You’ve seen the headlines, and you know firsthand: It’s rough out there. Even though the government contracting community will be less hit than other sectors, competition for existing customers will be extra fierce over the coming year. So, what if you could gather the area’s top CFOs in a room and ask their advice for 2009? ExecutiveBiz went looking for the Top 10 CFOs in Government Contracting — CFOs who’ve gone beyond numbers crunching to deliver the best in business and technical strategy to their companies. Hailing from small to medium to large businesses, each CFO shares a record of driving their company to greater heights. Here they share how they did it and offer their top tips to help you do the same in 2009.
Rick Attilio of Apptis
Leadership and partnering are the two key strengths that Rick Attilio brings to his role as CFO of Apptis. After coming on board in 2006, Attilio moved the company toward greater transformation. In a quick period of a time — a year and a half, no less — Attilio helped create the infrastructure and controls environment needed for Apptis to provide competitive advantage to new sales and delivery teams. Attilio’s efforts also paved the way for a strong infrastructure for regulatory oversight, including preparation for compliance with Sarbanes Oxley 404.
Throughout, Attilio has worked with C-level leadership and division general managers to define the company’s vision. The result has been to segment the company into two distinct operating divisions: Apptis Technology Solutions, the value added reseller solutions division, and Apptis, the programmatic services division — two very different businesses, with two very different go-to market strategies. “We are starting to see the effectiveness of that move — the efficiencies reflect themselves in the numbers,” says Attilio. Attilio’s extensive finance background, and years working within the government IT industry, are credited with driving those results. So is his leadership. “In addition to the wealth of knowledge Rick brings to his role, we at Apptis are consistently impressed with his outstanding leadership qualities and management skills,” says Bert Notini, CEO of Apptis.
Looking to 2009, Attilio is mindful of the change ahead. “We are on the doorstep of massive change,” he says. “We have been a bit insulated in this market in the past from the macro economic issues. I think we are going to see our government clients looking to industry for even greater partnership in dealing with the changes to come.” Paradigms are going to be broken, adds Attilio, making the need for innovation even more imperative. Apptis is already rising to meet the challenge. “We have been working on various new initiatives with our service delivery teams, cloud computing as one example,” says Attilio. “We need to partner with our clients to help them execute on their missions of national importance by delivering innovative, trusted solutions at lower total costs,” he adds.
Attilio’s Tip for 2009: Have a three-year plan
While many companies have a five-year plan in place it’s probably more effective to think in terms of a three-year plan, says Attilio. “I’ve done five-year plans before but I’ve found a three-year plan to be the most optimum. The one constant is that things change, and they change continually,” he says. “It’s about balance,” adds Attilio. “You need to have a long-term strategic view of what you want to accomplish, what you want to become, and then just drive the execution phase to make it happen … at the same time, you have to be agile in order to adjust your tactical execution in your go-to market approach for optimum result,” he says.
Mark Danisewicz OF AMERICAN SYSTEMS
Mark Danisewicz is a rare combination of longevity and fresh innovation. A mainstay of AMERICAN SYSTEMS since 1979 — the last 12 as CFO — Danisewicz has played a major role in guiding the company’s transition from one owned by its founders to a majority-owned employee stock ownership company. Along the way, AMERICAN SYSTEMS’ annual revenue has grown from $60 million to more than $200 million — and counting. The company has also been ranked among the top 100 majority-owned ESOP companies in the United States.
“Really, the greatest feeling I get is the fact that in nine years we were able to transfer the ownership of AMERICAN SYSTEMS from the original founders to the employees,” says Danisewicz. “As we sit here today the employees own the company outright,” he adds. It’s AMERICAN SYSTEMS’ employees — and his immediate team — whom Danisewicz credits with helping him move the company forward. “It’s all about who you surround yourself with,” says Danisewicz. “Particularly in the last three or four years, we’ve been fortunate to have hired some really, really good folks who have great industry and technical competencies,” he adds. Danisewicz expects that team to keep growing. “We are a $200-plus million company with visions of being a much larger company,” he says. “Because we are an ESOP company, because we are employee owned — I really like to get that message across to potential hires that you’re going to have a financial interest in the success of AMERICAN SYSTEMS.”
