Kent Kresa: 2001 business person of the year: a look at this local business champion. (Business Hall of Fame).

A look at this local business champion

From Tin Pan Alley to M.I.T.

Because he's never sought a high profile, it may come as a surprise to learn that Kent Kresa, a native New Yorker, grew up in a show-biz family. His father, Helmy Kresa, worked as the assistant to songwriter Irving Berlin. As a child, Kent Kresa worked as an actor, a fact that may help explain how, in the words of one business reporter, "his mild-mannered, studious-looking demeanor belies a tenacious maverick."

Kresa gave up the stage, however, to attend the Massachusetts Institute of Technology, from which he received a B.S. in 1959, an M.S. in 1961 and an E.A.A. in 1966, all in aeronautics and astronautics.

Show biz's loss was the defense industry's gain. Today, Kresa is Chairman and C.E.O. of Northrop Grumman Corp., an $18 billion, global defense company headquartered in Los Angeles. Northrop Grumman provides technologically advanced, innovative products, services and solutions in defense and commercial electronics, systems integration, information technology and nuclear and non-nuclear shipbuilding and systems. With nearly 100,000 employees and operations in 44 states and 25 countries, Northrop Grumman serves U.S. and international military, government and commercial customers.

The story of Northrop Grumman's continuing growth and evolution could not have been written were it not for Kent Kresa's visionary leadership. Over the course of Kresa's 27 years with the company, he has risen from vice president and manager of the company's Research and Technology Center, developing new proprietary processes and products for the company, to corporate vice president and general manager of the Ventura Division, a leader in the production of unmanned aeronautical vehicles, to group vice president of the company's Aircraft Group, to senior vice president-technology development and planning. Kresa was elected president of Northrop Grumman in 1987, chief executive officer in January 1990 and chairman in September 1990.

Adapting to Change

The fully integrated battle management of the near future will take a network-centric approach in which communications among ships, satellites, armies, aircraft and submarines will be fused into a net of interconnectivity enabled through cyberspace. Under Kent Kreasa's leadership, Northrop Grumman today represents virtually every technology that will play a significant part in this modern era of warfare.

Since the end of the Cold War, Northrop Grumman has built a broad-based weapons capability to meet current and emerging national defense needs, including anti-terrorism and homeland security. Throughout this transformation, the company has maintained a consistent focus and strategy. As a result, Northrop Grumman is now a top-tier defense company, a full partner with its military customers and an inherent part of the country's national security.

Specifically, Northrop Grumman is a defense electronics powerhouse that produces nearly 60 percent of the Pentagon's airborne radar systems and is well positioned in missile defense. As the second-largest provider of information technology for the federal government, Northrop Grumman is crucial to cyber warfare efforts, helping to protect the U.S. government's computers from Internet attack. The company is also the world's largest naval shipbuilder, with expertise in every class of nuclear and non-nuclear vessel, providing global force projection. Its systems integration expertise ensures unparalleled surveillance and precision strike capabilities and its commercial electronics capabilities remain world-class.

Northrop Grumman developed a business plan in the early 1990s to position the company for uncertain conditions facing the aerospace industry and its customers. The end of the Cold War and the accompanying sharp reductions in U.S. defense spending resulted not merely in fewer new programs, but also in a paradigm shift in defense procurement priorities.

Anticipating these industry changes, Kresa set out to transform Northrop Grumman from primarily a producer of military aircraft to a premier defense electronics and systems integration company, while retaining or building strong capabilities in military aircraft systems and modifications, information technology and services, and marine and underseas systems. This growth strategy concentrated on focused acquisitions in the defense electronics and information technology areas as well as on superior performance in existing businesses.

Transformed for Growth

Since the early 1990s there has been significant consolidation within the defense industry. There are now fewer than 10 significant defense firms, down from more than 50 competitors in the 1980s.

In early 1994, the Northrop significantly enhanced its electronics business with the purchase of Grumman Corporation, a major electronic systems integration company, followed by the acquisition of Westinghouse's Electronics Systems Group in 1996. This combination delivered substantial new capabilities and programs to the company, including airborne radar, airspace management, and marine and space systems.

In 1997, Northrop Grumman acquired Logicon, Inc., a leading defense information technology company. The union with Logicon further enhanced Northrop Grumman s existing systems integration capabilities in the critical areas of surveillance, precision strike, and advanced battle management.

By the turn of the millennium Northrop Grumman had methodically reshaped itself, beginning as a company that predominantly manufactured combat aircraft for the defense department, to a leading defense electronics, systems integration, and governmental information technology enterprise.

Over the past 36 months, Kresa led Northrop Grumman as it completed an unprecedented $48 million acquisition spree. Northrop Grumman's 2001 acquisition of Litton Industries strengthened the company's capabilities in existing businesses, creating a global electronics powerhouse and one of the largest IT suppliers to the federal government. The Litton acquisition also added a new prime capability, ship building, making Northrop Grumman the largest builder of nonnuclear surface ships for the U.S. Navy. In addition, the company has a strong global presence, with international sales comprising nearly 20 percent of total company revenue.

Looking Forward

Today, the Los Angeles Business Journal honors Kent Kresa for his 27-year history of success and leadership at Northrop Grumman, as well as for his role in ensuring that Northrop Grumman will continue to be a key partner to its military and commercial customers well into the future.