SAIC's Beyster on success and entrepreneurship

Few CEOs deserve the legendary status of Robert Beyster, founder of Science Applications International Corp. He founded the company in 1969 with a handful of people and over the course of 30-plus years built it into a multi-billion dollar operation.

This November he will be inducted into the hall of fame by The Greater Washington Government Contractor Award program, produced by the Fairfax, Va., Chamber of Commerce, the Professional Services Council and Washington Technology.

Beyster retired from SAIC in 2004 when the company had $6.4 billion in annual revenue. He then founded The Beyster Institute at the University of California-San Diego to foster entrepreneurship through employee ownership.

Recently, Beyster exchanged e-mails with Editor Nick Wakeman on SAIC, employee ownership and advice for today’s entrepreneurs.

Washington Technology: What was your vision for SAIC when you founded the company?

Beyster: My vision was simply to create a good place for people -- the company's engineers and scientists -- to work. I also wanted the company to have a strong culture of entrepreneurship where people would be free to identify and pursue new business opportunities, and then be rewarded for their successes.

WT: How quickly did that vision change and what did it change to?

Beyster: Things changed quickly, although my central vision remained the same for as long as I was a part of SAIC. I had underestimated the growth potential of the company, and it grew far more rapidly than I or anyone else expected.

Within a year or two after SAIC was founded, we realized we had a tiger by the tail. The idea of employee ownership wasn't a part of my original vision, but it did come about after we passed about $1 million in annual sales.

The character of SAIC was determined to a large degree by the company’s management team. They expected a lot from their employees, and I expected a lot from them. I was personally surprised by the path we took. It was a very exciting time, and I was happy to share the wealth we built with those who made it possible.

WT: Where did the idea for employee ownership of SAIC come from, and why did it become so important to you?

Beyster: As I recall, it was my idea. I needed to find some way to attract talented engineers and scientists to my young company. It wasn't called employee ownership at first -- we were simply rewarding employees for bringing new customers and new business to the company. But by the early 1970s I began to realize that rewarding employees with ownership was a powerful motivator. As it turned out, we were part of a movement in business that has continued to increase in importance throughout the years.

WT: What advice would you give a young Robert Beyster today, if he was starting a company?

Beyster: I would suggest that a young Robert Beyster do everything possible to ensure that his company is based on the concept of meritocracy, that is, you reward good performance. It still works, and there are plenty of companies doing it. There is a wealth of resources available to those who are interested in employee ownership, including those provided by The Beyster Institute and resources on integrating ownership and technology innovation provided by the Foundation for Enterprise Development.

WT: Why do you think your model at SAIC worked so well for so long?

Beyster: It worked because it was very motivating to the entrepreneurial people we recruited and hired. The result was a company that was growing almost more than we could handle. Employee ownership turned out to be a very powerful engine of growth for us.

WT: What do you see as some of the critical milestones the you and the company achieved?

Beyster: The acquisition of Network Solutions Inc. in 1995 and Bellcore/Telcordia in 1997 were two critical milestones for us. Both had a great impact on growing SAIC, and they turned us into a significant player in the commercial business world.

WT: Could you start the same kind of company today?

Beyster: I couldn't -- I'm too old and frail now. But I am helping people who are starting companies like SAIC. The business environment has changed over the years, but the principles we developed at SAIC are just as valid today as they ever were.

WT: What’s something about you that might surprise people?

Beyster: How persistent I am. Nothing stands in my way. I work harder than anyone else, and I never give up.

WT: What are the key characteristics that an executive needs to have to be successful?

Beyster: A successful executive needs to be persistent, able to choose good people, ready to reward people when they are performing, and to fire them when they are not.

WT: When you look forward, what trends or technology developments or needs in the market do you see that gets you excited or you see as having the potential to change the way contractors operate or the government operates or even will change our daily lives?

Beyster: I am very interested in nanotechnology, microchips, and cloud computing. These I believe are the way of the future.

WT: When executives or entrepreneurs come to you for advice, what’s the most common question?

Beyster: The most common question I get is “How do I run a company?” My advice to them is this: “You start small and build it big, like I did.”