Growth Strategy in GovCon: Part 2 – Characteristics of Successful Business Leaders
In Part 1, I discussed the various stages of growth in the GovCon market and the investments and decisions that small business leaders need to make to grow their company. While these investments and decisions help to establish a roadmap for growth, more is required for GovCon success. Through Red Team Consulting’s 17 years supporting thousands of companies, we have identified the core traits that successful small business owners and leaders must have. While this list is not meant to be comprehensive, it encompasses the most common and important characteristics that small business owners and leaders should have to position their company for growth.
Commitment to technical excellence in a particular field.
The federal government is continuing to invest billions of dollars in modernization and technology advancements. These agencies are looking for innovative companies that can help them achieve their missions by employing technology to modernize their operations and infrastructure.
Even those small business owners who do not have subject matter expertise in a particular field will prioritize building their talent pool and hiring expert resources to stay ahead of the government’s modernization efforts. As these companies grow from small to mid-tier, these executives continue to hire CTOs, former government executives, solution architects, and other subject matter experts in their market. Smart small business leaders remain committed to being the best in their field. This includes continual investments in billable staff, training new competencies, and constantly looking out for more technical resources.
Commitment to building and maintaining relationships.
Relationships still drive how companies grow in the GovCon market. Most new federal contractors win their initial business through a relationship. These same companies continue to leverage that relationship to grow their organic business, and that is often why we see growing small businesses have a large book of their business in a small number of federal agencies.
When it’s time for a company to expand into new agencies, many forget to leverage relationships as a way to fuel that growth. While it can be challenging to establish new relationships with recalcitrant federal agency customers who want nothing to do with face-to-face interaction, it’s still a critical tactic to boost growth. Relationship development should be a corporate-wide initiative – your entire overhead team and billable leaders can contribute to growth by establishing relationships with their customer counterparts.
Making smart decisions on growth.
Successful small business owners follow proven business development practices and that includes being steadfastly committed to their growth plan. They avoid low probability of win contracts, “shiny” contract opportunities, and often say “no” more than “yes” when making pursuit decisions. There is no faster way to stifle growth or waste precious time and dollars by investing in pursuits that have little chance of winning. The strongest small business leaders make smart, pragmatic, and calculated decisions when deciding on which opportunities to pursue.
Commitment to culture.
While a positive company culture may not translate directly to sales, it’s the base upon which all company growth builds. Many of the government contractors that have graduated into mid-tier status share a common trait among the executives and key staff – they all enjoy working for the company. While culture is not easily defined, it includes collaboration, communication, and commitment. Culture is a reflection of how much the company’s leadership cares for their staff. Do they regularly encourage their team, show them growth opportunities, listen to and address their challenges, and empower them to make decisions? A company’s culture pervades employees’ daily jobs – in a strong culture employees are happy, feel challenged, and know they are appreciated. If you’re unsure if you have a strong company culture (a red flag for you as a leader), then take a moment to look up various employee surveys which you can use to investigate employee satisfaction. But don’t stop with a survey – implement changes that improve the overall engagement and satisfaction of your staff.
Risk and investment for growth.
Growth is not cheap. As discussed in Part 1 of this blog, there are several investments that need to be made as your company transitions from small business to mid-tier. This includes strategic hires, accounting systems, ISO/CMMI certifications, CRM software, attorneys, and external consultants. Making these overhead investments requires a certain tolerance for risk, and if you’ve historically been conservative with spending, you could be holding your company back. This doesn’t mean you should take chances on uncertain hires or spend countless dollars on consultants or systems. It means that you understand that there is inherent risk in investing for growth and that you have to spend to reach your strategic goals. A good barometer for your risk tolerance is to gauge how willing you are to spend a good portion of your earnings each year on new investments versus keeping it as savings or personal earnings. Risk adverse owners save most of their earnings which may indirectly hinder the growth of the company. Those owners who invest wisely, perhaps to a point of some discomfort, are more likely setting up their company for success.
Grit, self-awareness, and a constant drive to improve.
It is difficult to segment all successful small business owners into one bucket, and there is no single set of attributes that guarantee success. However, in the GovCon industry there are a few character traits that emerge as common threads. First is “grit,” which combines passion and perseverance. It takes a special kind of a person to work nights and weekends on all aspects of their business while continually sacrificing personal time. I’ve also noticed that many of these same owners are keenly aware of their strengths and limitations – they make excellent hiring decisions to address any weaknesses they have. For example, for those owners that are uncomfortable with networking or relationship building, they hire individuals that possess those qualities more naturally. Finally, I have yet to meet a small business owner that is ever satisfied with their growth or success. Many successful small business owners continually think, “what’s next?” or “what else can we do to grow?”
Next in this series
In Part 3 of the 3-Part blog series on small business growth in GovCon, we will discuss some of the obstacles we see especially in those companies that have challenges with their growth.
