Photo: U.S. Navy

A few days ago I ran into a friend who is an executive at a defense contractor. We got to talking about the thin margins in some of his company’s shrinking Pentagon contracts. That’s when the subject of diversification came up.

His company has a few federal contracts beyond the Pentagon, but he’s been urging his management to diversify more into the commercial sector. His company has had some private sector contracts, but for the most part they were projects squeezed in between military contracts back when defense budgets were growing. My friend would like to see his company develop more commercial business.

He is not alone. In a recent report from PricewaterhouseCoopers, “Aerospace & Defense: 2012 Year in Review and 2013 Forecast,” diversification into commercial markets  is going from optional to required for most defense contractors. An excerpt:

Many companies are exploring commercial applications for their technologies. Most defense contractors, and their investors, have approached commercial markets cautiously because of mixed experiences, weighted toward the negative, in the past.

Much of that experience, though, is dated; defense contractors have had ample opportunities in their core markets for more than a decade.

However, many of the industry’s largest commercial markets have their roots in defense and space technologies, such as computers, computer networking, and telecommunications.

Going forward, defense contractors are expected to seek commercial applications for their technologies, even if it means licensing or supplying technology to commercial entities.

-Aerospace & Defense: 2012 Year in Review and 2013 Forecast, PricewaterhouseCoopers

Similarly, a recent Washington Post article (below) explored the diversification intentions of defense contractors. Interestingly, the article quotes Lexington Institute’s Loren Thompson on the biggest diversification obstacle facing defense contractors:

…the difficulty typically isn’t about technology or skills, but simply about culture.

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Contractors taking diversification seriously as defense spending shrinksAs contractors encounter shrinking federal budgets, they are increasingly seeking to bolster their presences in the international and commercial markets. Companies have long been promising this diversification, but there are now more signs this effort is fully underway.

via Washingtonpost

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The cultural problems defense contractors have diversifying into commercial markets are numerous and very real. One of those cultural problems is marketing.

Most defense contractors have not felt the need to market their companies beyond having a static website, attending some trade shows and answering RFPs. That’s what they’ve done in the past and it was enough. At least for military contracts.

For commercial work, however, defense contractors are realizing that they need to do more in the marketing of their business than they’ve done for government contracts.

Fortunately for defense contractors, they are stepping up their marketing at a time when a new, more effective approach to marketing is on the rise: inbound marketing.

Inbound marketing is different from the traditional interruptive, outbound methods of marketing. Examples of outbound marketing include advertising, press releases, direct mail and cold calls. For a visual to associate with outbound marketing, think of a noisy bullhorn.

Inbound marketing, in contrast, is focused on attracting attention online by publishing remarkable content to attract traffic to your website, converting that traffic into leads and then nurturing the leads until they are ready to buy. The visual for inbound marketing: a powerful magnet.

(click graphic for larger image)

Two of the most important aspects of inbound marketing are buyer personas and blogging.

• Buyer personas are a fictional description of a company’s ideal customer and include the challenges they face, their motivations and the types of information they need. Once a buyer persona is identified and brought to life, the content that is developed for that persona becomes very focused, helpful and valuable. In addition, a buyer persona includes their description of the problems that they need to solve, particularly as it relates to the search engine keywords that they would use. Their use of keywords in search engines to solve a problem is how they will first find your company.
• Blogging is the most effective way to reach your buyer persona with your content that is targeted at them. The benefits of blogging are numerous, but include improved search engine results and the ability to demonstrate expertise. Additionally, companies that blog get more website traffic and leads.

According to marketing automation software company HubSpot, in its State of Inbound Marketing Report, one major benefit of inbound marketing is that it costs 62% less per lead than outbound marketing. Additionally, inbound marketing is based on building marketing assets, primarily through blogging, that a company will own and have working for years to come (like compound interest). Outbound marketing, in contrast, only works as long as you’re paying to interrupt people (advertising, direct mail, etc.).

Click here to read PricewaterhouseCoopers “Aerospace & Defense: 2012 Year in Review and 2013 Forecast,” or see the SlideShare version below.

