Raytheon

Following the acquisition of General Dynamics (GD) and its more than 8,000 employees, Hughes Missile Systems (HMS) was in disarray. HMS faced not only the multifaceted challenge of rapid expansion, but the additional turbulence of clashing organizational cultures.

Aggressive, Hierarchical Culture Clash

General Dynamics was characterized by a strict hierarchical structure where employees were rewarded for domineering and aggressive behavior. When former GD employees secured many of the top executive positions in the newly consolidated company, original HMS employees were left feeling unrepresented, unrewarded, and unseen.

Resentment flourished and productivity steeply declined.

Louise Francesconi, who would become President of RMS, described the culture: "When you had to solve a problem or when something wasn't going your way, they were table pounders, they yelled at each other and you'd get into meetings and the decibel level would just be huge."

Three Companies, Four Cultures, One Mess

The situation was further inflamed when HMS was acquired by major defense contractor Raytheon and renamed Raytheon Missile Systems (RMS).

"Hughes Raytheon, by the time I left, was really the amalgamation of four different missile businesses. And so there was a huge mix of people. We had very different cultures," Louise explained. "Just even the engineering and manufacturing mix was the first time we were all together and we had such a huge job to grow the business."

Integrating employees from three different companies after two organizational overhauls proved an immense obstacle; RMS was a fragmented organization.

Problems Not Being Solved

Louise captured the dysfunction: "When you really leave a meeting when it's not happening, and you get back in your office and you shut that door, and you're really honest with yourself, you know it's because you weren't communicating right, you weren't focused on the right issues, personality got in the way, opinion got in the way. You weren't working towards one goal."

"It's that we weren't solving problems. We were just...piling on. And it got so bad, I was thinking of quitting," she admitted.

The classic response didn't work: "You know that old expression, 'No change, no change, no change!' You can just try harder, have more meetings, you know, dress it up any way you want. It doesn't change."

$100 Million Cut in 30 Days

RMS's leaders recognized the threat that infighting posed to the company's future. Then came the immediate crisis: RMS faced a 30-day deadline to engineer a $100 million expense reduction.

Before joining forces with Arbinger, the leadership team believed employee layoffs were unavoidable; even cutting 200 jobs would only create 20% of the necessary savings. Determining which departments would lose employees became a contentious battleground.

They needed a means for ending the internal battles, uniting the organization, and unlocking continuous, measurable improvement for the consolidated division. 

Choosing the Right Partner

After evaluating nearly 40 different consulting firms, RMS chose Arbinger because of its unique approach. Where other consulting firms claimed the ability to solve RMS's problems, Arbinger offered to equip RMS with the guidance and tools that would allow the division to solve issues on its own.

This approach would center around the empowerment of each employee, enabling them to both understand their individual contribution to the division's problems and to devise creative ways to hold themselves accountable and work collaboratively.

Immediate Crisis: $7 Million on Day One

Arbinger began its work with RMS's leadership team with rapid dramatic effect. As a result of the work with Arbinger, the executive team sought alternative ways to cut costs beyond layoffs.

They came together and succeeded in finding $7 million in savings on the first day of the project alone. By continuing to utilize this same Arbinger-based process over the next two months, the leadership team reached its target of cutting expenses by $100 million.

Remarkably, this achievement was realized without having to lay off a single employee and without any individual department or team feeling misused. Louise said that "it was like magic."

Training Front-line Employees

Experiences like the $100M cost reduction convinced RMS leadership that Arbinger principles were the solution for unlocking unanticipated business opportunities, inviting widespread collaboration, and powerfully impacting bottom-line results.

"We exposed or trained people deeply in the organization—even through our represented or hourly folks. So we went very very deep within the organization," Louise explained.

Over the next several years, 3,000 of the division's employees were trained to embed the Arbinger approach into their work practices. Some of this training was provided directly by Arbinger facilitators and the rest was presented by RMS employees who had gone through Arbinger's train-the-trainer program.

Monthly Leadership Support

In addition to this division-wide effort, Arbinger consultants continued to meet with the leadership team on a monthly basis. This supported management's commitment to deeply understand Arbinger principles and enabled them to effectively apply, authentically live, and persuasively teach these principles.

