The room at the Ritz Carlton for the ACG National Capital monthly breakfast meeting was filled with the region’s top government contractor dealmakers. Lucy Reilly Fitch, Senior Vice President of Acquisitions and Strategy at BAE Systems, was there. Rick Knop and John Allen of BB&T Windsor Group held court at a front table. And Shiv Krishnan, top executive at INDUS Corporation, warmly greeted colleagues.
These industry players and power brokers were merely the sideshow this morning. Renny DiPentima was the star. The President and CEO of SRA International stepped to the podium with well earned swagger. He prefaced his comments in two ways – first, the standard SEC required, legal mumbo jumbo that all public company chief executives must say prior to comments about the business, and second, he apologized before uttering a single word because he knew he would come across as brash.
DiPentima has reason to boast. Since issuing shares to the public in 2002, SRA has been on a hot streak. The company has delivered annual growth of 36 percent, with more than three quarters of it organic. They win roughly 70 percent of the new business they pitch and sport a stunning 95 percent contract renewal rate. As a result, annual revenue should top $1B this year, with three times that amount in signed and funded contracts already locked in.
Investors wise enough to back SRA should boast as well. The company’s market cap is $1.7B with shares consistently trading for more than $30, well above its $18 IPO price.
SRA’s success is fairly straight forward – excellent execution of a defined strategy in a growth market. The company empowers its employees, provides a supportive work environment, and preaches customer service and value. Fortune magazine has recognized SRA as one of the “100 Best Companies to Work For” for seven years running.
You’d think SRA would serve as a model for other government contractors. Build a sustainable growth business focused on customers and employees and all key audiences will celebrate the return. However, a recent article in the Washington Post by Ellen McCarthy titled “In Business to Get Out” creates quite a different impression. It seems a majority of the executives who run companies that serve federal agencies are merely interested in a quick score.
“In the government contracting industry that drives Washington’s economy, the process and promise of acquisition have become one of the underlying facts of life…”, McCarthy writes. The evidence certainly supports this assertion. Recent mega-deals like General Dynamics proposed $2.1B purchase of Anteon International Corporation, along with more modest transactions such as AVIEL Systems acquisition of OPTIMUS Corporation and Performance Management Consulting, have buy rumors swirling around those companies that remain independent.
The government contracting arena today feels like dot-com start-ups, circa 1999. And it’s dangerous. A business cannot and should not be built with merely an exit intention. Yes, companies exist to make money and government contractors are no different. However, the foundation of a successful enterprise is a value proposition to customers, partners, employees and investors. The get-rich-quick, build to sell model benefits the few who simply time it right. It eventually leaves most everyone else burned and bitter.
SRA’s DiPentima gets that. So does Phil Nolan, president and CEO at mid-size federal IT systems integrator Stanley Associates. Although about a third the size of SRA and still privately held, Stanley’s growth has been equally impressive. Since 1989, the company’s annual revenue has increased an average of 30 percent year-over-year with more than 70 percent of that growth attributable to repeat business from its existing customers. Like SRA, Stanley also promotes a contract renewal rate of roughly 95 percent.
What’s the secret to sustainable growth in today’s government contracting market? It all starts with a well defined value proposition to federal agency customers. This requires the delivery of a comprehensive set of services or, in some cases, specialized competencies that are difficult for competitors in the market to match.
SRA and Stanley both offer a broad suite of services that meet the requirements of customers in multiple segments of the government market – federal civilian, Department of Defense/Intelligence and Department of Homeland Security.
Stanley takes a lifecycle approach which has required the company to develop a broad portfolio of services, including concept definition, systems design, technical implementation and outsourcing.
Going niche is also viable fuel for a growth strategy in the government market as it gives a company a differentiated, high value competency. For instance, professional services firms like Macfadden and Robbins-Gioia specialize in program management.
Integrators can also carve out a technical specialization to compete for government work. Subsystem Technologies in Rosslyn, Virginia has a dedicated radio frequency identification tag (RFID) practice to complement its other technical service offerings. BearingPoint recently selected the company as a teaming partner to pursue RFID-related work with the Army.
Regardless the breadth and depth of service or technical offerings, a government contractor focused on long-term growth has to invest in sales and marketing. There is no substitute for it and the “build it and they will come” mentality puts a company on the road to stagnation.
SRA is organized into customer-facing business units to demonstrate depth of understanding for the federal agency’s business and mission. Stanley also has a customer-centric approach to sales and makes an ongoing investment in employee training to ensure they are in sync with this formal account management process.
Finally, the mantra of government contractors focused on a growth plan is “partner, partner and partner.” That’s how you add competencies and track record to the corporate portfolio, and leverage each other’s sales and marketing resources.
