By: Gloria Larkin
The federal marketplace is adapting to the new administration’s changing policies. Budgets are shifting, with some agencies closing operations and others expanding. Forward-thinking government contractors have anticipated these changes and are positioning themselves as problem-solvers to the remaining decision-makers and therefore improving their win probability on future contracts.
A business pivot example is the recent move by Raytheon, the maker of the Tomahawk cruise missile, to aggressively move into the cybersecurity business with a series of strategic acquisitions including a $1.7 billion purchase of a controlling stake in Websense Inc. The resulting new business unit Forcepoint is focused on the highly competitive but fragmented internal and external cyber threat market.
Tom Kennedy, chief executive of Raytheon Co., was interviewed in the Wall Street Journal about this diversification and said “We continued to evolve our capabilities in cyber and wound up developing some unique defense-grade cyber solutions. What we didn’t have was access to market channels. Websense had an in with small and medium-size enterprises and very large enterprises, which Raytheon didn’t. It would take 10 to 15 years to rebuild that market structure.” He continued with “Websense also sold into the federal government but didn’t have strong relationships there. By having access to [our] customer relationships, it helped cross-sell that way.”
However, most contracting firms do not engage in adapting as quickly and instead, sit in the wait and see spectator mode instead of aggressively stepping onto the playing field. And of course, most firms do not have millions of dollars to make strategic acquisitions.
Part of the issue in making a quick pivot is that some business people perceive any change with distaste or even mistrust. They may see diversification as dilution of focus or adaptation as weakness. These negative assumptions keep many businesses from moving forward in times of transition.
Large businesses are often at a disadvantage (billion dollar strategic acquisitions notwithstanding) because of the inherent challenges of getting multiple layers of decision-makers to agree on any decisions regarding change of targets, services, products or process. Small businesses conversely have a huge advantage because of immediate decision-making ability and the speed with which change can be implemented. As a result, this agile business model can serve small business very well in this fluid federal contracting environment.
Companies that adapt quickly to pivot with purpose and communicate their changes constructively will see more doors opening and ultimately more contracts won in the federal marketplace. This purposeful change in diversifying with new customers, providing new services or products and building new business relationships with whom to team, all incorporating appropriate consistent decision-maker messaging can build a clear roadmap to success.