On Wednesday, April 8, 2015, Northrop Grumman Chairman, Chief Executive Officer and President Wes Bush addressed the Carey Business School at Johns Hopkins University in Baltimore, Maryland. Below are his remarks.


Innovation and Global Security: Challenges and Opportunities

I’m delighted to be here today. I have been looking forward to speaking with you – especially because I have the opportunity to address a topic I feel to be of great importance – innovation and its role in our world, its role in our global economy, our security, our human well-being, and in the continued pace and promise of human progress.

My remarks today will naturally illuminate some technical topics – but my focus is on leadership aspects of innovation.

The Carey Business School students here are receiving an outstanding education, and many of you will be taking on leadership roles over time. My hope is that you will see innovation as a leadership imperative as you go forward.

This is a big topic, so let me get right to it. I work at a global defense technology company called Northrop Grumman.

We employ about 65,000 people in every state and in 25 countries around the world. Roughly half of our employees are technologists – scientists, engineers, mathematicians.

Our national security strategy relies on two fundamental pillars – having the best trained and equipped service men and women, and ensuring technological superiority. This is the mission we support around the globe for the U.S. and its allies. And that mission demands that we constantly bring forward new capabilities.

So while about half of our employees are technologists, all of our employees have something in common – no matter what they do for our company, they are innovators. That is to say, the health and future of our company demands that they innovate – that they employ new and different ways of doing things to create value where it didn’t exist before.

When everyone in an organization is committed to innovation in whatever they do, it makes for a great place to work. And let me say that this company and this industry is a great place to work.

I’m proud of what we do; I’m proud of whom our efforts support; I’m proud of the incredible technical challenges we meet and overcome.

One of the things that makes this work so interesting is the versatility of what we create. Yes, we create systems and technologies for defense and security around the globe. But we do so much more than that.

Sometimes our industry innovates technologies that come to have tremendous value to mankind in general – for daily uses: GPS, telecommunications satellites; even the Internet to name just a few examples.

Now we all know that innovation does not create itself. It is the product of the human mind and of human vision. And that means that it thrives or withers in direct relation to the health of the ecosystem we create for it – and leaders have a key role in creating and building that ecosystem.

At the national level, there are several important features of the innovative ecosystem that have been built over many years here in the U.S.:

  • An innovative spirit that leverages what I believe continues to be the best higher education system in the world;
  • A high cultural value placed on free inquiry and expansive thinking;
  • Diversity of thoughts, ideas and perspectives driven by the diversity of teams doing the work;
  • the property rights that incentivize innovative endeavors;
  • the rule of law that makes possible those property rights; and
  • capital markets that support the transition of innovation from the theoretical to the practical; That is to say, from a great idea, to real benefit in our lives.

Our commitment to innovation – and to the ecosystem it requires to thrive – will be critical to solving the many challenges facing us today and in the future: challenges that span the gamut from global security to environmental sustainability; from the exploration of our universe to the ability to feed and support a growing world population.

In a nutshell, mankind, in general, and the human condition in particular, progresses or stagnates based on the quality and vitality of our innovation. It has always been this way.
Let me focus in at the level of an enterprise, though, to discuss the leadership framework. Each enterprise, if it is to create value over any meaningful period of time, must have innovation as a core element of its culture.

To give you some context for how we think about this at Northrop Grumman, I’ll give you some examples of the types of innovations underway at our company today.

The first is broadly referred to as unmanned systems.

The title, “Unmanned Systems” refers to platforms in space, in the air, on land and under the sea. I’ll focus on the airborne platforms – some people call them drones – though we do not prefer that description.

These systems represent a revolutionary capability. They range from the size of an insect, to the Global Hawk high-altitude, long endurance aircraft that has a wingspan larger than a 737.

They allow our nation to spare our citizens from doing a growing number of jobs that are dangerous, or demand more than a human can perform – for example, when you need an aircraft over an area for durations longer than a day. Manned aircraft are limited by the endurance of the pilot.

Or when you need to fly at very high altitudes to get above weather, or other flight traffic, or hostile action.

There are many uses for these systems. Military uses have been the driver. But disaster assistance has also been a critical mission. For example in Haiti in 2010 following the earthquake there, and in Fukushima, Japan in 2011 addressing the nuclear reactor issues after the Tsunami.

It is not just the platforms that are amazing – the powerful sensors onboard and the data processing that converts sensing to information are incredibly powerful – and these are technologies we innovate as well.

One more thing! Today’s most advanced unmanned aircraft are truly robots – no one is using a joystick to fly them – they fly themselves. The technology surrounding unmanned systems is nothing short of amazing. And their civilian uses are growing by the day.

The next technology I’d like to discuss is cybersecurity.

Every day there are fewer and fewer aspects of our lives – from global security, to the money in your savings accounts, to the water quality in your homes – or even the entertainment industry – that do not depend on networked computers.

If those networks and computers are vulnerable, then our very way of life is vulnerable.

Well, we all know that those networks and computers are vulnerable. And the threat to the global financial systems, energy systems, transportation systems and other key infrastructure – is very real.

The threat is so real and so grave that the U.S. Department of Defense has ruled that a significant cyber attack could be considered an “act of war” to be responded to with conventional military force. And President Obama has recently established a policy of using economic sanctions to respond to malicious cyber activities

Note how little daylight there is between the needs of national and economic security for cyber defense. Cybersecurity is an important area of constant innovation – one our company is proud to support through our work with the tremendous talent in government that is addressing this security issue.

