What do two U.S. Air Force officers do upon retirement? If you’re Phil Soucy and Tom McMahan, you start your own company. Combining their vast experience in stealth technology, low observables — aircraft like the B-2 and F-117 — and systems engineering, the two launched Modern Technology Solutions, Inc., in 1993. Sixteen years later, the Alexandria, Va.-based company has grown to over 300 employees and offices in eight other locations nationwide. A key focus of MTSI is providing specialized technical support to government clients such as Department of Defense, Department of Homeland Security, the intelligence community and NASA. This summer, Soucy was named Greater Washington Ernst & Young Entrepreneur Of The Year in the government contractor category. On the heels of that award, Soucy recently spoke with ExecutiveBiz about the secret to MTSI’s 20-plus percent growth year over year. Plus, Soucy discusses the issue of the day: competition between the government and industry for top talent.
ExecutiveBiz: What went through your mind when you learned you’d won the Ernst & Young Entrepreneur of the Year award?
Phil Soucy: That was a huge honor and a big surprise. We’re a small company and all our people have opportunities to go to better known companies: Lockheed, Northrop Grumman, SAIC, etc. This award — and recognition —is definitely something we can point to as showing that we’re a good, solid, strong company moving forward in the area that we were uniquely recognized in: government contracting. That’s something that will definitely assist with our recruiting and retention.
ExecutiveBiz: You’ve touched on a hot button issue — employee retention. Tell us how you’re dealing with competition with government for top talent?
Phil Soucy: As everyone knows, the government is moving more toward insourcing. We tend to have folks who are highly experienced in technical niche areas. These are some of the very types of individuals the government is looking to hire. We’ve had several of our folks offered government positions and a couple of people have actually decided to accept those positions. That said, we aren’t feeling the impact too much; we anticipate it will continue to be minimal. The government needs good people and if some of our people can provide that talent I’m OK with that. On the other hand I try to make sure that any of our folks considering the switch from private company employment to government employment understand the pros and cons on each side. We have an environment here at MTSI where I believe people can come to their supervisor or to me and ask for our advice on what they should do. I try to stress the value of our culture. Our main tenant is “Employees First.” We believe that if we hire the right people and take care of them that they’ll do great things for our customers. So far, that has worked out very well. I try to also stress the value of working for a company that is employee owned. We have an Employee Stock Ownership Plan (ESOP) in place and that has the potential to provide significant long term value.
ExecutiveBiz: In the midst of competition with government, what would you advise other government contracting businesses about retaining top talent?
Phil Soucy: All too many companies focus solely on staffing up for the contract and when the contract goes away they staff down; frequently in a very disruptive and chaotic manner. This negatively impacts employee loyalty and frequently results in poor quality of services to customers. While we cannot guarantee anyone employment for life, we believe that it’s a long term commitment on our part and we want it to be viewed as such by our employee.
ExecutiveBiz: What’s your biggest challenge in business today?
Phil Soucy: Business development and generating opportunities hasn’t generally been a huge challenge for us, it’s getting the people that can help take advantage of all the opportunities in front of us. We’re pretty selective in who we bring onboard and because of that we may have to pass on an opportunity because we don’t have the people we need to do a quality job.
ExecutiveBiz: What will the company look like in two years?
Phil Soucy: We have a five-year plan that says by 2012 we expected to do $100 million worth of revenue and grow to 500 employees. That’s a few years away, but we are on track to achieve that goal.
ExecutiveBiz: How would you describe your leadership style?
Phil Soucy: I’ve seen other small companies where a screw doesn’t get turned without the CEO reading every single proposal, approving all new hires or approving each new policy change. That can be really paralyzing to a company’s growth. MTSI, by contrast, distributes leadership to the lowest possible level. We have a number of group leaders who are empowered to seek out work, hire people, work proposals, meet customer’s needs, and manage their costs. In many ways, our individual group leaders have all of the leeway of an entrepreneur. In fact, you might think of it as a kind of federal-state relationship. Our groups act as individual states working in particular mission areas. I and our corporate team, meanwhile, acts as a national entity setting basic ground rules and providing business infrastructure for the “states” to utilize in achieving their objectives.
ExecutiveBiz: What’s something most people don’t know about you personally?
Phil Soucy: For a hobby I race cars. I do road racing on closed circuit race course like Watkins Glenn or Virginia International Raceway. I have a stock car with 500HP, much like a NASCAR-stock car. When you’re driving 150+ miles per hour with other cars all around, you can only focus on the task at-hand, so all problems or issues are gone. It’s pretty exciting and, in a strange way, relaxing!