The CEO of American Systems talks about his strategy that has moved the company from being mostly a subcontractor to becoming a prime player.
Hoover spoke recently with Editor-in-Chief Nick Wakeman about the company’s strategy and where it is going next.
Q: How is the company different today?
Hoover: We are more aggressive in looking for opportunities to prime, and we are very focused on national priorities. These are things that enable the president to make this nation safe: C4ISR, readiness, national security, intelligence, acquisition, logistics and citizen safety.
We’re now structured around our core competencies: consulting, professional and IT services, custom solutions, human capital, managed services, and design and installation services.
We also installed a professional business development organization focused on vertical markets, and in January, we made Peter Smith our chief operating officer, which combines delivery and business development under one person.
Q: How is adding a chief operating officer helping the company?
Hoover: It enables us to have a seamless approach to the market. Peter has been with the company 30 years and has exceptional knowledge of the business.
It is actually the first time in my career where I haven’t been directly responsible for both delivery and business development. That’s a change for me.
It gives me an opportunity to take on broader external activities with industry partners and customers.
Q: How are those changes paying off for the company?
Hoover: When you put in a professional business development system, it takes three years to really get it engaged. You have to get out in front of the opportunities. In 2007, we hired our first BD professionals. The pipeline started to grow in 2008, and we submitted some significant new business proposals. Then in 2009, we started to get results. We had 13 percent growth. We booked close to $400 million in new business opportunities.
We finished 2009 with $230 million in revenue, and we expect 2010 to finish in the $250 million to $260 million range.
We were a large small business five years ago. Today, we are a small large business, and we have no problem taking on the big boys and girls of the marketplace.
Q: What do you see driving growth going forward?
Hoover: We have a lot of organizational confidence because we look at our indicators, our pipeline of opportunities, the qualified pipeline and the proposals submitted. Indicators are not results, but they do indicate something. If they are positive, there is reason to believe the results are going to be positive.
In 2007, we began to build the indicators. In 2008, we were still building but didn’t have the results yet. In 2009, we got the results, and the indicators remained strong.
In 2010, the indicators are even stronger, which means we can project continued growth in 2011, 2012 and 2013.
The employees understand this because they recognize [that] as they win new contracts it creates new opportunities for them.
Q: Can you elaborate on how a company gains organizational confidence?
Hoover: It’s like putting a baseball team together. Everyone knows what they are supposed to do, but you practice and play a game. You lose, maybe lose badly. You practice hard and still lose. You practice hard some more and lose again, but maybe it’s a little closer. Then you practice hard and win, and then practice hard again and win again.
All of a sudden, the ability of the team and the confidence of the team and the trust each individual has in the other members of the team go up.