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Dr. B's 9 Billion-Dollar Success Secrets

Dr. J. Robert Beyster developed a remarkably successful business over 35 years at the helm of his technology and engineering company, SAIC. Here's how he did it.
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In 1969, Dr. J. Robert Beyster--affectionately known as Dr. B by his employees--founded a technology business by the name of Science Applications International Corporation (SAIC). By the time he retired from the company in 2004, he and his team of scientists, researchers, and administrative staff had built up the business to more than $6 billion in annual revenue. In 2013, just before the company was split into two separate businesses, annual revenue reached $11 billion.

In his book The SAIC Solution: Built by Employee Owners, Beyster details the nine secrets of his company's success:

1. Put people first

Since the very beginning, the company put people first--the organization was expected to serve customers, employees, and owners (who were employees), not the other way around. This basic formula worked exceedingly well: Hire very smart people, encourage their entrepreneurial spirit, let them focus on customers, and reward them for their contributions.

2. Freedom (with strings attached)

SAIC was specifically designed to be a fast-and-flexible organization, where managers and employees would be free to pursue work they were passionate about--to start, operate, and grow their own business units under the umbrella of the parent company, and unleash their own energy and creativity.

3. Widespread employee ownership

If freedom of movement was the incentive that drew talented people to SAIC, then employee ownership was the glue that kept them there. The company built a culture firmly rooted in the simple idea that those who contribute to the company should own it, and ownership should be commensurate with a person's contribution and performance.

4. Participation in decision making

Employees were not only expected to contribute their ideas to improve the company and the services it provided, but also to make decisions that would put their ideas into action. While there was certainly a hierarchy of various managers and employees, the expectation was that decisions would be made at the lowest level possible, and problems resolved at the lowest appropriate level, thus cutting red tape and providing customers with more responsive service.

5. Organized for growth

Bucking the traditional rigid hierarchy of its contemporaries, SAIC created a decentralized organizational model. At SAIC, the central organization provided essential policy guidance to its various business units and exercised substantial oversight and financial control, but otherwise kept out of the way as much as possible. This approach allowed its motivated managers to build their businesses free of the kinds of administrative restraints that would have fettered their efforts in most other organizations.

6. No grand plan

Rather than follow voluminous plans that lay out company initiatives years into the future, SAIC encouraged the organization to grow organically, following the interests and instincts of its entrepreneurial program managers. While a formal planning process was eventually put into place to ensure the most efficient use of company resources, flexibility and initiative were always considered more important than slavish adherence to "the plan."

7. Everyone's a salesperson

From its earliest days, the company's leadership put a premium on hiring scientists and engineers who didn't just do the work, but who also were able to sell the work. By enlisting the people who did the work in the selling process, SAIC kept close tabs on emerging customer needs, developed close relationships with customers, and minimized the overhead expense that would have been required to hire and fund a large separate selling organization.

8. Extensive feedback and lessons learned

SAIC used informal and formal "lessons learned" processes to gather together feedback from employees who were directly involved in new initiatives or particularly complex programs, bringing insights to light and recording them for others to learn from.

9. Experiment constantly

One of the hallmarks of the company was the willingness of its leaders to constantly experiment with new business entities, corporate structures, and staff. To encourage experiments, managers at all levels of the company were annually given control over pockets of money (called "guidelines") that they could use to invest in growing their own organizations.

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Last updated: Aug 7, 2014

PETER ECONOMY

While Peter Economy has spent the better part of two decades of his life slugging it out mano a mano in the management trenches, he is also the best-selling author of Managing for Dummies, The Management Bible, Leading Through Uncertainty, and more than 75 other books, with total sales in excess of two million copies. He has also served as associate editor for Leader to Leader for more than 10 years, where he has worked on projects with the likes of Jim Collins, Frances Hesselbein, Marshall Goldsmith, and many other top management and leadership thinkers. Sign up here to always stay up to date with Peter's latest Inc.com columns, and visit him anytime at petereconomy.com.




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