Scott McIntyre, CEO of Guidehouse, recently spoke with ExecutiveBiz regarding his first place finish in the 2020 Wash100 Popular Vote, Navigant's acquisition, its impact on the company's growth and forging new partnerships.
“The Wash100 Award is a big deal in our community and I appreciate Executive Mosaic for making it what it is. It's great to promote this industry. I appreciate what you’re doing for all of us.“
ExecutiveBiz: Were there any main strategies within the company that led to Guidehouse's growth?
“When we carved out the PwC's Pubic Sector business a little over two years ago, we put in place a strategy that had four dimensions to it. The first was to build, either organically or inorganically, commercial capabilities and clients in three areas:
- Healthcare – Where we have a large public-sector healthcare footprint
- Financial Services – Where we have a similarly large regulatory footprint
- Energy and Utilities – Where we have a large energy utility and transportation footprint within the federal government.
Our strategy was to complement what we were doing in the public sector with commercial skill sets, capabilities and client critical mass. The acquisition of Navigant gave us a world class commercial global business in all three of those areas along with other capabilities around forensic accounting, dispute and litigation support, data analytics and sustainability, which has become a big business for us.
The strategy was to, as quickly as practicable, get into a high-quality commercial business. That was less about simply generating additional revenue and more focused on identifying real revenue synergies between the two companies and delivering exceptional quality.
We knew from experience that if we had colleagues who were deeply skilled in relevant commercial markets and they were interested and motivated to pull their skill sets and their teams' capabilities into the public sector to solve public-sector problems, then we would have a winning formula.
That would be a force multiplier, a strategic advantage and our young public-sector business would enjoy a capability to serve public-sector clients that many of our competitors did not.
In the circle of that strategy was: Could we take the breadth of what we do in the public sector and can we take some of the scale of large transformational engagements that we undertake with defense and civilian agencies and apply it to large commercial opportunities in adjacent industries?
When we look at recent revenue synergies, although we’re only six or seven months into the transaction, we see many opportunities that we would not have won if we didn’t have the combined business. So the strategy is coming together very neatly and ultimately, we took a huge step with the acquisition of Navigant.
We took another step with what I would call a very deliberate, rapid integration of the cultures, values and the leadership teams. We didn’t know whether this current crisis would reveal weaknesses in what we felt was a strong integration or whether we would find that the strong integration we perceived would actually help us weather the storm. So far, sitting here in early June, it's certainly the latter.“
ExecutiveBiz: How are you managing Guidehouse's rapid growth?
“We met with Navigant leadership and discovered a company where we didn’t need to disturb their delivery model, their go-to market approach, or the custody of their people, and that’s obviously an important thing in a professional services merger. We basically took their commercial business and operated it adjacent to our government business.
And then we took those practices that were essentially focusing on the same market areas and merged those units into single P&Ls. What we found was that when you’re buying a company, the top of the priority list has to be the cultures of the organizations and the leadership style transitions. We spent a lot of time getting to know our counterparts at Navigant, and they us, before officially closing this deal.
Navigant had other interested suitors, and the reason I point that out in a question about managing the scope and scale of the business is that one of the two or three key criteria for us in being able to do a deal was to have a leadership team, in terms of the acquired company, that is highly capable, highly motivated and excited to merge with another company. We found that with Navigant.
Scaling the business with their talented leadership combined with ours really has not presented us any unexpected challenges. We saw this very much as a merger of equals. Ultimately, we felt if we could really get ourselves on the same team; managing the scale of this business wouldn’t be terribly difficult.“
ExecutiveBiz: What your biggest changes are to your day-to-day duties?
“The first is that we obviously have people doing work and living in every timezone now. I can’t expect to meet and work on my schedule, so I have to adapt to their schedules since they are the ones that are doing all the great work. So one thing I have learned is that with a scale and global operation is that there is never a typical day.
