People
It started with some advice he had been given, which went something along the lines of "pick the best people you can for your project". Obvious, yes, but the reason was that if you pick the best people you then don't need to have all the necessary processes in place as they don't need them in order to get the job done. And apparently without them they work much better. But the flip side is that if you don't have the right people, those processes are vital to ensure that you get any decent work out of them at all.
So whilst he agreed with all of my previous points when dealing with the 'right people' he absolutely disagreed with them if those people weren't part of the project. Interestingly this is one of Kelly Johnson's famous "Rules of Management" (No. 3 - Use a small number of good people, 10% to 25% compared to the so-called normal systems).
And so we appear to have a two tier-system, both in terms of managers and engineers, with a 'good' manager understanding when to use fixed process (and more importantly with what people) and when not to, and a 'good' engineer able to work outside of fixed process when applicable. Unfortunately it seems both are rarities in the modern workplace, and perhaps the next best question is why, and what can we do about improving this. And perhaps the problem isn't with the current interpretation of Systems Engineering or Project Management but the people who are doing it.