In my last installment to this blog series about development contractors I wrote that large, diversified companies (i.e. companies that offer multiple services to multiple industries with multiple clients) can have a very tough time competing against well run, purpose-built development contractors like Chemonics. I argued that large, diversified companies probably shouldn’t even try to beat a company like Chemonics at its own game and instead should craft business strategies around what they can bring to the table that Chemonics can’t. I concluded by suggesting whatever that might happen to be would play a big part in defining the company's unique signature.
Today's post starts an examination of how well the logic holds up. Today we’ll take a look at #6 on The USAID 50
Abt Associates, Inc
USAID 50 Ranking: #6
Avg. Annual Obligation: $165 Million
For this one let’s shake up the format and make it more interesting.
Multiple choice question.
Which of the following characteristics represents Abt’s unique signature?
(1) Abt does an outstanding job of putting women into key leadership roles
Yes it does. In fact, according to Abt’s webpage the company currently has 36 officers and 20 of them are women, including the current President/CEO. And by the way, during the current CEO’s tenure the company has literally taken off, nearly doubling in size (both in terms of revenue and full time staff).
Abt clearly does an outstanding job of putting women into key leadership roles, however that is not Abt’s unique signature. Why? Because its not unique. Who else does it? Well, for starters how about Chemonics? Last year Chemonics appointed its first women President/CEO and there are four women currently serving on the company’s senior leadership team.
Now I actually think this is all a pretty big deal so I’m going to get into it a little bit.
This may sound strange coming from a man, but women in leadership is actually one of the first things that I check now when I'm considering new opportunities. I really want to see that a company has a clear track record of, and commitment to, putting women in key leadership roles before I go to work for them.
Want to know why?
Because it looks good to clients/USAID? It does look good to USAID, but that’s not why I care. Because it’s the right/fair thing to do? It is the right/fair thing to do, but that’s still not the main reason I care. Because I have a three year old daughter that might rule the world someday? Yes, but that’s still not the main reason I care.
Here’s why it’s important to me. Putting women into key leadership roles just makes your teams smarter and that makes your company perform better. Don’t believe me? Just listen to the researchers from Harvard who found a few years ago through repeated studies that if a group includes more women its collective intelligence rises.
In terms of recognizing the importance of gender integration in the workforce I’ve come to realize that I got very lucky early in my career. I happened to start my professional career working for a company that was still dealing with the aftermath of having just lost the highest profile case ever involving sex discrimination in the workplace. A woman in the Price Waterhouse office that I went to work for out of graduate school had been denied admission to the partnership even though she had an iron clad business case based on her performance. She sued the firm. Her case went all the way to the Supreme Court and the court found in her favor. After the decision (which came in May of 1989) she came back to the firm as a Partner and finished out her career.
When a company goes through something like that they have no choice but to start changing things about their culture. When I arrived at the company in mid-1993 the ratio of men to women in management and leadership roles had already started to rise. Over the next decade (during which time PW become PwC) the company admitted dozens of exceptionally talented women to the partnership. I got the chance to work for quite a few of them, including the one that started it all.
I only got to work with Ann Hopkins a handful of times but I still remember each of them. She had a big personality and a great sense of humor. She was cool. She was also brilliant, and she commanded respect. The way you knew she liked you was if she ever asked you to join her in the parking garage for a smoke. I know she like me because I got invited for four of those sessions. She never offered me a cigarette, but I think that’s because she could probably tell that I didn’t smoke.
What I’ll never forget about Ann was how adamant she was about writing and structuring documents. If you wanted to work for Ann your writing had to be crisp and concise, and all your documents had to be in two column landscape format. Why? So readers didn't have to flip the book around to see charts and exhibits. To this day I still put documents in landscape mode whenever I can. I’m not sure if its more because I agree with Ann that readers shouldn’t have to flip the book around (I do) or more because its a way to celebrate the important changes that she made happen in the company that so profoundly shaped my career. I guess its both. Here’s one thing I do know for sure. All of USAID’s economic growth programs in Pakistan have been doing their annual work plans and PMPs in two column landscape format for over 5 years now. You’ve all got Ann to thank for that.
Given all that was happening at PW in the 90s and early 00s it’s probably also no surprise that the most influential mentor I’ve ever had in my development career is also a woman. I could go on and on and on about all the things she taught me and why she is so revered by everyone that’s ever worked for her, but for the purpose of this post I’ll focus on the thing that’s most important and relevant.
I was running a Corporate Governance program for USAID in Bosnia at the time - early 2002 - and she was in country for one of her regular check-ins with me, our team and the clients. At the time I was trying to write a memo outlining some things that we felt required a modification in our contract. I was struggling with the introductory text.
Anyway, my boss looked at what I’d written, thought for a moment, and then put it down. Here’s what she said.
