Leidos CEO Roger Krone Looks Back On A Stellar Career, And Reflects On What He Has Learned

Leidos
LDOS
Chairman & CEO Roger Krone will retire next month, after nine years during which he nearly tripled corporate revenues and positioned Leidos as a leading information-services provider in the federal marketplace.

I interviewed Krone at Leidos headquarters in Reston, Virginia last week. Leidos contributes to my think tank.

Roger Krone’s current position bears little resemblance to where he thought his career was headed when he joined the defense industry in 1978, but that is because he adapted as the industry was transformed by the end of the Cold War and the coming of the information revolution.

The need to adapt is a central lesson he draws from his 45 years in the industry, and his own biography demonstrates the virtue of being able to change with the times.

Leidos is a new kind of federal contractor that could not have existed before the digital revolution. McDonnell Douglas, the top-ranked U.S. military contractor where Krone first rose into senior executive ranks, no longer exists.

So, Roger Krone’s career mirrors the evolution of the aerospace and defense sector, in a way that few other players can match. He hasn’t just survived, he has thrived by embracing new ideas as the geopolitical and technological landscape shifted.

But let’s begin at the beginning.

Roger graduated from Georgia Tech with a degree is aerospace engineering as the Carter administration was starting. He went to work at the sprawling General Dynamics
GD
aircraft plant in Fort Worth, the same plant where Lockheed Martin
LMT
today assembles the F-35 fighter.

His father had been a bomber pilot in World War Two, and Roger decided at a very young age that he wanted to design aircraft. He soon found himself working on the F-16 fighter—along with what seemed like half of his graduating class from Georgia Tech.

Designing aircraft in the 1970s involved sitting at a ten-foot drawing board using pencils, masking tape and protractors. There was only one telephone in a room where over a dozen designers worked, and processing information meant feeding punch cards into an IBM
IBM
360 computer.

Krone, who had begun his undergraduate studies using a slide rule rather than a calculator, can still identify parts of the F-16 which he helped design. He says a key formative experience at the time was running the local chapter of an aerospace association, which required him to motivate members who participated on a purely voluntary basis.

Knowing how to motivate workers wasn’t high on the list of management qualifications in the aerospace sector, which at the time was dominated by hard-charging males who put little stock in people skills.

Ironically, Roger Krone is ending his career at the helm of a company where being able to motivate highly skilled people with other options in life is crucial to success. He says he wasn’t a “people person” when he started out, but he has learned over time how important empathy is in leading a modern workforce.

Krone joined McDonnell Douglas in 1992, at the time the nation’s biggest military contractor, and worked on a stealthy Navy strike aircraft designated the A-12. The program went awry and ended up being canceled, which resulted in Roger shifting over to the finance side of the company. He eventually became the company’s treasurer.

By that time, though, McDonnell Douglas was beginning to lose its edge in both commercial aviation and tactical aircraft. With the Cold War ending, times were tough and the Pentagon was urging the industry to consolidate. In 1997, Boeing
BA
merged with longtime rival McDonnell, and Roger Krone became an employee of the Boeing company.

His finance experience at McDonnell enabled him to become Chief Financial Officer of a much-expanded Boeing defense group, and he was then dispatched to Philadelphia to run the company’s rotorcraft unit. Only six months after taking on the new job, the 9/11 attacks occurred and that put the industry on a different vector.

Krone continued to rise through the executive ranks at Boeing until he became head of its networks and space unit. Along the way, he found time to develop himself in other ways. He was licensed as a commercial aircraft pilot, certified as an accountant, received Six Sigma status as a green belt in the martial arts and became a marathon runner (best ten-mile time: 1:13:45).

But he remained an engineer at heart, and never lost his enthusiasm for designing aircraft—even after receiving an MBA from Harvard.

So it was something of a surprise when he beat out rivals to become the head of Leidos in 2014. Leidos was not an aerospace company, it was more focused on information technology and technical services. But Roger continued to adapt and ultimately led Leidos to grow its revenues from $5 billion the year he joined to over $14 billion in 2022 through a combination of internal growth and strategic acquisitions.

The biggest acquisition came in 2016, when Leidos absorbed the information services and support business of Lockheed Martin and thereby doubled corporate revenues. It subsequently acquired research-heavy Dynetics and naval design firm Gibbs & Cox.

An equally noteworthy feature of Roger Krone’s tenure at Leidos has been the increasing scale and complexity of its contracts with the federal government. It won a $7.7 billion contract from the Navy to support the world’s biggest intranet. It won another $7.7 billion contract to support IT services for the Air Force. And in 2021 it secured a huge $12.6 billion contract to provide IT support to the Army.

Leidos thus became an industry leader in federal information services, riding the wave of digital modernization that is transforming the way America’s military operates. That is a significant accomplishment, but it is nothing like being in the aerospace industry. Krone says when he was at Boeing, it was common to write a major proposal every two years; at Leidos, he participates in preparing a new proposal every week.

This seems like an operating environment where being a marathon runner might come in handy, because the pressure never lets up. Roger says the only way to prevail is to be passionately committed to the enterprise, and convey that commitment to employees. If they aren’t emotionally dedicated to the company’s success, then it probably can’t be sustained.

Thus, in the end, Roger Krone became a people person. The global pandemic in some ways completed his personal transformation as Leidos revamped its personnel policies to include mental health services, personal mobility, financial security and other features not previously central to the benefits package.

As he looks back today on his career, he reflects somewhat wistfully on all the people he worked with in the defense industry who were fired, and also the many personal trials that his employees have gone though. He says something he was not prepared for when he began at Leidos were the tragedies and losses that many employees suffered along the way.

But that’s the sort of thing you have to pay attention to when you run a people company. It isn’t like an assembly line. It’s an enterprise where each worker matters, and needs to be kept engaged for the business to work. Being able to adapt to new challenges is crucial, but so is understanding the needs of those who make your success possible.

As noted above, Leidos contributes to my think tank.