Danisewicz’s Tip for 2009: Stick to what you do best
“Good times don’t last forever, and bad times don’t last forever,” says Danisewicz. “You’ve got to stick to what you do best whether it’s good times or bad.” The number one thing to focus on is keeping current customers happy, adds Danisewicz. “In really tough times — not that you’re not paying attention to your customers all the time — but you really need to focus on great customer support because there are other contractors out there, great contractors, who want to support your customers as well … just getting out there and seeing your customers more frequently is a key step in that direction,” says Danisewicz. In AMERICAN SYSTEMS’ case, senior management routinely goes out and talks to customers. Onsite visits afford the chance for more timely customer feedback. “You really need to get out front and have more face time,” says Danisewicz, “particularly in times like this.”
Christopher Giusti of Capgemini Government Solutions
Christopher Giusti always wanted to be where the rubber meets the road, and in 2001 he got his wish. A senior manager at the time to Capgemini, a global management and IT consulting services company, Giusti took the lead in expanding the company’s reach beyond the commercial space. The U.S. public sector was the logical next step. Giusti helped craft a business plan to reach four key buyer groups within the U.S. public sector — federal civilian, federal military, public health, and state and local government — then guided Capgemini Government Solutions toward successful establishment as a subsidiary in 2003. Today, the company counts the Department of Defense, Department of Homeland Security, Department of Health and Human Services, and Centers for Disease Control, as well as select state and local governments, among its clients.
Over the past six years, Giusti has performed just about every role within the organization: finance, sales, delivery, and HR, to name a few. These days, he wears the dual hats of CFO and COO, and is looking to 2009 with ever-ambitious plans. “I would love for us to accelerate our growth both from the people side and the business side,” says Giusti. “There is an unbelievable amount of change in the market — much of it gut-wrenching — but this is not the time to sit on the sidelines; within all of this change lies opportunity.”
As the government takes on a larger role in the financial market, it will look to industry to provide unique and innovative solutions, adds Giusti. “There are also new issues and new problems emerging that no one has ever seen before or potentially contemplated before … again, those are opportunities for businesses to figure out ways to help drive, track and manage that change, and to see how they can fit into an overall solution with other business partners as well,” he says.
Giusti’s Tip for 2009: Intense focus on clients’ needs
Amid a change in administration and economic uncertainty, Giusti has this advice: Provide intense focus on your client’s needs. “I think — number one — is to stay focused on your client’s needs and really using these challenging times to get a better understanding of your client’s business and their pain points,” he says, adding, “Provide intense focus on meeting those needs.”
Marc Herman of KGS
You could say Marc Herman caught the “CFO bug” way back in the day, at the age of eight. “My dad had a wholesale jewelery supply shop and he used to take me to his storefront in downtown Cleveland,” says Herman. Instead of spending time in the showroom Herman preferred tapping away on his father’s old-fashioned 10-key adding machine in the backroom.
Today, Herman’s talents far exceed simple moves on an adding machine, of course. “Some CFOs can’t see past the numbers and actually stand in the way of what’s right for a business — not Marc,” says Larry Grant, president and CEO of Kforce Government Solutions, where Herman serves as CFO. “At the end of the day, Marc has the unique ability to understand a business’s strategy, intent, and operations and level them all against the balance sheet,” adds Grant.
That skill has spelled success since Herman signed up with KGS a little over a year ago. The company was formed at the time through the merger of Bradson Corporation, a solutions provider of finance and accounting support and program management, and KGS (formerly Pinkerton Computer Controls, Inc.), a wholly-owned subsidiary of Kforce, Inc. Within that short timeframe, Herman has helped both subsidiaries move forward as one unified company. Herman also recently oversaw KGS’s acquisition of dNovus RDI, a privately-held company based in San Antonio. Before the acquisition, Herman oversaw company growth of 20 percent over the past year. “With the acquisition we will grow even further,” says Herman.
Despite the economic downturn, Herman has his eye on future acquisitions. “Even though the capital markets have fallen and money is more scarce than it was before … we are on the lookout for other companies, in similar markets and spaces, that will complement our offerings — not necessarily duplicate them — but complement ours so we can continue to grow,” says Herman.
