Artwork for podcast Beyond Strategy
Carey Smith
Episode 129th March 2022 • Beyond Strategy • Andy McEnroe and Jenn Wappaus
00:00:00 00:20:12

Share Episode

Shownotes

A sit-down interview with Carey Smith, CEO & President of Parsons Corporation (NYSE: PSN), a nearly $4 billion market cap public company focused on providing technology-based solutions for the defense, intelligence, and critical infrastructure markets. Carey shares her thoughts on leadership, career progression, as well as what makes a successful organic and M&A driven growth strategy.

Transcripts

Speaker:

Hi.

Speaker:

Hello and welcome to beyond strategy an ACG national Capitol region podcast

Speaker:

focused on the leaders that are driving innovative change for their

Speaker:

firms in and around the DC area.

Speaker:

I am Andy McEnroe, one of the leaders of Raymond James as defense

Speaker:

and government investment banking.

Speaker:

And I'm Jenn Wappaus infinity wealth management group at RBC

Speaker:

over the next several months, we are going to take you on a journey

Speaker:

beyond the outline strategy.

Speaker:

What we mean by that is that we are going to speak with leaders from across

Speaker:

various industries in the national capital region who will help aluminate

Speaker:

how strategies are formulated decisions are made and results are achieved.

Speaker:

Our first episode features Carrie Smith, CEO, and president of Parsons

Speaker:

corporation, a $3 billion plus.

Speaker:

Market cap public company focused on providing technology-based solutions

Speaker:

for the defense, intelligence and critical infrastructure market.

Speaker:

You'll get to see what drives Carrie as a successful CEO.

Speaker:

She is passionate about her people and customers, especially

Speaker:

given the war on talent that everyone's currently dealing with.

Speaker:

She will highlight the M&A activity and cultural fit.

Speaker:

That is a must for companies that they are looking at acquiring

Speaker:

as well as some pretty hefty organic growth goals for Parsons

Speaker:

we are thrilled to be joint today by Carrie Smith, CEO and president of

Speaker:

Parsons corporation, a $3 billion plus market cap, public company, focused on

Speaker:

providing technology based solutions for the defense, intelligence and

Speaker:

critical infrastructure markets.

Speaker:

Carey, Thanks.

Speaker:

for being here.

Speaker:

And before we dive into your time at Parsons, let's let our audience learn

Speaker:

a little bit about your background.

Speaker:

You joined Parsons in 2016, but prior to doing so held a series of progressive

Speaker:

leadership roles across the aerospace and defense industry, what was it that

Speaker:

drew your attention to the aerospace and defense market early in your

Speaker:

career . Well, first I want to say, thanks for hosting me here today.

Speaker:

Andy and Jenn it's pleasure to be with you.

Speaker:

Um, I would say what attracted me to aerospace and defense market early

Speaker:

in my career was a flight that I had as a very young engineer with

Speaker:

the special operations forces and just getting to see the importance

Speaker:

and creditbility of their mission.

Speaker:

It was a search and rescue mission.

Speaker:

At that point, I was kind of hooked for the rest of my career.

Speaker:

When in your career progression, did you decide that.

Speaker:

Going beyond just leading a contract or leading a business unit that you

Speaker:

wanted to lead a large business like

Speaker:

Parsons.

Speaker:

Well, I started as a systems engineer and an integration test engineer.

Speaker:

Um, wow.

Speaker:

I love that.

Speaker:

I really aspire to go into management.

Speaker:

I started in engineering management at a very young age and

Speaker:

progressed up the ranks from there.

Speaker:

Uh, once I had the opportunity to kind of develop a vision lead teams

Speaker:

toward achieving that vision and being able to develop talent, those

Speaker:

were all areas that I really enjoyed.

Speaker:

And so moving up, the management chain was a logical step for me at a very young age.

Speaker:

Carrie, as you grew in the industry, were there any leadership lessons

Speaker:

or firm building skills that you leaned heavily on and where did you

Speaker:

acquire the skills or knowledge?

Speaker:

Well, the most important thing to build skills is to be willing, to

Speaker:

try new things and to take very diverse learning assignments.

Speaker:

I've been fortunate to work in multiple industries, both defense and commercial.

Speaker:

I accepted assignments that allow me to work in countries all over the world.

Speaker:

And I've had the opportunity to perform a very different types of roles.

Speaker:

Um, my breadth of experience had assignments and engineering

Speaker:

research and development, business development, strategic planning,

Speaker:

operations, manufacturing, and model, both profit and loss roles.

Speaker:

It's probably sounding like I couldn't hold a job, but it

Speaker:

was a diverse experience, um, from a soft skills perspective.

