As the year rapidly comes to a close, I’ve been looking back on our coverage and picking out some stories and topics that dominated the year and have me thinking ahead to 2012.
Topic 1: The budget
Two strains of coverage fell under this umbrella.
First, there was all the political wrangling and gamesmanship just to get a 2011 budget passed in the first half of the year. We went through a good six weeks of teetering on the edge of a government shutdown.
Then there was the related fight over the debt ceiling.
We can expect more brinkmanship in 2012. I don’t have to be a great prognosticator to predict that.
Second, is the ongoing shifts in industry as they prepare for budget cuts. The watchword of the day is "focus." Everyone is talking about concentrating on what they do best and shedding what doesn’t fit that core. That’s why we’ve been seeing an increase in divestitures as companies sell off businesses that don’t fit the overall corporate strategy.
To use a sports analogy, 2012 will be a rebuilding year. Companies will be preparing for when the real budget cuts start having an impact in 2013 and beyond. For smart companies, this is an opportunity to step up and help their customers become more efficient and effective while lowering costs.
Topic 2: Contractor-customer relationships The Barack Obama administration had some harsh rhetoric for contractors, particularly in the first half of the term. While the memos and guidances issued by the Office of Federal Procurement Policy have been reasonable in tone, damage has been done.
Of course, it doesn’t help when you have a customer who’s unsure when the next dollar will come in or an environment where any mistake has the potential to get your leadership dragged up to Capitol Hill for a public grilling.
In this kind of atmosphere, it’s been easy to blame contractors for the problems and see getting rid of contractors as the solution. Both ends of the political spectrum have taken advantage of this.
But harsh reality is starting to set in. With the complexity of problems and challenges the country faces, contractors will play a vital role. As we see budgets get cut, the role of contractors will only continue to grow.
We won’t see a boom in contracting, but there will see opportunities for contractors who understand the mission of their customers and can deliver solutions that meet those missions. And of course, the price has to be reasonable.
Topic 3: The year of scandals Unfortunately, this year we saw contractors suspended, individuals indicted and others fired because of alleged criminal activities.
We had issues at GTSI, EyakTek, and Science Applications International Corp. All three companies have worked to resolve the problems and move foward, but their stories stand as a warning and a lesson about greed. I don’t mean to sound preachy, but that’s the bottom line.
Will we see more scandals in 2012? Probably.
Topic 4: Executive moves
The market saw a couple of high-placed retirements – Michael Laphen, CEO at Computer Sciences Corp. and Walt Havenstein, CEO at SAIC, both gave notice of their retirements.
SRA International got a new CEO in Bill Ballhaus after being acquired by a private equity group. The old CEO, Stan Sloane, now runs Decision Sciences International.
GTSI brought in a new COO in Jeremy Wensinger, and Hewlett Packard’s public sector services business now has Marilyn Crouther as its leader after Dennis Stolkey was promoted.
I outlined several others in a recent blog.
What does this mean for the market? It emphasizes that as clichéd as it sounds, this is a people business and investment in your leadership is critical in this environment.
So we’ll see more moves in the next couple years. In a way, 2012 might be like Ranger School, where the drill instructor tells the newbies to look to their right and then their left because "someone won’t be here when we finish."
Topic 5: Favorite stories
When it comes to picking favorite stories, part of me is like a parent when asked about his children. I love them all.
But some deserve a little extra love, particularly stories that I think reflect the changing dynamics of the industry.
We’ve done several stories looking at how the market has changed including our
Top 100 stories in June and the
10th anniversary of the Sept. 11 terrorist attacks.
We also examined how
the market is driving companies to be more agile and
how critical infrastructure is to a company’s success.
Another favorite of mine examined
the evolving role of the CIO – the corporate ones, not the agency ones. To be frank, this was a story I wanted so badly to be a blockbuster hit and it just hasn’t caught fire. I’m not sure why, but I urge you to give it a second look. In today’s market where finding efficiencies is critical, your company’s CIO might be your best friend or your worst enemy.