QUESTION: What obstacles are you facing in diversifying into commercial markets? Please join the conversation below. And if you enjoyed this, please share it with your network.

The post How Inbound Marketing Can Arm Defense Contractors For Diversification appeared first on FIRE SUPPORT.

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If you’ve attended enough trade shows, you’ve seen them. They get bags with an exhibitor’s logo on the outside and then hit the trade show floor with one mission: to pick up as many promotional items as they can stuff in the bag(s). The effort they put into picking up exhibitor swag can resemble an episode of Supermarket Sweep.

Not surprisingly, many exhibitors put a lot of time, planning and money into distributing promotional tchotchkes to get visitors to stop at their booth. But research shows that’s not as important as teaching an attendee something new.

According to a study sponsored by Skyline Exhibits and Marketech 360, the number one reason attendees visited exhibits was to ‘obtain product information.’

The study interviewed 3,341 trade show attendees at 30 events, including one of the biggest defense contractor trade shows, the AUSA Annual Meeting & Exposition.

As shown in the graphic below, when combining the results of ‘obtaining product information’ (32%), ‘product demo’ (11%) and ‘seeing a rep’ (10%), 53% come to learn about what the exhibitor has that is new.

While giveaways are not unimportant (17% of respondents say that’s why they visit a booth), they should not be the primary focus of trade show exhibit planning.

In addition, there are the other important factors that prompt booth visitation that should not be overlooked such as pre-show promotion, exhibit staff training and display appearance.

However, the primary focus of a defense contractor’s trade show planning should be on how to help the attendees learn something new.

We have noticed in all of our studies over the past six years that there is a correlation between learning and inclination to buy, prescribe, recommend or influence after visiting an exhibit where there was new learning.

The Skyline/Marketech 360 study explains that what an exhibitor wants “is to change the perception of the attendee, change their behavior, or get a commitment to recommend, purchase or prescribe.”

The key is when learning occurs: “…what we have found in study after study – regardless of the industry segment – is that when learning takes place, the inclination for behavior change occurs.”

To help get you started planning for your next trade show, the study includes 15 examples of trade show exhibit tactics that can lead to meaningful attendee learning:

1. One-on-one conversations
2. e-details
3. Product demonstrations (individual or on-demand)
4. Expert live theatre
5. Video
6. Live presentations (Xpert Centers)
7. Case studies (using AV interactives)
8. Interactive AV
9. Product theatres
10. Quizzes
11. Challenges
12. Pre-arranged meetings/demonstrations
13. Lunch and Learn
14. Client led discussions or presentations
15. Separate areas for attendee networking

Click here to download a copy of “What Attendees Tell Us About Best Exhibiting Practices.” (Registration required)

Question: What trade show tactics have helped you learn something new? Please join the conversation below. And if you enjoyed this, please share it with your network!

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If you think back 15+ years, most companies had or were beginning to get their own websites. Now, all defense contractors have websites, but those on the cutting edge of business development are blogging. It’s similar to the mid 1990s with the advent of websites, except now it’s blogs that are becoming mainstream.

The reason for the adoption and growth of blogs is because they are the single most effective marketing tactic available today.

According to a recent HubSpot study, companies that blog get 55% more website traffic than those that don’t blog.  And, companies that blog get 70% more leads than those that don’t blog.

One of the best ways to understand what a blog is and how a company should approach blogging is in a popular four-word rule of thumb for the modern marketer: THINK LIKE A PUBLISHER.

Successful business blogs deliver content that is written for their ideal customer, also known as a buyer persona. The best blogs don’t prattle on about their company, new hires and awards. Instead, like a good magazine, great blogs deliver remarkable content that solve their prospective customers’ problems. The most successful blogs have a deep understanding of their readers.

