Lockheed Martin CEO Reports Big Change in Company Culture


The country’s largest military subcontractor is rethinking the way it does business in a bid to match the speed of innovation in the commercial digital industry.

The change was unveiled on Wednesday in a YouTube conversation that Lockheed Martin

LMT
President and CEO James Taiclet has had a meeting with former Deputy Defense Secretary John Hamre, now president of the Center for Strategic and International Studies (CSIS).

Lockheed, a contributor to my think tank, has heard government clients complain for years that the pace of innovation in the defense industry is not fast enough to keep pace with near-peer rivals. Of America or the rate at which new technologies are emerging. .

Taiclet, who joined the company after 16 years as head of cellular infrastructure provider American Tower

AMT
, has apparently decided to make business process acceleration a feature of his tenure.

Taiclet argues that Lockheed actually has a good track record of rapid innovation in what he calls the physical world, such as producing new planes in the company’s legendary Skunk Works.

Where it hangs out, along with its defense industry competitors, is to keep pace with innovation in the digital world, the high tech sector has concentrated in places like Austin, Boston and Silicon Valley.

Taiclet says that will change.

In fact, the change has already started as the company moves to become a pioneer in adapting commercial digital technology to the country’s military needs.

Much of the change will come from applying open architectures, agile software development and networking technologies to combat platforms in which the company is already a major player.

In some cases, this will require partnering with commercial technology companies, but Taiclet notes that the company already employs 10,000 software engineers. The main challenge is therefore simply to learn how to accelerate progress on the ground.

How much faster?

Taiclet talks about performing platform upgrades every six months rather than every six years, dramatically reducing cycle times for every facet of the system improvement.

He readily acknowledges that doing business in this manner in order to keep the joint strength ahead of his adversaries will require a different profit model, but having accomplished such a shift in the telecommunications industry, he believes he can do roughly the same. the same goes for defense.

One way to gain customer buy-in is to provide dynamic cost models that rigorously demonstrate the value of tradeoffs in system development.

The implication is that in many situations it makes more sense to go faster than wait for the perfect solution, especially given what potential enemies overseas are doing.

The company has held meetings with leaders of leading innovators in networking, gaming and other digital businesses with the aim of finding areas where their experiences can be applied to Lockheed culture.

Taiclet notes that “we don’t need to write all of our AI software,” hinting that the company may partner with commercial companies to harness their talents, but its main focus appears to be on developing talent. in-house capable of rapid digital innovation.

To that end, the company has developed a series of highly classified technology roadmaps that will help it determine where it needs to go to support its government clients.

CEO Taiclet can’t say much about these roadmaps, but he makes one point: he intends to get there quickly, ahead of his competitors and ahead of American rivals.


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