As I said, the innovations this industry generates are tremendously versatile and have applications across the spectrum of human need.

To drive that point home, let me tell you about the James Webb Space Telescope – a program we are building as part of an international space consortium.

We are building this newest space telescope to extend our capability beyond Hubble. From Hubble and other observatories, we have learned about:

  • Dark matter;
  • Black holes;
  • Planet formation; and
  • The age of our universe, which we presently estimate to be about 14 billion years.

And while telescopes look back in time by observing light that was transmitted many years past, Hubble is not sensitive enough to show us the universe as it was just after the big bang 14 billion years ago.  

But the James Webb telescope will. It is a hundred times more powerful than Hubble.

Whereas Hubble orbits the earth about 350 miles above the surface, this new machine will need to be so light-sensitive that it will have to operate at a temperature near absolute zero, requiring it to be positioned at a location known as a LaGrange point about a million miles away from Earth.

To take us back to the birth of the universe, this new machine will require bigger mirrors – so big, in fact, that they will have to fold up to fit in the rocket fairing for launch. And then, once on orbit, robotically deploy into perfect position.

And they will have to be incredibly smooth – an accuracy standard of less than a billionth of an inch.  So smooth that if each mirror segment was the size of the United States, no defect in the smoothness would exceed 2 inches in height.

The instruments that work with these mirrors will have to be able to detect the energy of a photon particle that began its journey 14 billion years ago. When this system is deployed, it is expected to re-write the textbooks on our knowledge of our universe.

It will also dramatically advance space technology. 

In my three decades of working in the aerospace and defense industry, I have gotten to be a part of making a difference in providing global security for people around the world and in helping advance the frontiers of science.

I’ve worked with teams of the brightest engineers and scientists, from government, industry and academia.  

And though it was my training as an engineer that gave me entrée to these wonderful opportunities, I thoroughly enjoy the business end of our industry.

So, how does a business leader create a culture that enables and drives innovation within his or her organization?

Let me discuss two ways: Discouraging risk aversion, and Encouraging diversity. There are many others, but today I’ll focus on those two.

Let me start with risk aversion. There is often a very negative public perception when something new fails. For example, when a new prototype fails in testing. Perhaps the rocket being tested blows up on the pad; or stress fractures are discovered in the airframe of an aircraft after its first flight.

And usually that negative perception is accompanied by speculation that the system was faulty in its conception, or shoddily constructed. Certainly those accusations are occasionally warranted. But that perception is most often uninformed.

Because warranted or not, risk is inherent in innovation. In fact, one could argue that prototypes that are not pushed to failure in testing represent a testing program that is not giving the customer its money’s worth. After all, how will the engineers ever know what a system is capable of if they don’t push it to failure in testing?

So there is an inherent tension between the necessity of failure on one hand, and the uninformed negative responses they often induce, on the other. And that tension makes it easy for a culture of risk aversion to take hold in an organization founded on innovation.

But business leaders in any industry must work hard to squelch the very human trait that often drives people to avoid failure – or even the perception of failure.

That tendency needs to be squelched because failures are inherent in pushing the technology to its maximum. If you’re going to have real innovation, you’ve got to push technology.

When I look for leaders to advance in our company, I look for those who have experienced failure and learned from it – that is usually the most valuable learning one can receive.

When we’re risk averse – that sends a very dangerous message to an organization’s best innovators that the place they work is not devoted to the true research, unlimited development, and pioneering innovation that drives them and energizes them.  

Risk management is the better perspective in innovative enterprises – it recognizes the necessity of failure, plans for it, and provides the path forward to success. Too many leaders hear “risk management” and translate it to “risk aversion” to the detriment of their enterprises.

Another critical piece of the innovation puzzle is diversity.

One of our company’s primary goals is to ensure and expand diversity and inclusion within our company at all levels of the organization. 

How important is this to us? It is so important that improvement in our diversity and inclusion is a key metric in our overall compensation strategy for all executives in our company.

We know that diverse thinking and an inclusive environment generate better ideas and foster stronger team commitment, collaboration and engagement – all of which are vital components of innovation. My own experience supports the academic research on diversity – I see diverse teams out perform non-diverse teams so routinely that I include a review of team leadership diversity when we are launching a new effort or assessing a problem in the business.

But diversity alone is not sufficient – it must be coupled with an inclusive environment that enables the power of diversity. In addition, an inclusive workplace makes our company more attractive to a broad array of valuable talent in a very competitive business environment.

Companies like Northrop Grumman must compete keenly for every talented person seeking a place to spend their professional lives.

Just as each of you will carefully consider the culture of any enterprise you may consider joining, we want those considering employment at Northrop Grumman to see us as the place they want to invest their futures.

Leaders play a key role in promoting diversity and inclusion, and I believe that leaders who genuinely value innovation also genuinely value diversity and inclusion.

To sum up, I think it is clear that innovation is the underpinning of the U.S. economy and for many economies around the globe.

It works best when there is a “perfect storm” of innovation, great education, property rights, the rule of law and strong capital markets.

Leaders have a critical role in fostering innovation, and it often comes down to these personal values that drive their decisions. And nurturing innovation, I believe, should be one of those values.

I encourage each of you to give this some thought as you develop your own leadership framework.

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