the maintenance. So the digital twin, which was historically just a, a different way of managing Understanding of what assets were in play now also contains access to this information to run simulations to simulate real world physics to model operations to understand asset behavior to understand implications of different supporting and maintenance regime.

So really, this is becoming foundational to the ability to execute on all of the other promises, the promises of MRO and predictive maintenance are possible. Because of the advances around digital twin simulations., and again, we see this is a, this is a role where investment using is likely to increase the requirements around the headcount because delivering value all the way up and down the stream. It's increasing the effectiveness of our manufacturer and our fabrications. It's increasing the ability to pursue different avenues in design and to be deliberately operating it in order to get that. To be able to pursue different commercial models, leasing by the, by the hour near,, and there are particularly in aerospace,, and defense, there are significant and complex systems that can support this.

So while this is some, some niche areas with GE and Siemens and Dassault,, there are a range of supplies here, which are really tightly linked to the assets themselves,, to allow us to understand.

Nuno Gonçalves: And, and I have a question, Mike. So yeah, you were, you were, when you were talking about the predictive maintenance and also on these, the, the twins,, engineer,, the role of that, these role, the, the, the parts that these roles have in sustainability, right? In, in actually being able to fly better, but also with less CO2,, emissions and, and so on, so forth. . Is what would it be fair to say that these are cornerstone roles that ultimately won from a from a almost a design perspective, right? Because one, it's a simulation role and an anticipation proactive role and the other one also proactive, but more from a mechanics perspective. Would these be fair to say that these are two roles that ultimately are also expected to have significant impact on sustainability in this industry?

Mike Reed: Yeah, absolutely. If we're looking to make any, any changes, any amendments to a platform design, the cost of fabricating that and demonstrating that it's achievable in the real world, significant. The detail that's possible, the physics that's possible in digital simulations allows a much broader range of alternatives to be considered and step changes to be considered before you get to that. That concept stage of actually bringing it to life in the real world. So the digital twin simulation is this is fundamental to accelerating those moves towards aggressive, not the right word, but significant sustainability objectives on the,, MRO, the predictive maintenance is key to allowing to maximize it so that we're not seeing assets sitting down on the on the tarmac or wherever they are waiting for maintenance that their operations being maximized so that they're operating as efficiently as effectively as they can.

So both of these are super key to ensuring that the products and the platforms are delivering at their at their optimum., the last one that I've already jumped on here,, is cyber security. And this is something that comes up regularly,, across almost all of our,, skills master classes when we're diving deep into industries,, and no, no different in aerospace and defense. , implications probably feel significant they do in healthcare feel significant., the, as I said, the, the visibility into what's possible specific. Specifically for these industries is somewhat limited, but we do know that generally both on the on the offense and the defensive side of cyber security, there is significant moves towards a eyes. as the, the, the huge lever to change performance, either as a, as a threat or in terms of defense,, from a commercial point of view, managing your own data is potentially securing,, complications, but there's also regulatory complications.

So minimizing the amount of,, risk by improving the defensive posture. Cyber security,, is,, significant commercial is becoming a more significant commercial driver. And again, this is one of those areas where we see a workforce transition that any individuals who have compliance framework,,, in their skill sets may have a path towards a role in cyber security, giving that the heavy lift the technical lift, which once used to be the requirement you needed from the individuals is now becoming the function delivered by AI. If we're going to,, pick some winners out of here, because we do to understand where to invest first,, is,, the,, MRO, Predictive Maintenance Engineering, and Cyber Security Analysts, they're, they're the quickest return,, Digital Twins, and the simulations that sit around them are significantly more,, Are a more significant investment.

So the time to get to the outcome takes long, whereas access to historic operations data and the ability to build up and models that talk about particular maintenance are reasonably established and cyber security is not just restricted to the industry. It is general. So there's the ability to leverage. The advances that are already happening there and move pretty quickly. So if you're going to start to transform your business, then they're the areas that you might look to try and invest because they are, they are what are going to propel you forward., but as you've said at the start, the other things that we want to be aware of is how do we be responsible and maximise the investment that we have already made in a workforce.

