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Focused on the Defense and Military Market? OK – What Is Your Formula for Success?

It’s a noted fact that many companies want to get a piece of the Defense & Military Market. Although most have concentrated on various Commercial Markets, they generally want to extend their portfolio to include a Defense segment in their business.This makes sense, as securing a position in Defense-related, programs can provide a predictable and sustainable source of business, however migrating to the Defense & Military Market is not a simple translation of what worked in building position and a business base in other market segments.To tackle this tough and complex market segment, a company needs to understand the groundrules, and make the right moves to get into the game to become a serious player.We have seen many, companies over the years declare commitment to crack the Defense & Military Market, only to discover two years out that they discontinued their efforts or abandoned the Market.Some of these organizations gained early success (by grabbing low-hanging fruit) or selected to develop this market segment for the wrong reasons. This requires Strategic focus, relatively deep pockets, patience, tolerance and an appetite and drive to run the course – no matter what materializes.The common denominator is that companies want to gain content on Deployable Programs. This is the attraction, although one must not overlook the fundamentals of the Program Life-Cycle, budget/funding allocation cycles/shifts, fierce competition and the realities of coping with the Government and Military machine. Securing a position in a Deployable program is a long-term, multi-phase arrangement and there are no shortcuts.Many years ago, we conducted research to understand and define the basic model utilized by major Defense Contractors/Integrators that grew-up in the Defense & Military Market.Our objective was not to translate this model to small-to-medium, sized companies one-for-one, however it became clear that the elements of the methodology/process defined were essential for success for any firm. Without taking this approach, we would have wandered aimlessly and taken years to understand a winning formula or never gotten there.Smaller companies could retrofit and apply this – with emphasis on their business priorities, resource constraints, budget availability and organizational make-up. The mindset and skills, within the organization, are key – remember that the square peg does not fit the round hole, without some adjustments. This also applies to attempting to translate the requirements of a Defense Gameplan into your core business.


