Northrop avoids acquisition pitfalls

Swiftly installing new management and efficiently integrating workers with similar skill sets have been keys to the success of Northrop Grumman Information Technology's acquisition strategy, according to the company's president.

Furthermore, they form the foundation of the company's re-organization, scheduled to be complete by the end of the year.

Herb Anderson, president of Northrop Grumman IT, said the Herndon, Va.-based firm has never had an acquisition fail, beginning with Northrop acquiring Grumman in 1994 and continuing with the subsequent acquisitions of Logicon Inc., Federal Data Corp., Sterling Software Inc.'s federal group and Litton Industries Inc.

"With acquisitions, you hear a lot about failures, but of our acquisitions, all of them have been successful so far," Anderson said during a Nov. 28 press briefing at the National Press Club in Washington, D.C. "Within one month, we name a top manager and within two to three months, the rest of the management team."

Anderson said "people and cultural issues" are the biggest stumbling blocks in acquisitions, but by being decisive and putting the new management in place quickly, "We let the people know where we're going and why."

Along personnel lines, Northrop Grumman IT has more than 900 job openings and was aided by the dot-com fallout, which enabled the firm to hire some displaced workers and re-hire others, Anderson said.

All of Northrop Grumman's companies used to keep their individual names, but Northrop Grumman IT is now the company's brand, and it encompasses all of the IT-specific acquisitions.

The various companies' key contract wins this year include being part of NASA's Scientific and Engineering Workstation Procurement (SEWP III) contract and the National Institutes of Health's Chief Information Officers Solutions and Partners (CIO-SP2) contract, as well as the Army's Communications-Electronics Command's task orders for Systems and Software Engineering Support Services, worth up to $1.4 billion across 10 years.

In the future, Northrop Grumman IT would like to be the prime contractor on some of these major contracts, but company officials are always open to having Northrop team with other firms when necessary, Anderson said.

The firm began realignment in June after the Litton acquisition. The realignment is basically complete, but it will become official on Jan. 1, 2002, Anderson said. "We're running smooth right now and it's pretty much done," he said, adding that he could not comment on possible future acquisitions.