Here’s why I’m bringing it up here. I think grappling with the difference between “have to” and “want to” in that context of better governance has made it a lot easier for me to understand the transformation that our industry is now going through in terms of how to approach gender integration efforts. I know there are still a lot of folks out there that think gender integration is a box-checking, affirmative action, compliance sort of thing. Well its not. Integrating gender in this modern era of best practices is about getting project teams, counterparts, and host country systems to want to do it because it’s what will ultimately make their efforts more impactful and more sustainable.
Sorry for going off on a tangent, I just think its really important for our industry to start to move more quickly and more decisively to transcend the old bean counting concept of equitable participation when it comes to gender integration. It needs to be a "want to" thing, not a "have to" thing. And, I guess there’s probably a good chance that development contractors who have figured out how to integrate gender effectively in their own back yard are going to have a lot more success integrating gender effectively across their programs in the field.
(2) Abt is owned by its employees
This is also true and I think it is an important reason that Abt has been so successful. However, just like the outstanding job that Abt does putting highly talented women into leadership roles isn’t unique, neither is its employee-owned company structure.
What other large development contractor is employee owned? This is starting to sound like a broken record isn’t it? Nine letter word that starts with C. Anyone?
Yep. Chemonics.
In the next installment of this blog I’ll be sharing a few reflections on the experience I had working for IBM ten years ago to help contextualize what I think gives employee owned companies such a huge advantage when it comes to development contracting. So I won’t go into it too much today. But there is one thing about Abt in particular that completely intrigues me and maybe someone out there can help me understand how they make it work.
If you look at the data on USA Spending you’ll see that Abt’s partnership with USAID is much broader than just the obligations the company receives through contracts. Abt does a ton of work under cooperative agreement (i.e. grants) with USAID. In fact, if my calculations of The USAID 50 included both grants and contracts Abt would probably jump decisively into the top five.
Now I don’t know a lot about cooperative agreements (I wish I knew more) but my understanding is that “cooperative” pretty much means “co-funded.” In other words, not only can’t you collect a profit/fee on the work, but you’ve also got to put some of your own money or assets to work on the deal.
If that is the case, where does a company like Abt get the resources to put its share into cooperative agreements? Or more pointedly, are they using the fee they earn from contract work they do to buy back into the grant work they want to do? If so, I think that is absolutely remarkable.
In fact, it feels kind of like a grown-up version of students asking the teacher for more homework, doesn’t it? Also sounds exactly like the kind of thing you’d expect from the best collection of policy/social science minds in the business, doesn’t it? Especially if those minds also happened to own and run the business.
(3) Abt has the best collection of policy/social science minds in the business
The funny thing is that I was first exposed to Abt over 20 years ago, years before I'd even started thinking about getting into development work. Here’s how I recall first learning about the company.
Multiple choice question.
Which of the following characteristics represents Abt’s unique signature?
- Abt does an outstanding job of putting women into key leadership roles.
- Abt is owned (and therefore managed) by its employees.
- Abt has the best collection of policy/social science minds in the business.
(1) Abt does an outstanding job of putting women into key leadership roles
Yes it does. In fact, according to Abt’s webpage the company currently has 36 officers and 20 of them are women, including the current President/CEO. And by the way, during the current CEO’s tenure the company has literally taken off, nearly doubling in size (both in terms of revenue and full time staff).
Abt clearly does an outstanding job of putting women into key leadership roles, however that is not Abt’s unique signature. Why? Because its not unique. Who else does it? Well, for starters how about Chemonics? Last year Chemonics appointed its first women President/CEO and there are four women currently serving on the company’s senior leadership team.
Now I actually think this is all a pretty big deal so I’m going to get into it a little bit.
This may sound strange coming from a man, but women in leadership is actually one of the first things that I check now when I'm considering new opportunities. I really want to see that a company has a clear track record of, and commitment to, putting women in key leadership roles before I go to work for them.
Want to know why?
Because it looks good to clients/USAID? It does look good to USAID, but that’s not why I care. Because it’s the right/fair thing to do? It is the right/fair thing to do, but that’s still not the main reason I care. Because I have a three year old daughter that might rule the world someday? Yes, but that’s still not the main reason I care.
Here’s why it’s important to me. Putting women into key leadership roles just makes your teams smarter and that makes your company perform better. Don’t believe me? Just listen to the researchers from Harvard who found a few years ago through repeated studies that if a group includes more women its collective intelligence rises.
In terms of recognizing the importance of gender integration in the workforce I’ve come to realize that I got very lucky early in my career. I happened to start my professional career working for a company that was still dealing with the aftermath of having just lost the highest profile case ever involving sex discrimination in the workplace. A woman in the Price Waterhouse office that I went to work for out of graduate school had been denied admission to the partnership even though she had an iron clad business case based on her performance. She sued the firm. Her case went all the way to the Supreme Court and the court found in her favor. After the decision (which came in May of 1989) she came back to the firm as a Partner and finished out her career.
