With one year under his belt as CEO of CACI, Paul Cofoni already has a lot to show for it: CACI has added $400 million of business in the last year, about half of through acquisitions, the other half through organic growth. “This is a company that has grown so fast, from being a $400 million company at the turn of the century, to being a $2.4 billion company eight years later — that’s a sixfold increase in size,” says Cofoni. In an exclusive talk with ExecutiveBiz, Cofoni talks about this remarkable growth, and his personal passion for bridging intelligence and security services in the continued war on terrorism.
ExecutiveBiz: Let’s talk about your first year of being a CEO of CACI. What were your biggest accomplishment and challenges, and how did you overcome any challenges that you face?
Paul Cofoni: Jack and I had been working and planning together for two years prior to this transition, so when it actually occurred, it was not a big deal because we had been gradually shifting over different responsibilities from him to me. So the first year really feels like the third year for me because since I’ve been here, Jack and I have had a great partnership in terms of leadership and the transition of leadership.
In terms of our accomplishments, we’re finishing up a really good year. We had a couple of tough years before that, so we have just turned the corner and are starting now to show good growth and profitability. We’re feeling really good about that. The business is growing nicely. We’ve added $400M of business to the company in the last year, about half of which has come through acquisitions and half of which has come through organic growth. I feel very proud of the fact that we’ve been able to grow at $400 million, which is the size of a lot of companies — in fact, bigger than a lot of mid-sized companies — and next year we have to do it again. Every year now we have to grow at $400-$500 million, add $400-$500 million to the business.
I am proud of the team that we’ve got. We have a nice combination of legacy personnel at CACI, such as Jody Brown, Bill Fairl, and other excellent people, and we’ve complemented them with others who have some experience working at large-scale Tier 1 contracting organizations, and who are able to help us do things a little differently as we grow into the Tier 1 role. We’ve worked very hard on organizing ourselves to focus on our very best and most distinctive solutions, or our functional core competencies, that we want to leverage those across all our clients. We’ve organized our solutions in a way so that they are more accessible to all of the company and all of our clients, and that is very important going forward.
Secondly, we’ve organized ourselves in a way to be account-focused, or client-focused. We have plans for each of our clients, whether they are at the level of the Army Materiel Command or NAVSEA, or SPAWAR, and we have developed plans that are focused on long-terms needs of those customers. We call this account planning, and it’s a brand new thing here. We’re teaching our team how to do it, and they’re doing very well. This gives us a long-term view of the client, where they’re going, and what they’re issues and problems will be. And it helps us figure out where we can place ourselves in the solution of these problems, how we can help the client vision-forward, to solve their problems going forward. It also gives the client a single way to view us as a company, and it aligns our resources to that client so that anybody that is participating with that client is aware of what our plan is for that client.
These are pretty dramatic changes. This is a company that has grown so fast, from being a $400 million company at the turn of the century, to being a $2.4 billion company eight years later. When you think about it, that’s a sixfold increase in size. In that period we’ve gone through a transformation, assimilating people from other companies, but also going through a transformation from small company to a large company. And there are things that large companies do a little differently than small companies and those are the things we’ve been focusing on.
I was fortunate that we’ve had just a great year this year, but the work that we’ve been doing in the last three years is what really set up the good year we’re having now. And we think next year can be equally good.
ExecutiveBiz: What would you say your biggest challenge in business is today?
Paul Cofoni: The biggest challenges really come in two areas:
One is the retention of our people. This is a constant battle every day, to create more “stickiness” between the company and the people so people feel like they want to stay. We have a wonderful culture but in this industry, the attrition is high, and it’s a constant problem. We’ve been working on it for a long time but I’d say that is the number one challenge.
The second challenge is growing the workforce and hiring people, and although there is a similar problem here, this year we’ve had a great breakthrough and added eight hundred people, net, to the population, so we’re doing quite well at hiring. Retention is still the one we have to improve. We’ll get it eventually, but it’s not solved yet. It’s not at a point where we’re comfortable yet. I would say it’s the biggest thing.