So how do we become a skills building powerhouse by leveraging who we have so they can become who we need. And again,, cybersecurity and admin keep popping up here as areas of significant opportunity across industries, just because of the amount of investments that's going across and the maturity across platforms. And the one in the middle here is one of the ones we've been talking about in the MRO space, about taking your current maintenance engineers and moving them into the preventative maintenance space. What we to do is to look at how, how do I get somebody from who they are to who they could be. And we're focusing on those paths which are adjacent, where the skills they have are relevant to the skills that they'll need.

The tasks that they're doing are aligned with the tasks that they will have to be doing. They may not be doing those tasks, they may be managing tooling, managing AI or agents that are doing those tasks. But an understanding of that task that they have at the moment is material and valuable in that transition. So if we're looking at admin and back office staff, we see across a number of industries, pathways to process automation. So what are those? Current data heavy manual repetitive tasks that exist in an organization that we can move for and giving those people who are currently involved in doing that work the ability to start to Configure and customize the tooling that could do it is the past part the process automation that we see across industries including A& D.

This is Becoming more and more accessible through re skilling So the cost of acquiring these skills is becoming lower. It's becoming more and more valuable for the individual because this requirement is becoming more and more useful across organizations., and the path to education here is reasonably open. There's a, there's a lot of different frameworks through which an individual can acquire these skills and increase the value to an organization. If you looked at the past from maintenance to predictive maintenance, again, this is becoming more and more common across manufacturing, production, automotive, as well as aerospace and defense. , it leverages. The deep understanding that,, the workforce in this space at the moment has about the performance specs and the operation of the equipment and allows him now to start working with that tooling that looks at the implications of those, those assets and operations on the future.

So it really looks at some of that specific,, ML modeling,, and IIT systems, which are monitoring in real time rather than historic,, and gives them the ability to leverage that based on what they know. Based on their current skills and their current experience and expertise around platforms. So it really is about leveraging the things that they know and giving them the ability to use that at a higher level,, and operate in a predictive framework., and again, depending on the specific, while there are some generic system,, courses available for understanding of IOT and more generally about predictive maintenance. There is a lot that's quite specific to the platforms themselves. So the ability to take somebody and put them through those courses to understand more deeply how to think about predictive maintenance in, in an asset., Is generally aligned, aligned to the asset itself, but again, it's a significant value up because it really is changing the game around the operations, the ability to, as I said, move this commercial model to a very different model.

And the last one we touched on again is around cybersecurity.. Which was historically quite a technical domain., but a lot of that heavy lift is now starting to become adopted by the AI and the technology itself in terms of both the offense and defense. So it becomes the ability to understand and manage this new tool. So step up from the technical. Cyber security aspects, understand the principles, but now manage the tooling that is doing it at a rate and in a way that wasn't previously possible. And again, we've talked about it from a bold perspective. These roles are growing. More of them are required. It's not that there's going to be less threats. There's going to be more threats that it's going to require to be more defense.

And in A& D, this is the bar to entry,, without, without protection, you're, you're You are not, and you're not able to play in the game. And so not only is it mandatory for the industry, it's going to be mandatory for those people who are working this industry to follow this path. And as I said, there's, there's,, asset specific,, training, but there's also training across platforms in, in how that new tooling is working., again, the, the, the cost of education here is going down, which makes it more accessible, which means the ROI. But taking your workforce that understands the nature of your infrastructure and moving to this position where they can now be delivering even stronger defenses is significant for the organization, but it's also valuable for the individual.

And we see a significant 20, north of 20 percent increase in salary value.