Herman’s Tip for 2009: Exceed Employee Expectations
“Obviously cost control is going to be an important part of getting through [the economic downturn] so if there is any pull back, maintaining profitability by ensuring good cost controls is essential,” says Herman. A key to good cost controls, he adds, is minimizing turnover. “Know the marketplace and exceed employee expectations, whether that be benefits or salary,” adds Herman.” Employees don’t just leave to leave — there is usually a reason. So, if it’s salary or benefits we need to make sure that we are compatible with or beat our competitors.”
Jaytee Kanwal of CNSI
It’s a scene ripped from Syriana or Wall Street, only this time with the good guys in the lead: Four corporate execs, all friends, are playing a high-powered game of racquetball when inspiration strikes. “We really need to start something on our own,” says one. The year is 1994, and one by one, they leave their corporate jobs to found a small consulting firm.
From CNSI’s humble beginnings— it generated $25,000 in revenue its first year, or as CFO Jaytee Kanwal points out, $24,697, to be exact— the Rockville, Md.-based company has gone on to become a leading provider of full-service IT solutions to commerical and government clients.
Along the way, Kanwal has demonstrated a killer backhand as the company’s CFO; he helped CNSI generate $160 million in revenue in 2008 alone. From accounting to finance, pricing to recruiting, plus a whole range of other responsibilities in between, Kanwal has worked steadfastly behind-the-scenes to ensure the company’s growth.
“As a founding partner, Jaytee has played a critical role in CNSI’s success,” says the company’s CEO, B. Chatterjee. “With an innate ability to reconcile the business needs with the financial — while maintaining a focus on the future — Jaytee proactively identifies risks and mitigation strategies that guarantee future success.”
Kanwal brings a “constant eye” to every project. He navigates the intricacies of pricing while another partner focuses on business strategy and the capture process. Kanwal also holds mandatory monthly financial reviews, a practice which began in earnest after CNSI landed its first contract with the U.S. Census Bureau back in 1996.
Kanwal’s Tip for 2009: Diversify
Kanwal is quick to shoot down any suggestion that the government contracting community will be fairly sheltered amid U.S. economic woes. “Diversification is the name of the game, the more you can diversify the less your portfolio is going to get hit,” says Kanwal. In CNSI’s case, with clients across multiple agencies on both the federal and state side, it’s projected to see its revenue increase between 10 and 11 percent by the end of 2009 — yet another example of the winning strategies Kanwal brings to the game.
Pamela Little of ATS
Pamela Little got a taste for the fast-paced life early on — real early. The oldest of five kids born within six years of each other, Little learned from a young age how to take a step back and see the full picture. “I think that really had a lot to do with why I enjoy going into stressful situations; I’ve always felt a responsibility to help people,” she says.
Fast-forward to today: In a career that has spanned more than two decades, Little has been recruited on several occasions to go into corporations and do a turnaround. “When you go in, time is of the essence,” says Little. “You have to be very strategic, you have to look at the issues, you have to make the tough decisions, you have to move forward.”
That’s just what Little did when she was hired as CFO of ATS Corp., a McLean, Va.-based IT company, in May 2007. Her task, among many, was to move ATS from a privately-owned firm to a public company subject to all the SEC and Sarbanes Oxley reporting requirements. Demonstrating her knack for seeing the full picture, Little quickly identified the need to recruit individuals with the financial expertise to move ATS forward as a public company. Little personally recruited a new vice president of investor relations, a vice president of contracts, and a controller— all while helping ATS acquire three new companies: Reliable Integration, Potomac Management Group, and Number Six Software.
It’s that kind of swift, results-oriented approach that’s earned Little the praise of ATS CEO Ed Bersoff. “Pamela is the quintessential CFO, combining a raw talent in accounting and finance, a dogged determination to ‘get it right,’ an unparalleled degree of energy and commitment, a business ethic well above reproach, and a level-headedness that seeks solutions to the thorniest of problems,” says Bersoff.
In moving ATS to a public company, Little also worked to strengthen the company’s culture — one responsible to shareholders as well as employees and customers. More open, ongoing communication, especially with financial partners, has been a key part of that growth. “By keeping the bank knowledgeable of where you are and what actions you are taking, they become more of a partner with you to work through any issues,” says Little.
