What’s in a name?
Ever since the end of the Industrial Revolution and into the first part of the 20th Century, companies have been buying, building and partnering with other companies. Economists might even suggest that that period of “First Wave Mergers,” back in the early 1900s, saw monopolies take over what were then the original critical infrastructure sectors of this country (railroads, electricity, shipping, etc.).
In the tech space — especially where cyber security is concerned — you can almost time your watch by who’s buying who, and how, like in a second marriage, the new “Mom” and the new “Dad” start planning where and how they want to manage their new household.
But what of the “kids?” Namely, what about the technology, and the team that built it? Then there’s the whole extended family to consider as well, namely the clients, the shareholders, and the thought-leaders who developed all that comprised the organization and its customer/user base.
I have spoken with numerous CSOs who have found themselves on the spectrum of (at one end), scratching their heads and asking, “Why should I buy/implement this product from Company Y, when last week it was owned/developed by Company X?” and on the other end, decision-makers who look at mergers and acquisitions as a model for how to infuse fresh, new leadership, technology and market awareness to what might otherwise be an aging tool set or product and program in the twilight of its lifecycle. And in some cases, it’s a little of either ends, or none of the above, that ultimately survive.
Case in point, with the recent activities surrounding the Lockheed Martin hand-off of its “IS&GS” business units over to fellow defense powerhouse Leidos. The media, the market, even the thought leaders within both entities have been interested in how a multi-billion-dollar defense contractor and an equally impressive, although not as well-known, professional services organization with an eye on defense, banking and health care, can marry up their talent pool and advance the interest of defending global infrastructures.
For those who may not be familiar with the name “Leidos,” the 47-year-old Reston, Va.-based defense company is a spin-off of Science Applications International Corporation (SAIC), which provides scientific, engineering, systems integration, and technical services to critical infrastructure sectors across the globe.
“We are 33,000 employees strong, in 30 countries, with ~$10 billion in revenue, and we are equipped to address some of the most significant challenges of our time,” said Leidos CEO Roger Krone in a recent announcement.
Leidos and Lockheed Martin’s Information Systems & Global Solutions merger combined thought leaders whose respective reputations have stood for decades, so the combination made natural sense for shareholders and executives, given the conditions of how this “Reverse Morris Trust” kept all development teams, code, thought leadership and even cross-reference accessibility between the two organizations in-tact.
In a series of signed contracts, exchange of shares and filings with various commissions, the two mega-companies gave birth to a $10.8 billion Fortune 500-backed business driver that now provides expanded cyber capabilities to address a need that is out-pacing the supply of solutions.
When hundreds of thousands of dollars (if not millions), have been exchanged in efforts to invest in top-notch security tools, tradecraft and talent, one of the concerns many business and technology leaders often discuss when these marriages occur is whether the acquiring organization will be able to sustain the development efforts of its predecessor.
In many cases, the acquiring company takes on the tech and jettisons the structure behind it in trade for its own methodologies, corporate culture and often, additional baggage. Figuratively speaking, such an action almost always means the early end-of-life for the former technology, as the new Branding and Messaging In-laws usually step in and start changing the drapes, the wallpaper, the furniture (and pretty much how the former family operated), to make it fit into the new collective.
Sometimes, however, the power of the two forces becomes even more effective (even if the new name may not be as recognizable). For example, in the case of the Lockheed-to-Leidos transition, Leidos, aside from now boasting a $10.8 billion household of assets, the purple-clad moniker includes a workforce complement that is comprised of 20 percent military veterans, more than 1,000 Ph.Ds., almost 7,000 employees with Master’s degrees, and a staff where four out of 10 employees hold classified security clearances. This is definitely not your mom's minivan-load for Saturday morning soccer practice.
“We support 80 percent of U.S. cabinet-level civil agencies and major elements of the public sector in key international regions,” writes new Leidos Civil Group President Angie Heise. “We perform critical mission work related to energy and the environment, air traffic management, science and exploration, critical infrastructure, information technology, and cybersecurity.”
I remember almost 20 years ago, when certain analyst groups were urging mid-size companies to extend their respective loci of influence to partnering with or acquiring smaller security firms to establish a more centralized offering of security tools and services. At the time, I watched from both sides of the name badge of one lesser-known Canadian-based company as it emerged as the front-runner for gobbling up its neighbors to create a matrix of often disparate, complex and sometimes non-interoperable product/service-based offerings that were lauded as front-runners in the market of comprehensive security offerings.