Speaker:

Um, my biggest leadership lesson is the most important attribute that you have

Speaker:

as a leader is to be a good listener.

Speaker:

You never have to be the smartest person in the room, but you do have to

Speaker:

ask very good questions, listened to diverse opinions, and you have to be

Speaker:

very decisive that after you've heard everybody's opinions, you come up with

Speaker:

the right course of action and proceed.

Speaker:

Um, so

Speaker:

Carrie, it's no secret that the gov con market is predominantly

Speaker:

male, male dominated.

Speaker:

How did being a woman in leadership roles change or impact how you deployed

Speaker:

personal growth or business strategies?

Speaker:

Yeah, it's definitely a been predominantly male.

Speaker:

Oh, it was my initial career as a systems engineer and a flight test

Speaker:

engineer with the special operations.

Speaker:

Um, I remember putting on a flight suit and they didn't make flight

Speaker:

suits for women at the time.

Speaker:

So I was rolling up the arms and the legs just to make it fit.

Speaker:

So I think for me though, I grew up with a father who always taught me.

Speaker:

You can do whatever you want in life.

Speaker:

And that's kind of how I've always approached my career.

Speaker:

My focus has always been on working hard, delivering results for customers

Speaker:

and stakeholders and having a strong network across customers and industry

Speaker:

podcast is titled beyond strategy.

Speaker:

And you've already given us some great nuggets focused on that, but now turning

Speaker:

our attention to your time at Parsons.

Speaker:

When you joined the company in 2016, it was as the president the

Speaker:

firm's federal solutions business.

Speaker:

This was after serving as the president of Honeywell's space and defense business.

Speaker:

What was your vision for the federal solutions business at the time you joined?

Speaker:

Uh, also in comparison to the critical infrastructure sibling that Parsons

Speaker:

has, which certainly dwarfed the federal solutions business at that time.

Speaker:

Yeah as you point out Andy.

Speaker:

Um, at the time I joined Parson's federal business was quarter of the

Speaker:

company and critical infrastructure was three quarters of the.

Speaker:

My objective was to grow the federal business into a solutions

Speaker:

integrator greater that differentiated with technology and make it

Speaker:

at least equal in size to the critical infrastructure business.

Speaker:

So to do this, we had to make several changes.

Speaker:

Uh, first we had to add a research and development investment.

Speaker:

Uh, when I got here, we weren't investing anything in research and

Speaker:

development or less four years.

Speaker:

That's increased by 20 times.

Speaker:

We also reinvigorated.

Speaker:

Um, M&A process with a focus on companies that had cyber and space

Speaker:

capabilities, and we've acquired over six or acquired six companies

Speaker:

in the past three and a half years.

Speaker:

And then by doing both the organic and the inorganic investments,

Speaker:

we moved up the value chain.

Speaker:

So we were able to bid prime and win more strategic solutions jobs as CEO.

Speaker:

Now, my objective is to have top positions in our high growth market

Speaker:

areas and to continue to be a global, critical infrastructure leader by

Speaker:

capitalizing on both the United States infrastructure bill, as well as the

Speaker:

growth of global infrastructure that.

Speaker:

Turning the clock back because part of this strategy is helping entrepreneurs,

Speaker:

other, uh, public company, CEOs, management, level individuals, figuring

Speaker:

out how they drive their own strategy.

Speaker:

What were some of those key day, one initiatives that you put in

Speaker:

place that helped transform Parsons?

Speaker:

How did you track your progress against those initatives?

Speaker:

Yeah.

Speaker:

So, um, day one was about five years ago, arriving here, persons,

Speaker:

but I'll give you a kind of a highlight of some of the things

Speaker:

that I did early on when I got here.

Speaker:

Uh, the first thing was to run the business, like a public company.

Speaker:

I came with over three decades of experience in public

Speaker:

companies, Parsons at the time.

Speaker:

Private company, ESOP employee stock ownership.

Speaker:

So to do that and be able to run like a public company, I immediately needed

Speaker:

to hire and promote the right talent.

Speaker:

I already mentioned that we initiated research and development, and that

Speaker:

was critically important to be able to drive technology differentiation

Speaker:

we also focused on personnel.

Speaker:

I'm a firm believer what I call people first.

Speaker:

It's all about the people.

Speaker:

It's all about your team, um, that enables a company to accomplish results.

Speaker:

So we formed a technical fellows program.

Speaker:

We've put in place a chief technology office, and we also formed a diversity

Speaker:

equity and inclusion council.

Speaker:

We developed a mentoring program.