Little’s Tip for 2009: Have a contingency plan
Looking to 2009, Little has this advice: It’s more critical than ever to have a contingency plan built into your strategic plan. “I don’t think it’s business as usual, CFOs really have to pay attention to the bank covenants that they have,” she says. “In the past if you deviated from a covenant it was just a matter of going to the bank and getting a waiver … that’s not the environment today.”
Rich Marksberry of iGov
Rich Marksberry brings a unique blend of tech and financial expertise to his role as CFO of iGov, a systems integrator based in McLean, Va. Marksberry joined iGov at a critical time in the company’s history, when it was redefining its focus away from simply being a product reseller to a full-scale information technology engineering and services firm.
With his arrival in January 2007, Marksberry overhauled the company’s accounting systems infrastructure — a move that jumpstarted iGov’s ability to better handle cost and time and material, as well as fixed-price, contracts. Marksberry also revised accounting and operational procedures to assist iGov in ISO certification, and updated the company’s IT infrastructure.
Looking to 2009, Marksberry has one main goal: to further raise the value of iGov for its shareholders. As a key player in that process, Marksberry sticks to a time-proven formula: Know your customers. “We are very keen on keeping our customer relationships up and running and understanding what their needs are,” he says. Staying focused is critical, he adds. “Knowing your prime customers and focusing enough to go after the things that you can provide is key; if you try to take too wide a swath at opportunities in the federal government you can really become overwhelmed, overextended and not focused enough to provide the solution that the customer needs,” he says.
Marksberry’s Tip for 2009: Go back to basics
“What you really have, when you’re dealing with a government customer, are people who are trying their best to fulfill their mission,” says Marksberry. “Whether they are trying to meet energy compliance standards or get ready for the next troop deployment — just being cognizant of their needs and bringing unique solutions to them to fulfill those needs can really help you focus on bringing them the right solutions and getting your proposal accepted.”
Bill Milligan of HPTi
Bill Milligan will be the first to tell you: He doesn’t see himself as a CFO as much as a business person. “When people think of a CFO, they think of cutting excess costs and that sort of thing; that really hasn’t been our focus,” says Milligan, CFO of High Performance Technologies, Inc., a Reston, Va.-based information technology company. “We obviously put time into that but you get so much more of a return focusing on the top line and growing that.”
Since joining HPTi six years ago, that’s exactly what Milligan has done. With a focus on two key business areas — software development work in science and technology, and technology consulting in health care at the VA — HPTi’s compound annual growth rate has increased 20 percent at the revenue line, and 31 percent at the profit line. Value-based pricing has been a big part of that growth. So has an institutional shift — a pretty significant one — that began over five years ago. “We’ve changed our project managers focus on financial performance to more of a gross profit approach,” says Milligan.
Milligan is looking to see HPTi accelerate its growth over the coming year. “I know in these tough economic times that might be a very aggressive goal,” says Milligan, “but we still feel we can differentiate ourselves.” HPTi’s ability to be “nimble” is a key point of differentiation, he says, as is the strength of the HPTi team. “There are going to be some challenges that we cannot today anticipate but we have a strong management team — of our eight executives I have known three 16 years or more — and with that you develop confidence in each other, we complement each other is probably the best way of putting it.”
Milligan’s Tip for 2009: Don’t get too comfortable
Even with long-term contracts, change is inevitable, says Milligan. “You can’t have blinders on and not recognize that things are happening — like the bailout —that we haven’t experienced before,” he says. “The federal budget can only get so big before some changes need to be made to shrink programs; somebody is going to be impacted.”
Part of not getting too comfortable means protecting your base, says Milligan. “The work that you have now, somebody is going to be looking at it,” he says. “With increased competition comes an increased cost in things like new business development … you have a certain amount of sales and marketing dollars and you’ve got to be more structured about how you are going to allocate those discretionary resources.”
Rich Sawchak of Paradigm Solutions
Rich Sawchak was building his career within finance and corporate development in the high-tech industry when Paradigm Holdings came knocking. It was Sawchak’s first entry into government contracting, and three years in, he’s proven to be a natural fit.
