Sabre CEO Lends Advice to Contractor Growth Strategy Panel
Posted by Sabre Systems
Seeking success growth strategies in a challenging marketplace led BB&T to invite Sabre Systems’ president and CEO Phil Jaurigue to a panel discussion before government contractors involved with the NAS: Patuxent River.
“(S)equestration, intense competition for new awards, increasing compliance requirements, and the government’s move towards low price contracting that is impacting profit margins,” were the challenges BB&T put before the panel that additionally included representatives of BB&T and Avascent Group, both specializing in defense and government services. “Despite these challenges, many contractors continue to see growth opportunities and are expanding in the face of these pressures,” the panel invitation read. Sabre Systems and Avian Engineering were the two firms selected to represent this view.
Although Sabre is still actively looking for M&A candidates, Mr. Jaurigue acknowledged the current slowdown of mergers and acquisitions. He recommended firms seek diversification. In this climate, he said, Sabre seeks to add depth to its core competencies and to grow adjacent markets. “We’re looking for the niche, the secret sauce, the proprietary, the unique property.”
Describing Sabre as a mid-tier company, Mr. Jaurigue called it “a Goldilocks firm” able to utilize the best business practices of both small and large organizations. Agility and responsiveness are the strongest capabilities to weather and succeed in the uncertain times facing the industry, he said.
The ability to move quickly “at least in the short term” may not be the best business development strategy over the long term, he said, but could prove imperative in the current need to search for new revenue streams. Slipping into nautical terms in response to the naval aviation workforce audience, Mr. Jaurigue said a lot of “tacking” would be necessary to navigate “choppy seas ahead.”
Success is not just the scientific and analytical, he further cautioned. Relationships both outside and inside the company remained primary. The true value of Sabre, Mr. Jaurigue said, was that people came first, employees and customers. “This is Sabre’s guiding force.”
Kevin Swittick of Avian echoed Mr. Jaurigue’s emphasis on retention of top notch employees and relationships with clients. Sabre takes this so seriously, outside consultants are brought in to evaluate employee retention strategies. “The intangibles of a great company are its culture. We are a people first organization,” Mr. Jaurigue said. “Employees and customers.”
Praising panel host BB&T as understanding both the contracting industry and “what’s flying right now,” Mr. Jaurigue noted that the deal structure of acquisitions and mergers is as important as the consideration. Tying this financial reality to the importance of employee retention and the threats of salary caps he agreed with Mr. Swittick that it is very difficult to attract the best and the brightest when competing against Hollywood and the Silicon Valley.
Mr. Jaurigue told a story of a recent Stanford graduate who rejected a $90,000 a year job with Northrop Grumman in favor of a $250,000 offer from Facebook. Salary caps, the contractors said, only made this competition more difficult. In prior times, he elaborated, there were national missions that drew the best and brightest to the firms working on important projects. Today Facebook and Toy Story 4 are proving more compelling.