Early in Daniel Burnham's career, he was on a weekend drive when he heard on the radio that he and his coworkers were being laid off. He still remembers the sting of having $78 in the bank, a child, a pregnant wife and no job. Today, as president and CEO of the $19.5 billion Raytheon Co. founded in 1922 by MIT legend Vannevar Bush, Mr. Burnham works to stay in touch with workers up and down the company's hierarchy and calls layoffs "the hardest part of any CEO's job."
Keeping a technology company prosperous is not easy, either, Mr. Burnham told the audience gathered in Wong Auditorium for the March 1 Industry Leaders in Technology and Management lecture sponsored by the Center for Technology, Policy, and Industrial Development (CTPID) and the Office of Corporate Relations.
"The tempo of technological change is transforming our whole way of life. You can feel it accelerating," he said. "Keeping your technology one step ahead of the competition is important, but technology alone is not enough to sustain the prosperity of a technology business."
In addition to technological quality and innovation second to none, Mr. Burnham said, great companies must pay close attention to market needs, internal structure and corporate culture. "You must have a bias toward growth and all efforts must be focused on how to delight the customer.
"Talking a lot and listening even more" are primary tools to assess both market needs and internal needs, he said. Staying close to customers through one-to-one contact, surveys and other assessments allows companies to anticipate needs and remedy problems.
Within Raytheon itself, Mr. Burn-ham said he finds it helpful to skip the hierarchy and exchange ideas with staff at middle and lower levels. "I can get the truth from people two or three layers down because they don't depend on me for career success."
Great companies need people who tell the truth and who can lead just as badly as they need new technologies, Mr. Burnham said, noting that MIT's Leaders for Manufacturing Program produces this precious human resource. "Management provides structure and you need it, but leaders inspire and can see the total system view. Leaders don't get seduced by technology. They use it as means to an end, not as an end in itself," he said.
Growing leaders takes work inside the company as well. Raytheon hires about 2,500 professional engineering staff each year, and the issue is rarely whether they are well trained. When problems arise, Mr. Burnham said it's often that the training is too narrow, so the engineers cannot engage with new technical systems or they prefer to be independent contributors rather than team members. Additionally, he noted, some engineers have trouble applying statistics to their work.
Mr. Burnham said he realizes the sting of layoffs, mergers and consolidations still touches many people in his industry. After the 1980s military buildup, federal spending reductions spurred a round of industry consolidations in the 1990s. Raytheon shed nonessential businesses and bolstered its core: defense and commercial electronics, business aviation and special mission aircraft, and engineering and construction. By acquiring major corporations including Texas Instruments' Defense Systems and Electronics and Hughes Electronics, Raytheon grew from a $10 billion company in 1995 to a nearly $20 billion company with 100,000 workers today.
When Mr. Burnham came to Raytheon last summer, there was still much lingering pain from the mega-mergers. "Being acquired is a terrible experience," he said. "I know -- I have been acquired. And only about one-third of acquisitions are successful. You have to do it quickly and get it over with. And you have to replace [the old company culture] with a culture the employees can buy into."
One strategy he's using to provide internal growth opportunities is capitalizing on lean production principles inherited through the Hughes acquisition. Using these principles, initially forged by the CTPID's International Motor Vehicle Program, means generating savings and cutting back production time. Mr. Burnham is looking for ways to apply these principles more broadly across Raytheon.
Mr. Burnham is optimistic that the evolving company culture will push these ideas forward. "People like to work together and to solve problems," he said.
A version of this article appeared in the March 10, 1999 issue of MIT Tech Talk (Volume 43, Number 22).