Speaker:

We created a dual technical career path.

Speaker:

So people didn't have to jump over to the management chain.

Speaker:

And we also had to transform our business development because we didn't

Speaker:

have things such as a capture managers or solutions architects at the time.

Speaker:

We built facilities such as skiffs and high bays.

Speaker:

Uh, we developed a secure dev ops environment to perform systems

Speaker:

engineering and software development work.

Speaker:

And then as I mentioned on the acquisition front, we acquired companies that

Speaker:

have very strong financial performance coupled with differentiated technology.

Speaker:

And then probably most important was customer engagement, really having strong

Speaker:

customer account management and also a engaging more with industry associations

Speaker:

outstanding.

Speaker:

And you've already talked about your career progression once inside the

Speaker:

doors here at Parsons, obviously joined, uh, as we mentioned, became the COO

Speaker:

in 2018, the president titles added in 2019 become the CEO in April of 2021.

Speaker:

Soon to be the chair woman, as well as the board, since becoming CEO.

Speaker:

What's one thing that you didn't expect.

Speaker:

And how did you overcome that obstacle?

Speaker:

Uh, that, that you may be.

Speaker:

Well, I'd say first, there were no major surprises and becoming CEO.

Speaker:

Um, since I was the president and chief operating officer before,

Speaker:

but I would say my time with investors and analyst has increased.

Speaker:

I also spend more time on reviewing and approving a sec public

Speaker:

documentation, like the 10 K the 10 Q the annual report, things like that.

Speaker:

That's it's fun.

Speaker:

And this is even more throwing.

Speaker:

No, I'm kidding.

Speaker:

But I also have responsibility for managing the board of directors, um,

Speaker:

where I've tried to shape the board agendas to be able to focus more

Speaker:

on strategy, growth, and talent.

Speaker:

Just a

Speaker:

follow question.

Speaker:

Your role adds the chairwoman title.

Speaker:

As I noted in April of this year, does it change at all for a, for

Speaker:

a business owner or for someone aspiring to follow in your footsteps?

Speaker:

How would you frame.

Speaker:

The CEO versus the chairwoman type

Speaker:

role.

Speaker:

Yeah.

Speaker:

The biggest differences as the chairwoman of the board, I'll

Speaker:

be responsible for setting the agendas and running the meetings.

Speaker:

That's the only real change I already, as CEO had a lot

Speaker:

of engagement with the board.

Speaker:

So it's really just that agenda.

Speaker:

Carrie, it's

Speaker:

clear that you care about the people here at Parsons and leadership

Speaker:

is also often only as good as the team that surrounds you.

Speaker:

How did you actively recruit, retain and incentivize executives to join you on

Speaker:

this journey?

Speaker:

Yeah, it's a great question, Jen.

Speaker:

Um, as I shared earlier, I call it people first mentality.

Speaker:

Uh, we have to focus on both recruiting and retaining the right people, um, in

Speaker:

order to have a successful business.

Speaker:

And when you have the light right leadership team in place, they drive

Speaker:

growth and they model the focus, the behavior that you want to see

Speaker:

at all levels of the organization.

Speaker:

So throughout my career, I've always had a strong industry network, and I

Speaker:

always kept what I call an, a list of people that if I've ever moved to a

Speaker:

different position or a different company.

Speaker:

They were people that I would want to have on my team.

Speaker:

Um, those are generally people that share my vision.

Speaker:

And we're all passionate about our customer's mission and are

Speaker:

focused on driving results.

Speaker:

When I became CEO in July, um, I also did engage an external recruiter to hire

Speaker:

a few new functional roles and after sharing our company's prospects and

Speaker:

our two strong end markets, federal and critical infrastructure, our culture of

Speaker:

agility, innovation, and collaborative.

Speaker:

And our growth strategy, the executives that we interviewed liked

Speaker:

our vision and joined the company.

Speaker:

So I think we've done a good job of bringing in talent from

Speaker:

the outside and also promoting.

Speaker:

You mentioned this earlier in our discussion about your

Speaker:

organic and inorganic components to your business strategy.

Speaker:

When you assumed the leadership role in the federal business, starting with

Speaker:

the inorganic side of the equation, can you tell us in our audience, the

Speaker:

strategy you put in place, how you identified the targets you were looking

Speaker:

to bring into the Parson's portfolio?

Speaker:

Um, you know, of course, some of the greatest hits Polaris, alpha OG systems,

Speaker:

QRC technologies, Braxton, echo Ridge.

Speaker:

And of course my favorite black horse, you know, all great companies,

Speaker:

but all with distinct attributes.