Links to all of these stories are embedded above. They stand the test of time and are worth a re-reading especially as the market changes and new pressures and priorities emerge.
Topic 6: What’s ahead? I don’t profess to have a crystal ball and I’m not good at reading tea leaves, but I think 2012 will be a year of retrenching.
The bold companies will be moving the pieces and pushing forward with initiatives into new markets and customers. They’ll manage their growth expectations in the short term.
The not-so-bold are going into 2012 with a “let’s just survive” attitude. Those are the companies that will miss the opportunity and will struggle to grow when the market turns.
So my Happy New Year wish for you is: Be bold. 2012 and beyond will not be for the timid.
Posted by Nick Wakeman on Dec 22, 2011 at 1:38 PM1 comments
My reaction to the news that
Hewlett-Packard Co. had tapped Marilyn Crouther to lead their U.S. public sector business might reflect my own biases, but I couldn’t help noticing that Crouther is a woman leading a large business in the government market.
Actually, I should say she’s another woman running a big government contracting operation.
Among the top 20 contractors on the Washington Technology Top 100, women lead the public sector business of six of them.
Three of the top five companies – Lockheed Martin Corp. at No. 1, Northrop Grumman Corp. at No. 2, and Raytheon Co. at No. 4 – have women leaders for their IT businesses.
The high profile of women among these large companies belies the joke we have at my office about MAWGs. MAWGs, or middle-aged, white guys, seem to be the predominant population when we attend industry events and often are our most common sources for stories. I cringe when I flip through a print issue and just see page after page of white guys being quoted.
Not that there is anything wrong with that, but it is refreshing to see strong, smart women in leadership positions.
While there is no arguing with success of women in the top 20, the numbers from 21 through 50, don’t look that great with only three more companies having a woman leading their public sector business – IBM Corp. at No. 21, Accenture at No. 33 and CGI Group at No. 41.
So the numbers aren’t reflective of the general population, but it is better than 10 years ago when only one company in the top 50 had a woman running at least the federal business. That was Anne Altman, who was the managing director of IBM’s federal unit in 2001, and today runs their global government business.
I also see a growing number of women entrepreneurs in the small and mid-sized ranks of companies, so I think we’ll continue to see more women leaders emerge at the CEO level.
As I watch this evolution, I can’t help but think of my mom, who really was the brains behind our family business. She had a natural aptitude for controlling costs and managing people at the family restaurant. Without her, it would never have been the success it was.
But at the same time, I also saw too many vendors and would-be partners turn to my father to talk about business. To dad’s credit, he always pulled mom in on those discussions. My parents had and have a great husband-wife partnership.
My parents sold the restaurant 20 years ago now and times definitely have changed since then.
But again, I ask the question from my headline: In the government market has the glass ceiling shattered? Or is it just cracking?
Posted by Nick Wakeman on Dec 19, 2011 at 1:35 PM5 comments
EDITOR'S NOTE: This blog was updated to clarify Dennis Stolkey's new role with Hewlett Packard Co.
The budget and economy dominated the news in 2011, but looking back at our coverage another topic also pops up and that the large number of significant personnel moves.
We had some top-level CEOs announce their retirements, a couple firings, some promotions and new hires that should have an impact on the market and individual companies in the year ahead.
I’m not ranking these, but here is a rundown of what I think were important executive moves in the market.
Ballhaus for Sloane at SRA
What a year for this company. It opened 2011 struggling a bit as a public company. Those financial problems opened the way for a private equity group to acquire SRA, which led to the departure of CEO Stanton Sloane. He was replaced by Bill Ballhaus.
As 2011 came to a close, SRA made another high profile hire when it plucked Deb Alderson from the unemployment line. She was the president of Science Applications International Corp.’s defense business and was fired because of a scandal involving a New York City contract held by her group. Though she was not implicated in any wrongdoing, the company felt it needed to make a change.
And to round out the SRA story, Sloane quickly found a new gig with Decision Sciences International, which tapped him to be its president and CEO.
