Robin Lineberger took on a new position earlier this summer as a principal with Deloitte, where he advises major aerospace and defense contractors.
Lineberger joined Deloitte Consulting in 2009 as CEO of Deloitte Federal Government Services after spending nearly years with BearingPoint, most recently running its government consulting and outsourcing business.
A third-generation military veteran, he joined BearingPoint after retiring as a captain in the U.S. Air Force, where he served in development, testing and other roles.
In a recent conversation with ExecutiveBiz, Lineberger discussed his new role and how he is working to help large aerospace and defense players navigate sequestration, understand shifts in the geography and focus of U.S. defense dollars, and capitalize on international opportunities.
Executive Mosaic: What is the nature of your new position and the strategy behind your move?
Robin Lineberger: I rotated out of the core federal market and into the broader aerospace and defense market. The principal reason for that is Deloitte recognizes that the broad aerospace and defense market ““ particularly the “D“ in aerospace and defense ““ and our clients in that market, are going through very challenging times.
What we expect is that they will have to continue to react to marketplace challenges, recast their strategies and realign their businesses. So, we believe that bringing more senior advisors into the market will allow us to take a leadership position at a critical time when our clients are looking at how they adapt to the future. Not only in the U.S. defense marketplace, but how they may have to reposition and take a broader look at the global defense marketplace.
To that end, Deloitte is creating a balanced approach by bringing commercial understanding from the aerospace and commercial manufacturing industries into the market and leveraging experienced leaders who have dealt with both the federal and defense businesses. Of course, when we say aerospace and defense, we mean defense, homeland security, the intelligence markets, and one would argue a good portion of those clients that are categorized aerospace and defense are in fact much broader in who they service.
Many clients serve the civilian agencies and have much more than just product-based businesses. Many of them are in professional services. So, it makes sense to bring someone like myself that has run, in gross revenue terms, a nearly $2 billion professional services firm in this challenging marketplace. I have a core understanding of the issues and challenges they face, how to adapt and I“™ve worked extensively with many of these companies while we jointly served our federal government. So, that“™s why I moved into the commercial side of the business.
To sum all that up, I“™m helping the existing aerospace and defense practice continue to take a leadership role in that market and bringing a new dimension of federal understanding, everything from regulatory to budget. Now when the CEOs and division leaders of aerospace clients come to us, we can engage them in a much different way than a pure commercial or manufacturing practitioner can.
Neither the timing nor the market that we“™re in is totally a coincidence. We have normal executive transitions where we get together and think about, “OK, we think we“™re going to make these transitions within the next year, what window in that year should we make the move?“ The front end of the government“™s new fiscal year will start two to three months into my transition, which is much more optimal than getting that quarter on the back end of the year, because getting out into the market as its making these changes is important.
If you consider my military background beginning in 1981, it“™s been 32 years in and around this marketplace, so it makes sense to bring that to bear in the aerospace and defense market.
Executive Mosaic: How are you working with your clients to plan ahead for the next three-to-five years in an uncertain environment with lingering sequestration and continuing resolution?
Robin Lineberger: It starts with the strategies; stepping back and looking at what are their lines of business, ranging from services to products. Products can be big platforms like an aircraft carrier, an aircraft platform, or cyber products. We take a look at their product portfolio and identify how a flat-to-down contracting market will affect particular products, and then help them make decisions.
For example, should they extend that product access or channel globally? Do the regulations allow it from an import/export control perspective? We look through their product and service portfolio, determine what the market will be for a product and the constraints they may have in being able to find other customers for that product, and then help them extend or work through positioning their business.
We do recognize the budget cuts and austerity that exist in the market and we certainly advise on being frugal when thinking about costs. However, we“™ve seen our clients take costs out and start consolidation but they“™re not going to cut their way to a long-term prosperity. So, this is where we need to think about a strategy of “what“™s the growth element of this paradigm,“ rather than the cost cutting element, which everyone gets.
They“™ve begun to react and you can see some hints of this when major companies recently announced new international divisions. They are starting to redouble their look at how they sell internationally. Many are also looking at non-governmental markets for some oftheir products and services.
If you look at the Deloitte Global Defense Outlook, 50 countries spend 97 percent of the dollars spent on defense in the world. We surveyed those countries to understand where they“™re spending their dollars and what their moves are. And what we are seeing is a movement first towards denuclearization and then smaller, more mobile forces, such as special operations forces.
Now, it“™s about helping our clients understand the directionality, in not only the U.S., but also these 49 other top spenders and how they are positioning their defense forces for the next generation. The question becomes, how do our clients realign, target and modify their product lines to accommodate those changes?
So, it“™s a very interesting pivot point as we recognize how governments are spending, where the spending shifts are, and how these large aerospace and defense companies can access and take strategic advantage of the knowledge and insights we can bring them.
Executive Mosaic: Have most of the big players already taking meaningful steps in these new directions?
Robin Lineberger: It varies. It“™s a very uneven response. You have to categorize them a bit, so, if I look at professional services firms and compare them to major platform providers, you“™ll come up with a mixed result.
You have to look at the applicability of ships, aircraft and ground vehicles; there are not many special operations forces buying aircraft carriers. So, you“™re seeing a bit of that correlate around those product lines that outfit agile, asymmetric mobile forces; communications gear, small mobile vehicles, armament and mobile data networks. Those are the kinds of things I“™m certain that you will begin to see.
Among the companies it varies because some are already international. Specifically what we see in the U.S. are subsidiaries of European-based firms and some firms are U.S.-based and already have traditionally sold internationally. It“™s almost apples to oranges comparisons based on where they are from, how they are positioned, whether they are a native U.S. firm or a foreign subsidiary.
Executive Mosaic: Are you working to help clients diversify into areas where budgets will continue to be strong in the future, like next-gen tech?
Robin Lineberger: We are not only working with firms to diversify and create those products, but also helping those that have those products understand regulatory limitations and how they would have to modify their product line in order to pass International Traffic in Arms Regulations (TTAR). We help them identify which technology they should not take offshore, because, they could possibly diminish the U.S. advantage or fall into the wrong hands. All of that has to go through the international arms control activity.
These are not foreign military sales where the government actually performs those sales and acts as the intermediary between other governments and aerospace and defense firms. It“™s where these companies set up or have an international division and sell product lines or derivatives of product lines that are currently being manufactured here or in other countries directly to foreign governments.