Today, while still an empire in its own right, that formerly north-of-the-border company (Symantec), is experiencing some of that family baggage that comes from managing all of those consumer-level yellow boxes vs supporting a global market that changes its mind about “Top Technology” faster than a Barracuda can snatch a fish (or another airport kiosk marquee).
Here are four factors CSOs might consider:
- People
Bruce Schneier is often credited with raising the banner of “People, Process & Technology” being at the center of any effective security strategy. Ever since the mid-1990s, when the former Computer Security Institute (CSI) and the FBI filed their annual security risk reports, experts have agreed that the problem with securing anything always comes back to the people. Likewise, in last year’s IBM-sponsored Cyber Security Intelligence Index, the magic number for problems involving people and cyber breaches came in at just north of 90 percent.
Given that people are always at the bedrock of the problem, it would probably be safe to infer that we are also the solution. The first logical review of whether an investment into a storyline that has merged with another is how the receiving party is going to treat the people for whom the originating IP is accredited. In the case of the Lockheed-to-Leidos marriage, given the already referenced transfer of an entire sector of strategic resources (and the funding to support it).
As for the marriage between Lockheed and Leidos—although the honeymoon has just begun, every indication is that the kids are going to do just fine, and that translates into potentially stronger capabilities than were those kids to have remained under the erstwhile care and feeding of one formerly overwhelmed parent. - Processes
Like in a good family pedigree, process is driven by breeding out bad blood to yield the best possible results. With a multi-generation of parenting that was fostered by Orville Wright, the Lockheed-Martin-Marietta-SAIC-Leidos ancestry has more than a century of proven success in not only innovating processes across virtually every spectrum of the global infrastructure, it actually invented many of them.
One of the first things that usually get modified in some way is the methodology behind the acquired organization to fit into the new marriage. In the L-to-L deal, two defense contractors with deep-seated knowledge about technology, critical infrastructure and security are blending their strengths into a single entity. And while new processes will likely be created that reflect market demands and new opportunities, the processes that were first defined by necessity in the halls of aircraft innovators and rocket scientists have been preserved for posterity through Leidos and its “collaborative brand of science, with knowledge shared across disciplines.” - Products
At the end of any deal is the bottom line, and with it, the price CSOs pay for a result on their investment. When a company buys-builds-partners with another company there’s always a risk that the core value of the legacy tech will somehow not be compatible within the adopted development cycle, or that the new marriage will ultimately absorb and eventually abandon the former portfolio.
With the Leidos transformation the marriage between some of the most advance resources, knowledge, skillsets and cyber security platforms that have been developed over a decade of practice offers military-grade cyber solutions through the new Leidos family, and that translates into better ways to help CSOs defend their respective infrastructures, period. - Culture
Like in a good working relationship between what once were total strangers, business analysts would suggest that transparency is the key to maintaining strong communications between the marrying parties.
A culture in which cooperative and open communication between the entities, reports Carolyn Betts in Bizjournals:
“Compelling leaders, who provide a clear vision for the future of the company, are the top reasons high performers choose to work for them. While you work to keep your senior leadership team in place, make sure to convey a strong vision for the next iteration of your business and you will dramatically improve the likelihood that employees stay on.”
And transparency, according to Heise, is key to making the marriage a long-term success. “I’m a big proponent of transparency and constant communication, she wrote to her new Lockheed-cum-Leidos “Civil Division.” “I understand that change is never easy; however, my executive team and I are going to work on making this transition as smooth as possible.”
In an era when businesses are striving to “keep their love alive,” so to speak, the betrothal between defense contractors Lockheed Martin and Leidos, and their joint national security efforts, continue their decades-long pedigree in supporting every branch of the military – from peace-keeping and humanitarian missions to major conflicts.
What's in a name? How about hundreds of years of top-notch research into refining how cyber security efforts improve U.S. and our international partners’ efforts to combat terrorism and cybercrime, supported with billions of dollars in R&D directly focused on cybersecurity and the problems that come with managing complex infrastructures.
CSOs might find purple is the new black!