“Beyond Strategy” is an ACG National Capital Region podcast focused on the leaders that are driving innovation, enhancing understanding, and achieving market clearing outcomes in and around the DC area. The podcast will interview senior level executives, private equity partners, and industry leaders to discuss topics including, but not limited to, mergers and acquisition, organic growth pursuits, leadership and management strategies.
Episode 2 includes a sit-down interview with Andy Maner, CEO of Avantus Federal, a NewSpring Capital portfolio company focused on delivering differentiated solutions to the defense, intelligence, civilian, and Homeland Security markets. Andy shares his thoughts on what it’s like to lead an acquisitive private equity-backed company, the importance of investing in your people, and his vision for where Avantus, and the industry, is headed.
Listen to the podcast and read a transcript of the interview below:
Andy McEnroe: Hi, hello, and welcome to Episode 2 of “Beyond Strategy,” an ACG National Capital region podcast focused on leaders that drive innovation, enhance understanding, and achieve market clearing outcomes in and around the DC area. I am Andy McEnroe with Raymond James Defense and Government Investment Banking team.
Jenn Wappaus: And I’m Jenn Wappaus, with the Infinity Wealth Management Group at RBC.
Andy McEnroe: Today, we are excited to present to you Andy Maner, CEO of Avantus Federal, a NewSpring Capital portfolio company. Avantus is a mission focused services and solutions firm headquartered in McLean, Virginia, with capabilities that include systems engineering, technical services, data and software solutions, digital innovation, and augmented intelligence, to name a few.
The company is an outstanding example of how private equity – coupled with robust executive leadership – can create an organization where the sum of the parts provides greater solutions to the market than individual standalone companies can. Avantus was initially formed in 2018 through the merger of E3 Federal Solutions and the Sentinel Co., and since that time, has acquired five additional businesses to create what it is today.
Jenn Wappaus: With over 25 years of executive leadership experience, Andy is no stranger to building and leading great firms. Previously, he served as managing partner of the U.S. Federal within IBM Global Business Services, where he led a 1.6 billion consulting, solutions, and technology business.
Prior to the acquisition by IBM, Andy was the Chief Executive Officer of NISC, a 200 million DC Capital Partners portfolio company focused on information management, services, and technology consulting for the federal market. I was so impressed with Andy’s personal mission statement. He is never one to shrink to a challenge. It’s the little things, like just making your clients happy and taking care of his people by trusting his talent, especially during the integrations with new acquisitions. He even dropped a few quotes from George Bush and Coach K.
Andy McEnroe: Now, here’s our conversation with Andy Maner, CEO of Avantus Federal. We are excited to be joined today on “Beyond Strategy” by Andy Maner, Chief Executive Officer of Avantus. Andy, thank you for being here.
Andy Maner: Yeah, happy to be here. Thanks, Andy.
Andy McEnroe: Before we dive into what you’ve been building at Avantus, I’d like to learn more about the Andy Maner mission statement. What I mean by that is, what are the core values and goals that you set out to achieve for yourself as a leader?
Andy Maner: Well, that’s a deep question.
Andy McEnroe: We go deep here early.
Andy Maner: I really only want to do things that are at a really epic or challenging moment. I tend to – throughout my whole career – take on hardest challenges at the hardest moments. I was in a war zone at age 23. And now in government contracting, as an example, I feel like it’s at a massive inflection point for our whole business, our whole industry.
And so, the Maner mission statement is: take on the hardest things that you can find. And then, of course, my George Bush upbringing… I worked for him the first five years of my career: stay humble. And then, you know, I don’t want to just do stuff. I want to have a good blend of getting stuff done daily. But also try and be a little awe inspiring. So I like a blend of doing routines. But I also like to try and do something really extraordinary.
Andy McEnroe: We will certainly pull a few of those threads as we continue in this interview. You brought up your public and private sector experience working for George H.W. Bush’s administration for CBP and Department of Homeland Security. You know, I think many folks know that you’ve now in your second iteration of a private equity roll up, the first one being NISC, and then also had a stop at IBM in between…
Along those various stops, what are some of those key lessons that maybe you derived from your mission statement that you’re now applying today at Avantus?
Andy Maner: There are some definite themes that have I’ve learned over time that exists in every job, whether you’re in the private sector, public sector, or you’re doing a non-profit, whatever. I learned a lot of that early in life from President Bush. I certainly take all the hard tasks on first, I never delay or procrastinate. I always try and do the things that only I can do. And I talked to our colleagues and employees about that. There are some things that only certain people can do, and you have to do those really well.
I also believe and spend a lot of my time forming a core team that’s cohesive, transparent, honest with each other. That takes 30 percent of my day. And then, you know, the attempt to be engaging, motivating, and inspiring for people to make people want to work with you and share your vision. These are things I’ve done for 30 years. I’ve made small mistakes, big mistakes, medium mistakes, and I basically like to laugh at myself, and then learn from them and move on.
Andy McEnroe: I know Jen is gonna start to dig in here on Avantus in a second, but you brought up earlier an inflection point within the government contracting market. And back when you form the two entities that kicked off the advantageous path, if you will. E3 Federal and the Sentinel Co., there was a quote in the press release that I pulled out. And it said that “…the continuously evolving federal market is demanding midsize companies that can develop solutions for fast moving missions and requirements. To succeed in this environment, we need to recognize the need to form optimal partnerships.”
Is that the inflection point you’re talking about within the government contracting world? Do companies need to be able to tie various capabilities together to better serve the end customer?
