J. Robert Beyster

It’s no secret that the U.S. economy is slowing down. According to the federal government, the economy shed 63,000 jobs in February, 2008—the fastest decline in five years. Housing prices have yet to find the bottom, the dollar is at all-time lows, oil prices routinely close at over $100 a barrel, and the rate of inflation is edging up. The Federal Reserve just announced that it will soon inject an extra $200 billion into the economy in an attempt to loosen tight credit markets, and it is widely expected to reduce the federal funds rate by another half percent at its next meeting. Surely, recession can’t be far behind—if it hasn’t already arrived.

But despite all the gloom and doom reported daily by the business press, there are always opportunities for those businesspeople who take time to look for them. The trick is to avoid getting blindsided by the very real dangers out there, while getting your organization ready to capitalize on opportunities as you find them. Believe me—there are plenty of opportunities for growth today, and there will be plenty tomorrow, and the next day after that.

At Science Applications International Corporation (SAIC), we builted an organization that was decentralized and entrepreneurial. We encouraged our employees at all levels of the organization to seek opportunities for new business, and we rewarded them with ownership in the company when they converted these opportunities into contracts. This system worked both in good times and bad.

As SAIC’s CEO, I felt that my role was:
• To hire talented people who could grow the business,
• To give these talented people the freedom to pursue work they were passionate about,
• And then to get out of their way

When you’re seeking new opportunities for growth—particularly in the kind of down market that we’re experiencing today, you can’t afford as a leader to constrain the natural entrepreneurial spirit of your employees. Indeed, it’s your job to find ways not only to encourage this spirit, but to allow your employees to convert opportunities into action. I personally encouraged managers to take action independently—within strict pre-agreed financial constraints—and without asking for permission first. In my mind, the more time managers spent talking directly with customers, and the less time they spent running back to corporate for permission, the greater the probability that they would be able to leverage opportunities for growth. And that was indeed the case at SAIC.

This approach has an extra benefit: when you treat your employees like the talented and responsible adults that they are, they will act like it. We granted our managers wide-ranging autonomy, and this made SAIC a very attractive place for motivated managers to work. Managers were given responsibility for their own profit and loss, they did important work for their customers, and they shared in the company’s equity through our stock ownership program. Like moths to a flame, we attracted the best people and then we gave them the autonomy to run their own businesses as they saw fit. These talented individuals attracted others just like them.

However, to retain talented, highly motivated employees, an organization has to be designed in a way that responds to their needs. We made sure that SAIC’s organizational structure was fluid, flexible, and responsive to our employees. This was especially important as the pressures of growth naturally pushed us to create a more rigid and inflexible organization. This required constant vigilance on the part of our leadership team. As time went on, the company’s hierarchy looked much more like a pancake than a pyramid—we pushed authority and autonomy deep down into the organization, and our employees responded enthusiastically. Their enthusiasm keep SAIC growing—through both good times and bad.

It’s true: today’s economic climate—and the climate for the foreseeable future—doesn’t look promising. But take your time to carefully assess your markets and customers, and look for opportunities to grow your business. It’s easy to get distracted by all the bad news, but keep your eye on the prize. Like diamonds in the rough, the opportunities to grow are out there just waiting to be found.

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Dr. J. Robert Beyster (La Jolla, CA) is the founder of Science Applications International Corporation (SAIC) and author of the book The SAIC Solution: How We Built an $8 Billion Employee-Owned Technology Company (John Wiley & Sons, 2007) with Peter Economy. Dr. Beyster served as CEO and chairman of the company for 35 years, and he promotes innovation and employee ownership through his Foundation for Enterprise Development and the Beyster Institute at the Rady School of Management, University of California San Diego.