2016 Lockheed Martin Fellows Conference

Remarks as Prepared by

Chairman, President and CEO

Marillyn A. Hewson

 


Lockheed Martin Fellows Conference
Orlando, Florida

May 17, 2016

 

 

 


Chairman, President and CEO 
Marillyn A. Hewson


Good morning, everyone.

Isn’t that a great video?

I wanted to open with that because I think it does a great job of summarizing something you all know very well:

  • That innovation is the lifeblood of this company;
  • That Lockheed Martin is on the leading edge of technological progress; and
  • That all of you…our top engineers, scientists, and technical professionals are the innovators that drive our continued success.

The Lockheed Martin Fellows are a special group. Our company has recognized that. I recognize it, and for good reason.

It’s your drive to solve the toughest challenges, not just those confined to our industry or even our planet.

You're pulled to difficulties that extend into the deepest reaches of our universe. I'm in awe of your ability to grasp the big picture of our business, while at the same time equally “wowed” by your technical expertise and commitment to flawless execution.

Perhaps most importantly, I admire your sense of purpose. It comes across in how you talk about yourselves and how you carry yourselves; the expectations you establish; and the examples you set.

I’ve always liked what one of our famous leaders, Kelly Johnson, wrote at a historic moment for Lockheed Martin. As Kelly conducted final preparations for the U-2’s maiden test flight, he recorded these words in his log book:

“Airplane essentially completed…

Terrifically long hours…

Everybody almost dead.”

Sound like a familiar sentiment?

Whether it’s the Atlas rocket that propelled John Glenn into orbit, the development of stealth technology with the F-117A, or launching a satellite system as fundamental to our way of life as GPS, we live for the moments, the milestones, and the breakthroughs that really matter.

You, and those innovators who came before you, have been there through it all. Thank you for all that you’ve done and what I know you will continue to do.

More than ever, I believe the world needs Lockheed Martin to lead the way forward. As I travel the world and represent our company, I listen a lot to commercial customers, to senior leaders in defense and government, and to smart minds wherever I go.

In all of these discussions, one message comes through loud and clear – we’re living in one of the most complex and dynamic security environments in decades.

So what does all of this add up to for Lockheed Martin?

What’s happening around the world is putting tremendous pressure on leaders in business and government, our customers. The challenges they’re facing aren’t easily solved. They’re incredibly complex, constantly evolving and moving fast.

When our customers face their toughest challenges, where do they turn?

We don’t want them going to someone they don’t know and who’s likely unproven. We want their first call to be to Lockheed Martin and our culture of innovation. That means turning to you.

Difficult challenges have always brought out our best, particularly in our best people. Lockheed Martin has been in the business of innovation since the very beginning. From the Lockheed Brothers, to Glenn L. Martin, to Igor Sikorsky, our founders were dreamers and inventors.

Most importantly, however, they understood that to succeed and thrive, they had to understand what their customers wanted and needed. They looked at challenges through their customers’ eyes and built the solutions the world desired. They understood that as you continue to push the frontier of innovation it is important to keep in mind that innovation is a business. And businesses succeed when they focus on their customers.

Sometimes, companies lose sight of that. Some of us remember that in 1975, the “next big thing” to hit the stores was the Sony Betamax video recorder. A year later, Sony's rival, JVC, released another video recorder – the VHS. Even though Betamax was, in theory, a superior recording format over VHS, customers weren’t buying them. Customers cared about cost and recording time, not about incrementally better formatting at a higher price.

Sony bet wrong. They made assumptions about what their customers wanted. Sony Betamax became one of those products that engineers liked, yet customers ignored.

It’s an important lesson and a situation we have found ourselves in at times. There are times when we’ve developed the technologically superior solution, yet underestimated key decision factors —like affordability— that were critical to our customers.

It’s that sense that we “know better” than our customer that can lead to lost competitions and strained customer relationships. A good example of this was the Advanced Transport Aircraft Competition for the U.S. Air Force.