April 10, 2006, 10:24 pm
Integrators Side-Step the Dot Com Bomb
Posted by jeffM
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April 3, 2006, 8:59 pm
Chorus of Credible Voices
Life in the penthouse is sweet. Your calls get returned. Your opinions are respected. And key audiences are inclined to say “yes.”
Just ask the folks at Cisco…or Microsoft…or SAP. Market leaders set the rules. They know how to leverage their resources, relationships and reputation for competitive advantage. No one ever got fired for hiring IBM, right?
Most of us don’t have that penthouse view. While our companies may be growth-focused with products and services that deliver measurable value, we are challenged to: 1) position ourselves against larger, better funded competitors; and 2) articulate a compelling value proposition with a meaningful differentiation.
This is Strategic Communications Group’s (Strategic) world. Our clients are market leaders and fast-risers in industries as diverse as enterprise software, satellite, telecommunications, information security, systems integration and professional services. Our integrated public relations and business development programs help companies grow sales, profitability and valuation, typically stealing away market share from competitors.
Public relations success is not screaming at the market in an attempt to outgun a rival. Rather, the goal is to create a “chorus of credible voices” to validate your company and increase awareness with the audiences important to your success.
Here are a couple of ideas:
1. Take advantage of PR’s snowball effect. Journalists and analysts pay more attention to companies other journalists and analysts are paying attention to. Make sure the news section on your corporate Web site is updated with relevant releases, articles and analyst comments. You should also proactively push this market coverage to targets on your PR list.
2. Turn your employees into brand ambassadors. They are a high-impact and low cost channel of communication to customers, prospects and partners. Take the time to educate the staff about your company’s positioning, messaging and differentiation. Distribute your public relations coverage internally and ask employees to share it with external targets.
3. Empower your partner ecosystem. Most companies typically place a low priority on supporting a partner in its own marketing and PR activities. Embrace your partners in this area. Participate in their case studies. Provide a quote for their press release. Interview with journalists in business and trade articles about them. You’ll get much needed awareness and validation on their dime.
4. Identify other credible third parties whose interests are aligned with your own. For EF Johnson, we asked the local municipality to declare “EFJ Day” to recognize the company’s 75th anniversary. When introducing WAM!NET Government Services to the federal market, we issued a joint release with Virginia’s then Governor Mark Warner who welcomed the company to the region.
Just ask the folks at Cisco…or Microsoft…or SAP. Market leaders set the rules. They know how to leverage their resources, relationships and reputation for competitive advantage. No one ever got fired for hiring IBM, right?
Most of us don’t have that penthouse view. While our companies may be growth-focused with products and services that deliver measurable value, we are challenged to: 1) position ourselves against larger, better funded competitors; and 2) articulate a compelling value proposition with a meaningful differentiation.
This is Strategic Communications Group’s (Strategic) world. Our clients are market leaders and fast-risers in industries as diverse as enterprise software, satellite, telecommunications, information security, systems integration and professional services. Our integrated public relations and business development programs help companies grow sales, profitability and valuation, typically stealing away market share from competitors.
Public relations success is not screaming at the market in an attempt to outgun a rival. Rather, the goal is to create a “chorus of credible voices” to validate your company and increase awareness with the audiences important to your success.
Here are a couple of ideas:
1. Take advantage of PR’s snowball effect. Journalists and analysts pay more attention to companies other journalists and analysts are paying attention to. Make sure the news section on your corporate Web site is updated with relevant releases, articles and analyst comments. You should also proactively push this market coverage to targets on your PR list.
2. Turn your employees into brand ambassadors. They are a high-impact and low cost channel of communication to customers, prospects and partners. Take the time to educate the staff about your company’s positioning, messaging and differentiation. Distribute your public relations coverage internally and ask employees to share it with external targets.
3. Empower your partner ecosystem. Most companies typically place a low priority on supporting a partner in its own marketing and PR activities. Embrace your partners in this area. Participate in their case studies. Provide a quote for their press release. Interview with journalists in business and trade articles about them. You’ll get much needed awareness and validation on their dime.
4. Identify other credible third parties whose interests are aligned with your own. For EF Johnson, we asked the local municipality to declare “EFJ Day” to recognize the company’s 75th anniversary. When introducing WAM!NET Government Services to the federal market, we issued a joint release with Virginia’s then Governor Mark Warner who welcomed the company to the region.
Posted by jeffM
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March 7, 2006, 2:24 pm
PR Hacks Pitch Media
When it comes to media relations, the world is full of PR hacks. They are lazy, uneducated and useless. They don’t know the market trends. They speak in jargon. And, at best, they are merely glorified schedulers.
