Strategic Sourcing at Lockheed Martin Corporation Prepared for: Corporate Sourcing Leadership Exchange June 2008 Meeting

Lockheed Martin Corporation Contents Lockheed Martin Overview LM Recruiting Model LM Strategic Sourcing Model Evolution Pipelines What Works What Needs Work Metrics & Reporting Related Best Practices June 2008 Lockheed Martin Corporation - CSLE

Lockheed Martin Overview 1,000 facilities in 500 cities and 46 states in the U.S. Business locations in 75 nations and territories internationally Operations Primarily the U.S. Department of Defense and the U.S. federal government agencies Lockheed Martin is largest provider of IT services, systems integration, and training to the U.S. Government Other business comprised of international government and some commercial sales of our products, services and platforms Customer Base Premier systems integrator, principally engaged in the research, design, development, manufacture and integration of advanced technology systems, products and services Business $41.9 billion Sales (2007) 140,000 worldwide Employees June 2008 Lockheed Martin Corporation - CSLE

Lockheed Martin Overview Locations LM Locations with over 200 employees June 2008 Lockheed Martin Corporation - CSLE

Lockheed Martin Overview Market Focus - Programs Focus on profitability and growth in the following markets: Defense/Intelligence Homeland Security Gov’t. Info. Technology • Net-Centric Operations • Information Superiority • Force Application • Focused Logistics • Missile Defense • Protection • Battlespace Awareness • Border and Transportation Security • Threat Information Sharing, Alerting and Protection • Critical Infrastructure Protection • Emergency Management and Response • e-Government • Enterprise Architecture • Information Security • Database Infrastructure and Management • Information Assurance Phoenix Mars Lander Also working with NASA to support America’s reinvigorated commitment to space exploration Over 3,000 programs in the U.S. and worldwide about 19 percent of global defense exports, and about 40 percent of all U.S. defense exports June 2008 Lockheed Martin Corporation - CSLE

Lockheed Martin Overview Business Areas Aeronautics Tactical Aircraft, Airlift, and Aeronautical Research and Development lines of business Space Space Launch, Commercial Satellites, Government Satellites, Strategic Missiles lines of business Information Systems & Global Services Mission Solutions: R&D and Engineering for Intelligence, Defense and Civil Agencies Information Systems: IT Infra-structure, Process Outsourcing, COTS Integration, Level of Service Solutions Global Services: Support of Mission Services, Nation Building, Stability Operations, Facility Services Electronic Systems Missiles and Fire Control, Naval Systems, Platform Integration, Simulation and Training Systems June 2008 Lockheed Martin Corporation - CSLE

Lockheed Martin Corporation - CSLE LM Recruiting Model Background Mid-90s: Many legacy company units, each with own staffing Many empty seats - Slow time to fill 1997: HR VP opens Washington Post, sees 6 LM recruitment ads…. “Has to be a better way!” 1998: LM Regional Recruiting Center (RRC) concept born June 2008 Lockheed Martin Corporation - CSLE

Lockheed Martin Corporation - CSLE LM Recruiting Model Regional Recruiting Centers (RRCs) Objectives: 1. Improve recruitment service and hiring performance 2. Develop a system that introduces significant cost savings 3. Create a transferable concept Cost per Hire Candidate Experience Cycle Time Eliminate duplication: ads, job fairs, sourcing efforts Interview once, but be seen by many BUs (one stop shopping) 24-hour offers June 2008 Lockheed Martin Corporation - CSLE

Process successful: LM Recruiting Model RRC Process Washington Metro Tyson’s corner satellite Delaware Valley Two centers: NJ and PA Third satellite in Owego, NY Orlando Silicon Valley Plus Rocky Mountain satellite near Denver Aeronautics – Ft. Worth Today, LM hires 10-12,000 people per year Over 80% hired through RRC process Improve recruitment service and hiring performance Develop a system that introduces significant cost savings Create a transferable concept June 2008 Lockheed Martin Corporation - CSLE

LM Recruiting Model Structure Snapshot Corporate Staffing Director Delaware Valley NJ-PA-NY Rocky Mountain CO Orlando FL Wash. Metro No. VA Silicon Valley CA Aeronautics TX Talent Sourcing Programs University Relations Strategic Sourcing & Military Relations All Business Units Regional Recruiting Centers Customer Supported: Regional Recruiting Centers (RRCs) Business Units University Relations & Talent Sourcing RRCs Strategic Sourcing RRCs Each staffing entity has budget responsibility All costs consolidated and billed back to the Business Units June 2008 Lockheed Martin Corporation - CSLE

LM Strategic Sourcing Model SSG – Evolution Beginnings In WMA RRC, initially identified need to proactively address increasing shortage of ‘cleared’ candidates (TS/SCI w/Polygraph) Included study of state of clearances & potential candidate population Small separate group formed within Staffing - Strategic Sourcing Group - to research, identify, ‘tag’ and source for these and other ‘critical skills’ Critical skills defined as those skill sets that are: Needed for maintaining & expanding LM’s core businesses Needed in significant quantities across multiple LM Business Units Always difficult to find and hire 2003 June 2008 Lockheed Martin Corporation - CSLE

