Lockheed Martin is huge – even bigger than I realized. So big that it receives $1 of every $14 spent by the Pentagon. What’s interesting is that it’s also a story on strategic agility, the ability to shift your business as the market demands. Lockheed had always made weapons for the government, so they had those relationships, but in the late 90s/early 2000s the government was entering the digital age, and needed someone reliable to build government-scale information systems.
Gurenica magazine profiles how they got to where they are today:
How in the world did Lockheed Martin become more than just a military contractor? Its first significant foray outside the world of weaponry came in the early 1990s when plain old Lockheed (not yet merged with Martin Marietta) bought Datacom Inc., a company specializing in providing services for state and city governments, and turned it into the foundation for a new business unit called Lockheed Information Management Services (IMS). In turn, IMS managed to win contracts in 44 states and several foreign countries for tasks ranging from collecting parking fines and tolls to tracking down “deadbeat dads” and running “welfare to work” job-training programs. The result was a number of high profile failures, but hey, you can’t do everything right, can you?
Under pressure from Wall Street to concentrate on its core business—implements of destruction—Lockheed Martin sold IMS in 2001. By then, however, it had developed a taste for non-weapons work, especially when it came to data collection and processing. So it turned to the federal government where it promptly racked up deals with the IRS, the Census Bureau, and the U.S. Postal Service, among other agencies.