Nuno Gonçalves: This is, this is great., I can, I think one of them, one is, is the. What I love about the conversations that we always have,, around these industries is that we start very large and we talk about the trends of the industry with them. So, okay, here's, here's what we can do is it's, it's just not about picking one thing. It's not only about building skills blindly, it's not only about doing organizational design and, and, and, and, and, and trying to have, no different silos, different or, or, or to tackle the issues. It's not about the technology that you're going to. Implement top marketplaces and it's not necessarily only about engagement surveys and all of that, right? So what I what I love about this is that I think we bring,, through what we have a view of where Are the biggest, trends?

Yes, but then what are the what is the journey, right? And what we've been talking about this past,, almost 55 minutes. It's it's it's always a journey It's not something that you can do on one thing and then you solve for the rest, right? Is is around understanding your business, which if you're operating in a business for many years Then of course you have your understanding but understanding your work Understanding how work will evolve. I think it's a cornerstone of Everything that all companies that need to do. I don't know if it's only hr, but it's at least hr needs to understand the part of work. I don't think it's a place where people spend a tremendous amount of time but that's that's what we What we say is that ultimately, if there's anything that you need to, to, to, to know here, we gave you, we gave,, the people that joined us views of, of how the industry is going, how roles are going, how this is being impacted on one side from more manufacturing supply chain robotics, but also from an AI perspective.

So we, we show the complexity, but then I think we need to deconstruct the complexity and deconstructing the complexity means, listen, focus on work. Reinvent work, make sure that you ultimately you're able to understand what is the impact of work and everything that you're going to do from,, from a work perspective. What's the impact on people mobilize your talents in a way that you're able to show and guide your talent to go to the roles that are more needed and where you will need them. And, in the future, where will you need that talent in the future, which is the mobility, the mobilized piece. And then once you start mobilizing and aligning the paths of growth. Then invest also on your, on your scaling and re scaling of your,, of your organization, of your, of your people as well.

So,, one, what I loved, complexity. So it's big as an industry, it's very complex as an industry, has multiple, multi channels of change and transformation as well. And this means that ultimately, You need to understand as an organization, where, where do you start? Because it can be overwhelming, right? So many things,, changing and in so many places from again, supply chain to digital engineers, where do we start? There's, there's no single recipe to say,, one, two, three, four, because every single organization is specific. But if you bring that visibility, then you, you can start having a perspective of what will be your biggest takeaways and what will be your biggest prize. , so if, if you ultimately transform and upskill as well, there is no company that will transform everything at the same time.

You need to find your own journey. And that's for me is one of one thing that is also very,, very important. And so. Reinvent, mobilize, re skill, equip yourself with the right data, equip yourself with right insights that Mike has just shared also here,, and then, and then make an action and decide. And, and one of the things that I love about this is that you at the end say,, yes, yes, here's the path of re skilling. You're not only talking about data insights. And very high level, but then what needs to be done. And here's,, here's the action moving forward. So,, I love this, Mike, thank you for all the all the all the data here as well.

Mike Reed: I think,, yep, that sounds a bit so exciting.

Nuno Gonçalves: Yeah, time flies when you're having fun. Yeah, that's that's always this, but, thank you for those of you that joined, if we start looking forward and if we click on the next slide, we'll we'll there's if you want to have more personalized skills master class for your organization Just reach out. We all we love to educate. We love to engage and make sure that ultimately We understand where you are from a maturity, but also try to give you visibility of where you need to go and decomplexify some of the complexity that you might eventually have. So,, QR code, QR code over there,, take it, book a personalized multi class with us and we'll, we'll try to give you as much insights as possible that are specific to you.

If we look to the future, We're Mike and I will be we will do. I don't know if it's an 80 180 degrees shift here, but certainly very interested to go and have a deeper dive on the community services industry, very different, very purposeful driven., and I'm very eager to actually go on the details of what does this mean and what will be the impact as always. So, and Mike, it's always a pleasure. It's always a treat. And I have many tweets that I, that I take today., of, of, of your insights as well. So thank you for joining everybody. Thank you, Mike, for all the preparation and all the data, very insightful. And I think we'll see each other on March 5th. So put on your calendars 11 AM Eastern.

Thanks everybody.