HP welcomes a familiar face
Hewlett-Packard was in the midst of a mind-boggling retrenching of its mobile and PC businesses when it quickly dumped its CEO Leo Apotheker and replaced him with former eBay CEO Meg Whitman.
Apotheker was leading an effort that included dumping HP’s mobile devices, a huge acquisition of a software company and the possible sale of its PC business.
HP’s board wasn’t bothered by the strategy; they just didn’t think Apotheker was the right leader. Since Whitman came on as CEO – she already was a board member – the company backed off the sale of its PC business, but the rest of the strategy is intact.
On a side note, Dennis Stolkey, who led HP’s Enterprise Services’ U.S. public-sector IT services business, is headed to Plano, Texas, to oversee all of HP Enterprise Services' American region. His replacement is expected to be named soon.
Morea bids adieu to CGI
Donna Morea grew up at American Management Systems and quickly rose to the top at CGI Group, which acquired AMS in 2004. She ran the state and local business, then federal and then oversaw all the North American government and commercial business. She’s slated to join the board.
CGI had no problem quickly filling her spot. George Schindler, another long-time executive with the company and president of federal, now has the reins of all of North America. Stepping into his old role at federal is Donna Ryan, yet another veteran of CGI and AMS.
CSC and SAIC hunt for new CEOs
Speaking of retirements, Computer Sciences Corp. and SAIC both announced that their CEOs were retiring.
Michael Laphen gave 12 months' notice, while SAIC’s Walt Havenstein gave about nine months notice. Both want to ensure a smooth transition to leaders at their companies.
GTSI shores up executive suite
GTSI started 2011 trying to overcome the stain of being suspended by the Small Business Administration. Contrary to a lot of predictions, the company is still in business and making moves to build its services business.
One of its positive steps was hiring Jeremy Wensinger as chief operating officer. He was president of Cobham Defense Systems and served as group president of the government communication systems unit at Harris Corp.
His hire is another step away from the traditional reseller business for GTSI.
TASC goes on a hiring spree
TASC would probably make my list just for bringing David Langstaff on as CEO. Langstaff was the company’s chairman, having helped broker the private equity deal that pulled TASC out of Northrop Grumman in 2009. He became CEO in March of this year when Wood Parker retired.
Langstaff led Veridian in the 1990s and early 2000s, before selling the company to General Dynamics.
But on top of Langstaff’s hiring, and perhaps more telling for the direction of the company is the string of other hires TASC has made.
- Retired Vice Adm. Thomas Kilcline Jr. was named vice president of a new naval programs unit.
- Bob Silsby, a former senior CIA official, was hired as vice president of the TASC business and technology office.
- Bob Pattishall, formerly of Northrop Grumman and a senior VP at Veridian, came on board as vice president of the Systems Engineering and Integration Community of Excellence. He’s also a 25-year CIA veteran.
- Dale Luddeke, formerly CACI’s executive vice president for corporate business development, was named chief growth officer to lead business development and merger-and-acquisition activities.
- John P. Hynes Jr. became senior vice president of the Defense and Civil Group. It's his second stint at TASC. He worked there from 1990 to 2001. He returns from SAIC, where he was a senior VP and general manager of the mission support business unit.
Not a bad run of new hires.
Some other executives moves of note:
- Kay Kapoor, formerly of Lockheed Martin, took over Accenture’s federal business.
- Dell Services Federal Government hires George Newstrom to run its defense and national security business.
- Todd Stottlemyer took the reins of Interactive Technology Solutions in late 2010 and has rebranded the company as Ascentia.
I’m sure some will argue that I’ve missed some critical hires, so please send your comments. Who do you think will make a big impact in 2012?
Without a doubt it was a business year for recruiters and human resources departments. I think some of the moves were driven by timing and the bad economy. I wonder what 2012 will bring.
Any predictions?
Posted by Nick Wakeman on Dec 09, 2011 at 1:27 PM1 comments