There’s something to be said for the scrappy underdog.
Take one company. Split it in two. Give one half a bright shiny new name, the existing senior leadership and the higher-margin business, and the other half, well, what’s left.
Who would you invest in?
That’s what happened at Science Applications International Corp. when the technology and engineering giant spun off a roughly $4 billion publicly traded company focused on government services.
The newly created company kept the old name SAIC.
The parent renamed itself Leidos.
The clean split was supposed to allow both companies to pursue their unique destinies, free from the organizational conflicts and other issues that had been a drag on the former combination.
Neither company came roaring out of the gate. But then, they picked a tough time for their late 2013 break up. Government spending still had not recovered from a year of sequestration and government shutdown.
Nevertheless, you could not miss a bit of backs-to-the-wall bravado from SAIC’s John R. Hartley last week, as he was named large company chief financial officer of the year by the Northern Virginia Technology Council. (Capital Business was a media partner for the event).
Hartley was so surprised he won that he had no formal remarks prepared. Instead he reflected on how far the spin-off had come.
“We were the B-team,” Hartley marveled.
Hartley himself was the former corporate controller at the once-united company. He started to say something about how chief executive Tony J. Moraco deserved better, until he caught himself after looking over at his boss.
Untangling one company from another is no easy feat. Recently, SAIC learned NASA would not reconsider a decision to pull a $1.8 billion contract award that had been sought by the combined company before separation, but which was awarded afterward and supposed to go to SAIC.
Still, SAIC has chalked up a couple of victories that could point to its strategy going forward. The company recently won a $221 million task order from the Army that expanded on the scope of work SAIC had managed from a previous contract award.
After a busy year, Hartley applauded his team for rising to the occasion.
Then again, he confided to a room of 900 at the NVTC ceremony, “It’s not anything I would ever want to repeat.”