Multiple paths to success
2007 Top 100 | Companies balance sales, business development and operations to win contracts
- By Michael Hardy
- May 11, 2007
"Brochures don't sell anything. It's about understanding the customer's problems and being able to solve the customer's problems." Donnie Blanks, Perot Systems
The federal contracting process is arduous under the best circumstances, but successful companies learn how to work with it in ways that lead to big-money deals, productive ongoing partnerships with agencies and good references for future work.
Broadly speaking, companies must do three things well to succeed: cultivate customers over the long term, close the deals and then perform well under those contracts. All those moving parts have to be coordinated, timed right and brought to the fore at the appropriate time. For managers and executives, knowing how to balance those elements is essential.
But there is no one right way to do that. Leaders of some of the Top 100 companies described their approaches, and each takes a different view. Strategies vary depending on the company's market, its size and the philosophies of its strategic leaders.
"There are different schools of thought," said Greg Baroni, president of the federal systems division at Unisys Corp., of Blue Bell, Pa., No. 27 on the Top 100 with $785.3 million in prime government services revenue in fiscal 2006. "When you look at the marketplace, you really have categories of players."
Technology product developers, service providers and consulting firms, for example, have different strengths to play to and different ways to structure themselves.
"I came out of the consultancies, so my concept of operations tends to resemble that," Baroni said. To a large degree, it depends on what the company's managers are comfortable with and what has proven effective.
"It's like if you're a football team and you have a penchant for passing, versus one that has more of a running offense," he said. "You might say I've found an offensive style that works for me, and I've superimposed it here."
Agencies take so long to finalize deals, due to budgetary issues and organizational realities, that long-term business development and short-term sales efforts blend together for contractors, said Donnie Blanks, executive vice president of the government services unit at Perot Systems Corp., of Plano, Texas, No. 60 on the Top 100 with $257.7 million in prime government services revenue. At Perot, the business development organization is responsible for all new business, and operations focus on delivering good performance for existing contracts.
"You can't win [new business] unless you have sterling past performance," he said.
Brad Antle, chief executive officer at Reston, Va.-based SI International Inc., emphasized performance even more strongly. SI is ranked No. 42 with $359.8 million in prime government services revenue.
"It all starts with operations," he said. "It all starts with delivering services to your existing client base. If you can't do that well, you have a hard time convincing anyone that you can do something else for them. If it's a recompete, it's even more important. If [the customer doesn't] think you're performing at top level, someone else may be able to convince them that they can do it better."
Contractors have to understand how agencies work, Blanks said. He suggested a pyramid as a suitable comparison. Politically appointed executives are at the apex, career managers in the middle and operations personnel at the base.
"The guy at the top is focused on making a difference for the organization while he or she is in that job," he said. "The poor guy in the middle, he has to look up and catch the bright ideas coming from the top and figure out which ones to implement, and he's also concerned about managing those below him. You've got to hit all three levels in positioning your company."
Even after agencies award contracts, the contractors need to continue to cultivate business, he said. "The ultimate objective is to win enough business there to?become a trusted adviser to them," Blanks said. It "takes a long time to become that trusted adviser as opposed to just a vendor."
"In my view, it's a closed-loop system," said Stan Sloane, the new CEO of SRA International Inc., of Fairfax, Va., No. 33 with $484.7 million in prime government services revenue. "You start out with business development because you don't know where the customer might be heading, and you have to know that to position yourself in the near-term sales arena. And if you win that, you have to do well on the execution because if you lose the customer, you break the cycle."
At SRA, all three prongs of the organization are running full-tilt all the time, he said.
"It's important that you have robust processes for the front end as well as the operations," he said. "Those things are interrelated. You don't just sell something and then go away. The performance is instrumental to winning new business."Blurring the edges
Although the priorities of business development and operations are different, some companies find success by blurring the lines. At Perot, Blanks said, he has built a business development team with people whose background is in operations, but not the business side of operations. His team can "do more than make presentations," he said.
"Brochures don't sell anything. It's about understanding the customer's problems and being able to solve the customer's problems," he said.
As a corollary to that, Blanks has made the business development team directly responsible for winning new contracts. He contrasted that with contractors who put the burden on "capture managers," a position many companies create specifically to chase certain contracts.
At Unisys, each account has one company partner who is responsible for all three phases of the operation: cultivating more business from the same customer, closing deals on tasks and contracts, and ongoing performance.
"The reason is they're on-site all the time," Baroni said. "They have face time automatically, so why not make it productive from a business standpoint?"
Alion Science and Technology Corp., of McLean, Va., No. 79 with $169.7 million in prime government services revenue, is another company where technical expertise is seen as more important than a pure business background for developing new business. Bahman Atefi, chairman and CEO, said the company's scientists and engineers do most of the business development because they are the ones responsible for performing the work.
"They're dealing with their counterparts [at agencies], who are also scientists and engineers," he said. In many cases, he added, Alion appoints a capture manager with a business background to pursue a specific contract, but the technical side of the company is involved from the start.
The other major type of contract is a multiple-award indefinite-delivery, indefinite-quantity vehicle. In those cases, winning the contract is only the first step. Then the company has to compete for individual task orders under the contract.
"You go marketing the tasks under that," he said. "That marketing is largely done by our scientists."Listen and relate
Because the different aspects of the process are so tightly connected, maintaining the flow of information is essential. Agency leaders have to worry about what information gets shared, at what point and how.
At Alion, one business group will typically take the lead role, Atefi said. The manager of the group is responsible, and meets early and often with company executives to keep the capture process on track. Once the company wins the contract, another person generally steps up to take the reins as project manager.
When Alion was smaller, the same person would often serve in both roles, said Stacy Mendler, the company's chief operating officer. Now that Alion has grown to about 3,600 employees, the leaders can usually appoint one person to concentrate solely on capturing the contract, she said.
Sloane said there are technology tools to capture market information. The trick is to make good use of it, correlating various pieces of information to reveal patterns and trends in the market.
"This is a very knowledge-oriented business," Sloane said. "We don't manufacture commodity items. What we sell is the intellectual capacity of people. People are fundamental to our performance. When you talk about leadership, part of it is art, part of it is science. The art part of it is about how people relate to other people."Associate Editor Michael Hardy can be reached at firstname.lastname@example.org.