Bill Hoover on leadership, change and finding the right strategy

Bill Hoover, the recently retired CEO of American Systems Corp., says he never had a grand career plan that led him to hold senior executive positions at companies such as AdTech, BDM International, PRC Inc., and Dynamics Research Corp.

But during a 36-year career as a government contractor, he did have guiding principles that included trusting his gut, which was instilled in him during a seven-year stint as a U.S. Naval officer. He also learned that to succeed, you have to put the focus on understanding customer priorities.

And finally, as a leader, you have to trust the people who work for you, which often means giving them the authority they need to do their job.

Hoover, who is the father of Washington Technology Senior Staff Writer Mark Hoover, sat down with me to discuss his career, trends in the market and the leadership skills you need to succeed.

What follows is an edited transcript of that conversation.

Washington Technology: Why was this the right time to retire?

Hoover: In 2012, I went to Lebanon [to visit American Systems employees working on projects there] and we got in around 2 a.m., and I remember laying in my hotel room and all of sudden my heart started racing. My doctor said it was time to see a cardiologist, and I ended up having a repair of my valve. It was a minimally invasive procedure through my rib cage. I was out of the hospital in two days.

But I got to thinking: [My wife and I] had just celebrated our 39th wedding anniversary, all the kids are out on their own, and in 2013, we’d have our 40th wedding anniversary, and I would turn 65.

Jane has been a phenomenal individual. She’s been my anchor to windward for 40 years, and I wanted to spend time with her.

So, I told the board in June 2013 that was going to retire. At first, they didn’t want to believe me, but they understood.

[The company’s board of directors ultimately chose chief operating officer Peter Smith to be CEO. Smith has been with the company since 1980.]

In the nine years Peter and I worked together, I knew him as an individual who not only knew the company but was open to the changes we had to make if we were going to succeed.

WT: Why did American Systems need to make changes when you came on board as CEO?

Hoover: When I got there in 2005, I asked the leadership what they wanted to do. Did they want to sell? Did they want to remain an ESOP [employee stock ownership plan]? It was clear they wanted to remain an employee-owned company, but we needed to make changes to the way we did things.

American Systems in 2005 was what I’d call a large small business. We had a couple hundred million in revenue, and we did such good work that we were a preferred partner. So, the majority of our work was as a sub.

In good times, it is OK to be a sub, but inevitably there will be a downturn, and when things get tough, it is a lousy time to be a subcontractor.

We needed to go after more prime contracts, and that entailed a cultural change, changes in infrastructure and that sort of thing.

But I had leaders – Peter, Mark Danisewicz [executive vice president and chief financial officer], Joe Kopfman [executive vice president and chief compliance officer] and Brian Neely, [chief information officer and chief technology officer] – who were committed to making the changes that made us what we are today, which I now call a small large business.

WT: So what kind of changes did you have to make?

Hoover: We didn’t have a robust infrastructure. We didn’t really do business development. As a preferred sub, people wanted us on their team, so we didn’t spend a lot on BD and proposal development.

Today, we are 65 percent prime and 35 percent sub, and that is a dramatic change in a nine-year period.

The challenge was that people had to learn new behaviors.

When I worked for Bob LaRose at AdTech, he had an expression that everyone was a business developer. Everyone had a responsibility to grow the business. That’s an attitude and mentality that isn’t prevalent in all organizations.

WT: What kind of actions did you have to take?

Hoover: First, we needed a strategy. Before I came on board, we had made four or five acquisitions, and I asked the team, Why? They didn’t have an answer. The reason was because we could afford them, and the reason we could afford them was that typically no one else wanted them.

Sure, we increased revenue, but we didn’t do it in the most strategic manner.

So, we put together a strategic plan for the organization and focused on national priorities. In good times, priorities get a lot of money, and in bad times they get money.

We put the plan together, and we divested the fastest-growing part of our business because it wasn’t strategic to our business going forward. The business was good – it was a value-added reseller – it had good revenue, but not good margins.

And margins are where you create value for the business.

WT: Describe your approach to creating a new strategy?

Hoover: When we put our strategy together, I acted as the facilitator. I told the team that if I disagreed with anything that the team came up with, then I would step out of that role and into my role as CEO. But I insisted on one thing, that we have a TLC culture.

What’s that? It’s not "tender loving care." It’s "teamwork, leadership and continuous improvement." That’s the foundation of the culture.

WT: When you act as a facilitator, how do you inject your vision?

Hoover: Facilitators play a critical role in directing the conversation.

You say you want to make a difference, but how do you make a difference?

Do you make a difference in things that matter or don’t matter? How do you determine what matters?

We looked at the president’s oath of office: “I do solemnly swear that I will faithfully execute the Office of President of the United States, and will to the best of my ability, preserve, protect and defend the Constitution of the United States.”

He doesn’t say anything else. So, what does that mean?

We have the best military in the world because we have the best men and women who serve. We provide them with the best equipment on the battlefield. We call that acquisition and logistics [one of American Systems’ market segments].

We want to provide them with the best information, that’s C4ISR [another market segment].

We want to provide them the best training to use that equipment and information, and we call that readiness [another market segment].

That’s defending from the borders out.

Defending from the borders in is criminal justice and homeland security. That is citizen safety [another market segment].

The fifth element is what we call national security. Others call it intelligence, which feeds the information to the other elements to ensure they can complete the missions they have.

That’s how we got to where we are.

WT: So as you make decisions, you throw it up against that framework?

Hoover: We’ll do a quadrant analysis. If it is above the horizontal line, then its strategic. If it is below the line, it’s nonstrategic. If it is to the right of the vertical line, we don’t have critical mass. If it is to the left, we have the critical mass.

So, if we are thinking of an acquisition, for example, we break down the target. Where do we have critical mass? If we have critical mass, we’re more likely to grow organically. If we don’t, we’d look to make an acquisition.

If it is below the line, we drop it.

WT: It sounds simple, but it is still hard to pull off.

Hoover: It’s not rocket science, but it is logical and reasonable. It provides guidelines. The interesting part of this is that it allows others to do their jobs and make decisions.

If you have the framework and guidelines in place, people can make judgments based on your strategy.

It gets into leadership and teamwork. To have an effective team, you have to have a clear, common mission and goals. People need clearly defined roles and responsibilities, accountability and authority.

Most organizations tend to remember the responsibility and accountability part, but what gets forgotten is the authority part.

I try to explain to people, if I’m not willing to give you the authority to do your job, then I might as well eliminate the position and save the money because I’m going to do your job for you anyway.