Heard of sequestration lately? Think it’s highly political in Congress? Well, these headlines mean a lot more for Lockheed Martin than a water cooler topic of discussion.
As the military shifts to a more mobile format, companies that support and supply the military have to shift as well.
Lockheed Martin is the largest provider of aeronautics, space and military hardware, information systems, support services, as well as training and research to the U.S. Government and its allies.
By 2021, the base defense budget will have declined by 21 percent, as a result of the sequestration. This combined with the modern focus meant pivotal change for Lockheed.
This shift came at a time when Lockheed’s leadership and culture were entrenched in the historical way of operating.
They were also experiencing Talent Armageddon scenario; as a great deal of their long term employees, the experts, were looking to retire soon. Lockheed Martin also had a very high turnover, 20% and over, with many of their engineers and critical staff within the first three years of their careers.
This combination was so problematic that in 2008, Lockheed said they would need to hire 400,000 engineers – to a company of 120,000 – over the next 5 years, a shock and awe situation.
The differences in age, experience, backgrounds and values also began to affect Lockheed as a whole. With goals, strategies and belief systems shifting and colliding, everyone had to begin rethink how they were performing.
There is a way things have always been done, an unspoken code of conduct, that was thwarting growth and change.
As a result, the newer employees saw more appeal in more creative, cutting edge places. They were being more nimble- focusing on surveillance, drones and creative technologies- which Lockheed had been unable to fully capitalize on.
The Work Effects Solution
Our work began by focusing on inclusiveness and flexibility. Incoming employees were of focus as well, striving to align the way they thought about their jobs, not just the way they performed the work.
To measure this, we employed the Diversity Maturity Model™ (DMM*); an engineered, metric driven approach that quantified business targets, positions & processes, and employee outcomes into a single score. This scale then impacted 25% of bonus money for every director and above throughout the organization.
The DMM* impacted everything from the recruiting process, to the on boarding programs, to the performance management systems, to the way managers managed to the leadership programs.
From there, we dove into how to provide oversight and accountability for those managers and front line supervisors to actually implement change. We encouraged them to create very specific actions their teams could own and share across the whole organization. This enabled new ideas to be intertwined with the proven practices of the experts- and ensured that best practices would be leveraged on a much broader scale.
Annually, from 2005-2009, Lockheed Martin found that the overall DMM™ rating increased 73%.
Areas like organizational climate and culture increased 67%, and customer experience management increased an impressive 133%. They dramatically reduced their turnover; going from 20% in the first 2 years to less than 7%.
Lockheed has also been able to elevate their stock price. Even with the continuous cutting of budgets, they have secured quite a number of new contracts.
These consist of four technologies, four products, and four services that 5-7 years ago, Lockheed hadn’t been offering. The strategies, goals and cultural beliefs had now been aligned, producing the outcomes they envisioned four years prior.