If you wanted to create a picture of today's market, which elements would you include?
I should take a snapshot of Lockheed Martin and General Dynamics, today, then compare it to what the two companies look like in two years.
In just a couple of weeks, two of the largest defense companies in the world will have new CEOs, and at a time when the market is going through profound changes, where budget constraints are raising questions about every major weapons platform, and nearly every other system.
That’s going to be a leadership challenge for every company in the defense and civilian market.
The hard thing will be differentiating between the kinds of changes at these companies: whether the changes are due to new leadership, or due to reactions to market changes. Frankly, it might not make a difference.
Both of the new CEOs are women – Marillyn Hewson at Lockheed, and Phebe Novakovic at GD – and that adds another wrinkle, but I’m not sure how much of one.
The fact that, now, most of the largest defense companies in the world – Lockheed, Northrop Grumman, GD, Raytheon, and BAE Systems – have women either at the very top, or close to the very top, probably says as much about changes in society overall as it does the defense industry.
While having more women in leadership positions is something we should all celebrate, I don't think gender is going to be the driving factor in the decisions that these companies in the market will have to make over the next few years.
Getting back to my snapshot of Lockheed and GD, or any other company for that matter, I would include:
- Number of employees
- Lines of business
- Turnover rate overall
- Turnover of senior leadership
- Training budget
- R&D spending
- Win rate
That’s probably a good start. What else should I include?
Most of the elements of the snapshot are self-explanatory, but I included training and research and development because it would be interesting to see how spending in those areas, which might not have an immediate return, affect other areas, such as revenue and margins.
I included lines of business because I think that there is a good chance that many of the companies in the market, from the large defense contractors to the small and midsize IT contractors, might not be doing the all of the same kinds of work that they are doing today. We’ve seen a lot of portfolio-shaping in the last couple of years, and I expect that to continue.
I’m sure I’m missing things, so please let me know.
In the meantime, try to take a step back and look at the market; it won’t be the same one in two years.