In the 1980s, the Air Force decided it needed to replace its aging C-141 StarLifter fleet – a cargo aircraft. If anyone knows how to build cargo aircraft, it’s Lockheed Martin. So, we took the competition for granted.

We submitted two bids, actually; a C-5-based design and an enlarged and upgraded C-141 design, thinking at the time that the customer would continue to use a known brand. McDonnell Douglas, however, decided to develop a new aircraft specifically designed to meet the Air Force requirements.

This new aircraft, which became the C-17, could do the work of our C-141 StarLifter and also met some of the missions our C-5 Galaxy does. And the McDonnell Douglas design was cheaper than our proposal to revamp either of these aircraft.

And, as you know, they won the competition. We didn’t listen to what the customer said they wanted. We assumed we knew better than them. And as a result, we didn’t win the competition.

That’s why we’ve invested so much time and effort in our customer focus initiatives. Our customers will always define our success. We’ve made great progress in focusing our innovation on our customers by listening to their needs and partnering with them to deliver the best solutions. And our success comes from efforts made by the people in this room and your 125,000 teammates across the Corporation.

To continue our momentum, [senior vice president of Corporate Engineering, Technology and Operations] Rod Makoske has led an effort to revamp our long-term technology strategy to best align with our customers’ future challenges and requirements. This strategic framework, which you’ll spend time exploring at this conference, will help us prioritize the opportunities that will deliver market-leading value to our customers.

To create this new technology strategy, we stood up a Corporate Technology Strategy Working Group, a team which brought together:

  • Corporate Engineering, Technology & Operations,
  • Business Development,
  • All of the Business Areas,
  • Government Affairs,
  • Finance,
  • Human Resources,
  • Communications,
  • and Legal.

A truly cross-functional team working together to create a strategy informed by our business goals and the needs of our customers.

We built this strategy around our customers, working to understand their missions and future needs. We studied the global technology landscape, including our competition’s investments and planning. And we looked at the evolving and emerging threats our customers face.

At the end of the process, the team developed a comprehensive strategy that:

  • Refocuses our technology investments on customers’ long-term requirements and doubles down on a small number of “big bets” like hypersonics, directed energy, and autonomy, to name a few.
  • It establishes a coordinated university strategy; one that consolidates technology investments, talent needs, and philanthropy outreach.
  • It aligns our internal R&D enterprise around common objectives and better defines the role of our Corporate Engineering, Technology, and Operations organization.
  • And, it strengthens our position as the preferred partner for our global customers.

With the power of our nearly 60,000 scientists and engineers aligned around our technology strategy, I am confident that we are better positioned to address the long-term needs of our customers and deliver the innovative solutions that will drive our continued success.


Marillyn Hewson Address to LM Fellows Conference

Lockheed Martin Chairman, President and CEO Marillyn Hewson addresses the 2016 Fellows Conference in Orlando, Florida. The LM Fellows program recognizes the preeminent technical individual contributors within the Corporation. LM Fellows have many years of experience, and are recognized technical experts across the enterprise and serve as individual contributors, technical leaders, and mentors.



A strategy, however, is just a roadmap. To be successful, we need each of you to embrace the strategy and put the power of your collective minds behind it to deliver solutions that will define our modern legacy of innovation. And I believe the best way for you to do that is to focus on three priorities:

  1. Accelerate the pace of innovation through collaboration,
  2. Grow our customer partnerships, and
  3. Develop our talent pipeline.

Now let me touch on each of these in turn.

First, is to accelerate the pace of innovation through collaboration. Scientists and engineers work in a world of connections. You find ways to connect the dots between already established thoughts, ideas and solutions to create something new. That ability to make unexpected links is what makes you innovators.

With your help, I believe we have the opportunity to accelerate the pace of innovation at Lockheed Martin.

Look around this room. Your colleagues here and around the world represent an extraordinary resource – one unique to Lockheed Martin and one that is unmatched in our industry.