When a company goes through something like that they have no choice but to start changing things about their culture. When I arrived at the company in mid-1993 the ratio of men to women in management and leadership roles had already started to rise. Over the next decade (during which time PW become PwC) the company admitted dozens of exceptionally talented women to the partnership. I got the chance to work for quite a few of them, including the one that started it all.
I only got to work with Ann Hopkins a handful of times but I still remember each of them. She had a big personality and a great sense of humor. She was cool. She was also brilliant, and she commanded respect. The way you knew she liked you was if she ever asked you to join her in the parking garage for a smoke. I know she like me because I got invited for four of those sessions. She never offered me a cigarette, but I think that’s because she could probably tell that I didn’t smoke.
What I’ll never forget about Ann was how adamant she was about writing and structuring documents. If you wanted to work for Ann your writing had to be crisp and concise, and all your documents had to be in two column landscape format. Why? So readers didn't have to flip the book around to see charts and exhibits. To this day I still put documents in landscape mode whenever I can. I’m not sure if its more because I agree with Ann that readers shouldn’t have to flip the book around (I do) or more because its a way to celebrate the important changes that she made happen in the company that so profoundly shaped my career. I guess its both. Here’s one thing I do know for sure. All of USAID’s economic growth programs in Pakistan have been doing their annual work plans and PMPs in two column landscape format for over 5 years now. You’ve all got Ann to thank for that.
Given all that was happening at PW in the 90s and early 00s it’s probably also no surprise that the most influential mentor I’ve ever had in my development career is also a woman. I could go on and on and on about all the things she taught me and why she is so revered by everyone that’s ever worked for her, but for the purpose of this post I’ll focus on the thing that’s most important and relevant.
I was running a Corporate Governance program for USAID in Bosnia at the time - early 2002 - and she was in country for one of her regular check-ins with me, our team and the clients. At the time I was trying to write a memo outlining some things that we felt required a modification in our contract. I was struggling with the introductory text.
Anyway, my boss looked at what I’d written, thought for a moment, and then put it down. Here’s what she said.
Drew, here’s the thing. Companies in Bosnia aren’t going to adopt better governance practices because regulators try to force them to do it. The whole point of this project is to help companies realize that they should want to adopt better governance practices. Fines and sanctions aren’t going to get anyone’s attention in this environment. What you need to do is help these companies understand that good governance practices are ultimately whats going to enable these companies to attract capital, compete and grow. It has got to be a "want to" thing, not a "have to” thing.That quick four-minute conversation got everything I was trying to say focused and it ultimately got us all back on track. And btw, thanks again for that insight Tessie!
Here’s why I’m bringing it up here. I think grappling with the difference between “have to” and “want to” in that context of better governance has made it a lot easier for me to understand the transformation that our industry is now going through in terms of how to approach gender integration efforts. I know there are still a lot of folks out there that think gender integration is a box-checking, affirmative action, compliance sort of thing. Well its not. Integrating gender in this modern era of best practices is about getting project teams, counterparts, and host country systems to want to do it because it’s what will ultimately make their efforts more impactful and more sustainable.
Sorry for going off on a tangent, I just think its really important for our industry to start to move more quickly and more decisively to transcend the old bean counting concept of equitable participation when it comes to gender integration. It needs to be a "want to" thing, not a "have to" thing. And, I guess there’s probably a good chance that development contractors who have figured out how to integrate gender effectively in their own back yard are going to have a lot more success integrating gender effectively across their programs in the field.
(2) Abt is owned by its employees
This is also true and I think it is an important reason that Abt has been so successful. However, just like the outstanding job that Abt does putting highly talented women into leadership roles isn’t unique, neither is its employee-owned company structure.
What other large development contractor is employee owned? This is starting to sound like a broken record isn’t it? Nine letter word that starts with C. Anyone?
Yep. Chemonics.
In the next installment of this blog I’ll be sharing a few reflections on the experience I had working for IBM ten years ago to help contextualize what I think gives employee owned companies such a huge advantage when it comes to development contracting. So I won’t go into it too much today. But there is one thing about Abt in particular that completely intrigues me and maybe someone out there can help me understand how they make it work.
If you look at the data on USA Spending you’ll see that Abt’s partnership with USAID is much broader than just the obligations the company receives through contracts. Abt does a ton of work under cooperative agreement (i.e. grants) with USAID. In fact, if my calculations of The USAID 50 included both grants and contracts Abt would probably jump decisively into the top five.
Now I don’t know a lot about cooperative agreements (I wish I knew more) but my understanding is that “cooperative” pretty much means “co-funded.” In other words, not only can’t you collect a profit/fee on the work, but you’ve also got to put some of your own money or assets to work on the deal.
