Kim Kelly

CI Advocate for Winning Business

At the time of this interview, Kim Kelly was a manager of business development for International Launch Services, a joint venture between Lockheed Martin (LM) and two Russian companies. He has worked in proposal development for 20 years. He started in 1982 with IBM Federal Systems, which was later acquired by LM. Since 1991, he has been a full-time competitive intelligence professional and has provided major CI studies to proposal teams at 10 different LM locations. He is a member of the Society of Competitive Intelligence Professionals (SCIP) and was instrumental in LM's selection as one of 12 companies (and the only aerospace company) honored for their best-practice CI operations by the American Productivity and Quality Center (APQC) in 2000. Kim is now an independent competitive intelligence consultant and a partner with Knowledge Link.

KimKellyCI@aol.com

Please tell me about your background and how and when you started performing competitive intelligence.

I have an Operations Research and Industrial Engineering degree from Cornell University and an MBA in Finance from George Washington University. I've worked with Lockheed Martin for 20 years. I really spent the first 18 years in one facility and changed companies three times but never left the building! In the aerospace industry there's been a lot of consolidation. Originally, we were known as IBM Federal Systems — a little bit of an anomaly since IBM was more of a commercial computer-oriented company, while we applied computer technology to the DOD (Department of Defense) and civilian government area. We were eventually bought by Loral, and Loral was sold to Lockheed Martin. Two years ago our unit was known as LM Naval Electronics and Surveillance Systems (NESS), in Manassas, Virginia. From there I went to my current position.

I started out in an area called Cost Engineering, which is a function that estimates costs for production and development programs. "Engineering" was in that organizational name because we were involved in initial production of a new system. In other words, we weren't producing chairs or widgets, we were developing new systems. Instead of having cost tables to refer to for material and labor costs, our engineers had to calculate hardware costs — also referred to as "should costs." Should cost is a cost projection for a not-yet-manufactured or not-yet- developed product. So it was in this cost-analysis-oriented job from 1982 to 1991 that I had my first analysis apprenticeship. Much of my stint was doing software cost engineering — estimating the cost of software development — a complex process particularly since it is very labor intensive. We had a specialized department that would look at software project costs, at what the cost drivers were, and we came up with cost approaches to software development, system engineering, and documentation. This provided me with a total program cost estimation capability, leading to my competitive intelligence position in 1991. The total program cost capability was an important point, because we started CI long before most people had heard of the profession. And through the CI process, I was able to achieve a win rate of 80 percent at NESS Manassas, which was way above the industry average. The largest proposal I have worked on is the Joint Strike Fighter Program, the largest contract ever ordered by the DOD or by the U.S. government. And in 2000, when I moved to Lockheed- Martin's joint venture called International Launch Services, I helped assist in improving our win rate by 30 percent. So certainly I'm a big advocate of competitive intelligence and its impact on the business.

How would you describe your current function in a nutshell?

I'd like to split that into two pieces; tactical competitive intelligence and strategic competitive intelligence. I spend most of my time on the tactical side — day-to-day proposal bidding activities. Strategic is higher level, broad-based analysis that affects the organization over a much longer period of time. My role is to figure out the right price to bid for our proposal in order to have a competitive bid. In that process we need to forecast our competitor's bid and technical approach, our competitor's team structure, team strengths and weaknesses, and how the customer will evaluate our proposal vs. our competition's. We try to conduct this analysis months before the proposal has to be submitted so that we can have an actual effect, a real influence on how our proposal is postured, and improve our chances of winning. We'll try to influence our own team to be doing the right things by showing what our competition is doing. We'll look at our competitor's technical solution, we'll come up with a should-cost, we'll try to estimate what their win strategy will be, and go from there.

One way I like to describe our job is that we are an advocate, or a window into what our competition is doing. We have to be objective from that standpoint. I am the only person in the organization that is objectively communicating what our competition is doing. We're starting to have an influence at the executive management level of our respective companies. People know it's a valuable input and are seeking that kind of expertise, which may be why you're doing a book on it. The fact that you're doing a book about CI is a good indication that we're making a lot of progress in the business world.

With strategic CI, we conduct market analysis or look at our business strategy, and try to show how our competition or our customer may influence our assumptions and our strategies. As I perform my tactical work, over months and years, I keep an eye out for trends or issues that will affect the business at a broader scale, particularly if my customer or competitor is doing a right turn and changing something dramatically. For example, we were making a product and there was a key subsystem, like the engine of a car, and I noticed that, of the five companies that made the subsystem, two had been purchased recently by our competitors, and a third was rumored to be in the process of being acquired by a fourth. I wanted my management team to know now, as early as possible, that the five alternatives were down to three, now going down to two, and that our competition was...