As Howard Lance celebrates his eighth anniversary as the chairman, president and CEO of Harris Corporation, his simple business strategy is: “Where are we going to play?” In other words, “Where can we grow our market share?” and, “How are we going to win?” It is a formula that continues to produce results that are attracting worldwide attention, like Harris’ partnership with the Orlando Magic at Amway Arena – where their technology links 1,100 individual video screens at 10 times the resolution of other venues. Since Lance took the helm, Harris has grown dramatically, tripling its financial strength while bringing a nearly fivefold increase in earnings for Harris’ shareholders. Now, the question before him is, “How does Harris continue this record of success and stay on the cutting edge of emerging technology?” All indicators are this is one history that will repeat itself.
SCB: In a world where technology changes so fast how does a company like Harris stay ahead of the curve?
HL: That is the challenge. The arena of government contracting moves at a particular pace, but the commercial business sector operates at a completely different cadence. What is more, every time technology changes it gives the opportunity for a new upstart company, which is more aware and more nimble to capture the market. Think about it, the companies that built and operated the railroads didn’t recognize or respond to the rise of air transportation. One of my primary roles as a leader is to challenge the other leaders within the company to be constantly thinking, “What’s Next?”
We have found that acquisitions are a great and dynamic way to broaden the perspective and the knowledge base of our company. Much like hiring the best and brightest young graduates, it makes us multi-dimensional. In fact, one of the awards that is most meaningful to me is that, for a number of years, Harris has been listed as one of the top companies for leaders.
SCB: Finding and developing leadership is a challenge for any company. What is the process you go through in hiring or selecting members of your leadership team?
HL: Well, it is easier said than done and no one bats 1.000. The first is the objective side; you look at their skills, experience, and track record. But then you look for the more intangible attributes and attitudes. We want people who aren’t complacent, who are constantly pushing themselves and are inwardly motivated. I also look for people who are willing to take risks, to make decisions. Some people are so afraid to fail, they simply can’t decide. You learn to distinguish between “this is what I have done” verses “this is who I am.”
The majority of our leaders have been developed from within our company. But we also see the need to seed from without. Without that diversity, you tend to think the whole world is what you see. Like someone who grows up and never travels outside their community, for them that is the whole world. That can happen in corporate cultures as well. We want people who aren’t myopic, so we aren’t limited by our experience, thinking that is the sum of reality. We look for people who know what is in the realm of the possible, who can lead from the front and set the course others can follow.
SCB: Recently, Harris received the Wall Street Journal 2010 Innovation Award for the CONNECT Technology for Health Care IT. What exactly is that?
HL: We are moving our company from being a ‘communications’ company to being an ‘information company’. We realize the challenge and the future is in moving large amounts of information from one location to another, quickly and securely. We were first faced with the problems in the medical field through our involvement with the armed forces. They realized that when a soldier is wounded and treated in Iraq, then flown to Germany for more sophisticated care and then back to the United States, their medical tests and treatment history was not always following them. Thus at each location, duplicate tests were being done, which is both costly and invites error.
Similarly in the private health care industry, the company that makes the CAT scan machine or the MRI machine utilizes their own proprietary software to run and store this data. Often, that software doesn’t interface with other software systems storing and transferring that information. Our CONNECT technology is helping to resolve this problem, so that all the diagnostic information is readily available, where ever the patient is. What is more, we are teaming with other companies, like Siemens that is a leader in medical imaging technology, to improve the information transfer.
SCB: Is this sort of partnering a new approach for Harris?
HL: Engineering firms like to think we can do it all. More and more however, we realize partnerships with these kinds of companies are an important strategic move; each company building on the other’s strengths. It works much like an acquisition which allows us to position ourselves to move into a more dominant position by linking our technology with their products and existing markets; it is a faster way from point A to B.
One of the primary goals in health care is to save money, while achieving better outcomes. To realize that goal, information is the key. All information should be secure yet accessible; right now, all the various systems stand alone. Additionally, this technology allows for remote monitoring. For instance, we are involved with the University of Pittsburgh Medical Center, which is one of the best in the nation and leading the world in integrated medical care in various locations. We’re helping to establish a clinic in India. Imagine a remote location, like a clinic in India, getting access to the best medical care at a leading university.
SCB: You were a featured speaker at the Goldman Sachs Global Industrial 2010 Conference in New York. What does the opportunity to address a gathering like this do for your company?
