For any organization looking to grow in an unpredictable market, the Dayton, Ohio-based company MacAulay-Brown, Inc. holds numerous lessons in navigating change, and coming out on top.
In the six years since Sid Fuchs became president and CEO of the national security company that delivers engineering services, cybersecurity and product solutions to federal customers, change has been a constant, and so have growth and expansion. That’s no accident.
“If you want to head down the path of transformation, you have to look at your options and assets with the end point in mind—your talent base, organic growth accounts, investment capital, capability sets, and a real and executable strategy with success criteria that will get you there,” Fuchs said, speaking from MacB’s national capital headquarters, in Vienna, Va.
A simple snapshot of MacB’s performance shows its impressive trajectory, from a once predominantly SETA contractor to high-end engineering services and solutions firm, all in just six years.
Most remarkably, it all occurred at a time when government contracting growth largely came to a halt, with sequestration in 2013, and later, with increasing preferences toward small business set-asides, insourcing and LPTA contracts.
MacB felt the impact of those challenges, but has been able to navigate them and maintain a steady and upward trend, all while incurring no debt.
“We didn’t do everything right, and sometimes the outcomes didn’t favor us, but we became a cohesive and resilient leadership team, learned quickly from our mistakes and moved forward,” Fuchs said.
“The market contraction forced companies to survive, die or sell, and I think we definitely did more than survive,” said Fuchs, a 30-year industry veteran who has led organizations ranging in size from $100 million to over $1.5 billion in annual revenue. These include several successful turnarounds.
“I had the pleasure of taking an established company and positioning it for success in a new environment, in the middle of a complete market reset—it has been quite an interesting experience,” said Fuchs, reflecting on MacB.
There has also been a change in expectations, especially in business rhythm, execution and focus.
When Fuchs arrived, MacB was bidding roughly $600 million (total contract value) per year; today, that value stands at $1.4 billion, a 120 percent increase. Meanwhile, the company’s new business win rate, which once stood at 12 percent, is now 32 percent—almost tripling in value. The same gains hold true for the company’s re-competes, jumping from the low 70s to the high 90s.
Fuchs attributes these performance improvements to MacB’s leadership team keeping things simple, and focusing on execution and discipline throughout the business development, capture and proposal phases.
The company now collaborates effectively across operating groups, leveraging technology and expertise that enable MacB to pursue larger and more complex programs.
“We don’t have 100 accounts, we’ve got 25 major accounts, and that’s where we put our energies,” Fuchs said. “I always say, ‘An army everywhere is an army nowhere’—we are a focused organization.”
The company has also added many new customers inside new and current markets through a combination of M&A, and strategic organic growth. In addition to new customers, MacB now has six integrated labs across the country that develop solutions in software and custom tools, training, RDT&E, prototyping and instrumentation.
Fuchs is equally proud of MacB’s prime-sub mix, going from a 60/40 split to 75/25 today—there again, no small move given the amount of work still allotted to small business set-asides. In such cases, MacB either bids as a sub, and on occasion wins business back, or finds additional ways to grow organically.
Acquisitions have played a key role.
In just four years, MacB has made three acquisitions, with Secure Computing and Communications in 2013; Commonwealth Technology, Inc. in 2014; and late last year, Enlighten IT Consulting, a move that has since expanded MacB’s reach into cloud engineering, big data analytics and software solutions for defense and commercial customers. Each acquisition has brought new customers, capabilities and expertise, and has provided more opportunities for cross-team collaboration.
MacB’s acquisition approach employs a delicate balance.
“We can quickly spend money to acquire companies, technology and equipment, but trying to merge and evolve cultures in a way that doesn’t break it takes patience and thoughtfulness,” Fuchs said. “It requires deliberation, planning and communication.”
That approach most recently paid off when Enlighten IT Consulting, operating as a wholly owned subsidiary of MacB, was awarded a basic ordering agreement from the U.S. Army Contracting Command. The 3-year agreement makes Enlighten a preferred source to provide commercial cloud hosting, transition support, data center migration and application modernization services.
The award came just weeks after MacB was awarded a contract by the U.S. Air Force Life Cycle Management Center to operate and manage all software and IT systems for the USAF’s Equipment Management System. In all, MacB’s customer base now spans federal agencies such as the departments of Defense and Homeland Security, federal law enforcement and the intelligence community. (Over a third of MacB’s wins can’t be announced or discussed in public because of the classified and sensitive nature of the customers, missions and technologies involved.)
Common Goal Framework
Central to that growth has been a focus on culture. Or as Fuchs calls it, a “common goal framework,” which comprises five key areas: customer success, meeting financial goals, business development, leadership and team development, and effective business operations. The common goal framework also ensures a high-ops tempo and sense of urgency exist across the company with measurable results.
“If you can’t measure it, you can’t manage it,” Fuchs said.
“We execute against a ‘quad four’ model—if you look at how government agencies or businesses segment their operating environment, the upper right quad is generally mission-critical development or services,” Fuchs said. “We have moved toward that quad while being able to grow our special engineering advisory work. The MacB business mix has shifted to a more balanced portfolio of product and software solutions, cybersecurity and high-end engineering services.”
Fuchs keeps that impact at the forefront of all communication.
“It is important to continually tell the story and strategy of MacB—where we were, how we got here, what we do and where we are going” Fuchs said, reflecting on the company’s 38-year history. “It’s important to put things in words and context so people don’t just say, ‘You’re a company that does engineering, but what does that mean for me—context and impact are critically important.”
Play to Strengths
Equally important, Fuchs says, is never confusing activity with results.
“It is not enough just to bid, you have to bid and win—we do a ‘lessons learned’ and post-mortem analysis when we lose and when we win so we can play to our strengths,” Fuchs said. That, coupled with a “maniacal focus” on people, as Fuchs puts it, fuels company strategy.
“We have promoted and developed many people internally; we’ve also brought in talent from the outside—so it’s a mix of company legacy and historical expertise coupled with new energy and ideas,” Fuchs said. Fuchs and his team have implemented programs on leadership development, succession planning and workplace training since he started, which has helped maintain the company’s focus on hiring the best, developing them and then providing opportunities for success and growth.
Underpinning those efforts is no small measure of risk, managed and well executed.
“I’m very proud of this team and what the company has accomplished,” Fuchs said, offering particular praise to MacB’s owners.
“This has been a very challenging half a decade of dealing within a shrinking industry—we have been impacted, there is no question, but we’ve taken calculated risks and it has paid off handsomely for MacB,” he said.