Leadership in Turbulent Times

Remarks By Marillyn Hewson
President, Systems Integration-Owego,
Lockheed Martin Corporation
Binghamton University
Binghamton, New York - 10/08/2009

Thank you President DeFleur, Dean Dhillon, for inviting me to be a part of this wonderful lecture series on Accountability and Society. I’m honored to be here.

Being here with you today, I’m reminded of the story of the farmer who entered his mule in the Kentucky Derby. His friends asked, “Do you really think there’s a chance your mule could win the race?” And the farmer answered, “No… but I think the association will do him good.”

Well, when it comes to discussions of accountability, sharing the program with Abraham Briloff is about as good an association as I can imagine. As all of you know, Professor Briloff is what my kids would call an accounting rock star. His brilliant career spans generations.

And, speaking as an executive of a publicly owned company, it’s humbling to know that just a word from Professor Briloff can make the stock prices of major corporations move. I bet a lot of CEOs and portfolio managers wish they could claim that kind of magical power!

But as Professor Briloff has always taught, there is no magic involved. Just truth. It’s his courage in being the bearer of the truth that has earned the great respect he commands today. Professor Briloff has never been seduced by smoke or mirrors. He shines a light on the fundamentals, even when doing so is unpleasant or unpopular.

So in tribute to that spirit, I’d like to speak with you today about leadership in turbulent times. Because it’s easy to be a leader when everything is going great. The challenge is how you act when things go wrong. In times of great change… or tremendous challenge… that’s when the leadership fundamentals matter most. When the seas are rough, you need the anchor of strong values, and the beacon of clear vision, to stay afloat.

Now, I suspect, when I talk about turbulent times, you can imagine the kind of things on my mind. I arrived in Owego in September 2008… and it has been, to put it mildly, quite a year.

It was last September that Lehman Brothers filed for bankruptcy and Wall Street started imploding, sparking the financial crisis that flew around the world. Since then, the U.S. economy, and countless American families, have suffered the pain of recession, as companies big and small have been forced to lay off millions of hard-working employees.

I don’t need to tell you this period has been tough on our community too. Here at Binghamton University, I know you’ve experienced a decline in state support. At Lockheed Martin in Owego, program terminations and cancellations, as well as shifting priorities for our government customers, presented us with significant challenges as well… and as many of you know, we had to take the hard step of reducing our workforce by nearly one quarter this year.

The business environment appears murky for the foreseeable future, but I assure you that we are a resilient group in Owego. Our team is pulling together, and we have a plan in place to move our business forward.

While we must look ahead, we are working as best we can to address the needs of our colleagues who are leaving the business. We’ve assigned an employment representative to everyone who has been affected, to help them look for new jobs within the Corporation, and also help them polish their interviewing and resume writing skills. We’ve offered online professional development courses on topics from a library of several thousand, and held two career fairs, one internal to Lockheed Martin companies, and one external led by the New York Dept. of Labor, attended by 18 companies. I’m pleased to say that more than 300 employees received initial job interest, and many are currently interviewing or have already received job offers. We wish all of our colleagues as smooth a transition as possible in a challenging business environment.

Given the nature of the aerospace and defense industry… and our role in supporting the vital missions of our government customers… we are very conscious of the high expectations for our behavior as a business. I’m not an accountant – but I do think an awful lot about accountability. At Lockheed Martin, we have multiple stakeholders to whom we are accountable – our employees, our community, our shareholders, our government customers, and the American taxpayers they represent. No less important, is our accountability to our international customers, business partners and teammates. Regarding the presidential helicopter, we made our case as best we could… but it was up to the customer to choose. We were accountable for honoring whatever choice our customer made.

But if being accountable means accepting responsibility, there’s another side to this equation too. A proactive side of seeking and taking responsibility. And the word for that is leadership.

In ways I never would have chosen, I had to learn about taking responsibility very early in my life. My dad died when I was nine, leaving my mother with five young children. My mom taught us self-reliance… and to take responsibility for our own personal success. She encouraged us never to set limits for ourselves on what we thought we could achieve; she always said that the more experiences we had, the better we’d become. Mom certainly has her own goals, and is still living them today… at 90, she insists on going it alone at home, and is enjoying life to its fullest.

The example my mom set for me and my siblings helped shape my view of leadership today: To me, leadership is a set of personal behaviors that set the course and create an environment that energizes people to achieve a goal.

In simple words, it boils down to this: If you want to be a great leader yourself, you always have to be thinking about other people. Because you may be the smartest person in the room, but that’s not enough to succeed. You have to be able to motivate others, and inspire them to reach their own potential. You have to create a climate in which those around you can perform at their best.

