Reshaping an Industry

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Reshaping an Industry

• Mohammad Komeilian

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Agenda

• Introduction
• Executive Summary
• Advice
• Conclusion

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Introduction

• Lockheed Martin Corporation, an advanced
  technology company, was formed in March 1995 with
  the merger of two of the world's premier
  technology companies, Lockheed Corporation and
  Martin Marietta Corporation.
• Headquartered in Bethesda, Maryland, Lockheed
  Martin employs about 130,000 people worldwide and
  is principally engaged in the research, design,
  development, manufacture and integration of
  advanced technology systems, products and
  services.

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Introduction

• Needed to restructure themselves to prevent
  themselves from takeovers
• Have to stay focused, not distracted by change
• Companies must stay focused on their business

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Executive Summary

• The US defense industry started with the Cold
  War, new challenge winning the peace
• Many companies have disappeared in this era
• Lockheed-Martin, Boeing-McDonnell Douglas and
  Raytheon-Hughes are examples

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Executive Summary

• 15 players in 1990-4 players in 1997
• Lockheed-Martin grew while it shrank!!!
• Secretary of Defense told the CEO of major
  defense companies that many of the them will go
  out business in the next few years
• Therefore there are only two possible ways1-Move
  into new markets 2-Increasing market share in
  existing markets during a period of severely
  declining business

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Executive Summary

• Lockheed chose to follow either routes through
• External Re-Engineering
• Combining companies though MA
• Internal Re-Engineering
• Changing the way a company does business
• Eventhough the above are exclusive but should be
  done at the same time

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• How to do it?

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Read the Leaves

• Dont wait until an industry is about to collapse
  to make crucial changes. Read the tea leaves
  early on and watch for danger signs
• Beware of forced restructuring
• E.g. Lockheed and Northrop competing to buy
  Grumman

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Have a Roadmap even When There are No Roads

• Having read the tea leave , both Martin and
  Lockheed chose to follow similar roadmaps in
  1990, both set to increase market share in the
  core businesses, even during of downturn. Both
  Martin and Lockheed were both searching for
  corporate partners.

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Move Expeditiously

• Once a strategy has been established, moving
  quickly is critical to succeed.
• MAs Re-Engineering have so many moving parts
  that if one part stalls the entire endeavor may
  grind to a halt
• Better to be 80 percent correct and make the
  change happen than to be 100 percent correct
  after the opportunity has passed

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Make Megachanges

• Set Goals that may seem unattainable then
  motivate people to reach their goals.
• E.g. Jack Welch and General Electric

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To Think Outside the Box, You have to Get Outside
the Box

• Here is Edward Bear coming down the stairs now,
  bump, bump, bump on the back of his head, behind
  Christopher Robin. It is as far as he knows the
  only way of coming downstairs, but sometimes he
  feels that there really is another way, if only
  he could stop bumping for a moment and think of
  it.

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To Think Outside the Box, You have to Get Outside
the Box

• The painting of the fuel tanks and the need to
  reduce the weight, was suggested by a line worker
  whilst the engineering team was working on light
  weight material

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Benefit by Bench Marking

• Essential to set goals, monitor progress and
  provide feedback throughout any period of
  restructuring, also very important to quantify
  results at the end
• Cycle time
• Scrap
• Rework
• Benchmark it with other companies in the sector
• Also it is essential to ask customers how they
  think you match up against the measurements that
  are important to them

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Focus on the Customer

• The process of change will be invisible to
  customers but the results should always be very
  apparent and very positive.
• Always under promise and overproduce
• E.g. The hotel which hosted the meetings

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Be Decisive

• No decision will please everyone, but managers
  must make the tough decisions. If they do not,
  someone higher up in the organization will decide
  to replace them with others who will.
• The man who makes no mistakes does not usually
  make anything

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Other Important Advice

• Create One Culture for One Company
• Building a new culture means embracing the best
  of the best with an open mind
• The Real Assets Go Home at Night
• Alfred P. Sloan Take my assets but leave my
  organization, I will have what ever I lost in 5
  years
• Re-organizing everyone to new offices when moving
  into the headquarters
• Communicate, Communicate, Communicate
• Dispense both good news and bad news
• Pogo The Certainty of Misery is better than the
  misery of uncertainty
• E.g. question and answer with Dan Tallep, with
  the employees

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Conclusion

• Leave the status quo
• Move with the market
• Do not get blind by past success
• The world hates change but that is the only thing
  that has brought progress

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Thank you for your time

• mohammad_at_abern.com