Northrop Grumman has a proud and lengthy heritage. From transporting Charles Lindbergh across the Atlantic, to carrying astronauts to the moon’s surface and back, to building the B-2 stealth bomber, Northrop Grumman has developed numerous groundbreaking innovations. As CEO Kathy Warden looks to the future, she believes resilience and agility are critical in responding to accelerating disruption in the business environment.

“What mainly puts companies out of business is the disruption that they don't see coming, or the one they see but choose to believe won't take hold and disrupt them.”

For Kathy Warden, having the resilience to survive repeated, accelerating disruption is about listening and acting with agility. “You need market awareness,” she explains. “If you don't see it coming, you certainly aren't going to be prepared for disruption. That requires a level of customer engagement that many companies did not need to have in the past. They absolutely need to stay closely attuned to their customers' needs in a much deeper way now.” 

“You also need to be able to respond very quickly,” she adds. “The lead times in seeing those indicators as disruption and trying to take advantage of that disruption is accelerating. A company has to be able to adapt very quickly.”

“You need to figure out how to monetize technology. Digital disruptors use technology in ways that more traditional businesses don’t think about. You really have to think about the digitization of your value stream and how a company can thrive through it. And that requires a whole different kind of expertise, both in the management of the company and within the organization.”

Staying ahead of digital disruption means CEOs must strike a balance between people and technology investments. For Kathy Warden, both are critical, but people are the key ingredient in the recipe. “Both are absolutely essential, but I lean towards people,” she says. “People are the source of innovation – the source for thinking that allows you to apply technology in novel ways to support the company’s underlying business model. For me, investing in talent and ensuring that people’s skills evolve in relevance over time is absolutely critical.” 

Throughout this document, “we”, “KPMG”, “us” and “our” refer to the network of independent member firms operating under the KPMG name and affiliated with KPMG International or to one or more of these firms or to KPMG International. 

The views and opinions expressed herein are those of the interviewees and survey respondents and do not necessarily represent the views and opinions of KPMG International or any KPMG member firm.  KPMG’s involvement is not an endorsement, sponsorship or implied backing of any company’s products or services. 

Kathy Warden