Since its recent spin-off from L-3 Communications, Engility Corporation has experienced a period of rapid change, as the company set up shop in Northern Virginia and faced the government contracting market with a brand-new identity.
However, it has also been a period of significant opportunity, as Craig Reed, Engility’s Senior Vice President, Strategy & Corporate Development explained in a recent interview with WashingtonExec.
Below, Reed shares the challenges and benefits of Engility’s transition, as well as the company’s successful approaches to LPTA and its acquisitions growth strategy.
WashingtonExec: What lessons have you learned through your part in the L-3 spinoff, which turned Engility into its own company as opposed to a subsidiary? What challenges did this experience present?
Craig Reed: Probably the most valuable lesson learned was the cultural transition and the branding transition of creating a whole new culture and a whole new corporate identity. We had the opportunity to take a step back and say, “What kind of company did we want this to be?” and not to focus on how L-3 had done business in the past, but how we wanted to create a company that was optimized for the market that we were in.
Our CEO, Tony Smeraglinolo, took the leadership team offsite the week prior to the spinoff and focused on those issues, and we started by defining the values of the company that we wanted to run. This was both a career opportunity and a life opportunity for all of us on the leadership team. We had the opportunity to say, after spending the last 25-30 years of working with other companies, “If this were my company, this is how I’d do it.” But it all came back to the values. Ultimately, we concluded that the values of customer focus, differentiation, servant leadership, and earned trust would provide the foundation for the kind of culture and company we wanted to lead.
WashingtonExec: Thinking about leadership roles you’ve held throughout your career, what approach do you consider to be most important in leading a team?
Craig Reed: The most important thing for me is differentiating between leading the team, and leading through the team. The whole team can be more successful and productive by my providing leadership in a way that allows them to perform their roles and feel ownership for their contributions to the success of the company, and I certainly try to apply this approach with my team.
I think that’s really the transition from management, or managing a team, to leading through a team and enabling the team to be successful. That starts with picking “A” players; in creating a new organization, I had the luxury of handpicking my team and feel that I brought in all “A” players. The second dimension of this is trying to communicate regularly and effectively, having that two-way communication so they know and feel they are a part of where things are going, that they have context and insight into what we’re trying to achieve, and then giving them the opportunity to be successful.
WashingtonExec: In what ways did your education prepare you for your career and on the other hand, what’s the biggest thing you’ve learned that a university could not have prepared you for?
Craig Reed: I’ve had exposure to lots of books, lots of teachers, lots of curriculum, and lots of classrooms over the years.
But for me the real experience in the education process was pairing coursework with internships; the start I got and the opportunities all directly trace back to the internships that I was able to secure along the way. So, what you’re studying or the teachers you have access to and the coursework and things like that, that’s kind of table stakes. How those help you then get internships and those kinds of early opportunities are the differentiator.
My first internship led to my subsequent internship, which then got me my next internship, which probably got me into grad school, which probably then got me my first job. So they’re all interrelated. The advice I’ve given my own kids, and other young people, is that while you’re in school, it’s surely important to work hard and get exposed to a broad variety of subject matter, but potentially even more important to spend energy on trying to find those internship opportunities that will differentiate you in your early career.
WashingtonExec: What’s the best professional advice you’ve received, and what advice would you offer a young professional in your field starting out in their career?
Craig Reed: I’ve worked in the defense industry space for a long time, and there are a lot of military metaphors. But one that’s always stuck with me is, “No one wins medals in peacetime.” You need to go find the most important and challenging battle that your company has to fight and be a part of winning that battle for the company, and then the rest will take care of itself. People who are focused on their own personal gain or personal recognition will probably not achieve the same career potential, no matter how smart or talented they are, as those people who look for what they can do to make the company successful in the toughest and most challenging areas.”
WashingtonExec: How has Engility primed itself for growth, expansion, and moving into new markets?
Craig Reed: The key to the Engility story was recognizing that the services marketspace isn’t monolithic—that there’s both a solutions side of the business that requires technical investments and other kinds of investments to differentiate yourself, and then there’s what we call a pure play services market, where the key to success is delivering high-quality people at the lowest possible cost. Tony optimized our company to deliver those pure play services, recognizing that every dollar that you spend on the solutions side sub-optimizes your ability to compete on cost on pure play services.
We have extremely talented and great people and we have always provided high-quality services to our customers in the past, and with the creation of Engility, we can now provide those services at the lowest possible cost. We think that that cost sensitivity, whether you call it LPTA or call it best value at the lowest point on the cost and performance curve, is going to continue to be very important to our customers for a long time to come.”
WashingtonExec: We’ve heard that Engility has cracked the code in terms of working in an LPTA environment. Would you explain how LPTA does or does not work for Engility?
Craig Reed: Whether you call it LPTA or you call it best value at the lowest possible cost, I think that a focus on cost-effectiveness is here to stay. Macro budget pressures are driving customer buying decisions to try to figure out how to do more with less. Customers want to pay for talent and they want to pay for good people. What they don’t want to pay for is levels of organizational hierarchy or lots of overhead that don’t directly contribute to the success of their program or their mission.
We’ve tried to create a company that delivers those services in the most cost-effective and efficient manner possible. Rather than LPTA per se, the cost-efficient delivery of high quality services is the absolute cornerstone of our business strategy.
WashingtonExec: How do acquisitions play an important role for Engility?
Craig Reed: In our first strategic planning process as a new company, it was obvious to us that we weren’t opportunity-limited with the model that we had. There were plenty of opportunities to take away from our competitors in the core markets we were currently serving. Since we didn’t want our folks diluting their energies by looking in at adjacent markets or new market areas while we still had areas to grow within our current markets, we decided that we would use acquisitions to help us expand into those adjacent marketspaces.
DRC helped us expand to new customers who buy services like those Engility provides elsewhere and expanded and enhanced our core offerings to our current customers as well as our new ones. The acquisition helped increase our scale, which allowed us to spread our fixed infrastructure costs over a larger base of business, and that even further enhanced our cost-efficiency. And, probably most importantly, it helped us infuse talent into our organization which brought a great deal of energy, raised the bar, and provided career growth opportunities for all of our employees.
We think this government services market is ripe for consolidation and, following on the heels of DRC, we will continue to be a consolidator in the market. We’re also going to be agile because in this market, you can’t just position yourself and stay the same. We’re going to continue to look to ways to maximize our ability to be competitive in the marketplace.”
WashingtonExec: We hear that you work on Engility’s Twitter account. Please tell us about that.
Craig Reed: Engility’s corporate communications and investor relations team does a lot of the social media coordination for the organization, but I do actually have my own Twitter account and monitor a lot of Twitter feeds. I get up in the morning, have my coffee, and check my Twitter feeds as my primary source of news. My son thought it was pretty amazing that I even knew how to find Twitter on the Internet.
WashingtonExec: What types of hobbies or activities do you enjoy in your spare time?
Craig Reed: I live vicariously through my kids and really enjoy their successes and adventures. I also enjoy spending quality time with family and friends, staying physically active and spending time at the beach and in the mountains.