If you ask people what Melbourne, Florida-based Harris Corp. does, there’s a good chance a lot of them would point to telecommunications — perhaps hand-held radios more specifically. That’s not a wrong answer. But they might still get a bit of a talking to from the president of Harris IT Services in Herndon.
I say this from experience. Wayne Lucernoni, who leads the 3,000-employee business unit, asked me that very question, and I gave that very answer — following it up with acknowledgement that the company does quite a bit of information technology as well. Again — not a wrong answer. But not good enough for Lucernoni.
So you asked me what Harris does. Do you sometimes feel the perception of the company within industry falls short of reality? A lot in industry know us for antennas, ground systems, radios. They count us as not quite a telco, but a systems integrator version of a telco. What they don’t historically know us for is the core enterprise IT. It’s true that we’ve grown into that, in the Air Force in particular, then with the acquisition of Multimax. We’re well known in our customer spaces, but when people think of Harris the brand, it’s not us [the IT business] they know.
Linda Hudson once told me her goal as CEO of of BAE Systems was for people to no longer asked her at cocktail parties what the company did. Do you relate to that? We’re not a global IT brand yet. But we’re on a campaign to change that. I don’t work in Treasury today, but in three years, I want to be the most important provider to Treasury. That means I need to start campaigning now.
So where does the company play now? The two areas where we have a lot of traction and are underway in campaigns are health care and intelligence. In the Air Force, we harvested that but while chasing other things.
What’s the strategy for expansion? We’re getting much better at saying no. Some choose to bid at everything, figuring you have to win your fair share. I don’t believe the customer appreciates that, nor do I think it’s true. You can’t do more for less unless you’re in there for the long haul. We’re not a speed-dating company.
We actually reduced our pipeline [of opportunities that the company might pursue] by 25 percent, and yet, we’re bidding more than we were bidding last year. And we’ve doubled our capture rate. This message about focus makes good business sense. Our customers know who we are, and as we have the ability to expand, we will.
Tell me about Harris IT Services’ presence in the D.C. region. We have 1,000 employees here. We consolidated seven buildings and 400 employees into [the Herndon headquarters] about a year ago. The four remaining locations in Virginia are customer program specific. We did the same as everybody else, de-layering management, reducing executive headcount where it made sense and reducing spending in those areas that didn’t have the strongest potential. Over time you stray further from the line. But in the last few years, we focused more on operational excellence.
With federal budgets tight, we saw a lot of companies make acquisitions, expand into new markets. Does that mean Harris opted out of that strategy? As companies got desperate and budget pressure got real, people tried to do the right thing but took a lot more risk on performance in the process. That will come to bear in industry consolidation. But we’re among the companies that chose not to play — chose to stay where we’re strong. We don’t do too many acquisitions, but we do well at organic growth [Harris, which reported about $5 billion in 2014 revenue, doesn’t break out financials for the IT services group].
We want to stay away from the bloodletting. We’re not desperate for growth. The fact is that we’re inside the fighters, we’re in the space station, we’re in [Navy] ships and a lot of military vehicles. People just don’t know it.