I challenge you to take the time to connect the dots with your colleagues during this conference. Find out what they’re working on. Look for new ways to collaborate. Pursue the links between your ideas and theirs. By coming together as one company, we can truly unleash the power of Lockheed Martin’s innovation for our customers.

You have already created a very useful Fellows Portal that is driving new levels of interaction between Fellows and connecting other Lockheed Martin employees with Fellows that have the unique experience they need to assist with a particular project or challenge.

The LM Fellows Action Teams are also a great resource for teams in need of rapid-response, top-notch resources that facilitate cross-functional collaboration. That’s what happened last year when a member of our unmanned underwater vehicle program reached out to the Advanced Fluid Dynamics Fellows Action Team with an urgent fluid dynamic issue.

The vehicle was having unexpected drag issues and not performing to specification. The team was able to mitigate the problem using an innovative solution, a series of distributed arrays of minimally intrusive micro vanes. I’m not 100 percent sure what minimally intrusive micro vanes are; however, I’m certain no one other than our Fellows could have come up with that solution.

This conference is another great example of how you’re sharing ideas and making connections. We need to continue with these important initiatives while also ramping up our efforts to stay ahead of the competition.

Let’s multiply our competitive advantage to the greatest extent possible because the results have the potential to change the world for the better.

Our hypersonics programs are a great example of innovative collaboration. For the Tactical Boost Glide program, MFC is providing the hypersonic vehicle seeker and the rocket booster stack; Space Systems is providing the guidance navigation and control; and Aeronautics is providing some parts of the airframe.

No one single business area could provide such a comprehensive and complete technical solution. We need to drive more of this type of collaborative innovation to every corner of the corporation. We must continue to push the breakthrough technologies that will be our growth engines of the future.

The world is changing and our customers are changing as well. At a time when the Department of Defense is reaching out to Silicon Valley, we need to remind them of who the real innovators are – the men and women of Lockheed Martin, the men and women in this room.

That’s why the second priority to grow our customer partnerships is so important. We’ve long had innovation centers of excellence at Lockheed Martin – one-of-a-kind facilities like the Skunk Works in Aeronautics, Space Systems’ Advanced Technology Center, MFC’s Applied Research and Advanced Programs, MST’s laboratories, the corporate Advanced Technology Labs, and the Lighthouse Center for Innovation.

These organizations have exceptional relationships with our U.S. government partners and their advanced research organizations like DARPA, the Air Force Research Laboratory and others. It’s important that we continue to invest in these relationships as we pursue new contracted research and development, or CRAD opportunities.

As we grow our business outside of the U.S., our international customers are looking for the same level of partnership and the ability to collaborate, share knowledge, and grow indigenous technologies and capabilities.

Our model of innovation “centers of excellence” has been very successful in the U.S. and we’ll continue to pursue opportunities to expand that concept to our international partners. These facilities have incredible potential, especially as they link in to our global innovation network and centers of excellence in the U.S.

A great example is our Center for Innovation and Security Solutions, or CISS, in the United Arab Emirates. I had the opportunity to visit the Center earlier this year and was impressed by the great work they are doing.

The CISS, which celebrated its first full year of operations in March, aims to foster innovation and create sustainable global technology partnerships in the UAE. For example, over the past year, the CISS worked together with the Lighthouse in Suffolk, Virginia, to host a Joint Flight Simulation training exercise with UAE Air Force pilots over our Global Innovation Network. This collaboration between Lockheed Martin and the UAE Air Force leveraged the Center’s technology to train and prepare pilots at home with significantly less time and money.

Because of the Center’s connectivity, someone in Abu Dhabi could actually fly a campaign scenario with any flight simulator in the U.S. that’s linked into our network. This type of global connectivity makes all of our centers stronger and brings exponential value to our customers.

And I believe we can do even more.