To make sure that your business blog is packing the maximum marketing firepower, here are seven habits of highly effective blogs:

1. Have a great title – In fact, spend half your time writing just the title. Like a magazine at the supermarket checkout, it needs to get your reader’s attention and make them feel like they are going to miss something great if they don’t read it. The best blog titles are actionable, keyword-conscious (i.e. the words for which you want to be found via search engines), brief, clear, definitive and intriguing.
2. Focus on just one topic – There are two primary reasons for this: 1) it’s easier for the reader, 2) each blog post should focus on just one long-tail keyword. For instance, the keywords for this post are “defense contractor” and “blogging.”
3. Be educational (or solve problems) – Statistics show that the blog posts that have higher readership and social sharing tend to be educational and not promotional. If your post is educational, your readers will share it and come back. If your post is promotional, say goodbye to the reader because they won’t return.
4. Blog consistently (and as often as possible) – As with most things related to Internet marketing, there are numbers to support the best practices. HubSpot tells us companies that blog at least 20 time per month generate five times more traffic than those that blog fewer than four times per month. And even if you only blog four times per month, it still generates almost four times more leads than not blogging at tall.
5. Optimize for your readers AND search engines – But do it in that order. One of the objectives of blogging is to get readers to return and share the content with their social networks. If you write for a search engine with lots of oddly placed keywords and awkward phrases, however, your readers will sniff that out and won’t like it.  But, you also need to make sure you’ve included your keywords in the title and your page title, and other SEO related best practices like including a meta description, image file names and alt tags.
6. Look good – How long should each post be? As long as it needs to be. Beyond that, make it visually appealing for an enjoyable read by using bolded text, subheads, numbers and bulleted list. Also, include internal links to additional resources, use high-quality images and don’t be afraid of whitespace.
7. Capture leads – Remember that you’re blogging to fill your business development pipeline. Your blog has huge lead generation potential. Make sure to include calls-to-action (CTAs) on your blog and in each post. For example, on this page there are four CTAs (2 inviting you to subscribe to this blog, and 2 to download popular marketing ebooks).

What do you like most about the blogs that you read? Please join the conversation below, and if you found this article helpful, please share it with your network via the buttons below.

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In the movie Zero Dark Thirty, which dramatized the operation that found and killed Osama bin Laden, one of my favorite scenes was short and probably overlooked by many.

Photo: Columbia Pictures

In the scene, a CIA officer was asking the National Security Advisor for support to launch the risky operation to try and kill or capture bin Laden. The National Security Advisor was skeptical, reminding the CIA officer “…I was in the room when your old boss pitched WMD Iraq…at least there you guys brought photographs.”

The CIA officer responded, “You know, you’re right, I agree with everything you just said. What I meant was, a man in your position, how do you evaluate the risk of not doing something…“

This scene reminded me of the notion that not making a decision IS a decision.  We’ve all seen indecisiveness in the business world – it’s a very human trait. It was a problem for Hamlet, too.

Indecisiveness can also play a role in marketing. There is no shortage of reasons why some defense contractors are keeping their heads down these days: some blame defense spending cuts and a poor economy. However, these days another reason for marketing indecisiveness is because marketing has changed so much in the last few years. A lot of businesses simply don’t know what to do or how to start.

Because of the Internet, there are many new, cost effective marketing tactics available to defense contractors that can be enormously beneficial. And, many of those new marketing tactics are even more effective than the older, more traditional forms of marketing. Which leads us to blogging.

Blogging is the most powerful and cost effective marketing tool for defense contractors.

So what exactly is a blog? The name is derived from web log, where articles are published on a regular basis. Here’s how HubSpot defines it:

Blog – A collection of articles that provide helpful, valuable, educational, and remarkable content to your target audience. By providing this value, blogs can easily and effectively draw prospects to your website.

The benefits of blogging are numerous, but let’s start with the numbers (according to HubSpot’s State of Inbound Marketing Report):

More traffic:

Companies that blog get 55% more website traffic than those that don’t blog.

More leads:

Companies that blog get 70% more leads than those that don’t blog.

More customers:

57% of companies have acquired a customer through their blog.

Blogs affect purchasing decisions:

71% of companies said blogs affect their purchase decisions

But the benefits of blogging don’t stop there. Another marketing benefit is the impact blogging has on search engine optimization (SEO).

