Sunday, March 15, 2009

Dyncorp's Smart Power

There is a side of the government services industry that is glamour-less. It involves cleaning up the mess hall, fixing helicopter engines, training international security personnel and delivering the mail. In fact, industry insiders often refer to this business as “ash and trash.”

Yet, Dyncorp’s Bill Ballhaus had an uncanny way of making mundane logistics and administrative work for US federal agencies drip with appeal. Perhaps it was his exuberance for the business and its prospects for growth. Or maybe it was his youthful good looks that led the person sitting next to me to quietly whisper, “Jeez, how old do you think he is?”

Regardless, Ballhaus had an interesting story to tell to the 150 or so executives gathered last Friday at the Association for Corporate Growth’s National Capital Chapter executive breakfast. (Photo courtesy of ExecutiveBiz.)

Here are a few highlights:

--Dyncorp delivers what Ballhaus referred to as “elements of smart power and soft power.” The company’s service capabilities include security training and enforcement, infrastructure development, community building, and logistics.

--The company has experienced double digital organic growth the last few years. Revenue has now hit $3B generated from 50 contracts and 100 task orders. Nearly all of its business is with the US federal government and Dyncorp’s average contract duration is a stunning 14 years.

--The value proposition to federal customers is clear and straightforward: Dyncorp is one of the few companies that can stand up and staff a program rapidly, nearly anywhere in the world.

--The company has also improved profitability and its cash position by eliminating nearly 300 infrastructure positions. Ballhaus explained that one of his priorities is to continue to drive inefficiencies out of every segment of the business.

--Ballhaus is betting that Dyncorp’s organic growth will continue because of the government’s increasing need to maintain and manage existing military and infrastructure programs in hot spots like Africa, South and Central America, and (of course) the Middle East. Even when the US military begins to pull back, there will be ongoing support, training and monitoring requirements to maintain stability, he explained.

My take-away from Ballhaus’ presentation is that success in business – regardless of the industry or product/service offering – comes down to a relatively simple concept: stay close to the customer to understand their evolving needs and establish a differentiated positioning. Now that's smart power.

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