BETA
This is a BETA experience. You may opt-out by clicking here

More From Forbes

Edit Story

Raytheon Intelligence & Space President Roy Azevedo Explains His Business

Following
This article is more than 2 years old.

Raytheon Technologies RTX celebrated its first birthday on April 3. The company came together in the biggest aerospace merger ever just as the global pandemic was beginning to take its toll in 2020.

Considering the severe impact the pandemic had on demand for commercial aircraft equipment and services, Raytheon Technologies (a contributor to my think tank) has fared surprisingly well.

That fact is traceable largely to the defense parts of the company, which do not follow the rhythms of the commercial business cycle. While commercial aerospace was experiencing the financial equivalent of wind shear last year, the defense business lost little altitude.

All four segments of Raytheon Technologies—Collins Aerospace, Pratt & Whitney, Missiles & Defense, Intelligence & Space—do extensive business with the Pentagon.

For instance, Pratt builds all the engines for the Air Force’s latest bombers, fighters and tankers.

However, the place where defense spending is most heavily concentrated within the company is the two legacy Raytheon units. Intelligence & Space is especially intriguing, because so much of what it does is secret.

In the first quarter alone, the unit booked well over a billion dollars in classified work.

I didn’t expect unit president Roy Azevedo to talk about any of that when I interviewed him this week, but was hoping he could explain the capabilities and culture of his business.

He proved to be surprisingly open.

With $15 billion in annual revenues and 37,000 employees located at 500 domestic locations and scores of overseas sites, it is a complicated story. Intelligence & Space has 5,500 active programs, almost all of which are connected in some way or another with national security.

Azevedo views the complexity as a source of strength. The unit’s myriad undertakings are all grounded in a series of competencies that are fungible across diverse customers and missions, but no program provides more than 2% of revenues, making Intelligence & Space results highly resilient.

The business breaks out into three broad categories: sensing and effects, which contributes 50% of revenues; command, control & communications, which contributes 30%; and cyber, training and services, which contributes 20%.

Once you get beyond the top-level numbers, though, the relationships become harder to follow. For instance, pure cyber programs and products contribute less than 10% of business unit revenues, but cyber competencies inform every facet of its portfolio.

The OCX pathfinder program for controlling GPS satellites is a case in point. The system has the most stringent information assurance requirements ever levied on any constellation control architecture, demanding extreme cyber competencies, but it isn’t even located in the cyber part of the business.

Some of the mission areas in which Intelligence & Space is engaged require unique combinations of expertise. For example, its work on countering hostile unmanned aircraft (“drones”) includes both kinetic and non-kinetic kill mechanisms in a layered architecture ranging from high-power lasers to precise jamming of electronic signals.

Being able to survive and thrive in delivering such solutions to the joint force requires besting world-class competitors, so the ability of Azevedo’s unit to win a succession of contracts bespeaks remarkable skills.

Another business area where the unit has distinguished itself is the collection and processing of imagery. Raytheon Intelligence & Space performs more such work than any other company in the world, exploiting imagery from both orbital and airborne assets, including drones.

Most of the requisite skills are already resident in the enterprise, but it recently acquired Blue Canyon Technologies in order to bolster its expertise in small satellites such as those increasingly favored by the armed forces for use in low-earth orbits.

Blue Canyon currently has over 90 satellites in production and supports missions for customers such as the Air Force and the Defense Advanced Research Projects Agency.

Many of the programs Azevedo oversees involve not just delivering hardware and software solutions to government customers, but providing technical support in the field to military users.

Roy Azevedo observes that Raytheon Intelligence & Space has some of the “coolest” technologies on the planet, but unlike commercial companies it often can’t talk about them.

Nonetheless, being engaged in such a business naturally fosters a culture of inclusiveness, because when you operate at the cutting edge of innovation, you need employees who themselves are at the cutting edge.

Further elaborating on his company’s culture, Azevedo says there are three overarching themes he always stresses to customers. First, his business unit wants the help customers solve their hardest problems. Second, the unit strives to meet its commitments. And third, it seeks to remain true to its values, which begin with respecting people.

This isn’t just rhetoric.

The legacy Raytheon culture from which much of his business sprang was renowned for both the sophistication of its technology and its emphasis on workforce diversity.

Raytheon Intelligence & Space operates in a different corporate setting today, but its values remain intact, and in Roy Azevedo’s view, contribute significantly to its ongoing success.

Check out my website