CONTRACTOR OF THE YEAR
Maximus' two-step to success
Two critical moves in 2006 set Maximus on a fruitful path
- By Nick Wakeman
- Jan 22, 2013
The ground work for making Maximus Inc. one of the best government contractors of 2012 was laid in 2006, when the current management team took over.
Richard Montoni became CEO that year, and led several changes that have resulted in a track record of success for the company, and his being named executive of the year as part of the Greater Washington Government Contractor Awards. The company also was a finalist for contractor of the year.
“I was very surprised, and the team was surprised,” Montoni said. “We were just very, very happy to be selected as a finalist.”
The annual awards are presented by the Fairfax County, Va., Chamber of Commerce, the Professional Services Council and Washington Technology.
Montoni credits two strategic moves that the company took in 2006, when he took the reins after serving as chief financial officer for four years.
The company was at a crossroads at the time, he said. It was founded in 1975 by David Mastran, who successfully ran the company. “But when a company gets to a certain size, it needs to change cultures and values and process to be successful in the next chapter,” Montoni said. “And that’s where we were when this team took over.”
In 2006, revenue stood at $700.9 million. The company finished 2012 just shy of $1.1 billion.
“We did two things of strategic significance that are the underpinnings of our success over the last six years, and I think we still have success ahead of us,” said Montoni, who calls those strategic steps pillars.
Pillar one was to focus on the government and the delivering of health and human services. For Maximus, that means helping governments with the administrative side of delivering services, such as Medicaid processing and eligibility, work-to-welfare benefits, child support and other services. The company’s tag line is “Helping government serve the people.”
The benefit of focus is that it helps a company distinguish itself from the competition. It also helps it identify opportunities, identify risk, and pick and deploy the right technologies, he said.
In the area of Medicaid, for example, Maximus has focused on being what Montoni calls the first mile. “We design and map the processes and bring in the technology,” he said. “We go into the community and identify the most likely participants of a program and we’ll perform outreach.”
The company works with non-profits in the community because they know who needs the benefits, and who should be eligible, he said. Nationally, Maximus works with over 400 non-profits and provides services in over 12 languages.
The company will perform application in take, whether online, fax, mail or in person. They do the processing and help the state determine eligibility, he said. Maximus also helps applicants pick a health plan.
“You need three legs of the stool: people, process and technology,” Montoni said.
The second pillar builds off of the first, and is the company’s focus on risk management. Maximus has a three-tiered risk management strategy.
Tier one is getting it right the first time. “That sounds simple but it’s crucial. You really need to focus on that,” he said. For this, the company has a focus on project management.
Tier two is trust by verify. “With a lot of young companies there isn’t a lot of verifying,” Montoni said. That means collecting information. For example, the company conducts a quarterly questionnaire for each project with 25 yes-no questions that cover technical, delivery, customer satisfaction, compliance and financial aspects of the project.
“These are smart questions that get to the heart of a project,” Montoni said.
The scores from the questionnaires are added up, and give a consolidated perspective of how the company’s portfolio of projects is performing, he said. The questionnaires also help spot troubled projects early.
Tier three is managing the risks and returns of new work. The company has a business review committee that Montoni chairs. New opportunities are presented to the committee, and are given the thumbs up or down.
In the beginning, there was some chaffing as projects got rejected, but Maximus’ two business units formed their own business review committees to go through the process before coming to Montoni’s committee. “No one likes to go in front of the CEO and get turned down,” he said.
The committee goes through every risk area of a new opportunity, contractual, operational and financial, and how Maximus can mitigate those risks, he said.
“You can’t run a company without risk; it just has to be balanced,” Montoni said.
He also uses the committee meetings as a way of instilling Maximus’ values and strategic goals in all employees. Montoni said that he invites a wide range of people to come to the committee meetings. They include new hires and people from all levels of the company.
“People hear the questions that are being asked, and they learn what is important, and then they go into the market and they can see and shape opportunities that are good for the customer and good for the company,” he said.
In describing his company, Montoni talks a lot about “culturalizing” what the company does and how it does it.
The business review committees are a prime example. Another is an emphasis on project management. The company holds three-day boot camps each year for its hundreds of project managers. “We want world-class project management,” he said, which gets back to tier one of the three-tier risk management strategy: get it right the first time.
This kind of culturalization doesn’t happen overnight, of course, so patience might be a critical lesson learned from Maximus’ success.
“It took three years to culturalize a lot of what we are doing,” Montoni said. “But once we did, the momentum and the confidence started to build and the opportunities started to build too.”