LM Strategic Sourcing Model SSG – Evolution Beginnings (cont.) Developed critical skill list – hard work! Set up initial ‘central repository’ of sourcing knowledge (Strategic Sourcing SharePoint) Developed specialized research on critical skills Began development of critical skill pipelines, with limited staff 2004-2006 June 2008 Lockheed Martin Corporation - CSLE

LM Strategic Sourcing Model SSG – Evolution Business case to expand team to accommodate more pipelines Based on existing research, focused LM’s need to tap into broader labor market (‘passive’ candidates) Highlighted other companies’ best practices re: passive candidates Gap analysis: present state vs. desired state Showed considerable groundwork already established ! Role of RRCs vs. SSG re: pipelining candidates – tactical vs. strategic: different approach, different tools Benefits of dedicated work on pipelines Resources needed to close the gaps Gained buy-in from RRC stakeholders Early 2007 June 2008 Lockheed Martin Corporation - CSLE

LM Strategic Sourcing Model SSG – Evolution Current State 5 strategic sourcers 9 major skill pipelines in progress (since 3Q07) and producing viable, critical skill candidates Established Service Level Agreement, early 2008 Contributing on hard-to-find sourcing assignments Completing research requests Establishing credibility as we go June 2008 Lockheed Martin Corporation - CSLE

LM Strategic Sourcing Model Why ‘Expro’ Pipelines? Industry research: > 50% of Labor Market is ‘passive’ For LM critical skills, considerably higher A focus purely on active candidates ignores over half the talent market Build predictable talent pipelines in advance of need, given tightening market of critical talent Enhance positioning relative to our competitors; attract more than our share of critical skill talent Gain talent advantage by maintaining relationships with top talent over time, to convert the best candidates quickly Break ahead of ‘business as usual’ to improve key recruiting outcomes June 2008 Lockheed Martin Corporation - CSLE

LM Strategic Sourcing Model Filling the Pipelines Mine/Research LM Candidate Database Internal Pipeline External ‘Soft-Sell’ Advertising/Outreach Mine Web: Any/Every Way Strategic Sourcer Engage ‘Silver Medalists’ Employ Social Networking Tools Contacts the Prospect (email or phone) Begins the dialogue Obtains basic profile or resume Sets framework for follow-up w/prospect Completes CRM form Enters info/resume as Pipeline prospect/candidate Continues to update prospect record over time Research, Research… LM Proprietary Web Tools June 2008 Lockheed Martin Corporation - CSLE

LM Strategic Sourcing Model From Pipelines to Applicants Passives to Actives When the prospect’s timing is right When we have a particular opportunity that we market to them and they’re interested Strategic Sourcer refers the candidate To the appropriate recruiter (if actual requisition is known) To RRC manager if just area of fit is known Candidate type changed: ‘passive’ to ‘external’ Smooth transition is important! Candidate shouldn’t feel like they’re starting over Still working this process Leads Contacts Hires Candidates Strategic Sourcing RRCs June 2008 Lockheed Martin Corporation - CSLE

LM Strategic Sourcing Model SSG – Services Provided Primary Services Critical skill pipeline development, sourcing support Special Research Requests New Market Research, Acquisition Support, other research Additional Activity/Output Update/maintenance of critical skill list, sharepoint, industry conferences, etc. All services defined in Service Level Agreement June 2008 Lockheed Martin Corporation - CSLE

LM Strategic Sourcing Model What Works All-Sourcers List Soft-sell advertising Focused use of specialized tools Elevator Pitches – for campaigns Varied backgrounds of sourcers Building relationships over time June 2008 Lockheed Martin Corporation - CSLE

LM Strategic Sourcing Model What Needs Work Transitioning passives to RRC recruiters Soft-sell advertising More automated data capture Identifying skill pools in the corporation Integrating understanding of SSG into dynamic staff changes at RRCs Verifying ‘real’ needs June 2008 Lockheed Martin Corporation - CSLE

LM Strategic Sourcing Model Metrics & Reporting Monthly Pipeline Reports – internal to team Monthly Reports – highlights to staffing/staffing management Quarterly Reports – staffing/staffing management Pipeline stats, sourcing projects for RRCs, specific sourcing assistance, special activities to build pipelines, resulting hires, etc., June 2008 Lockheed Martin Corporation - CSLE

Related Best Practices Partnership with Talent Sourcing Team Alumni network Strategic Focus on Transitioning Military Chat sessions by skill focus Consistent LM recruitment branding Close partnering with LMCareers team (applicant/hiring database) June 2008 Lockheed Martin Corporation - CSLE

Questions/Discussion Lockheed Martin Corporation - CSLE June 2008 Lockheed Martin Corporation - CSLE