Here’s why: each and every post you write gets published as its own, individual, indexed page page on your website. If you think of indexable pages as lottery tickets for getting found online, then each page is a new opportunity to win more chances of the right people finding your site.

And there’s proof to back that up: Businesses with 400-1,000 pages get six times more leads than sites with 50-100 pages.

When your blogging focuses on keywords related to the problem your company solves, the blogging helps you rank in search engines and get found by people looking for the solutions you provide.

Blogging can also help you cut down on the need to use pay-per-click (PPC) advertising. When people are searching on Google, they click on the organic results at least 70 percent of the time (vs. 30 percent for paid, sponsored listings). And people with higher levels of income and education tend to click on the paid results even less.

Your organic results, derived largely from blogging, continue to deliver results over time, almost like compound interest. PPC, on the other hand, only works as long as you’re paying for it. It comes down to the classic “own versus rent” as it relates to your marketing dollars. Do you want to “own” your marketing assets (blogging) or rent them (advertising, direct mail, trade shows)?

Blogs help give you additional real estate for more business development opportunities. Each page of your site can include relevant calls to action with offers for premium content like whitepapers and ebooks, or complimentary analyses of some type relevant to your prospect.

Once a website visitor has clicked on a call to action and gone to a landing page to provide their contact information in return for what you’re offering, you have just taken the business relationship to the next level. And that visitor becomes a lead to be further nurtured.

Blogging is also good for your company’s reputation:

• Blogging helps you become an industry leader through education
• Your blog marks you as trustworthy, as a source of valuable information.
• The expertise demonstrated in your blog makes people think your products and services are equally topnotch.

Finally, blogging is the first step in developing other, repurposed content such as webinars, videos, eBooks, whitepapers, speeches and even books.

What do you think? Please join the conversation below, and if this article was helpful, please share it with your network (you can use social media buttons below).

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Zeroing your website (known to civilians as website optimization) has to do with getting the right people to your site, as well as what to do with them once they get there.

While optimizing a website does deal in part with search engines, the more important aspect is about website visitors. (More on the search engine part later.)

Website visitors are important because the more of the right visitors you have, the greater the opportunity for developing contacts, business and contracts.

But the important distinction about website visitors is that you want more of the right visitors, not just more visitors.

There are 3 primary aspects of website optimization: 1) buyer personas, 2) user experience, 3) and on-page SEO.

Buyer Personas

The secret sauce of getting more of the right visitors is based on buyer personas.

According to Adele Revella of Buyer Persona Institute, “Buyer personas are examples of the real buyers who influence or make decisions about the products, services or solutions you market. They are a tool that builds confidence in strategies to persuade buyers to choose you rather than a competitor or the status quo.”

Buyer personas are an archetype of your ideal customer, and help you to refine your marketing activities. As you develop a clearer picture of just who your buyer personas are, it can dramatically focus and direct all your marketing activities.

For website optimization, buyer personas help you to

• Create a website experience that “speaks” to them
• Use the right lingo
• Create marketing content that interests them
• Guide visitors along a specific path on your website
• Encourage meaningful alignment for your entire company

Buyer personas help you to know who you’re marketing to. As a result, understanding your buyer personas saves time, money and resources.

If you’re like most defense contractors and have multiple personas, get started by prioritizing them. Focus first on the most influential personas and the products and services that most appeal to them.

Website User Experience

After you’ve honed your buyer personas, the next step is developing the user experience.

As much as possible, you want to give your website visitors a feeling – show your visitors that you understand them and care about their problems.

The user website experience can be broken down into three main areas:

1. Content – Give ‘em what they want! Answer their questions and then guide them to the next logical step in their research phase (and your business development process).
2. Design – Keep the buyer persona in mind when designing the site, not the website designer or your CEO. Keep the design simple (think Google’s home page), simplify the website navigation and color schemes.
3. Optimization – Use the keywords your buyer persona uses rather than the ones your company and industry does. There is often a difference.

On-Page SEO

With the big guns of buyer personas and user experience properly aimed, you can then proceed to on-page SEO.

