04 June 2013

Dismantling SAIC (Or, a Quick Example of the Failings of Traditional American Management)

A poignant blog post went up about a month ago. It reads:

I was surprised to read in today’s Washington Post that SAIC has decided to sell off the Tysons headquarters complex. It appears to me that SAIC is being dismantled piece by piece in anticipation of the split into two separate companies. Depending on the terms of the sale, there will likely be a short-term boost to the bottom line of both SAIC and Leidos which may help ease the transition to two companies, at least in the eyes of shareholders. This boost won’t last. The present dismemberment of SAIC is a great disappointment to me; it is very difficult for me to watch. – Bob
"Bob" is Robert Beyster, the founder of SAIC. Not only does Beyster offer a new vision of employee entrepreneurship but in SAIC he founded one of the largest employee-owned companies in the world. 
In Beyster's disappointment in the dismantling of SAIC I think that we see a major disparity between two kinds of managers.  Beyster knew how to build a company whereas traditional management seems better suited for getting the best price for it. Traditional management seems more versed in the tools of Wall Street, knowing how to price assets, than the talents of an entrepreneur, knowing how to create assets.
But of course Beyster wasn't just an entrepreneur. He enabled employees to become entrepreneurial. And the results he got were stunning. From the time that Beyster founded the company to when he retired, revenues and profits had grown an average of 35 percent per year for thirty-five years, an amazing feat of business growth that may have never been replicated in modern times. It wasn’t until his thirty-second year at SAIC that he failed to increase both revenues and profits over the previous year.
The new management does not have the same talents as Beyster. Worse, they don't even seem to have the same inclination or vision. 

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