Global Leaders Series

A conversation with Kelly Ortberg - President and CEO, Rockwell Collins

When Kelly Ortberg took the reins as president of Rockwell Collins in August 2013, he had big shoes to fill—those of Clay Jones, one of the aerospace and defense industry’s most effective and most admired CEOs. But Ortberg was prepared; for years leading up to the succession, Ortberg played a pivotal role in helping to shape the business strategies that were in place when Jones retired.          

A mechanical engineer, Ortberg ran both the commercial and governmental operations. He also led the launch of Rockwell’s Pro Line Fusion integrated avionics system, which has been selected for more than 15 aircraft platforms since its introduction in 2007. He has since been elected CEO. Former Aviation Week & Space Technology Editor-in-Chief Tony Velocci recently sat down with Ortberg for a lengthy conversation about his goals for Rockwell Collins and his thoughts about the industry.

Extract

Rockwell Collins has long been viewed as one of the aerospace and defense industry’s model companies—based on return on invested capital, productivity, leadership. What is the missing ingredient that generally characterizes under-performing companies?

There are many reasons why a company might be a poor performer, but the two main reasons are they either lost sight of their end market, or they lost sight of their customer, or a combination of both. That is why we continue to invest heavily in R&D: to advance our technologies and stay very close to our customers in our market space. But it is not just about having the best widget; sustaining a high level of operational performance also requires having your customers’ trust and knowing that they can depend on you— particularly on airplane development programs. Currently we invest 18-20% of revenue on R&D.

At one time, A&D was synonymous with transformational technologies. Is there still a place in this industry for such investment, given the current emphasis on affordability and industry’s increased aversion to risk?

Oh, I think so. An example of where we believe transformational technology in which we are involved is fusing sensors and digital databases to provide an unprecedented level of situational awareness and safety for pilots. Some Internet-related technologies also will prove transformational and open up all sorts of opportunities to provide new and improved services for air travelers. But while there remains a role for transformational technology in aviation and aerospace, you have to balance it with the market environment that exists today. It’s no longer about technology at any costs. Customers are looking for best value within budget constraints?

What lessons could aerospace and defense companies learn from the best in class outside this industry?

We try to do too much ourselves. The A&D industry burdens itself with trying to develop too many unique solutions. In a strange kind of way, I believe the new [Defense Dept.] budget probably will drive cultural change and ultimately lead to behaviors that allow A&D to be more productive and less inclined to do too much ourselves. At the same time, we’re all becoming more global, which is going to require all A&D companies to better understand how to address broader markets with more geographically dispersed supply chains. That too will change the culture of our industry.

 

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We do a really good job of trying to understand our customers and what they want—in some cases, delivering solutions that solve problems they have a difficult time articulating.

Kelly Ortberg President, Rockwell Collins