Speaker:

Yeah.

Speaker:

So I think the engineer in me will come out because at first, the first

Speaker:

thing we do is a gap assessment.

Speaker:

What are our technical capabilities, who are our customers

Speaker:

and where do we want to go?

Speaker:

Then we develop a one to end list and starting with company one.

Speaker:

That's the company that we go after.

Speaker:

Um, in the sec newly revised list that we work with.

Speaker:

We like to work with companies that we know have a strong cultural fit.

Speaker:

So they'll work well with our folks.

Speaker:

And we'd like to close deals on an exclusive basis and not go

Speaker:

to auctions if we don't have to.

Speaker:

Um, so that fit and that understanding or foundational.

Speaker:

We know if we have a similar approach and we have a shared commitment to

Speaker:

mission, to innovation and our people that the rest kind of falls in place

Speaker:

and it'll be a successful acquisition and a successful integration.

Speaker:

So starting with Polaris alpha, um, what we were kind of missing there, we

Speaker:

wanted to enhance our space capabilities.

Speaker:

They brought space, situational awareness.

Speaker:

They brought additional cyber security, data analytics, cloud capabilities.

Speaker:

OG systems was next with geospatial intelligence and threat analytics.

Speaker:

Then we acquired a QRC technologies to supplement our RF portfolio and

Speaker:

specifically situational awareness Braxton, uh, was a significant

Speaker:

acquisition in that they really helped us with ground systems as

Speaker:

well as resiliency and had a presence on many, many different platforms.

Speaker:

Echo Ridge was.

Speaker:

Because they were a smaller technology play where we did an assessment.

Speaker:

And we said, if we had to develop this capability in house, what

Speaker:

would it cost us for spying it?

Speaker:

So they brought assured position, navigation, timing, capabilities,

Speaker:

and software to find radios.

Speaker:

And your favorite Andy Blackhorse solutions has been outstanding.

Speaker:

They brought cyber electromagnetic spectrum and information operations.

Speaker:

Most importantly, focused on the near peer threat, which where we wanted to acquire.

Speaker:

I would also say, um, just a highlight on integration,

Speaker:

even though you didn't ask it.

Speaker:

Uh, we do take a different approach to integration the company.

Speaker:

We like to adopt the companies that we acquire as best practices, because

Speaker:

they were successful for a reason.

Speaker:

And we don't want to change.

Speaker:

One example of that would be that we took the recognition program,

Speaker:

which was called the drive awards program from Polaris alpha.

Speaker:

But we do that with all of our companies.

Speaker:

What made them tick and how do we change persons to be better?

Speaker:

We also keep the leadership team.

Speaker:

So the companies that we buy and when they joined.

Speaker:

Parsons often they get increased responsibility.

Speaker:

Great example is our chief technology officer came from Polaris alpha, our head

Speaker:

of corporate developments from Pluras Elpha the CEO of black horse picked up a

Speaker:

lot of the business that was at Parsons.

Speaker:

We put it under him to run.

Speaker:

So his portfolio enhanced and the head of Braxton also picked

Speaker:

up a lot of our space portfolio.

Speaker:

So when we get to see this great leadership talent, it really helps.

Speaker:

Well, I think

Speaker:

the culture, point's a great one, Carrie.

Speaker:

I mean, I've seen you transform Parsons culture, whether it's as simple as adding

Speaker:

games and beer taps to certain offices, or just adopting a more open forward-leaning

Speaker:

culture, if you will, into the community, which has just been tremendous to see

Speaker:

and integrate being the best practices with the other companies

Speaker:

that you bring in is fantastic.

Speaker:

So tell us a little bit about.

Speaker:

The organic side of that strategy.

Speaker:

Was there a list of must wins that were central to the person's

Speaker:

federal side of the business?

Speaker:

Yeah, so we, we pride ourselves first on having a very high, competitive

Speaker:

win rate and more importantly, um, pride ourselves on having a

Speaker:

close to 100% recompete win rate.

Speaker:

We feel that we, once we win jobs and we perform for our

Speaker:

customers, we keep those jobs.

Speaker:

And I think a testiment is 2021.

Speaker:

We were close to a hundred percent win rate, um, to drive growth.

Speaker:

We also, um, as we got bigger, we really said we've got to win

Speaker:

a bid and win bigger programs.

Speaker:

Those that are greater than a hundred million in 2021, we went over 12

Speaker:

programs that were greater than a hundred million the most in Parsons history.

Speaker:

And two of those contract awards were greater than two.

Speaker:

Oh, that's, that's outstanding.