If that is the case, where does a company like Abt get the resources to put its share into cooperative agreements? Or more pointedly, are they using the fee they earn from contract work they do to buy back into the grant work they want to do? If so, I think that is absolutely remarkable.
In fact, it feels kind of like a grown-up version of students asking the teacher for more homework, doesn’t it? Also sounds exactly like the kind of thing you’d expect from the best collection of policy/social science minds in the business, doesn’t it? Especially if those minds also happened to own and run the business.
(3) Abt has the best collection of policy/social science minds in the business
The funny thing is that I was first exposed to Abt over 20 years ago, years before I'd even started thinking about getting into development work. Here’s how I recall first learning about the company.
When I first started my career with Price Waterhouse I worked for a little group inside the firm’s Federal Government practice that built and maintained risk analysis tools for the US Department of Housing and Urban Development (HUD). Our job was helping two agencies inside HUD - the Federal Housing Administration (FHA) and the Government National Mortgage Association (Ginnie Mae) - figure out what would happen to their multi-billion dollar mortgage guarantee programs (i.e. how much would taxpayers have to cough up) if the United States ever experienced a serious downturn in the housing market. (In case you’re wondering it turns out we were quite a ways off, just like everyone else’s!)
Well, one morning I'm sitting in my bosses office waiting to start a meeting. While I’m waiting the mail clerk pops in and hands me a document, asks me to put it on my boss' desk. I looked at it and noticed that it was an RFP from our client the FHA. (Yeah, this was back before people were really using the internet). Anyway, I start flipping through the RFP and realize that FHA is planning to commission a whole new set of risk analysis tools which would eventually replace the ones that our group had been building and maintaining for over five years. When my boss finally showed up (he always had a fluid sense of time) I handed him the document. Clearly he was expecting it because he didn’t even look up, he just asked if it was the RFP to build FHA’s Loan Level Microsimulation Model. I said yes and told him that I thought it looked really interesting. Then I asked him why none of us knew about it and why we hadn’t already been strategizing for our proposal. I’ll never forget his answer. Here’s what he said:
"No chance man … Abt wrote the book on that."He was right. Abt won that one. We didn’t even submit a proposal.
I first went to work for Abt 15 years later as a consultant in Pakistan. Abt brought me out to help them establish some private sector alliances to leverage and scale the investments USAID had made in hygiene promotion through their project. It was a fun assignment I think largely because I actually managed to get deals done with a couple of large multinational consumer products companies operating in Pakistan. It was also interesting because it involved something entirely new for me: establishing dozens of community-managed water filtration plants. I ended up learning quite a lot about the subject while I was out there helping them on that project. Any guesses why? Abt’s project director wrote his PhD dissertation on the subject.
A year later I went back to work for Abt in Pakistan to help them out on a USAID-funded workforce development initiative. Guess who else was there? One of the original architects of the Americorps program who at the time happened to be directing all of Abt's work with the US Department of Labor. Abt brought him out to Pakistan for that first two weeks of the project for work planning meetings so he could share some perspective and let the client and resident project team pick his brain. He had some fascinating insight and some great ideas. When he left he gave everyone his card and said to call him if we wanted to brainstorm any new ideas that came up.
All development contractors try to provide those kinds of resources whenever they can, but what makes Abt unique is that they don’t have to use freelancers to do it. They’ve got these people on their full time staff.
How do they do it?
Simple. Chemonics and Abt both do health for USAID but Abt also does health for the US Department of Health and Human Services (HHS), the US Department of Veterans Affairs, Blue Cross/Blue Shield, the Bill & Melinda Gates Foundation and the New York State Department of Health. Chemonics and Abt both do economic growth work for USAID but Abt also does it for the US Department of Commerce, the US Department of Treasury, and the Federal Reserve System. I could go on but I think you probably get the point.
The bottom line is that contracting with Abt gets you access to the best collection of social scientists that the private sector has ever assembled under a single roof. There is no way you could ever put together the breadth and depth of technical/policy talent that Abt brings to the table if your only client was USAID. First of all, you'd never have the revenue that you’d need to afford them all. More importantly, I don’t think you’d ever be able to keep them all interested. Because it has such a diverse base of clients Abt can afford them … and keep them all interested at the same time.
Abt defines their unique signature as "Bold Thinkers Driving Real World Impact.” I like it. It’s true, and it definitely works for me. Also probably a much better way to capture it than the way I’ve always thought of the company.
But I just can’t help it. To me Abt will always be “Scary Smart People Still Asking for Extra Homework."
Flip a coin for the catchier phrase ... either one is a great reason for USAID to love them.
- DS
Next Up ... The Big Blue Blues
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