Lessons Learned From Explosives Detection About Winning in Policy-Driven Industries
On December 21, 1988, when Pan Am Flight 103 took off from London Heathrow and disappeared from radar thirty-eight minutes later, the plane was found crashed near Lockerbie, Scotland. A Semtex bomb hidden inside an improvised explosive device placed in checked luggage was the cause of the deaths of 270 people.
At the time the wreckage came down in Scotland, a global market had to be invented instantly – the technology, standards, certification processes, procurement vehicles, and physical infrastructure.
Up to that time, plastic explosives were considered essentially undetectable by any feasible method. The security measures in aviation consisted mainly of passenger walk-through metal detectors and carry-on bags checked with a rudimentary X-ray system. Checked baggage was completely unsecured.
None of these existed but suddenly had to be developed concurrently.
William McGann, Ph.D., CEO of Shepherd Strategies, was employed at a research organization that used advanced physics and chemistry for ultrasensitive detection, not in aviation security. Nevertheless, he thought he could make a difference. With no other motivation than this, he left his research position and joined a startup that he co-founded, Ion Track Instruments, just outside of Boston, MA.
What happened next was a series of changes over time, with the starting point a mere change in the conception of a product-to-market approach: building the market while building the technology, at the same time, with no map and no guarantee either would succeed.
Initially, Ion Track’s main challenge was far from being technical. Since there was no explosives detection market, the standards for detecting explosives were not only nonexistent but also completely undefined. There were no detection levels, no testing procedures, and no shared understanding of what “efficient” meant for a portable system ready for use in the field.
Rather than waiting for those standards to materialize, Ion Track took the initiative to engage the FAA and security agencies worldwide to help them set the very requirements against which the company would later be certified. It was not just a side effort; it was the main strategic step in the early years, and the standards set then remain in place to this day.
Companies that sat back while those frameworks were being written found themselves shaped by decisions made without them.
Companies in the room when definitions were being set had the chance to build products that fit the resulting requirements.
The difference between those two positions was not accidental. It was a function of who showed up early and who waited for clarity that never came on its own.
However, these things are not excluded from aviation security only. In fact, the phenomenon recurs across technology-driven markets, including government, infrastructure, transportation, advanced manufacturing, defense, and healthcare technology.
The regulatory framework is not something that is just handed over to us finished. Instead, it is concocted by people. What you are left to decide is whether your organization has not only the know-how but also the connections and the credit to be one of them. Otherwise, you get to see what they decided after the fact.
It is not feasible for a single technology to cover all the threats in explosives detection scenarios. As a matter of fact, among all detection technologies, explosives trace detection (ETD) systems were the most sensitive; however, they heavily relied on the efficiency of sample acquisition.
On the other hand, the imaging systems did not have any sample acquisition issues, yet they were susceptible to generating high false alarms. There were always pros and cons to each of these approaches; they were very effective in some cases and less so in others.
It made sense at first to keep looking for a single solution that could handle everything before implementing any. Unfortunately, the market remained stagnant for years.
The turning point came through completely changing the mindset. Dr. McGann refers to it as “Implement the Possible.” The idea is to realize that a single technology cannot handle the entire threat landscape.
Instead, come up with a system-of-systems strategy — go ahead and deploy the technologies that work now, against the subsets of threats they can handle, and meanwhile develop the framework for their integration as the industry evolves. This led to the development of effective systems in a relatively short time. Dr. McGann’s biggest regret, looking back, is that he didn’t advocate this approach earlier. Earlier adoption would have not only sped up the technology but also the market.
For instance, any company operating in complex regulated environments today can take this literally. Identify the exact portion of the problem your present capabilities can effectively solve. Target your deployment towards that portion. Accumulate the commercial experience, operational records, and customer relations that will put you in the position of credibility for a wider mandate when the law finally follows.
Waiting for the final solution is not a thorough plan. In most markets, that is how late entrants lose to early entrants.
In July 1996, TWA Flight 800 crashed. For months, the assumption was that it was a terrorist attack. But eventually, the conclusion was that it was an accident caused by a mechanical failure; a sudden ignition of an empty fuel tank by static electricity.
There was no terrorism. Yet the Gore Commission, established by the former Vice President, to investigate the disaster, took the explosives detection industry to new heights with transparent, very specific procurement mandates: technology specifications, deadlines, and funding assurances. After two years of Capitol Hill testimony, real policy was born. The industry’s finest moment in procurement was prompted not by an attack but by an investigation into a non-attack.
That is exactly what it means for markets to be event-driven.
Khobar Towers. The bombings of the embassies in Nairobi and Dar es Salaam. The USS Cole bombing. 9/11. Each event brought a surge of policy focus and procurement actions. Those companies that were already set up (authorized, commercially verified, operationally utilized) rode the wave. Those who were still trying to get ready when the opportunity arose didn’t.
“I have never come across a government that truly understands technology. What I have witnessed is the ‘we need it and want it now’ scenario.” Fond of being frank, Dr. McGann states, “Governments are not proactive but reactive, particularly in security and infrastructure, going from one forcing event to another, driven by a host of asymmetric threat scenarios.”
They do not react to technology readiness. The policy window opens temporarily after the world forces it, and then only for a short time before the attention shifts away and procurement cycles close.
The 9/11 hijackers got into the aviation security system through a small airport in Maine. They passed that checkpoint and went on to Boston, taking their threats into the secure zone they should never have been able to reach. It didn’t matter if sophisticated detection technology was installed at Logan, JFK, or any major hub. The threat entered the system where security was weak, and the whole network suffered the consequences.
This is a systems issue, not a technology failure. And it involves a very specific point for any enterprise functioning within a network-dependent, regulated environment.
Your advantage in the market is not only shaped by how your product performs. It also reflects the wholesomeness of the system you are a part of. If there is a break in that system, for example, a regulatory loophole upstream, an un-moneyed correspondent, a non-compliant shortfall at a node you do not control, these will be strategic factors for your business, whether they are related to what you are making or selling or not.
It is not enough for companies operating in heavily regulated industries to know only their portion of the system. They should figure out the system as a whole. Where do the shortcomings lie? Who is responsible for fixing them? What will happen to your competitive position if the gaps are suddenly closed due to an event that you did not anticipate?
These are not side issues. In fact, they should be considered the very basis of any growth strategy in a regulated environment.
First, make commercial traction. Only use government policy and funding to speed up the growth that you already have, but not to replace growth that you have not achieved yet.
The ones that did a full thing on government commitment used a policy mandate as a basis rather than a boost and failed to survive the period between policy windows. Such periods are indeed real, sometimes long, and come without warning because the happenings that close windows are as unpredictable as the ones that open them.
What Ion Track did through standards work, operational deployment, and commercial development was to build a track record that government funding is a multiplier rather than a lifeline.
The clear strategic advice McGann offers:
Policy windows will open. Funding is there. The question is whether you will be positioned and commercially credible within the organization at that time, or if you will still be preparing for a moment which may not wait for you.
Stay tuned for more insights from William McGann, Ph.D., Chief Executive Officer of Shepherd Strategies.
Our consulting firm helps companies in transportation, energy, infrastructure, and technology access government funding and navigate procurement to accelerate growth.
Contact us if you have questions or have a project to discuss.
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