With Technology Transfer, Business Skills, And Capacity Building, Everyone Wins
Targets, goals, percentages … these are the hallmarks of many minority and women-owned business development programs. More rarely, one finds true partnerships and nurturing relationships that truly build capacity and capability for qualified diverse suppliers. Northrop Grumman’s mentor-protege program is a unique program that creates unmatched opportunities for its participating businesses.
“We teach them how to fish,” states Tizoc S. Loza, Northrop Grumman’s Corporate Project Manager for Mentor-Protégé, SBIR and HBCU/MI Programs. He references the way the company’s program gives participating businesses the skills and technology that they need to be successful, so that they can find not only the “fish” they need for today, but also build the skills and abilities to go after the really big fishes of tomorrow. Evidence of the program’s success lies not just in the record-setting 20 Nunn Perry awards the company has received from the Department of Defense (DoD) – welcome external recognition, to be sure – but also in the legacy that the company and its member firms are building as they thrive.
In 2010, Northrop Grumman had 18 active mentor-protege programs. The mentor-protege pairs that participate each year work with a number of agencies and governmental entities such as the FAA, DHS, DoD, and the State of Texas. Loza serves as relationship builder, helping form relationships between minority firms and government needs that meet requirements and can be integrated into Northrop Grumman’s supply chain to both improve small business capabilities and make Northrop Grumman a better producer of products for the government.
As a part of the program, Northrop Grumman looks at the minority or disadvantaged small companies it has been working with to find a good commitment match where they can gain management approval, and then transfers technology and technical knowledge to the suppliers being mentored. Transfers are based on a wish list from the firm to be mentored and long-term goals for both parties.
Transfers can be business acumen, business development skills, or specialized technologies. In many cases, the technology in question is something Northrop Grumman spent significant research dollars to develop being passed to a small business to make them a better supplier. “Now, there is a cost to them, too,” notes Loza, “They have to retain it and continue to improve on that, investing their own time and resources to maintain and improve it for their customers.”
In some cases, the technology fits into the small business own research initiatives. Northrop Grumman often works with companies in conjunction with the Small Business Innovative Research Program (SBIR), finding firms that have ideas they want to bring out of the lab and into the marketplace. With the help of the mentor-protege program, the firms can qualify and verify their technology for government platforms and government programs, such as space programs or military applications.
The payoff for the program and the technology transfers can take time to materialize. Many Northrop Grumman projects can go on for years, with significant technological developments each step of the way. “We are always expanding and pushing the state of the art,” says Loza, pointing out the push-pull nature of the mentor-protege program, “We’re pushing the state of the art, but we’re also pulling suppliers to technology enhancements to meet our need. It’s a constant thing here, you moving on, you’re pushing the envelope, and you’re bringing along those suppliers.”
Success Stories
Though the investment in smaller firms can take years to materialize, Loza is able to point to a number of successful ventures and contracts that have grown out of the mentor-protege program. Northrop Grumman looks at the program as a win-win situation over time, with victories for the firm, minority suppliers, other industry leaders, and the government, as everyone benefits from a more sophisticated and capable supplier base.
As an example, Frontier Electronics Systems Corp.(FES) from Stillwater, OK, a women owned, Native-American firm, had an existing relationship with Northrop Grumman. They wanted to do more, and after graduating from the mentor-protégé program as a DoD Nunn-Perry Award winner, they became the only Native American firm in the state of Oklahoma designing and manufacturing space flight hardware for both satellites and the International Space Station. The company was able to diversify their business and technology portfolios, expand their Research and Development scope to include SBIR work, and earn GOLD supplier status with, not just Northrop Grumman but also The Boeing Company, where they are a three time Supplier of the Year award winner. FES also earned a STAR supplier rating from the Lockheed Martin Corporation.
Another firm that has benefited from a mentor-protege relationship with Northrop Grumman is Saalex Solutions, Inc., small, service-disabled veteran-owned business. The company first met Northrop Grumman representatives in 2001, and entered into a formal mentor-protege relationship in 2004 when SAAlEX received the DoD Nunn-Perry Award with Northrop Grumman. As Loza recalls, the company was able to move from around $150-$300 thousand (USD) in revenue to over $20 million. Northrop’s Infrasture support and guidance was vital to SAALEX growth and success. The firm was nominated as an NMSDC Supplier of the Year in 2006, and has gone on to a number of prime contracts.
On average, Loza finds that companies that participate in the mentor-protege program grow between 10 – 20 percent. Other firms have doubled in size, and some of the standout successes have found themselves in a position to be acquired by other large companies due to their growth rates and success at integrating and leveraging the technologies and skills from the mentor-protege relationship. Participating firms also have the opportunity to partner with each other for peer relationships and contracts, expanding their reach and expertise in their target markets.
Challenges To Navigate
In continuing its successful mentor-protege program, Northrop Grumman has several challenges to navigate. There’s the challenge of finding suppliers that are a good match, expanding the reach of the program, and navigating the difficult budgetary environment the government is facing in terms of program budget re-authorization.
When it comes to finding potential suppliers, the firm has been challenged in the past to find minority firms with a sufficient track record of quality performance and the capabilities to function successfully in emerging technical situations. Since many of Northrop Grumman’s projects are destined for irretrievability in space or use in the military arena, there is no margin for error. The company has to seek out proven performers and long-standing partners for any manufacturing. There is more leeway on the Information Technology side, where Northrop Grumman can look for certified skills and use those as a benchmark for potential inclusion in the program.
The firm is also trying to expand the overall reach of its mentor-protege program efforts. Originally, the mentor-protege was a DoD program, but the program has grown due to its clear benefit to small businesses. As a result, the long-term goals are to be able to provide the mentor-protege type of enhancement to small businesses that are working with other agencies as well as state or local governments.
National budget issues are a concern, however. In the current budget proposal for GFY 2011, the mentor-protege funding was not reauthorized, but with dedicated campaigning from business owners and industry the funding was restored. “Help us make sure programs like these do not disappear because they do provide a great benefit to small business. A lot of small businesses do not have the funds or the resources to train their employees, to enhance their capabilities, or even to receive a new product line for them to continue surviving and becoming a larger business from their current status,” says Loza, committed to fighting for the program’s survival.
Regardless of all the challenges, Loza feels that the mentor-protege program is one that holds great promise for all industries. “We’re always improving, always making it better,” he says. By heightening the visibility of such programs using platforms like NMSDC and other local and national diversity councils, their reach can be expanded in the minority business community to benefit minority firms throughout the business world.
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