As Paradigm’s CFO, Sawchak took a then newly-minted public company with business in both government services and commercial software, and co-authored a growth strategy. Sawchak helped revamp the senior management team, changed Paradigm’s commercial banking relationships, navigated acquisitions amid a less than appropriate balance sheet, and refocused Paradigm on its core customer mission. Later, in 2007, Sawchak oversaw two acquisitions, Caldwell Technology Solutions and Cyber Forsensics Firm Trinity IMS, boosting Paradigm to a $40 milllion company.
“In these challenging times we need executives with exceptional business and finance skills, not just industry experience,” says Paradigm’s CEO Peter LaMontagne, “Rich’s leadership and experience have made all the difference in successful execution of our strategy to date.”
With a focus on national security and cyber intelligence, Sawchak is looking to the next stage in Paradigm’s growth: breaking the $100 million mark as a company over the next three to five years. That’s the baseline case. The aspirational case is to grow into a mid-sized company of $200 million or more. “Our strategy is two fold,” says Sawchak. “We’ve got a fairly large and growing pipeline of opportunities, and we plan to complement that with smaller strategic acquisitions to bring us new technology areas or access to new government customers that are vital to our success.”
Going into 2009, Sawchak remains optimistic. “We feel strongly that the Department of Treasury — related to initiatives surrounding TARP and supporting technology modernization — is going to be a strong, growing area,” says Sawchak. “We also feel that the national security and intel spaces are going to garner funding to deal with continuing cyber threats and initiatives,” he adds.
Sawchak’s Tip for 2009: Focus on insight and communication
“It really boils down to insight and communication,” says Sawchak. “Especially in 2009 and 2010 CFOs are really going to have to have good insight into their business from a forecast perspective … that will also require real-time, open communication with partners, especially on the banking side.” Communicating with employees, and keeping them vested in the process, is also critical, adds Sawchak. “I’ll have to quote Peter LaMontagne, our CEO, who says, ‘Part of our strategy for retention is making our company culture more than a paycheck and a holiday party.’ You have to create a real culture that allows people from the top of the organization to the ‘bottom’ to be linked into the strategy. Ownership breeds retention. It enjoins people to the plan.”
Don Shoff of INDUS
Rumor has it that when he’s away from the office, Don Shoff attaches a calculator to his golf bag. Shoff is quick to shoot down the rumors — “scurrilous canards!” he delicately calls them — but anyone looking for clues to Shoff’s mastery of the game both on and off the field, in his role as CFO of INDUS, could be forgiven for asking.
Consider a few of Shoff’s accomplishments: Since joining INDUS in 2002, Shoff has helped the company grow from 200 to 500 employees, all within a five-year period. Shoff also oversaw two nearly simultaneous acquisitions in 2005, which helped INDUS further diversify its customer set. At the time INDUS had few contracts with the Department of Defense and various intelligence agencies. “These two acquisitions helped us gain a foothold in that arena,” says Shoff, “It was an interesting experience … and year.”
INDUS’s CEO, Shiv Krishnan, is less understated about Shoff’s contributions. “INDUS’s financial strength and the maturity of our financial management and reporting systems, which rival those of other public companies, are in a large part due to Don’s leadership,” says Krishnan. “With Don’s expertise in all aspects of finance, including his IPO experience, INDUS is well-positioned for further growth as a strong mid-tier federal IT player.”
At a time when business journals are screaming headlines like, “CFOs Pessimistic on the Economy,” Shoff is nonetheless optimistic about INDUS’s growth. “I think there’s going to be room to grow in certain sectors,” says Shoff. “There may be shifts in the government’s high-level priorities — away from certain defense and weapons systems and a move toward environmental improvement and efficient energy initiatives, for example— but where there’s a shift there’s always an opportunity.”
Shoff’s Tip for 2009: Plan for delays in procurements
Shoff advises to “plan for the worst but work for the best,” as he puts it. Part of that preparation, he adds, is being mindful of delays in procurements that will likely accompany a change in administration. “Sometimes those delays turn out to be even longer than first anticipated,” says Shoff. “Having staff onboard in front of those procurements now becomes a big drain on your overhead … try to be more efficient with overall staffing levels. With the approaching changes, it is more important than ever to minimize indirect costs and increase staffing efficiencies.”