I recently read a compelling study by the Gallup organization. Like many researchers, Gallup is interested in identifying the best leadership traits. But they took their study one step further, and they interviewed followers too. As they wrote, “When companies want to know why a product is popular, they ask their customers. So, if we want to know why people rally behind a leader, shouldn’t we ask them why they follow?”

And what they found, in their random sampling of more than 10,000 men and women, is that when people were asked what it is that they get from the leaders they value most in their lives, the responses came down to four basic things:

Stability… trust… compassion… and hope.

All of these traits are at a premium when dealing with turbulent times. Yet, turbulent times, by definition, throw stability off track. It’s hard to provide a firm foundation when the ground is shifting beneath your feet. But one thing I’ve learned, which I think is consistent with accounting at its best, is that communication and transparency are indispensable.

It may seem obvious that leaders should communicate with their colleagues in times of trouble. Yet, so often, people’s instinct is to circle the wagons… hunker down… and focus in, instead of out. Leaders may worry that sharing bad news will only make people upset. Or, they may feel they need time behind closed doors to sort out perfect answers to every question.

It’s a natural impulse to want to withdraw. Natural, but wrong. People are resilient. They can deal with bad news. It’s the uncertainty of not knowing they can’t stand.

And in today’s world of texts and Tweets, that anxiety can’t be corralled. A dialogue is happening, all the time. People aren’t just listening, they’re talking. They will share what they’ve heard. They will speculate. They will try to connect the dots for themselves. But they may get it wrong. And rumors, once launched, are difficult to dispel.

So leaders have to speak up. They have to speak out, speak openly, and speak often. They have to use every channel – emails, videos, face to face, making time to sit down with their team. Great leaders don’t pretend they have all the answers – but they show they’re always willing to engage. They empower those around them by sharing information, instead of leaving people in the dark, because they know that when people get left in the dark, they are likely to conjure up nightmares… and oftentimes, those nightmares are even scarier than the truth.

But here’s the key: you need your channels of communication working well before a crisis hits – just like you’d be wise to put your parachute on before you jump out of the plane.

The team needs to know where they can get the latest updates… and where to direct their concerns.

And leaders need to know how to use the tools that reach people where they are. Folks my age remember when the fax machine was a mind-blowing innovation. Now, we also need to be comfortable reaching out through a Facebook page or an online video link. Especially for a company the size of Lockheed Martin, with 140,000 employees around the globe, webcasts allow us to reach our workforce in a direct, immediate way.

While stability can rarely if ever be assured, it is imperative that leaders share critical information as it becomes available so that everyone benefits from the same common base of understanding – in as near real-time as possible.

Yet, all the communication in the world is for nothing if people don’t believe you, or if they don’t believe you truly have their interests at heart.

And that gets to trust. Trust is essential for leadership, and it has to be earned every day… by the high standards you set… the energy and enthusiasm you bring… your commitment to self-improvement… your advancement of others… and your humility about yourself.

I’m sure we all have our own stories we could tell about leaders who’ve inspired trust among their followers.

I think of Sam Walton – the founder of Wal-Mart – from 25 years ago this year, when he promised his team that if Wal-Mart’s pre-tax profits reached 8 percent, he’d do a hula down Wall Street. The team hit the target, and Sam – good to his word – put on a grass skirt, Hawaiian shirt, and lei… stood on the steps of Merrill Lynch… and wiggled his way into corporate legend. In his words, we wanted “to make our people feel part of a family in which no one is too important or puffed up to lead a cheer or be the butt of a joke.”

At Lockheed Martin, we’ve put leadership development at the core of our corporate strategy. Over the last few years, we've invested heavily in what we call "Full Spectrum Leadership" - a collective widening of the definition of what it means to be a leader at our company.

To succeed, our leaders need to stand out for business performance and for personal behavior as well. They need to show they can handle the “soft stuff” as well as they deal with the “hard stuff,” because, as anyone who manages other people can confirm, sometimes it turns out that the soft stuff is the hard stuff!

In our view, there are five key characteristics of full spectrum leaders.

Our CEO, Bob Stevens, has described those characteristics like this:

• First, we want people who can see beyond what is today to shape the future. We want leaders who take the initiative ... embrace new challenges ... go after new markets … create new products … and leverage traditional strengths in bold new ways.

• Second, our leaders must be able to build enduring, inclusive relationships - within our company … with our customers, teammates and communities ... and with an expanding array of constituencies.

• The third imperative of full spectrum leadership is energizing the team. We want leaders who seize the initiative and foster environments where people can excel - where diversity is valued … where lifelong learning is encouraged … and achievements are rewarded. As Bob says, the point of leadership isn't to create more followers, it's to create more leaders. And the more we can do to support our employees, the more the entire enterprise will flourish.

• Fourth, great leaders deliver results. They turn strategy into reality. They keep their focus on the goal, and don't quit when the going gets tough.

