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.

Hi.

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

focused on the leaders that are driving innovative change for their

firms in and around the DC area.

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

and government investment banking.

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

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

beyond the outline strategy.

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

various industries in the national capital region who will help aluminate

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

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

corporation, a $3 billion plus.

Market cap public company focused on providing technology-based solutions

for the defense, intelligence and critical infrastructure market.

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

She is passionate about her people and customers, especially

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

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

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

as well as some pretty hefty organic growth goals for Parsons

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

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

providing technology based solutions for the defense, intelligence and

critical infrastructure markets.

Carey, Thanks.

for being here.

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

a little bit about your background.

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

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

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

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

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

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

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

the special operations forces and just getting to see the importance

and creditbility of their mission.

It was a search and rescue mission.

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

When in your career progression, did you decide that.

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

wanted to lead a large business like

Parsons.

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

Um, wow.

I love that.

I really aspire to go into management.

I started in engineering management at a very young age and

progressed up the ranks from there.

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

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

were all areas that I really enjoyed.

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

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

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

acquire the skills or knowledge?

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

try new things and to take very diverse learning assignments.

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

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

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

Um, my breadth of experience had assignments and engineering

research and development, business development, strategic planning,

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

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

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

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

as a leader is to be a good listener.

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

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

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

the right course of action and proceed.

Um, so

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

male, male dominated.

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

personal growth or business strategies?

Yeah, it's definitely a been predominantly male.

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

engineer with the special operations.

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

suits for women at the time.

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

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

You can do whatever you want in life.

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

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

and stakeholders and having a strong network across customers and industry

podcast is titled beyond strategy.

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

our attention to your time at Parsons.

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

firm's federal solutions business.

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

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

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

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

Yeah as you point out Andy.

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

company and critical infrastructure was three quarters of the.

My objective was to grow the federal business into a solutions

integrator greater that differentiated with technology and make it

at least equal in size to the critical infrastructure business.

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

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

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

development or less four years.

That's increased by 20 times.

We also reinvigorated.

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

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

in the past three and a half years.

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

we moved up the value chain.

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

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

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

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

growth of global infrastructure that.

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

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

out how they drive their own strategy.

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

place that helped transform Parsons?

How did you track your progress against those initatives?

Yeah.

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

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

that I did early on when I got here.

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

I came with over three decades of experience in public

companies, Parsons at the time.

Private company, ESOP employee stock ownership.

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

to hire and promote the right talent.

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

was critically important to be able to drive technology differentiation

we also focused on personnel.

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

It's all about the people.

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

So we formed a technical fellows program.

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

equity and inclusion council.

We developed a mentoring program.

We created a dual technical career path.

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

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

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

We built facilities such as skiffs and high bays.

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

engineering and software development work.

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

have very strong financial performance coupled with differentiated technology.

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

customer account management and also a engaging more with industry associations

outstanding.

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

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

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

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

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

And how did you overcome that obstacle?

Uh, that, that you may be.

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

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

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

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

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

That's it's fun.

And this is even more throwing.

No, I'm kidding.

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

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

on strategy, growth, and talent.

Just a

follow question.

Your role adds the chairwoman title.

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

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

How would you frame.

The CEO versus the chairwoman type

role.

Yeah.

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

be responsible for setting the agendas and running the meetings.

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

of engagement with the board.

So it's really just that agenda.

Carrie, it's

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

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

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

this journey?

Yeah, it's a great question, Jen.

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

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

order to have a successful business.

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

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

at all levels of the organization.

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

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

different position or a different company.

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

Um, those are generally people that share my vision.

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

focused on driving results.

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

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

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

agility, innovation, and collaborative.

And our growth strategy, the executives that we interviewed liked

our vision and joined the company.

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

the outside and also promoting.

You mentioned this earlier in our discussion about your

organic and inorganic components to your business strategy.

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

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

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

to bring into the Parson's portfolio?

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

QRC technologies, Braxton, echo Ridge.

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

but all with distinct attributes.

Yeah.

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

thing we do is a gap assessment.

What are our technical capabilities, who are our customers

and where do we want to go?

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

That's the company that we go after.

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

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

So they'll work well with our folks.

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

to auctions if we don't have to.

Um, so that fit and that understanding or foundational.

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

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

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

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

wanted to enhance our space capabilities.

They brought space, situational awareness.

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

OG systems was next with geospatial intelligence and threat analytics.

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

specifically situational awareness Braxton, uh, was a significant

acquisition in that they really helped us with ground systems as

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

Echo Ridge was.

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

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

would it cost us for spying it?

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

and software to find radios.

And your favorite Andy Blackhorse solutions has been outstanding.

They brought cyber electromagnetic spectrum and information operations.

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

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

even though you didn't ask it.

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

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

they were successful for a reason.

And we don't want to change.

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

which was called the drive awards program from Polaris alpha.

But we do that with all of our companies.

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

We also keep the leadership team.

So the companies that we buy and when they joined.

Parsons often they get increased responsibility.

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

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

lot of the business that was at Parsons.

We put it under him to run.

So his portfolio enhanced and the head of Braxton also picked

up a lot of our space portfolio.

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

Well, I think

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

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

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

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

and integrate being the best practices with the other companies

that you bring in is fantastic.

So tell us a little bit about.

The organic side of that strategy.

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

federal side of the business?

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

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

close to 100% recompete win rate.

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

customers, we keep those jobs.

And I think a testiment is 2021.

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

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

a bid and win bigger programs.

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

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

And two of those contract awards were greater than two.

Oh, that's, that's outstanding.

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

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

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

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

solutions sides of the business.

What's next for Parsons?

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

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

and they're enduring markets.

Our goal is to have top positions in these markets.

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

missile, defense, and C5 ISR.

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

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

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

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

to your point, how do we connect the dots?

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

to acquire differentiated company.

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

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

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

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

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

complex security environment.

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

that's driven by digital transformation.

So we leverage innovative technologies to deliver integrated

solutions at the speed of relevance.

And I'll highlight at the speed of relevance.

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

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

operate at the speed of a small business.

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

First is to focus the portfolio, prioritizing those

markets that I mentioned.

Um, really focusing on those.

We do a lot of things.

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

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

through data technology and software.

Third will capitalize on the global infrastructure spending.

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

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

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

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

retain the brightest in our industry.

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

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

we.

Segment until the end of this interview.

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

should learn at some point in their

career.

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

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

together towards a higher value purpose.

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

maybe most important question.

What is.

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

Carrie Smith,

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

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

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

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

Remember families, most of them.

Family first.

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

and president of Parsons corporation.

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

and ACG national Capitol region

podcast.

Thank you very much, Andy

and Jenn

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

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

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

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