There are currently over 200 determinants of page ranking by search engines. Unfortunately, an increasing number of those factors are out of your direct control, also known as off-page SEO. In fact, search engine industry leader Rand Fishkin from SEOMoz estimates that 85 percent of page rank determinants are off-page (e.g. social sharing, inbound links).

However, there are five key areas of on-page search engine optimization that you can control and which are critical toward optimizing your website’s ability to get found by search engines and searchers.

1. Page Title – (That’s the line of copy at the very top of your browser) Include your keywords here, think of it like a magazine title. This is more important to the search engine than the website visitor, but don’t overlook this.
2. URLs – Include dash-separated keywords here to help the search engines.
3. Page Headers – These are more important to the search engine user than the search engine. When the visitor gets to your page it signals that they’ve reached the right place, in part because they likely were using  search terms similar to what appear in the page’s headers.
4. Content – This can be text, video, images, slide presentations. It is your chance to fully and comprehensively discuss the topic for which the visitor was searching. Don’t stuff keywords here (you won’t fool the search engines), but do include synonyms and alternate phraseology for the searched topic.
5. Meta Description – This is the short description visible on the search engine results. It has no effect on the search engine algorithms but the person searching often reads it before deciding to click on your link.

Question: What is the biggest challenge you have faced in zeroing your website for marketing? Please join the conversation with a comment below. And if you found this article helpful, please share it with your network via the social media buttons below.

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With so much change happening now in the marketing world, I am often asked by friends, business executives and marketing professionals about how to keep up with the latest in marketing. This question gets asked with increasing frequency because so many of the traditional marketing tactics are waning in effectiveness. I always respond that if you only read one marketing book, read The New Rules of Marketing & PR by David Meerman Scott.

The New Rules of Marketing & PR is the field manual for the future of marketing. It is an international bestseller with more than 300,000 copies sold in over 25 languages (from Bulgarian to Vietnamese). First published in 2007, its 4th edition will be released in July, 2013.

The book offers step-by-step instructions (like any good field manual) for harnessing the power of modern marketing and PR to communicate with buyers directly, raise visibility, and increase sales.

The New Rules of Marketing & PR shows how any type of organization can leverage Web-based content to get the right information to the right people at the right time – for a fraction of the cost of traditional big-budget marketing campaigns.

These new rules of marketing and PR apply to defense contractors, too.

David Meerman Scott, on his blog, WebInkNow, outlines how Raytheon has taken a content marketing approach to public relations.

Raytheon has hired former journalists who use the same newsroom skills honed as reporters (e.g. investigating, creating content, editing, meeting deadlines), to execute what Scott describes as a “real-time marketing & PR” approach. And it’s working: journalists and Pentagon officials pay attention to what Raytheon is publishing, and frequently use the content.

To read Scott’s full article on Raytheon’s “new” marketing, click through to the article here.

Web Ink Now: How Raytheon implemented a brand journalism approach to content marketingI’m always fascinated by organizations that embrace brand journalism, hiring reporters to create content that serves as marketing and public relations. For almost a decade, I’ve recommended that companies of all kinds model their sites not on their peers’ boring old brochure-like approach but rather aspire to becoming like a media site such as Forbes, the BBC, or The New York Times and that they actually hire reporters and editors, not marketers and copywriters, to produce the content.

via Webinknow

Question: What marketing challenges as a defense contractor are you facing? Please join the conversation with a comment below. And if you found this article helpful, please share it with your network via the social media buttons below.

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For defense contractors, this is a time of enormous upheaval and change.

• Defense budgets are declining in the countries that have had the largest defense budgets.
• Traditionally non-defense companies are earning an increasingly larger slice of defense budgets.
• The nature of military procurement is evolving away from the program management model.

As a result, to survive, defense contractors have been diversifying…

1. To other parts of the government.
2. To commercial markets.
3. Overseas.

Deloitte’s 2013 Global Aerospace and Defense Industry Outlook states:

In response to declining sales to the U.S. government, A&D companies in the U.S. will likely strengthen their marketing and competitive positioning in emerging markets…

CNBC affirms this international push in “Three Defense Industry Predictions for 2013“…

Cash Will Be King – To Be Spent on Marketing Abroad – As spending in the U.S. winds down…  companies will focus on building up more international business to make up for slower bookings in the U.S.