Just last month, Lockheed Martin Canada opened its new IMPACT Centre in Ottawa. The innovative demonstration center is designed to bring Canadian industry and academia together for critical research, development, and advancement of technology.

The IMPACT Centre was created to promote the growth of small Canadian businesses, advance research, support sustainability, and enhance Canada’s capability for major exports in defense and technology sectors.

Partnerships like these reinforce our relationships with our international customers and provide Lockheed Martin with greater access to worldwide talent and technology. We are committed to expanding our international business and that growth will be built on partnerships like these.

You play a key role in making those partnerships successful.

The third priority area is to develop the talent pipeline we need to keep our momentum going. Part of our success lies in the fact that we hire the best and brightest and empower them to innovate. We want no daylight between great people and great work.

Today, we are well positioned with an extraordinary depth and breadth of technical talent across the Corporation. We must focus on keeping that pipeline of talent strong. That means a continued emphasis on our university partnerships and recruiting relationships.

These programs are working extremely well and I’m proud that we connect students with Lockheed Martin Fellows to address real-world challenges. They get to know us and learn what we do. We get to know them and their capabilities. And we listen to their ideas. These relationships and practices help to build the strong pipeline of talent that benefits everyone.

We’re focusing on the next generation of innovators as well. Just last month, we announced the launch of Generation Beyond; a first of its kind, national educational program to bring the science of space into thousands of homes and Classrooms across America.

We designed this new program to inspire the next generation of innovators, explorers, inventors and pioneers to pursue careers in Science, Technology, Engineering, and Mathematics – the critical STEM fields we will rely upon for our future talent.

Our children – the elementary, middle, and high school students of today – make up a generation that has the potential to change our world forever. This is the generation that will walk on Mars, explore deep space, and unlock mysteries that we can’t yet imagine.

They won’t get there alone. It is our job, the job of everyone in this room, to prepare, inspire, and equip them to build the future. And that’s exactly what Generation Beyond is designed to do.

The time and effort you put into supporting our STEM initiatives are critical to their success and I thank you for that.

With your help, we will continue to invest in our talent and inspire a new generation of Lockheed Martin innovators, explorers, and hopefully, Fellows.

So, in summary, as we continue to implement our technology strategy, we must remain focused on the business of innovation. Our recent portfolio changes and strategic actions have created new opportunities for collaboration across the organization.

As individual businesses, we have proven to be very successful. As a fully integrated and collaborative team, we can be unstoppable.

We need your help to leverage the full breadth of our talent, technology, capabilities, and resources to drive value for our customers.

Earlier I painted a picture of the world as many people important to our success see it. It’s a realistic view grounded in the challenges they’re facing, the pressures they’re feeling, and the responsibilities they have to those they serve and represent.

This connection to the customer and our understanding of their priorities must drive everything we do.

At the same time, let’s not be constrained by the present and what’s right in front of us. It’s OK to look up and lift your eyes to the horizon beyond.

In fact, we have to do this. It’s how we’ve always made the biggest difference. It’s why many of us are here in this industry and at this company. And it reminds me of a very relevant quote from Scott Winstead, the U-2’s strategic development manager at Skunk Works. He said, “We excel at building what we imagine. And we are imagining a bright future.”

I think that can be said, and should be said, about each and every one of the platforms, technologies and systems we work on.

I ask you to imagine a bright future for our company, for our customers and for the world.

Take that vision and, above all, lead as Lockheed Martin Fellows have always led; with unbridled curiosity, a relentless pursuit of new truths, and a dedication to solving the world’s most difficult problems.

I’ll close with one very important question that I’d like you to consider over the next few days. What’s next? What’s the next franchise program after the F-35, Littoral Combat Ship, Black Hawk, GPS, or PAC-3? What’s the breakthrough technology that will give our customers the edge they need? What can we do now to lay the foundation for the future we will build together?

I am confident that with your help, we can find the technology after next generation. We can continue to promote the business of innovation today, tomorrow and for decades to come.

Thanks again for all you do.

 

# # #