We are also now equally balanced between commercial and public sector clients and revenue. We work with utilities, health systems, medical device makers, large industrials, consumer products companies and banks. It's important for me to learn from my colleagues, our clients and the industry economics of those sectors. The ways that they procure and the strategic and operational priority lists presents a learning curve.
Fortunately, I’m surrounded by people here at Guidehouse, many of whom came from Navigant, that have been living in those worlds their entire professional careers. They've taken the time to work with me to further my understanding of those industries. I spent most of my career serving federal and state and local clients. I spent a few years in the aerospace and defense industry and a few years in healthcare, but by and large, my background is government contracting.
There's certainly a learning curve, but there’s also an appreciation curve as well because the more I learn about what our clients are facing and the challenges that they’re dealing with in their industries, the more we can pivot our capabilities to solve some of their problems. That’s already been effective.“
ExecutiveBiz: How has the acquisition of Navigant shifted the company's capabilities?
“The ability to go into our public-sector health clients and have commercial clinical operations, commercial payer capabilities and experience with drug companies and life sciences companies, then pull that commercial pedigree and capability into certain public-sector pursuits or public sector deliveries is a game changer.
In my experience, it wasn’t always easy to tap into those types of commercial capabilities before we carved out our public sector business from our former parent company. We’re building this platform to make this as seamless as possible by utilizing the skills running to the government.
There are all kinds of things we do for the government that have enormous value to our commercial clients. Especially in heavily regulated industries like healthcare, utilities and financial services, which is about 80 percent of our commercial footprint.
Being able to utilize the regulatory knowledge and the knowledge of the regulator into the commercial client base is the top tier of our value proposition. Through the acquisition of Navigant, we also gained a world-class forensics, forensic accounting, litigation and disputes business and they work with industries all over the world. They are positioned to do that kind of work and we didn’t have that capability within legacy Guidehouse.
Our clients in the public sector do occasionally require litigation support or an investigation and oversight or monitoring function and compliance work, which Navigant brought to us. The other thing that Navigant brought, which has been critical, is they have a very mature, highly capable and profitable sustainability business.
That is a business that we were not in as a public-sector entity at PwC. Navigant has an A-list of clients in banking capital markets, in industrial products and consumer products. They have a top 50 client base with the best brands in the world that have turned to Navigant for their sustainability needs.
That’s something that was completely brought to us as a skill set through this acquisition that we will take to our public-sector clients. We brought to Navigant a very robust capability around artificial intelligence and machine learning. We do a lot of this work in the government and have for several years.
We also made a large investment in the last two years in robotic process automation (RPA), and that has obviously been skewed almost exclusively in the federal government. We provide the ability to take those proofs of concept, especially where we’ve done RPA to automate a lot of the back office processes that can apply to the commercial industry that has been a big capability.
Additionally, we still have a big investment and professional talent in financial management, finance optimization and financial analysis. We brought that finance skill set into Navigant's commercial world, which has been another big game changer. That’s the second tier of the value proposition.“
ExecutiveBiz: What should we be watching out from Guidehouse in the next year because you guys are coming from a bunch of different angles. So what should we look out for?
“Given The combination of organic and in organic growth characterizing 2020, we’re going to see a lot of organic growth in 2021. We also have an appetite for continued, albeit very focused, acquisitions.“
ExecutiveBiz: What does your recent Wash100 win mean for you and the company?
“I love the idea of getting this kind of recognition for our young brand. This is a business that is two years old. I think it underscores the fact that we’ve put together some great capabilities in the formation of Guidehouse and the legacy PwC public sector practice merged with Navigant Consulting.
Our people are going to be very happy to see this recognition. As I look through the top 100, there’s not a company on that list that is any younger than we are. It’s great to see the brand and get that kind of identity in our community.
The Wash100 Award is a big deal in our community, and I appreciate Executive Mosaic for making it what it is. It's great to promote this industry. I appreciate what you’re doing for all of us.“