HL: Six to eight times a year we participate in venues of this type. The presentations are webcasted, so you have the opportunity to speak to the global investment community. But of equal importance, these conferences bring together investors and analysts in an environment where you can meet and discuss our company in small groups or one on one.
SCB: There you mentioned a number of enterprises Harris is involved in, for instance a multi-billion dollar contract with the FAA [Federal Aviation Authority]. What exactly is Harris doing and what are the other commercial and international spin-offs?
HL: This is a 15-year contract, which started in 2002. There are three steps in this project. The first was to design and develop a highly reliable networking system that links over 4,000 FAA sights across the country. By reliable we mean the downtime is no more than a few seconds a year, thus it has multiple redundancies built into the system. The second step is deploying or installing this new technology. Finally, we maintain or operate it in an ongoing basis.
Right here in Palm Bay we have a NOC (Network Operation Center) that monitors the entire system 24-7, with a back-up location in Virginia. Needless to say, by setting the standard for these kinds of highly sophisticated and secure networks, the opportunities to deploy and monitor in other countries is obvious. What is most exciting about this system is it will save the government and therefore the taxpayers nearly $500 million, which is a sizable return on investment.
SCB: Another arena was using radio/communication technology developed for our military for use by domestic law enforcement and first responders.
HL: This is another technology that has a huge market domestically and internationally. In the U.S. alone there are over 1.1 million tactical radios in use. One growth strategy we have employed is finding adjacent markets, new markets where we can utilize similar technology in a different application. Standardizing – which is both modernizing a system, for instance from analog to digital and allowing various services, e.g. police, fire and rescue, to communicate together securely – is paramount.
Many of the people involved in the first response field were familiar with Harris reliability because of their experience in the military using our equipment; therefore moving into this field has been a natural bridge for us. Plus, when you become the standard for this kind of technology, everywhere communities and nations are updating their communications networks, a door of opportunity opens for us.
SCB: Like our community has braced itself for hurricanes, we are bracing ourselves for the layoffs at the Space Center. What do you think the county and the state should do to attract large companies like Harris Corporation and smaller companies that have the potential to be like Harris?
HL: I believe this has to begin at the State level. Enterprise Florida, like the EDC here on the Space Coast, is making some significant efforts, but Florida has to market itself as a ‘place for business,’ not just a ‘place for pleasure or leisure.’ The tourist industry, like the agricultural industry in the state, is vital and important, but Florida has fallen behind other states like Alabama, Mississippi and Georgia in attracting new business.
Former Governor Jeb Bush understood this and worked to create the I-4 Corridor as a business artery. He was very effective in Broward and Dade Counties as well. Unfortunately, the momentum for this type of action has waned in recent years. However, Governor Scott’s emphasis on job creation and his background as a CEO could turn things around. He has already reached out to me for input and ideas.
SCB: What are the factors a large company looks at when considering relocating or building a new facility?
HL: There are a number of considerations and there is a lot of competition. First, are the resources there, in terms of skilled workforce and infrastructure. Here on the Space Coast that is a very positive ‘yes’. Secondly, is it a place people want to live or relocate to? Well, that is a given; we have the ocean, the river and a wonderful climate year-round, plus a very good school system, right up through the university level. Third, are the economics right. Fortunately, Florida doesn’t have a state income tax, which is attractive; however, people seem hesitant to give tax breaks for businesses to locate to the area or to spend money to attract businesses that may not yield a return for five years. Also, with a large retiree population, the hunger for new business development and the investment needed to attract that kind of business isn’t always supported.
SCB: When I interview women executives they like to talk about their family, but with men it is all business. How do you balance the demands of your personal life with being CEO?
HL: It isn’t easy and it is something that I talk to our young executives about – the work/life balance. Fortunately, my wife was a business executive when we met and she continued to pursue her career until we moved overseas. Therefore, she understands the demands and is very supportive. Most of our major clients are not in this area, so I travel up to 140 days a year. I am careful to guard the time I have with my family and whenever possible will take a three-day weekend to be with them. My daughter is still a student at Holy Trinity Academy, so our world sort of rotates around her schedule.
Also, my wife and I love our community and enjoy being involved together in its betterment. I think that is something that has become part of the culture here at Harris. I am so proud of our people, even with the downturn in the economy, the company’s participation in this year’s United Way campaign was up 10 percent over last year. That’s amazing.
