How mergers, workforce culture led Parsons to be more tech-focused — Washington Technology

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How mergers, workforce culture led Parsons to be more tech-focused

Nobody would blame executives at Parsons Corp. for resting on their laurels. Listed at No. 50 on Washington Technology’s Top 100 companies list, the firm won an estimated $430 million in government contracts in the past year, much of it in the defense and security sectors.

According to internal figures, the company pulls in about $3 billion in annual revenue and remains a major player for large-scale engineering, design and building projects around the world, such as the new airport in Mexico City.

But there are some questions about the short-term-and long-term growth potential for the global infrastructure market.

Last year, the Engineering-News Record called the construction design services market “healthy” but said it had “concern about the future,” citing a less than robust economy, political turmoil both at home and abroad and other trends that portended a potential slowdown.

The publication also pondered the disruptive potential of developments like the Internet of Things and smart devices as these technologies become increasingly interwoven into the brick and mortar infrastructure business. President Donald Trump’s plan for a $1 trillion infrastructure-spending package has some optimistic, but Congress has been mired in gridlock and it’s not clear when lawmakers will tackle the subject.

In response, Parsons executives said they have has made a noticeable shift over the past six years to account for these trends, seeking out complimentary technological components in cybersecurity, missile defense and smart buildings to its repertoire. In interviews, high-level executives recounted their efforts to leverage outside acquisitions and internal restructuring to change the way the company is perceived in the marketplace.

“I would say if we’re talking about our legacy reputation and brand, it’s that we do large complex problems very well,” said Virginia Grebbien, Parsons’ chief of staff responsible for corporate strategy and government relations. “Moving forward, the metamorphosis that [we’re moving towards] is that we provide solutions to large complex issues. That’s a big difference, moving from projects to solutions.”

That subtle change in messaging is in line with the company’s overall strategy to become more technology-focused. Evolving from an engineering and infrastructure firm to a “technology-driven engineering services firm” was, according to executives, both necessary for survival and a forward-thinking business strategy in line with the company’s desire to be an innovator.

Carey Smith, president of Parsons’ federal business unit, elaborated on the distinction and cited the need to stay ahead of market trends. “If you look at where the market is going [in the future], it’s basically converged security: combining cyber and physical security into solutions,” said Smith.

Grebbien cited the purchase of three companies between 2011 and 2014 as illustrative of the company’s acquisition-based business strategy: Secure Mission Solutions, Sparta and Delcan. Each firm served a distinct purpose.

Secure Mission Solutions has allowed Parsons to move more deeply into the missile defense space, snagging lucrative and high profile contracts with the Defense Intelligence Agency and Missile Defense Agency.

Sparta gave the company not only a suite of federal-oriented cybersecurity offerings, but also “the talent it brought into the organization, in terms of individuals who understood what software-type tech brought to the equation as opposed to construction technology,” Grebbien said.

Meanwhile, the Canadian-based Delcan served both a geographic and business purpose: Parsons already had plans to expand business north of the U.S. border and also felt that Delcan’s intellectual property around autonomous vehicles would allow them to become an early player in an emerging market.

Of course, any large organization relying on acquisitions must be wary about how it incorporates new products and personnel into the existing environment. According to a Bain survey of executives who have managed through mergers, culture clash was listed as the number one reason for why an acquisition failed to deliver its expected value, while research by the U.K.-based leadership consulting firm Senn Delaney found that up to 80 percent of mergers and acquisitions never live up to expectations, citing “how well the cultural aspects of the transition are managed” as the key determining factor between success or failure.

Parsons has purchased seven different companies since 2011.

To this end, Grebbien said Parsons has taken a “break” from mergers and acquisitions since 2015 as they worked to absorb and integrate previous purchases into the existing environment. Among the largest contrasts between the legacy workforce and newcomers were relative age and differing skill sets.

Both Sparta and SMS employees skewed significantly younger and brought with them a different mindset that initially led to challenges. But she said they also brought in experts from the software and IT world that offered a contrast to their staff, who mostly had backgrounds in construction technology.

“They’re focused on the mission and they had different work hours and wore jeans and had blue hair and wanted to play ping pong in the office during work hours, so how do you deal with that?” Grebbien said. “I think the leadership team embraced [it], but there were miscommunications or miss-steps, if only because the two teams didn’t always understand each other.”

Another major transformation was in the company’s recruitment focus, from an organization dominated by engineers to a more hybrid workforce with engineers and IT specialists working side by side. One advantage to pursuing an acquisition-based business strategy is that executives have had a lot of practice dealing with these questions.

“Because we’ve done so many integrations over the years, we have a really detailed acquisition playbook,” Smith said.

Moving forward, the firm hopes to use its new offerings to further penetrate markets in the Middle East and Africa.

“We’ve been established there for at least 50 years: Saudi Arabia, Qatar, UAE. We’ve never sold security solutions there but there’s a big need,” she said.

About the Author



Derek B. Johnson is a staff writer at FCW. He has a Master’s degree in public policy from George Mason University. His journalism has appeared in The Washington Post, GoodCall News, Foreign Policy Journal, Washington Technology, Elevation DC, Connection Newspapers and The Maryland Gazette.

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