Do you have a diversification plan?

Lockheed Martin and IBM Corp. look further afield to leverage their technologies. Their strategies provide a lesson for the rest of the market, for those looking for new ways to leverage what they've got.

One of the hot topics in today’s market is diversification. By that, I don’t mean that companies are adding new lines of business such as IT and home appliances.

Those are conglomerates, and successful conglomerates are a very rare breed.

Rather, when the executives I talk to speak about diversification, it is more in the context of moving into adjacent markets -- taking a service that you provide to one set of customers, and then taking it to another set of customers. The idea is that it helps spread your development costs across multiple customers, and it should even out the ups and downs of the markets.

Two stories crossed my desk recently that I think are good examples of this strategy in action.

In one, IBM Corp. is taking its data analytics capabilities deeper into the health care world. Working with UCLA and Excel Medical Electronics, IBM is looking at how big data can aid in the treatment of traumatic brain injuries.

According to the ZDNet story, the idea is to stream vital signs, intracranial pressure, respiration and other data to better predict trouble, rather than simply relying on an alarm going off when pressure reaches a certain level.

Health care is probably the hottest market for big data, so it is probably logical to make a push there, but why I point this one out is because it is another example of how IBM is taking a certain capability, and then pushing across multiple markets. In the case of big data, they are taking it to health care, cybersecurity, the Smart Cities program and, of course, multiple government applications.

When you can do that successfully, the cost of developing big data applications and capabilities is spread across a much broader base.

Another part of IBM’s strategy that I like is that it relies on partnerships to get deeper into this market. While IBM may be the data analytics expert, it recognizes that it isn’t the brain trauma and medical device expert.

The second example has a little bit more "out of the box" thinking behind it.

Lockheed Martin Corp. has decided to start manufacturing liquefied natural gas tanks at a facility that it built fuel tanks for, under the NASA Space Shuttle program.

The company sees an opportunity to leverage the technology it developed for the space program to help meet the growing demand for liquefied natural gas. The LNG tanks will be used for storage and transportation.

Luckily for Lockheed, the manufacturing facility is in Louisiana, where the natural gas boom is, well, booming.

It allows Lockheed to take its space shuttle technology and apply it to a new market, and new set of customers. It’s a nice bit of diversification.

But there is something more going on with this Lockheed announcement.

What isn’t said in the announcement is that it also allows the company to keep open a highly technical manufacturing facility, and continue to employ some very skilled workers.

Because the space shuttle program is shuttered, and because other manned space flights are years away, the facility would likely have been shuttered and employees laid off if Lockheed Martin didn’t find some way to keep the plant running and workers working, all at a profit.

The skills and knowhow would have been lost.

Imagine the cost to Lockheed and the government, when manned space flights gear up again and the company had to restart these capabilities from a closed or moth-balled facility.

With this strategy, the company has found a way to reap revenue today, while keeping the skills it needs for the long haul, when a more robust space program returns.

The lesson from both IBM and Lockheed is to understand the value of your capabilities, and to recognize how those capabilities can be applied across multiple markets.

NEXT STORY: DCAA gets its own bad review

X
This website uses cookies to enhance user experience and to analyze performance and traffic on our website. We also share information about your use of our site with our social media, advertising and analytics partners. Learn More / Do Not Sell My Personal Information
Accept Cookies
X
Cookie Preferences Cookie List

Do Not Sell My Personal Information

When you visit our website, we store cookies on your browser to collect information. The information collected might relate to you, your preferences or your device, and is mostly used to make the site work as you expect it to and to provide a more personalized web experience. However, you can choose not to allow certain types of cookies, which may impact your experience of the site and the services we are able to offer. Click on the different category headings to find out more and change our default settings according to your preference. You cannot opt-out of our First Party Strictly Necessary Cookies as they are deployed in order to ensure the proper functioning of our website (such as prompting the cookie banner and remembering your settings, to log into your account, to redirect you when you log out, etc.). For more information about the First and Third Party Cookies used please follow this link.

Allow All Cookies

Manage Consent Preferences

Strictly Necessary Cookies - Always Active

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data, Targeting & Social Media Cookies

Under the California Consumer Privacy Act, you have the right to opt-out of the sale of your personal information to third parties. These cookies collect information for analytics and to personalize your experience with targeted ads. You may exercise your right to opt out of the sale of personal information by using this toggle switch. If you opt out we will not be able to offer you personalised ads and will not hand over your personal information to any third parties. Additionally, you may contact our legal department for further clarification about your rights as a California consumer by using this Exercise My Rights link

If you have enabled privacy controls on your browser (such as a plugin), we have to take that as a valid request to opt-out. Therefore we would not be able to track your activity through the web. This may affect our ability to personalize ads according to your preferences.

Targeting cookies may be set through our site by our advertising partners. They may be used by those companies to build a profile of your interests and show you relevant adverts on other sites. They do not store directly personal information, but are based on uniquely identifying your browser and internet device. If you do not allow these cookies, you will experience less targeted advertising.

Social media cookies are set by a range of social media services that we have added to the site to enable you to share our content with your friends and networks. They are capable of tracking your browser across other sites and building up a profile of your interests. This may impact the content and messages you see on other websites you visit. If you do not allow these cookies you may not be able to use or see these sharing tools.

If you want to opt out of all of our lead reports and lists, please submit a privacy request at our Do Not Sell page.

Save Settings
Cookie Preferences Cookie List

Cookie List

A cookie is a small piece of data (text file) that a website – when visited by a user – asks your browser to store on your device in order to remember information about you, such as your language preference or login information. Those cookies are set by us and called first-party cookies. We also use third-party cookies – which are cookies from a domain different than the domain of the website you are visiting – for our advertising and marketing efforts. More specifically, we use cookies and other tracking technologies for the following purposes:

Strictly Necessary Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Functional Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Performance Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Social Media Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Targeting Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.