Also, in the environment we’re in, there are not a lot of new-start programs going on, so there is more competition for what does exist already, in other words each other’s incumbencies. So we have to be ever vigilant about our existing client base and making sure they’re happy. This is going to be a big challenge going forward — fending off the competition and keeping our clients happy in an environment where there is less to go after, and where everyone is trying to feed on each other’s incumbencies.
ExecutiveBiz: The Company has been very aggressive on acquisitions. What is your future plan for acquisitions?
Paul Cofoni: Well, our strategy for the next three to five years is to stay focused on the intersection of intelligence and security services.
If you think back at 9/11, the “fault line” of 9/11 was the lack of communication across the agencies of the intelligence community, and then between the intelligence community and law enforcement. That is where there was a lot of justifiable criticism. This is not to necessarily say that if all had worked out better, perfectly, that we would have been able to stop 9/11, just that these were identified as weaknesses.
The government since that time has been very focused on trying to fix or improve those conditions. We think this is the big problem going forward, and we are focused in that space. How we do a better job of sharing information across those boundaries involves both culture and policy, as well as technology issues. How we get the collaboration to occur between Intel and law enforcement, be it local, national law enforcement, or military in the cases of international activity is the opportunity for large improvement. We’re heavily vested in that area. This is where we have a lot of capability. And this is where we’ve acquired four companies in that space since last year: Wexford, Athena, Dragon and IQM. All four of them are in that space of intelligence and security services, and only one of them is Information Technology company and that’s Dragon. The other three are all professional services companies that are highly specialized, experts in their fields, generally doing consulting, leveraging the military or the Intel community with their expertise and expert knowledge. Many of them are former full-career Intel professionals or former military professionals with a full career, coming back with all the knowledge that they’ve accumulated and able to continue making important contributions by leveraging young people who are coming into the military or Intel with the knowledge of a career professional.
This is the area that we are currently focused on because we think that the global threat of terrorism is pervasive and persistent and will go on for generations. We believe Intel, combined with a good collaboration between military and law enforcement, is the best way in the short-term to prevent future 9/11s around the world. We’ve seen evidence of that. We’ve seen it in Frankfurt, we’ve seen it at Heathrow, we’ve seen it in JFK, and at Fort Dix. And these are just ones that have been printed in the newspapers, but as you can imagine there are many more that don’t make it to the public’s view. We think that the points of contention that exist between the adversary and ourselves are not ones that will reconcile themselves naturally. In this case, the adversary has an extreme point of view that says that Westerners are not welcome in that part of the world. They want Westerners to leave that part of the world, and they want Western influence to be removed.
But there are several reasons why it’s impossible for our country to do this, independent of what party is in power or what personalities are in office. One, we are globally interdependent. We can’t just extricate ourselves economically from the rest of the world. This is not just about the Middle East. The Califate that the adversary wants to reestablish and control extends all the way from Asia Pacific through the Middle East to North Africa, so it’s a huge territory that they want. And we are heavily vested in those areas from an economic and a trade standpoint. The second reason is that we have allies all over that region of the world whom we can’t just desert. We’ve made commitments to them, so deserting them doesn’t fit our culture as a country. The third reason is that we are energy-dependent. And there is no short-term solution to the energy-dependency we have on that part of the world.
So what they want, we can’t do even if we were inclined to do it. So this is a fight that’s here to stay for multiple generations, and it’s the biggest problem we have even though it’s a quiet problem. It’s a quiet problem because it hasn’t reoccurred since 9/11. In fact, 100 miles outside of Washington D.C., the level of appreciation for the threat drops off drastically. And you get hundreds of miles from here and talk to people and they just give you blank stares when you talk to them. And I talk to friends, I talk to relatives, and they give you a kind of blank stare that asks: have you become one of these paranoid people that think something bad is going to happen any minute? It’s like a reality check.