In Wharton’s Perspective on the Aerospace and Defense Industry, six challenges facing defense contractors are outlined, along with six profitable growth strategies, including this recommendation…

Industry-Specific Globalization — Develop a high degree of geopolitical expertise and sophisticated skill sets to effectively play in the global arena. The challenge of developing global markets for A&D companies is closely aligned to country-specific governmental, policy, and cultural considerations.

From a marketing perspective, one of the most cost-effective things a defense contractors can do when diversifying internationally, is make sure their website is capable of developing business internationally.

In recent years, websites have changed from electronic brochures to publishing platforms to reach a wide audience and generate leads.

To get a measure of your site’s business development strengths and weaknesses, enter the URL in HubSpot’s free Marketing Grader, and in less than a minute it will generate a comprehensive assessment. Included in the report are explanatory videos and other tips on website best practices.

Then, to make sure your site is ready for international marketing, check out HubSpot’s “50 SEO & Website Tips for the International Marketer” to make sure you have a “cuturally-optimized website” that will cross borders, open doors and generate business opportunities.

Question: How are your diversification efforts going? Please join the conversation with a comment below. And if you found this helpful, please share it via the social media sharing buttons below.

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According to Wikipedia, “‘silver bullet’ refers to any straightforward solution perceived to have extreme effectiveness.”

Most of the time, when the term “silver bullet” is used, it is prefaced by the words “there is no” [silver bullet]. But if a defense contractor were to deploy only one marketing tactic that would have the most impact, it would be content marketing.

In the last ten years, the way people buy has changed dramatically. And that change has led to a revolution in marketing.

Previously when a buyer was researching a purchase, their information sources were somewhat limited. Early in their purchase research, a buyer had to contact the seller to get most of the information about the product. Once that contact was made, the seller could exert some influence and control over the buyer.

Now, however, buyers can do extensive purchase research on the Internet before having any contact with the seller. In fact, SiriusDesision research has found that “over two-thirds of the buying process occurs before sales is even contacted.”

The buyer is now less dependent on the seller for product information. And, because of technology, buyers can more easily filter out marketing messages they don’t want.

With the buyer now more firmly in control than ever before, companies are beginning to realize the only way they can influence the sale is to be helpful to the buyer. And the way they are doing that is with content marketing. From the seller’s perspective, content marketing helps pull a prospect down the sales funnel rather than push them.

Content marketing tactics include eBooks, buyer guides, webinars, whitepapers, blogs, videos and more.

For an effective content marketing effort, the seller identifies their buyer personas and maps out the types of content needed at different steps of the purchase process.

In a helpful eBook from Kapost, the emergence of content marketing is outlined, along with helpful tips and several practical worksheets to get you started on a building an effective content marketing campaign.

Additionally, the eBook includes a side-by-side comparison (in cartoon form) of how to do content marketing right vs. how to fail miserably at it. The cartoon series reminds me of the U.S. Army’s popular comic book, PS, The Preventive Maintenance Monthly.

The eBook covers seven critical content marketing best practices that are worth repeating:

1. Add Muscle to Your Team – Establish a content marketing team. Assign internal and external roles responsible for planning and executing the strategy.
2. Join Forces to Generate Ideas – One of the most important steps is to do some research in order to learn and confirm your buyers key pain points. Business development, sales and customer service people are some of the best places to get this information. Interview your customers, too.
3. Capture Their Attention – You can’t bore your prospects into buying from you. Remember that they don’t care about you and your products as much as do you. Your content needs to be newsworthy, educational or entertaining.
4. Organize Your Plan of Attack – When starting a content marketing effort, don’t treat anything as a one-off effort. As much as possible, all content activity needs to be a repeatable, scalable process.
5. Distribute Your Message – There are a variety of ways to distribute your content. This is where social media can shine. As social media expert Jay Baer says, “Content is fire, social media is gasoline.”
6. Pull Them Through The Funnel – Once you have your buyers in your marketing automation system, map out the types of content they need and when they need it with lead nurturing. That way, like with  fire support, you can ensure the content is “on time, on target.”
7. Learn From Successes and Failures – There will be both. Content marketing is an iterative process where, based on the marketing metrics that you monitor, you’ll want to make adjustments and do more of what’s working, and less of what’s not working.