I admit this is a harsh assessment from someone who works for a public relations consultancy. However, these past few weeks I have lived the pain journalists say they experience every day.
It all started when I registered for the FOSE trade show as a member of the media because of my technology column in SmartCEO Magazine. The Emails started to fill my Outlook Inbox. Three the first day. More than 10 the second day. And by week’s end I had received close to 50 pitches to meet with executive “so and so” to discuss the next generation (always next generation) version of “such and such.”
Admittedly, there were a couple of gems in the lot that more than likely would pique a journalist’s interest. (I have included two of them below.) Here’s what they had in common:
1. They relate the company’s product or service to a market trend, thereby providing context. Answering the “why” question for a journalist or industry analyst is the foundation of effective public relations.
2. They offer customers or other third parties as a resource to validate claims. I realize you won’t always have a customer who is willing to talk on the record, so identify an analyst, partner or even a prospective user who can share their insight.
3. They have a clear call-to-action. The goal of a media pitch is not to sell the story. Rather, its purpose is to sell the interview. Then it is up to the client (with the PR professional’s counsel) to convince the writer that there’s a story that interests their readers.
If you’re currently working with a PR shop ask to see their most recent pitch on your company’s behalf. You too may feel the journalist’s pain.
FOSE PR Pitches
There are only 21 states with consumer data protection laws, and businesses throughout the country are making headlines with consumer data loss more and more frequently. It’s time for them to start cleaning up their act. FOSE 2006 is a great opportunity to talk with an expert in the field of data security and storage about what it takes to protect our personal information - not while that data is in transit, but at the end-point.
Sam Burton, IONA Public Relations for CRU-Dataport
The looming threat of a bird flu outbreak paired with terror attack concerns such as the use of Anthrax or Mustard Gas have driven global fears and headlines and have also galvanized national funding and counter-measure research initiatives. At this year's FOSE 2006 conference, researchers from East Tennessee State University and biotech company AMAOX will be announcing the start of medical trials for a multi-threat counter-measure treatment that addresses the bird flu, anthrax, and mustard gas. The team responsible for this breakthrough, which received funding from the National Institute of Health, attributes the speed with which they were able to bring their research from the lab to drug trials to collaborative technology software from Mindjet.
Jennifer Sanders, Blanc & Otus for Mindjet
I admit this is a harsh assessment from someone who works for a public relations consultancy. However, these past few weeks I have lived the pain journalists say they experience every day.
It all started when I registered for the FOSE trade show as a member of the media because of my technology column in SmartCEO Magazine. The Emails started to fill my Outlook Inbox. Three the first day. More than 10 the second day. And by week’s end I had received close to 50 pitches to meet with executive “so and so” to discuss the next generation (always next generation) version of “such and such.”
Admittedly, there were a couple of gems in the lot that more than likely would pique a journalist’s interest. (I have included two of them below.) Here’s what they had in common:
1. They relate the company’s product or service to a market trend, thereby providing context. Answering the “why” question for a journalist or industry analyst is the foundation of effective public relations.
2. They offer customers or other third parties as a resource to validate claims. I realize you won’t always have a customer who is willing to talk on the record, so identify an analyst, partner or even a prospective user who can share their insight.
3. They have a clear call-to-action. The goal of a media pitch is not to sell the story. Rather, its purpose is to sell the interview. Then it is up to the client (with the PR professional’s counsel) to convince the writer that there’s a story that interests their readers.
If you’re currently working with a PR shop ask to see their most recent pitch on your company’s behalf. You too may feel the journalist’s pain.
FOSE PR Pitches
There are only 21 states with consumer data protection laws, and businesses throughout the country are making headlines with consumer data loss more and more frequently. It’s time for them to start cleaning up their act. FOSE 2006 is a great opportunity to talk with an expert in the field of data security and storage about what it takes to protect our personal information - not while that data is in transit, but at the end-point.
Sam Burton, IONA Public Relations for CRU-Dataport
The looming threat of a bird flu outbreak paired with terror attack concerns such as the use of Anthrax or Mustard Gas have driven global fears and headlines and have also galvanized national funding and counter-measure research initiatives. At this year's FOSE 2006 conference, researchers from East Tennessee State University and biotech company AMAOX will be announcing the start of medical trials for a multi-threat counter-measure treatment that addresses the bird flu, anthrax, and mustard gas. The team responsible for this breakthrough, which received funding from the National Institute of Health, attributes the speed with which they were able to bring their research from the lab to drug trials to collaborative technology software from Mindjet.
Jennifer Sanders, Blanc & Otus for Mindjet