We haven’t educated the American people on the scale and scope of this threat. And yet it’s ironic because on the one hand, it’s the least understood threat by the American people, but on the other hand it’s the most likely threat to affect their lives. Yet for a number of reasons, we have not done a good job of educating the American people. There is a lack of understanding, a lack of awareness, a lack of involvement. Less than one percent of our country’s population is involved in this fight today. I’ve given books on this topic to my nieces and nephews saying: “You guys have to read these books, read these books like a reading assignment, because this is your problem. I am going to do this for a while yet, but when I am no longer working, it’s going to be your generation that’s going to have to deal with this, and your kids. And by the way you better start thinking about what your kids are going to have to deal with.”
I am passionate about this topic because I don’t want my little granddaughters to have to solve this problem. We are much more prepared in this current generation to deal with this situation than these little kids are. On the other hand, I am really encouraged when I go to our locations, and see our people who work in the intelligence community who are young, and who are committed to this fight. They are using their education, and their technology orientation when they have it, and are using all their skills to help support the intelligence community, and the warfighter.
Still, I am disappointed that we haven’t done a good job at educating the American people. We have that ahead of us to do, so that they “get it” because it’s really here. It can happen again any day. We can have another 9/11 any day. It’s like a hockey game: one is eventually going to get the puck in the net if you shoot enough times.
ExecutiveBiz: Are you looking at potentially using some of your skills sets to help companies or countries internationally in some of the anti-terrorism and Intel work that you currently do?
Paul Cofoni: Yes. Ultimately, our vision, when I talk about this intersection of intelligence and security services, is that this notion of security services is so comprehensive that it would naturally find itself applicable in all parts of the world that are threatened by terrorism. There are many places in the world today that are seeking turnkey solutions to security, both from the standpoint of protecting information, but also protecting facilities and people, making their economic environment safe for trade. So there are parts of the world that are converting themselves to be trade or tourism centers and so they are very worried that this threat of terrorism will retard their ability to develop fully economically around trade and tourism. Dubai is a great example of that today, where they are trying to convert their economy from an oil economy to a trade and tourism economy, and creating another Malaysia if you will, another center of the world economy. They are having to confront questions about whether companies are going to feel good about establishing themselves here, or be comfortable sending their people. It’s everything from physical protection to designing security into buildings, to information security, so it’s multi-level or comprehensive from a security standpoint.
In this way, we should evolve into an international company to the extent that we find ourselves involved in those parts of the world where there is a great need for security. We will naturally get there because our customers in the Department of Defense and Intel also exist in those hostile, very difficult environments, and we are there supporting them. Over time, we will build up the infrastructure in those parts of the world and we will be able to offer that to both our classic clients but also to new clients, which could be other governments and multi-national corporations. .
But right now, today, we are not in that space, though we will evolve internationally. We already have a very nice business in the UK, which is oriented to commercial proprietary software, so although it’s a different business, we do have to that extent, about five percent of our business operating internationally.
ExecutiveBiz: Some personal stuff, Are you a big Patriots fan?
Paul Cofoni: Yes, I am a big Patriots fan. I went to the Super Bowl for the first time. I took my son, and we went and spent three days and were like little kids. It was wonderful. You should go one time, go with a good friend, someone that you get along with really well, and you’ll have such a wonderful time. Too bad they lost, the only unfortunate part of the whole experience, but we had a terrific time.
ExecutiveBiz: What is something people don’t know about you, personally?
Paul Cofoni: I love sports, all sorts of sports, so sometimes I’ll just head out of here and go down to the ballpark and watch the Nationals play. I just go down there by myself, sit out there in the stands and watch a baseball game or go to a hockey game. I kind of got hooked on the Capitals this year. That’s one thing people probably don’t know about me: I’ll sneak out of here and go watch a baseball game.
Interview with Paul Cofoni conducted by Lisa Singh
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