Frank St. John: Lockheed Martin's COO Leading Innovation & Defense!

Good morning, good morning. Good to be with you guys this morning.

Yeah, yeah, but I'm happy to carve out a little bit of time to talk to you guys, because helping people understand how to better understand and manage their finances is a great thing. So I appreciate you guys doing this.

Yeah, let me begin by saying that when I started, I honestly didn't even know there was such a thing as COO. I was a high school intern. The summer before my senior year, I started at what was then Martin Marietta, and I was 15 years old. My mother drove me to work the first couple of weeks until I got my driver's license. I worked there prior to graduating high school, then I went over to UCF and got an engineering degree, and I worked as a work experience program intern through that whole time. When I graduated, I went into engineering on different programs and products that we were selling to our customer. After about 20 years of taking on more and more responsibility in engineering, I eventually moved over to what we call program management, where you're basically responsible for delivering on the entire contract, including the engineering piece. I saw some success there, and then eventually started managing a portfolio of programs. About 10 years ago, I started moving into executive leadership. I've been the president of our Missiles and Fire Control business area, I've been the president of our Rotary and Mission Systems area, and then about 5 years ago I was blessed to be asked to become the Chief Operating Officer. So it's been a more than 40-year journey, but steady progress along the way, and just so blessed to be in this role now.

Yeah, I've had some deep experience in some of the groups, exposure to all of it, and I feel like at this point I know the corporation pretty well.

Yeah, and a lot of people look at Lockheed Martin and they see it as an industrial or a manufacturing company, but Lockheed Martin really differentiates itself when it comes to innovation and developing new technologies, applying those technologies to our customers' missions, and also being an integrator of technologies that other people develop, not only aerospace and defense companies but also commercial companies. If you think about big data, cloud computing, artificial intelligence, how do we take all of those technologies and integrate them together to the benefit of our customer, who has some pretty demanding missions that they're trying to accomplish for the safety and prosperity of our nation and of the world?

I think at the heart of most people's success is a background of coaches and mentors. I look back over my career and I see six or eight people that stand out as people that I either emulated their leadership style, learned from them different lessons about the work we were doing, but also about how to relate to people, how to deal with challenges. A lot of good coaches and mentors over the years. I would also say great teams, great teammates that continues even today. Some people occasionally say, 'How do you manage a 120,000-person corporation?' And my response is, 'I don't. I have a team of eight or ten people that I work very closely with, and then they have responsibilities and they have teams, and so it's really about how do you organize and communicate strategy and alignment through a large organization.' I think another thing that has been a key all along is maintaining the focus on our customers' mission. The best business is to meet your customers' greatest need. So we look at every day what are the threats that our customers are facing, how can we apply technology in a safe, affordable, reliable way to meet those needs, and then good business kind of follows out of that. Keeping that focus on customer mission is really clear. Then I would also just say in terms of personal success, if I keep my eye on making my teammates successful and benefiting our customers and our shareholders, my success is all taken care of. Put myself at the bottom of the list in terms of priorities, focus on the customers, the shareholders, the teammates, and everything has just kind of worked out. I would add to that some great advice that I've received over the years almost continually is to just trust God through this whole process. He's got a plan and a purpose, and His favor is a big part of what's happened in my life. So that's what I would say were the keys to success here over the years.

Yeah, it's hard to believe it's been that long. I was thinking as I was getting ready for this podcast, I thought it's been more than a decade at least, and then when I saw that it's been 13 years, I couldn't believe it. Time has really flown by. I would just say the experience has been a couple of things. One is consistently good outcomes over the last 13 years. There's been a lot of ups and downs in the market, and you and your team have been steady, constant, good advisors through that process. I've also experienced a real tailored, personal focus. We have, and I'm sure a lot of your clients do, we have some interesting, unique objectives with our financial plan. You guys have always taken the time to dig into what's going on with family, what's going on with kids, what's going on with objectives we're trying to achieve. It's just been a really solid, good experience, and that's why we continue to work with you after all these years.

Yeah, it's interesting. As you go through life, you always encounter different challenges or different opportunities in front of you. A good example of something that you guys helped us work our way through was our home that my parents lived in for 40 plus years. It was a property that we owned, and when my parents passed away, we were faced with disposing of that property. One of the things that we talked with you and the team about was what are the tax liabilities going to be associated with that, because it had appreciated significantly over 40 years. So you and Michael put us in touch with a group called the Realty Gift Fund, and it really allowed us to satisfy a bunch of objectives. We had the property appraised, we essentially deeded the property over to Realty Gift Fund, and then they charged a relatively small fee and donated the balance of the property value to our donor-advised fund. That allowed us to do a lot of things. We avoided the headache of renovation and sale of the house, we got the tax benefit of donating the home, and simultaneously avoided the tax on the appreciation. That is something that prior to the conversation with you and the folks at SFM, we never would have known was available to us. It was fairly straightforward, it wasn't a heavy lift, and it was a solution that now I share with anybody that's in a similar situation. I say, 'You know, here's a good idea, you ought to look into something like this.'

Yeah, and it is one of the objectives that Frasier and I have from our financial plan is to be able to continue to give generously as time goes on, even after the point at which I'll be retired. That donor-advised fund is a great way of taking highly appreciated assets and moving them in there and creating a channel for taking the blessings that we've received and being able to bless others. I would just say the experience, as I said, in working with you folks over the years has been incredibly positive. As our net worth and as our resources have grown, we have just continued to work with you and your team because of the personal attention and because of the professionalism and steady hand. We count this relationship as one of the most valued relationships we have. You guys are great stewards of the responsibility we've asked you to take on with us.

Yeah, absolutely.