Winning the Battle for Growth
Valkyrie Enterprises (VE) is a rapidly growing, veteran-owned middle market business headquartered in Virginia Beach, VA. Founded in 2007 by President and CEO Gary Lisota, VE focuses on acquisition, readiness, and modernization services for the Department of Defense, Navy, and Army (among others). VE has won many awards of late including:
- Inc. 5000 " Fastest Growing Private Companies (2nd year in a row)
- FORBES.com's -America's Most Promising Companies (#51 in Dec. 2011, #65 in Feb. 2013)
- Top Simulation and Training Companies - MT2 " 2013, Yellow Ribbon “Up and Coming“Company
- 2011 Impressions in Print Leadership Award " Hampton Roads Chamber of Commerce
- 2010 Best Place to Work among mid-sized companies " Virginia Business
Recently, the center had the chance to speak with Gary Lisota (see below), about their successes, challenges, and where the firm is headed in the future.
Q: What was the impetus for founding VE?
After spending 25 years at AMSEC I'd helped to take that company through all of the developmental stages. From being an embryonic business to a bigger small business to a medium-sized business and then ultimately to a big business with $457 million in revenue. I wasn't ready to hang it up yet and I recalled that some of the most enjoyable time I had at AMSEC was when it was smaller and I had more time to spend with my people and customers. So I was yearning to get back into the small business environment.
Q: What did you feel was your competitive advantage over other defense contractors?
It's two things really. The first one kind of sounds like marketing fluff, but our motto is “We hire the best to be the best.“We didn't create that motto up front, but kind of stumbled into it. Because I knew so many people in this industry (defense engineering) I was able to hire really great people right off that bat and that was my initial offering to clients I knew. A lot of the people I hired were known by the clients as top-shelf talent and it became a Jack Welch sort of thing right from the beginning. The whole “A's hire A's and B's hire C's,“so because we had all these “A's“we continued to staff up with a really great collection of technical talent that our customers now know us for. We trade more on quality and best value than low-cost.
The second differentiator for us is maturity. A lot of people wanted to follow me over from my old company so I was able to fill my back office (HR, IT, Finance, etc.) with people who were really over-qualified. This gave us a major advantage in the beginning because most small businesses hire to the lowest common denominator of the skill requirement necessary because you can't afford top-end back-office talent. Because my goal was to make this a rapid growth company, I knew that I wanted to have more capability in the back office because my experience at AMSEC taught me the importance of having people who can anticipate growth in those areas. My staff is more than ready to handle any kind of growth that I could throw at them.
Q: What would you say you've invested the most resources in over the last few years (Operations, People, etc)?
We are an ISO 9001-2008 company and have spent more money on building our quality management system and building an environment of continuous process improvement (which ISO is all about) than probably anything else. When I started VE I told everyone that we needed to be an ISO 9001-2008 process type of company so nobody was shocked by the investments. That's a really important thing because if you get to be pretty big before you implement that it can be a challenge. Once you have a lot of people, processes, and even non-documented processes in place you have to break a lot of china to get certified. So I wanted to make sure that people knew right away that this was going to be an ISO company.
Q: VE has seen tremendous growth rates over the last few years and you're expecting that growth to continue moving forward. Where have you seen that growth come from?
Yes, because of the sequester we're looking at 30% growth this year and 70% growth next year. We see this growth coming from winning contracts. You have to lay the foundation for winning them with a capture planning process so customers get a chance to learn about who you are well before the RFP comes out. We're now at the point (around six years old) where our brand is very well-known in the Navy defense sector, our reputation is high quality and great people. We feel we've positioned ourselves well for explosive growth and are really excited about some of our bids that we hope will come across in the near future.
Q: What do you think will be your biggest challenge moving forward?
Looking forward, our major challenges are the defense budget and the sequester. Unfortunately this industry doesn't look very promising given national politics, debt issues, and the squeeze that's putting on defense. The government is having mechanical issues and can't even pass a budget. So once again we'll be on a continuing resolution, which is damaging overall to the industry because things are not funded at the appropriate level and everything treads water until there is a budget. All of these fits and starts associated with funding and the budget are really hard to deal with.
Q: What is your advice to other Middle Market executives that are facing the same challenges of navigating through growth?
A lot of it is about attention to detail, understanding your market, and working very hard. I'm a big believer in metrics as well. Part of it is because I came from a big business that had to report metrics upstream, but I use a lot of metrics to manage a company. You need to understand your financial metabolism and the more data you have about how the company is operating the better off you are. It allows you to spot negative trends early and take early action.
There's the old adage that at the end of the day you need to follow the money. Figure out where the money is and where the money's going and that's where you need to be headed. There are a lot of people that fall in love with solutions that they think are the greatest thing since sliced bread for solving a problem, but if your target customer doesn't think they have a problem then they won't pay for a solution. You don't want to get into the mode of having solutions in search of problems. Focus on fulfilling your customer's needs so that it's not about selling what you want to sell, but selling what your customers want to buy.
Q: What advice would you give to students debating between a career in the Middle Market or at a larger company?
I actually faced this choice when I came out of the Navy. I had an offer for a very good job I was interested in with General Electric and at the last minute a friend of mine who had joined a small business said “don't do that“. He asked me to come work at the small company with him because at a big company you don't have the gravitas or whatever to move ahead unless you have gray hair. Big businesses have a lot more structure relative to pay and promotion. They have to be more risk averse and less about meritocracy.
In a small business it's all about being nimble and responsive. The power players are visible very quickly. There aren't as many people in general to be looking and for a young person a small company makes it easier for you to get recognition for your effort and skills. This can then move you up faster and gives you more exposure to different parts of the company. In a big company, you're hired to do a job in Finance, you're going to get one little piece of the Finance puzzle to play with and you won't be a big-picture person. Your job will be to take a piece of paper and move it from your “In“basket to your “Out“basket.
In a similar type of job in a small business, they won't have that kind of depth and they need people to be jacks of all trades. So the learning experience you have in a small business is ten-fold (in some cases more) and you can really learn an industry or profession fast in a small business. Now, for some people having that type of freedom and agility to move quickly makes them uncomfortable, so if you're all about job security and working 9-to-5 then big business will work for you.