Click here to read or download the eBook, “Content: The Force That Moves the Buyer Down the Funnel.”

Question: What content marketing challenges are you facing? Please post your comments below. And if you know someone who will find this article helpful, please share it with them (you can use the social media sharing buttons below).

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Social media has changed the world like the printing press did over 500 years ago. Just much faster.

Social media has touched nearly every aspect of the business world, including the defense industry. Many companies have responded by tapping into the potential of social media to transform and better run their businesses.

And while the mention of social media brings to mind externally facing networks like Twitter and LinkedIn, there is also a tremendous growth of social media within companies. Examples include internal wikis, blogs and other collaboration networks. For instance, in my marketing agency, the primary internal communication is done with Yammer. Yammer is a social network service for private communication within organizations or between organizational members and pre-designated groups.

Internal social media has enabled companies to collaborate horizontally with unscripted conversations that travel randomly across management hierarchies. But the nonlinear, viral and horizontal nature of social media can be at odds with companies where a more traditional, top down hierarchy still exists.

In a McKinsey Quarterly article, Roland Dreiser and Sylvain Newton argue that a new type of leader is required who can capitalize on the transformational power of social media while mitigating its risks.

The authors outline a study of GE officers from various business units and regions. Based on the study, the authors developed a “six-dimensional set of skills and organizational capabilities leaders must build to create an enterprise level of media literacy—capabilities that will soon be a critical source of competitive advantage.”

Here is a recap of the six social media skills that successful executives need to have:

1. Producer – To lead and transform organizations, successful executives are using things like internal blogs, wikis and video. Whereas in the past a speech or internal memo might have been sufficient to get the word out to employees and stakeholders, executives now need to be able to do things like concept, write and produce their own videos. And this type of communication can’t be too slick – it needs to be authentic and motivational.
2. Distributor – The non-linear nature of social media can appear to be at cross purposes from the traditional “command and control” method of communication. With social media communication, the initial distribution is only the starting point. The ensuing discussion, both internally and externally, must then be monitored and responded to when appropriate. The C-Suite needs to become comfortable with and harness the positive energy that can occur in a horizontal communication and collaboration environment.
3. Recipient – Executives today are drowning in a flood of e-mails, tweets, LinkedIn updates and RSS feeds. With the aid of software tools, executives must develop filtering skills to filter the important from the unimportant. And, executives need to participate in the ongoing social dialogue which is where acceptance or resistance to ideas will be built.
4.  Adviser – At most defense contractors, social media is still in its infancy. Transformational executives must play a role in raising the media literacy of their subordinates and stakeholders.
5. Architect – Traditional communication tends to be vertical like a military chain of command. Social communication is more horizontal and less linear. The social media savvy executive needs to “marry vertical accountability with networked horizontal collaboration in a way that is not mutually destructive.”
6. Analyst – Executives must keep their heads out of the sand and stay abreast of emerging trends and innovations. In a world of accelerating technological advancements, executives need to be sensitive to competitive and marketplace implications. But more importantly, executives who experiment with new technologies will be able to act faster and reap the benefits.

What do you think? What challenges do you see facing the defense industry’s adoption of social media? Please post your comments below or email me.

Click here to read the McKinsey Quarterly article,  “Six social-media skills every leader needs.”

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The global management consulting firm Booz & Company, summarizes the current and future situation for many defense contractors this way:

Today’s declining budgets and changing customer requirements, and the increasing success of nontraditional competitors such as Cisco, Eurocopter, and even Boeing Commercial Airplanes signal that the industry’s status quo is likely untenable. Some portions of the sector may become more stable by spanning defense and commercial applications…

The recipe for success in this type of environment can be distilled into a single imperative: manage the company as a business rather than as a collection of programs.

