Raytheon makes customer-focused move

I don’t usually pay too much attention to when companies move locations and open new offices, but Raytheon’s recent move to consolidate the headquarters of its new Intelligence, Information and Services business in Northern Virginia is worth commenting on.

It’s emblematic of what executives are telling me is a top priority – staying close to customers.

Raytheon’s IIS business is a recent creation. In March the company realigned and combined its Intelligence and Information Systems business with its Technical Services business.

Lynn Dugle, who was running the Intelligence and Information Systems out of Garland, Texas, was named the president of the new business, which has about $5.5 billion in revenue. The Technical Services business was based in Dulles, Va.

Some rank-and-file Raytheon people told me as recently as a week ago that they were wondering which location would win out as the headquarters, and this week, the company picked Dulles.

It makes sense, because look at Raytheon’s competitors: Lockheed, Northrop Grumman, General Dynamics, Boeing and others. All either have their corporate headquarters in the Washington D.C. area, or their major IT and information systems business is located here.

As I’m told repeatedly, this business is about relationships and if your leadership isn’t located near the leadership of your biggest customers, then you have to be at some sort of a disadvantage.

When the market was flush with growth, it probably worked to have your leadership fly in several times a month, but as the competition intensifies in the market, you can’t take that risk.

So I’d lay odds that Raytheon picked Dulles as much for competitive reasons as for the usual tax and other enticements localities to attract businesses.