Louise emphasized the commitment required: "Arbinger is not about training. It's about exposure to a concept. And you as a leader have to think deeply about it, okay? But then you have to practice it. You have to work at it. And that's the beauty of having a team around you that is exposed to it and that is trying to practice it at the same time."

"It's not just casual interface. It's very rich hard work. It's that focus on success, the result, the answer in a way that focuses on others, that is so accelerating that culture moves around it."

Cultural Transformation Spreads

As RMS's employees began to learn how to implement the Arbinger approach, a powerful shift began to occur within the division. Employees began to look beyond the narrow confines of their own individual roles and needs and started instead to focus on the needs of their colleagues and of the organization at large.

A spirit of genuine interconnectedness and mutual concern spread throughout the division, transforming culture as employees from the top down started to make dramatic, organization-wide changes with demonstrably positive impact.

By transforming culture, RMS transitioned from being a collection of 17,000 disparate employees—each with competing interests and lingering tribalistic loyalty to a former company—into a unified organization.

Meetings Transformed

Meetings ceased to be characterized by yelling, finger-pointing, and defensiveness. Instead, sincere listening and genuine collaboration began to take place.

"It had huge impact on union negotiations, how we held meetings, how we communicated, huge difference," Louise noted.

Decisions were made much more quickly as stalemates were mutually abandoned for the greater good.

Dramatic Efficiency Gains

Louise described the transformation in their planning process: "When we first started to really use an Arbinger approach to develop our goals for the organization, it probably took us a day when we first started. Eventually we got down to half a day. Eventually we did it one hour."

"Twenty people collaboratively in a room in the course of one hour would come up with complex goals for a six billion dollar business that were about every piece of the organization succeeding. It was—nobody believed you could do it. Nobody."

"Now what you do with those other seven hours? That's where you leave the other group behind. You leave the competition in the dust. It's fabulous."

Years-Long Problems Solved

Louise explained the breakthrough in problem-solving: "Could we solve and move forward technical problems in a way that we never could before? Absolutely. Answers came to things and how to interface with subcontractors or suppliers that we've been working literally for years to figure out."

"It's again one of those things that people say it was magic. And some people say it can never be repeated again, and they're wrong. Because it was a way we went about it. They're just hard work, working the right way." 

Extraordinary Business Growth

When each of the employees was able to adopt RMS's vision as their own and became determined to work toward that vision, the division started to thrive.

Annual sales skyrocketed from $1.9 billion to $5 billion.

Louise captured the achievement: "We doubled the business. In a time when people didn't even think we could grow 5%. And just the human way we communicated with each other to me was critical."

World's Largest Producer

According to RMS executives, neither the cultural transformation nor the substantive financial growth would have happened without Arbinger.

Today, RMS is the world's largest producer of its sophisticated products and the largest division within Raytheon Technologies.

Sustained Growth, Not Magic

Louise emphasized the replicability: "You grow with it. You practice with it. You develop it. You learn it."

"Did we still have problems? Yes. Did we make every milestone? No. Could we solve and move forward technical problems in a way that we never could before? Absolutely."

"Some people say it can never be repeated again, and they're wrong. Because it was a way we went about it. They're just hard work, working the right way."

Raytheon Missile Systems proved that even the most aggressive, dysfunctional culture—where "table pounders" yelled in meetings and a female president considered quitting—can be transformed when 17,000 employees learn to focus on making others succeed rather than protecting their turf. When faced with a $100M cost reduction in 30 days that seemed to require 200+ layoffs, RMS found $7M in savings on day one by working collaboratively, reached the full $100M in two months without a single layoff, and went on to grow from $1.9B to $5B in annual sales. They reduced complex goal-setting from a full day to one hour and solved supplier problems that had stumped them for years. The lesson: integration after multiple mergers doesn't require choosing which culture wins, it requires giving 17,000 people from four different businesses a common way of seeing each other that makes collaboration accelerate rather than stall. That's not magic; it's just "hard work, working the right way."