Lockheed speaker: Business innovation is key to success

BY ROBERT FRANCIS
April 19, 2010

The need for innovation – and innovators – was a key topic for Bruce L. Tanner, executive vice president and chief financial officer at Lockheed Martin Corp. on April 13.

He started off his topic by receiving cheers and applause from the crowd at the 2010 Business Week Executive Dinner at the University of Texas at Arlington. The cheers and applause were received when Tanner showed a video of Joint Strike Fighter as it performed a picture perfect vertical landing at Patuxent River Naval Air Station in Maryland.

“This is a supersonic, stealthy fighter jet which can take off vertically, gun its engine, and hit almost 1,300 miles per hour,” he said. “And it can ride more than 41,000 pounds of thrust to vertically land on a dime in confined areas at sea or on land.”

The video, which has been a hit on YouTube, shows the most visible demonstration of innovation, Tanner said. The Joint Strike Fighter, or F-35, will have its production line at Fort Worth’s Lockheed plant.

But he also noted that to build a complicated piece of technology like the Joint Strike Fighter or F-35, takes more than just innovation by engineers.

“It takes innovation across the entire spectrum,” he said.

Tanner noted that while half of Lockheed’s 140,000 employees are engineers, “70,000 of us are not.”

Lockheed has to foster an environment to help support innovations made by engineers and scientists, he said.

Tanner said one aspect of the company’s business model it rethought when building the F-35 was determining the number of models to create for the Army, Navy, Air Force and Marines.

“We’ve created an adaptable design, with three different variants, depending on the need – conventional takeoff and landing, carrier variant and short takeoff and vertical landing aircraft,” he said.

He also said Lockheed has changed the supply chain model so that all suppliers are connected by a computer network that allows one team to change a design and collaborate with another team on the change. Before, Tanner said the teams would “leave their breakthrough on the shelf,” because they couldn’t impact what another team was doing.

Lockheed even went to Disneyland to get some ideas about building the F-35. Rather than have assemblers crawl under the aircraft to install parts, the aircraft now moves into position for the assemblers. The same technology is used to allow Disney to quickly position design sets and backdrops at their theme parks, he said.

Tanner said Lockheed, like other companies with products based on technology, are working to deal with their current employees hitting retirement age.

“In the aerospace sector, the average age of our workforce is right around 50,” he said. “And with baby boomers reaching retirement age, we’re facing what you might call a ‘silver tsunami.’

In 2009, Lockheed hired more than 15,000 employees and will hire 12,500 this year. Yet there are fewer engineers coming from U.S. schools.

“In 2006, for example, U.S. colleges and universities awarded roughly 68,000 engineering degrees – almost 10,000 fewer than in 1985, even as the number of college diplomas overall rose by more than 400,000,” he said.

Lockheed has reached out to schools to develop and encourage interest in engineering and math. Last year, employees at Lockheed Martin Aeronautics in Fort Worth and at the Grand Prairie Missiles and Fire Control location with more than 10,000 students in North Texas with interactive projects ranging from paper airplane design to using F-35 cockpit simulators.

The company has also changed how current employees work and communicate, embracing social media as a mean s for collaboration, communication and knowledge-sharing, he said.

While Lockheed has about 15,000 employees in Tarrant County, the Bethesda, Md.-based aerospace and defense giant recently became the title sponsor of the annual WBTshowcase in Arlington, a conference that focuses on technology and innovation. Tanner also has Arlington ties, as a graduate of UT-Arlington, where he received his MBA in 1990.

“Back then, Google was a number, Twitter was something canaries did and ‘e’ was just a letter of the alphabet,” he said. “The idea that UT-Arlington would have a world-class Executive MBA program in China would have seemed absurd.”

rfrancis@bizpress.net

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