Speaker:

And it seems like Parsons continues to climb, not only the contract size ladder,

Speaker:

but the capability ladder in terms of what it's offering to its customers.

Speaker:

You mentioned some of the acquisitions that have probably helped put those

Speaker:

puzzle pieces together, but on both the critical infrastructure and federal

Speaker:

solutions sides of the business.

Speaker:

What's next for Parsons?

Speaker:

Well, we're well positioned and strong and markets.

Speaker:

And these are markets that have high growth rates, uh, they're profitable

Speaker:

and they're enduring markets.

Speaker:

Our goal is to have top positions in these markets.

Speaker:

If you look on the federal side, that would be cyberspace,

Speaker:

missile, defense, and C5 ISR.

Speaker:

And then on the critical infrastructure side, it would be transportation,

Speaker:

environmental remediation, and water and wastewater, and the way that we've been

Speaker:

at work, the way that we're going to do that is what we've been doing for the past

Speaker:

five years, which is continuing to move up the value chain of solutions integrator

Speaker:

to your point, how do we connect the dots?

Speaker:

Drive end to end solutions investing in internal R and D and then continuing

Speaker:

to acquire differentiated company.

Speaker:

Since this podcast is called beyond strategy, we must ask what are

Speaker:

the central tenants to Parson's strategy and mission moving forward?

Speaker:

Well, first our vision is to create the future and that's whether we're creating

Speaker:

the future of national security or global infrastructure to deliver a better world.

Speaker:

As you look at the world we're facing today, it is a

Speaker:

complex security environment.

Speaker:

There's adversaries challenging on every domain and we're in an economy

Speaker:

that's driven by digital transformation.

Speaker:

So we leverage innovative technologies to deliver integrated

Speaker:

solutions at the speed of relevance.

Speaker:

And I'll highlight at the speed of relevance.

Speaker:

One thing that we haven't lost as we've gotten bigger is our agility as

Speaker:

a company where we've got breadth and depth, like a large business, but we

Speaker:

operate at the speed of a small business.

Speaker:

More specifically, I'd say we have four priorities.

Speaker:

First is to focus the portfolio, prioritizing those

Speaker:

markets that I mentioned.

Speaker:

Um, really focusing on those.

Speaker:

We do a lot of things.

Speaker:

We're a diverse company, but those are the seven markets that we're focused on.

Speaker:

We'll continue to move up that solutions, value chain and differentiate

Speaker:

through data technology and software.

Speaker:

Third will capitalize on the global infrastructure spending.

Speaker:

And then finally, at the market, organic growth in each of our top markets.

Speaker:

And we'll supplement that with, um, a creed of M&A, we have to continue

Speaker:

to achieve these priorities by competing for the war on talent.

Speaker:

People first means a lot, and we have to make sure that we recruit re

Speaker:

retain the brightest in our industry.

Speaker:

And that we keep this culture, which I think is innovative and different at

Speaker:

Parsons, where people can truly come in and thrive in their careers carry as

Speaker:

we.

Speaker:

Segment until the end of this interview.

Speaker:

What's one lesson that you've learned from your job that you think everyone

Speaker:

should learn at some point in their

Speaker:

career.

Speaker:

So I'll probably some repetitive on this, but I'd say the one lesson is people are

Speaker:

your most important resource and it's the customer's mission and what binds us

Speaker:

together towards a higher value purpose.

Speaker:

We end all of our interviews on this podcast with a simple, but

Speaker:

maybe most important question.

Speaker:

What is.

Speaker:

Important or salient thing that we and our audience should know about you.

Speaker:

Carrie Smith,

Speaker:

I'd say for me, work is very important, but family always comes first.

Speaker:

Um, I pride myself on the fact that as I moved up the leadership ranks, I never

Speaker:

missed a soccer game or a swim meet or a critical school event for my kids.

Speaker:

Um, and it's the one message I try and give all leaders.

Speaker:

Remember families, most of them.

Speaker:

Family first.

Speaker:

I love that people first, uh, within the organization as well, Carrie Smith, CEO,

Speaker:

and president of Parsons corporation.

Speaker:

Thank you for joining us on our inaugural episode of beyond strategy

Speaker:

and ACG national Capitol region

Speaker:

podcast.

Speaker:

Thank you very much, Andy

Speaker:

and Jenn

Speaker:

Well, once again, a special thank you to Carey Smith for joining us

Speaker:

on beyond strategy, an ACG national capital region podcast for Jenn Wappaus.

Speaker:

I am Andy McEnroe reminding you to subscribe to this podcast, wherever

Speaker:

you get your podcasts from, we hope that you will join us again.

Links