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Transcript: Ronald Sugar, Chairman and CEO, Northrop Grumman

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LONDON, England (CNN) -- From under seas. To cyber space. To outer space. U.S.-based defense contractor Northrop Grumman is there. Armed with a doctorate in electrical engineering, Chief Executive Ron Sugar leads the company that is one of the top five defense contractors in the world. With 125,000 employees and annual sales of almost $31 billion dollars, the company is at the forefront of the warfare revolution. CNN's Todd Benjamin caught up with him in London and began by asking about his thoughts on leadership.

Sugar: When I was a kid growing up I think I always wanted to be in charge and the only difficulty was that I discovered people didn't always want to follow me. One of the reasons for that was I didn't really understand that to be a leader you needed followers who are willing followers.

Benjamin: What philosophy did you take away from that?

Sugar: You really have to have a sense of where you're going otherwise you can't be a leader, and then you want to surround yourself with really good people, the right appropriate people for the task and you want to empower them and bring them into the process with you and trust them and say hey this is where we want to go, what are your thoughts. And they're always astonished when I say to them "what can I do for you, how can I work for you so you can get your job done"?

Benjamin: The defense industry has changed radically from when you first started in it and changed again since the end of the cold war. Where do you see the future?

Sugar: I read a piece just a couple of days ago that indicated that we really have begun a next world war. We didn't realize it but in fact we are in a next world war. And it's a different kind of war than the kind of wars we've experienced in World War I or World War II or even the Cold War and the rules are going to be different. But the one thing which I think is going to be necessary is for technological advantage wherever possible because we don't have human advantage in this country. There are many more people outside this country who would probably do us harm than we have that we can defend. The only differentiator we have is the quality of our technology.

Benjamin: How will this manifest itself?

Sugar: A great deal of digitalization of the battlefield. The greater use of improved intelligence gathering, sensing, unmanned aircraft, spacecraft, information processing, information warfare where you have a better understanding of what the other guy is saying to himself before he can actually act on it. You can interrupt it, you can disrupt it. And of course you cannot deny the need for kinetic weapons and the actual ability to strike something which is the target.

Benjamin: Now technology is a powerful weapon for the military, but ideology and insurgency is also a very powerful weapon, so can the war on terror ever be won?

Sugar: Well, I think it has to be, but it's going to have to be won on more than just purely a military basis. Clearly there are many dimensions. And if you're able to create more terrorists than you can somehow neutralize overtime, you're not going to win. So, there are some fundamental structural issues in terms of poverty, in terms of class structure, clashes, cultural clashes, religious clashes which are really big issues and these things are going to go on for many, many generations.

Benjamin: The defense industry by nature of what it makes is a very different industry from several other industries. How do you respond to critics who would say that you make weapons which maim and kill?

Sugar: Our purpose is to provide the technological firepower so people don't maim and kill us. And that we can protect our way of life. And while it would be nice to live in a world where there are no weapons, and it would be nice to live in a world where everybody has the same values and respect that we might have; that is not the world we live in. And so it becomes a simple imperative of do we want our way of life, our society, our families, our civilization, the structure of the civilized world as we know it to prevail, or do we want something else to prevail? And, fundamentally, because the world is a dangerous place, we need the kind of technology that we provide.

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