Here are the key elements to construct your Defense & Military Gameplan:1) Industry Structure – like other verticals, the Defense & Military Market has its unique characteristics and operating standards. The primary operatives consist of the Government/Military (target Program Offices/Agencies usually cross-military in-scope), Lead Labs and the Defense Contractor/Integrator community (Industry), with participating Commercial, Technology firms (supplier base) and third-party influencers (Technical Agents, Consultants, etc.). Although smaller firms are unable to cover all of these entities, it is critical that for program-based, selling that these various sources are taken into consideration. Without this, it is easy for the competition to outpoint/outmaneuver your firm and leave you high-and-dry (usually without even realizing it). Further, each of these entities plays a role in various phases of the program life-cycle from the R&D (proof-of-concept phase) to Pre-Production to Full, Deployment/Production and continuous life-cycle support.2) Program-Selling – the Government/Military have gone through several cycles over the last decade. There has been a resurgence of discrete, Program Selling and Life-Cycle considerations vs. the previous emphasis on single-year budget and short-term, tech refreshes and insertions. To target the Defense & Military Market translates into a common ground – selective, Program focus. If this approach is not adopted – then your firm will be, viewed as, a solution looking for a problem-to-solve. The Program Offices/Agencies manage program elements and control the funding/budget allocation, while the Lead Labs and Defense Contractor/Integrator base translates specifications into hard deliverables. For technology providers and other suppliers – the Defense Contractor/Integrator base represents the key “consumer” and the pathway into fulfilling deployable contracts. There are many occasions where working directly with the Government/Military complex is warranted, however for most suppliers – their bread-and-butter is adding value to Defense Contractor/Integrators’ deliverable solutions to the End-User.3) Industry Marketing – the Defense and Military Market, like other verticals, requires dedication and an active program to build position and momentum for your firm. One of the first tasks is to determine which segments of the Defense and Military Market fit your firm’s capabilities and expertise. Well-recognized segments consist of Avionics (Airborne Platforms), Navtronics (Surface-Ship Defense/Undersea Warfare), Vetronics (Ground-based, Vehicles) and Space-based, vehicles. This is further refined by target area of emphasis and application segment – for example C4ISR (Command, Control, Communications & Computers for Intelligence/Surveillance/Reconnaissance) for an airborne target identification/tracking application. Or, an anti-cruise missile application hosted on a surface-ship. Or, a detection system for roadside bombs engineered on an operating HUMVEE-like, vehicle. The mix is endless, however one must be clear and specific about the focus, because it is too easy to wander aimlessly in this vast Defense and Military Market. To reinforce the commitment to the market, most firms will attract or train/develop specialists that “walk the walk” of the Defense and Military Market allowing them to “speak the customers language.” Further, the company should develop a Media-based, program – which is an element of the Defense Gameplan – to actively participate in Industry Interviews, submit useful articles (usually program and application-based), fuel Webinars (useful to the target audience), host problem-solving Workshops (usually account-focused) and invest in building a Sector Management function (over time) that can interface with selected Agencies/Program Offices (to build position and develop new classes of opportunities). This may appear to be daunting, however the first-step is to prioritize/select your entry elements and get in the starting-gate. This is a long-term, proposition and will build content and momentum over the years. The battle cry for most, serious Industry players is to achieve a level where the Government/Military specifies their content for Program fulfillment, which becomes a conditioned response. This is the high-point of determining the effectiveness of your Defense Gameplan.4) Government Contracting – this is a complex and consistently changing area, which can make or break firms. If your firm does not have in-house expertise and considerable Government contracting experience, it is advisable to leverage an outside expert that is conversant in Federal Acquisition Regulations (FARs), DFARs, Certs, Reps and the current (and future) requirements and mindset of the Government contracting machine. There are subtleties in working contracts with the Government that rival any other Market segment, in terms of, sophistication, complexity, formality, savvy, groundrules and dedication. Just take a look at what is required to set-up and negotiate a contract that has ITAR (International Trade in Arms Regulations) implications – and you will quickly understand. On the flip-side, the Government has been continuously working on streamlining the acquisition process and has an emphasis on Rapid Response to drive quicker-turn, contracts that support shorter, deployment cycles.


5) Caveats and Qualifiers – a few tips for the uninitiated:Be watchful of contracts that taut IDIQ (Indefinite Delivery/Indefinite Quantity)- these contracts provide no formal commit. They draw suppliers in to share the program risk. Have seen IDIQ Programs that have gone through the roof, in terms of, production business and some that just fizzled, after the initial, ramp-up phase.When your firm leverages into a Program, make every effort to understand the various phases required to reach full, deployment/production and ask the question about “recompetes” along the way. The Government/Military is noted for going back to Industry to keep the incumbent honest and to stir-up the competitive pot. Just imagine making a five-year, commit into a Program – riding it to Pre-production and them being written out of the script for full, Deployment.Be tuned-in to the contracting terms – for example “rights in data” and “2nd sourcing,” which are standard terms for the Government/Military. What they translate to is that contractually your firm is obligated to relinquish its “secret sauce or family jewels” to the Government, during the contract period.This allows the Government at any time to transfer this and set-up a 2nd source that will replace your content. There are many, valid reasons why the Government would exercise this provision, however it results in your firm being displaced.This article is not intended to simplify or provide a tree-top view of what is required to make it in the Defense and Military Market.In fact, the real game requires other drivers and it is more demanding and relentless. In the final analysis there are no guarantees. This article is instructional in-scope.Conversely, the Defense and Military Market continues to have attraction and is one of the most, predictable Industry segments, which provides sustainable dividends.Although this Market segment continues to morph and evolve, it continues to be one of the most compelling segments, in terms of, the technology developments/advancements that support active programs, platforms and applications. Whether your firms is extending its reach or is dedicated, having a Defense and Military segment in your firm’s portfolio is a smart move.Edmond Hennessy
Performance Marketing Group
Copyright 2011

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