“We've organized around the concept of collaboration“¦ it marries well with our idea of bringing commercial best practices to the federal government.”
EM: Let's talk about the merger. Could you share with the readers what has been going on with the new company? How is it going?
Paul Dillahay: In the past six weeks or so, I've been spending time with my HIG partners. I'm excited for a number of reasons for both myself as well as for the team. HIG has a tremendous amount of capital. They bought NCI with the sole purpose of using us as a platform to build a bigger government services provider. They are serious about it. The market is pretty good from an M&A perspective so there is opportunity and we are participating with HIG in assessing those companies. The big obvious change is no more ï¬ling of 10Qs and 10Ks, a little less preparation around the quarters. However, we have ï¬nancial obligations to HIG and their lenders, and we are committed to continually growing the business. We are doing all the things we were doing previously. Nothing has dramatically changed for the team, we're focused on continuing to execute.
What is the direction for the company going forward?
Dillahay: If you go back and think about some of the earnings calls that we had, our strategy hasn't changed. We said that 2017 is a rebuilding year and it is. That being said, there has been tremendous progress made strategically. We are rebranding the company. You may have noticed when you walked in to our offices there was a new logo and word art on the walls. Part of that rebranding is to move out on a strategy that includes a new tagline:
“Navigate, collaborate and innovate.“
With regards to protecting the core, extending relationships with current customers and expanding into new ones, that is exactly the same strategy we've had. We are disciplined in the opportunities that we pursue. We feel very good about 2018 and beyond for the company. We will ultimately grow about 7 percent this year and can repeat this going into the future with the emphasis we have put in to technology and trying to differentiate ourselves.
We've organized around the concept of collaboration, and believe it marries well with our idea of bringing commercial best practices to the federal government. For example, we are investing in artiï¬cial intelligence in a pretty big way, looking to enable our customers to beneï¬t from artiï¬cial intelligence through higher levels of accuracy of process ï¬‚ow and lower cost to the government. We've partnered with a leading commercial provider of artificial intelligence ““ CrossChx, Inc. ““ and we've signed an exclusive agreement to bring artificial intelligence to the federal market. They market their product today to about 300 commercial hospitals. We are going to take that capability, rebrand it and bring it to the federal space. We currently have seven pilots underway, including pilots in coordination with our customers both on the Army and the CMS side. The pilots will provide us with proof of concepts across areas such as fraud, waste and abuse, cybersecurity, machine-to-machine communication (M2M) and patient care coordination. We expect to begin to bid this solution and deploy these capabilities in several customer environments beginning in 2018.
NCI had a heritage of a very strong foundation in terms of modernization of IT systems and infrastructure, working primarily with our Army customer. That has been our core business. Our focus on agile, analytics and artiï¬cial intelligence does not mean we are abandoning our core IT infrastructure modernization capabilities. We have a robust pipeline of opportunities and will continue investing in these capabilities. We do see value in emphasizing the agile, analytics and artiï¬cial intelligence capabilities we have. And strategically, this is where we are placing bets right now, as evidenced by the exclusive agreement we signed with CrossChx.
What's one of the greatest shifts you've made in the organization as part of your leadership approach?
Dillahay: One of the things I quickly realized when I got here was we needed to improve how we were critically assessing and rewarding our high performers in the organization. This includes me being accountable to the staff as well as vice versa. One of the things I quickly realized when I got here was we needed to improve how we were critically assessing and rewarding our high performers in the organization. We had truly high performers and we had peers that were not high-performing. According to the data, they were all getting rated the same and receiving the same merit. I wanted to change this. As a result of making updates to our performance management process, we have seen tremendous results this year from our annual performance management reviews. The bell curve that now exists in terms of highest performers all the way through to the lowest performers in the company is more typical. We are building and fostering a meritocratic work culture to support organizational performance excellence and are recognizing our high performers with signiï¬cantly more merit, training and incentive compensation than the employees performing satisfactorily.
How has your team responded to this new merit strategy?
Dillahay: I look at overall enterprise attrition““and I haven't seen a jump. We hire very speciï¬c and unique skills in some of our programs. But if we hire ten employees in the same program and they are all performing exceptionally, aren't they all average? Tell me who is differentiating themselves. Who wrote a proposal? Which one jumped in to help out on a corporate initiative? Which one is making an impact in the community? If we hire all exceptional people then we are all average. This is a hard concept to accept, especially for those who think they are exceptional and unique. But if you think about it, it makes sense. And, so what do I do differently to differentiate myself as an individual in this system in order to get recognized? That's the challenge that we as a management team and employees have ““ to truly identify those who are unique individuals, who are performing above and beyond. There could be a hiccup in any one location, but in the greater scheme of things it should accelerate the performance of the entire enterprise.