• Finally, the fifth imperative of leadership is foundational to all the others - and that's to model personal excellence, integrity, and accountability. The tone set from the top will shape the organizational culture as a whole. That’s good when it’s good… but, as Enron taught us, when it’s bad, it’s really bad. And as Professor Briloff knows better than anyone, if a company’s ethics are just an illusion, then the company’s success is too.

Reflecting back on trust… it must flow in all directions. Leaders must trust their teams, and vice versa. Leaders have an obligation to help each member of their team understand where their contributions fit in the larger mission… and trust them not just to do the thing right, but also to do the right thing. Lockheed Martin’s core values, simple and aligned with this construct, are in fact: “Do the right thing….perform with excellence…and respect others.

The next key feature of leadership is compassion – and not just for tough times but all times. People want to know you care about them as people, not just as employees. It’s more than treating people as you’d like to be treated. It’s about treating people as they’d like to be treated – and for that, you need to genuinely know who they are and what matters to them in their lives.

I feel very fortunate to work at a company where compassion starts at the top.

I’ve experienced it myself. To give just one example, this spring, just after the Secretary of Defense announced his decision to end the presidential helicopter program, I got a call from our CEO.

I’m sure Bob was having a tough week too. The proverbial buck stops with him. But he took time out of his busy schedule to call – to offer his reassurance and support… to ask how we were doing in Owego… and to ask how I was doing myself. It meant a lot to me that, at a time when I was really focusing on my team and their worries and their concerns, my own boss was thinking about me.

And I think, when you build that kind of culture of compassion, it flows in all directions. I’ve seen it in our colleagues at Owego, who’ve been so supportive of one another through this very stressful time. Even I’ve gotten emails from employees that say, “I’m sorry you’re having to go through this, Marillyn. I know this has been a hard day.” And I just think gosh, their compassion is incredible. It’s really humbling. And it really reinforces my conviction that we’re going to come out of this even stronger.

And that’s the perfect segue to my last point, which is the need to inspire hope. Good leaders help people see where all this change is leading, and the role they will play going forward. They help them keep things in perspective… stay focused… stay calm… and believe that, as hard as things may seem right now, there’s a positive outlook ahead.

I once heard a story about an officer in the British Army, about whom it was said that his troops were willing to follow him anywhere – but only out of morbid curiosity.

The truth is, people aren’t likely to follow if they don’t think you know where you’re going. To inspire hope, you need more than faith. You need a vision and a plan to make it real.

In our case at Owego, instead of just cutting back and continuing with existing programs, we’ve put together a new strategy focused on new areas of growth, leveraging our core markets. We’ve shared that plan, in detail, with our colleagues in a series of informational webcasts, as well as in smaller group sessions where people can ask questions on any subject. We want our team to feel good about their mission, and to maintain their sense of purpose and pride… to know that we won’t be paralyzed by change, but rather that we’re going to capitalize on change… and to keep reinforcing the incredible talent and dedication our people bring to their work every day.

That’s why we continue to invest so much in things like talent development, diversity, and training. Our relationships with Binghamton University are an important part of that. We have 447 employees with 500 degrees from the university…some have multiple degrees. Seventeen students are enrolled in your School of Management’s Executive MBA program… and many more Lockheed Martin team members are taking advantage of your terrific curriculum. This is the third year we have awarded (15) $1,000 scholarships to the top five juniors in Electrical Engineering, Computer Engineering, and Computer Science. We sponsor senior design projects, and our engineers regularly volunteer to engage with students and facilitate visits to our facility. We’re excited about the future of our company, and want the BU community to be a part of it.

To sum up, then, when I think about the best traits of leadership in turbulent times, it comes down to applying the leadership traits that should guide us at all times:

• Ensuring stability – with open, transparent, two-way communication, so that everyone shares the same base of information, and people feel equipped to manage change, instead of being managed by it.

• Earning trust – leading by example, and embodying the values you promote… by holding yourself to the highest standards, and demonstrating your own passion for your work.

• Showing compassion – caring about the men and women on your team as people, not just as employees.

• And inspiring hope – helping people understand there is light at the end of the tunnel… and that even a storm can drive you forward, to new and better shores.

We’ve tried to do that at Lockheed Martin. In my view, it’s not a tough sell. We’re still a terrific place to work. We still have a bright future ahead of us.

You know, we recently wrapped up our annual drive this fall to provide school supplies to needy families in our community. Our team at Owego collected nearly twice as many items as had been donated the year before. It’s a testament to the generosity and spirit of the entire Owego workforce… and a tribute to their positive attitude and professionalism, even through adversity.

Because, when leaders work to ensure the kind of climate and culture that will bring out people’s best, together, you build the kind of organization that can make it through the worst.

I have the honor of leading my team, but each day, they are the ones who inspire me.

Thank you very much.