Booz outlines five key challenges facing the defense sector:

1. Steep Declines in Federal Spending – For defense contractors, creating shareholder value in the past was facilitated by an ever-expanding market. That is no longer the case: “creating value will require alternative methods, some of which will be understandably unfamiliar to current management teams…”
2. Evolving Customer Requirements – While many defense contractors are still developing solutions like they did in the Cold War, today many threats are less predictable and evolve more quickly. As a result, “Defense companies need faster development and fielding cycles to remain relevant for large portions of their core markets.”
3. The Rise of New Competitors -  Nontraditional companies like Accenture, Apple, Cisco and Dell have become increasingly successful in the defense sector. Excluding Cold War-era systems, these companies account for 40 percent of major hardware program acquisitions. “Traditional defense companies, which are sometimes slower to deliver and more expensive, have had difficulties competing against these new competitors, even in traditional ‘core’ markets. These traditional companies will need to determine whether they can compete in their core markets without development of commercial-like capabilities and, if not, how commercial-like capabilities can coexist with traditional defense capabilities.”
4. Shareholder Suspicion Regarding Strategic Investment – Many investors are treating the defense sector like it is in irreversible decline and are urging defense contractors to ignore growth and focus on maximizing dividends.
5. Talent – Some of the skills necessary to compete in the current and future defense sector are vastly different from what defense contractors currently have.

So what can defense contractors do in this once-in-a-lifetime market upheaval? Booz makes five recommendations for defense sector survival:

1. Focus Your Value-Creation Strategy – Don’t batten down the hatches and wait for DoD to come roaring back and tell you what to do. Additionally, don’t lose focus and go in several new directions all at once. “It is best not to dilute effort by trying to execute too many strategies and business models, and don’t hunker down to wait for the customer to steer you in the right direction. In the last downturn, companies that hunkered down fared worst, and usually ended up exiting the sector.”
2. Don’t Miss the Opportunity to Invest in Things That Matter – In chaotic times like these that also represent opportunities, don’t try to do everything, but rather focus on those few things that truly differentiate you.
3. Consolidate Dramatically and Invest for Future Growth – “The defense sector is undergoing the kind of correction that happens once every 20 or 30 years. It is hard to overstate the extent of the downturn. At some defense companies, however, wishful thinking persists. Some believe they will find the fast-moving stream in this otherwise stagnant water. But there is no fast-moving stream. The market is already down by a third in terms of acquisition dollars, even before a possible sequestration. Costs must be cut.”
4. Lead from the Top and with Decisiveness – “In a downturn, though, decision-making needs to be more centralized and more direct, in part because difficult decisions will be required and ‘self-amputation’ is an unnatural act.”
5. Develop and Reward the “General Manager” – Since the 1980s, the pentagon has acquired a portfolio of programs rather than products. Consequently, much of defense industry management has come up through the program management ranks rather than from general managers. “The same leadership skills that have characterized success over the past decade or two will not necessarily apply during a downturn. In a period of industry contraction, business leadership skills are at least as important as—if not more important than—program management skills.”

As defense contractors diversify into commercial markets, the need to market their companies has become much more important. In the past, defense contractors could be satisfied with just responding to RFPs. Now with fewer DoD opportunities and new competition from the non-defense companies, defense contractors are fighting a business war on two fronts.

To many defense contractors, the word “marketing” conjures up trade shows, direct mail, brochures and PowerPoint presentations. But those things are only a small but visible subset of marketing.

One of the most popular marketing paradigms is that of the “Four Ps” – price, product, promotion, and place (or distribution). Marketing involves developing a product, its pricing strategy and how (or where) it will be distributed. Only once those three elements of the marketing mix are in place should promotion come into play.

QUESTION: What marketing challenges are you facing? Please share your comments below or email me. And if you found this helpful, please share it via the social sharing buttons below.

Click here to read Booz and Company’s Defense Industry Perspective or view it in SlideShare below.

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