Andy Maner: Well, the inflection point is rooted right where you just mentioned. We cannot get our work done on behalf of the government the way we used to. People can keep trying, they can hang on to the past, it simply doesn’t work. Doing great client delivery involves partnerships of every kind. Partnerships with technology providers. Prime sub, sometimes you have to be a great sub, sometimes you have to be the prime. You cannot go out this alone. And you have to bring the best technology and people to your clients every single day.
The second part of that inflection point is talent. We invented horrific words in government contracting. Words like “butts in seats.” These are human beings. And every single one of them has and needs to have a career path. So gone is the day where you’re just putting squads and platoons of people into a problem. “Oh, I hope they do well. I’ll check on him four times a year.” This is a living, breathing ecosystem. And federal was, I think, a little slower to figure that out. But I think it’s impressive what we’re all doing right now as an industry for our people. Because gosh knows they deserve it.
Jenn Wappaus: That’s amazing. So let’s start digging into Avantus a little more. As someone who specializes in marketing strategy, I can certainly appreciate the need for good branding. When you started Avantus, you know, it didn’t exist a few years ago, you brought two companies together. How did you come up with the name Avantus Federal?
Andy Maner: Well, first of all, I did. I’m a bit of a branding guy myself, by background. I also had led a platform before, and one of the key lessons learned from the first time was I wanted everybody to be a part of the new brand. And so how do you do that? Well, one is you don’t brand it right away. The bulk of our employees have been there for the creation of that brand. So I wanted them to be a part of it, number one.
Number two, we looked at this for almost a year. And the name came in month 11. We went through a rigorous process, as you would do on brand, to more talk about what do we want to stand for, what do we believe in, how are we going to treat talent, how do we believe in the missions of the government… So everyone was so anxious in the room to get to the name. But, the company that helped us made us go through exhaustive work on knowing who do you want to be. And I love that. I love that discipline. I suffer from “let’s go, let’s go” sometimes, and that was the greatest thing that ever happened.
That said, Avantus comes out of two big thoughts. One, it comes out of the word advantage or advance. And the second part is really important to us was “us.” “Us” is about us doing it together, the “we.” And it all still stands for “U.S.” For our customer. We don’t have customers in commercial. We serve the U.S. government, full stop. And we’re proud of that. And we believe in it. And so that’s where the name came from. And we really did it at year two, where we had already acquired six businesses. And we didn’t want to be a NASCAR hood. We wanted to be a company.
Jenn Wappaus: Exactly. And it really sounds like that. I mean, taking the time figuring out who you are, and bringing it together. I love it that.
Andy McEnroe: We’ve already kind of danced around this a little bit. So the two companies come together. E2 Federal and Sentinel. You then go on to add additional businesses, like minded businesses, five acquisitions up until present time.
Take us back to the beginning. What brought the partnership with NewSpring together? You know, did you pitch them on a vision or a thesis? And then embark on this M&A warpath? Or was it more opportunistic, from a from an M&A perspective based on the assets that were in the market?
Andy Maner: Well, I knew the journey we wanted to go on. And the first thing I had to have was the two or three people that I have had long, two decades relationships, and we have a seasoned team of people I’ve worked with more than 15 years. People like Chris Blaine, Luanne Pavco, Chad Kim… I wanted to have a core starting lineup, if I use a baseball analogy. I needed my starting five.
Second, in terms of choice of capital, which you mentioned, our industry benefits from having enormous choice of the kinds of capital and the tone of the capital. And like everything we do, the capital has to match the strategy, not the reverse. And NewSpring was a possibility for us. But for me, it was really based on trust. They could flex on check size. As well as for me, I really value speed and efficiency in our acquisition warpath. And they work very smart, very deliberate, no wasted words. I didn’t need to explain the intricacies of Federal, “Oh, what’s sequestration? Oh, what’s a CR?” I wanted to move fast. I didn’t want to be sitting with people in mid-July somewhere going, “Let me explain how the budget, you know, Schoolhouse Rock, of federal budgeting.” So speed and efficiency, high trust, high velocity.
And then the final piece that every person in our market has to decide is, what are you going to do with free cash flow? How much can you invest back in the business? So my point is, we have been afforded the opportunity because of really strong organic growth, to invest lots of treasure and time back into ITM, which is our talent program. Technical differentiation, and that’s allowing us a cleared data engineer to not have to be billable every minute of every day of every second. And so that investment, that makes a great company. And so once you have that thesis, well, it’s not going to be for every capital provider, and NewSpring was just all bought into the thesis right from beginning.
Andy McEnroe: And it seems like that thesis has continued to evolve. And in many ways with this acquisition path that you’ve been on, you’ve added higher end capabilities that can better serve the customer. Can you speak to the specialization that Avantus now brings to the market, and maybe some of the capabilities – for our audience – that each of the acquisitions brought into the fold?
Andy Maner: Sure. We built our brand off of doing only the things we do well and doing them exceptionally well. So we’re in data, space, cyber and missions. That’s all we do. And I know that’s pretty broad. But when you come down to M&A, and you come down to who you want to be, it’s a little tighter. So we’ve been really, really focused on that. The best part of Avantus is our capability set runs from really high end data engineers, all the way to program managing, and everything in between. And we love that breadth. Because that breadth, one, it creates career paths within the company, the most important thing.
But second, when your customer adores you, as we say, you’re gonna get more missions, more challenges, because the thing we all have to recognize is that more is being asked of our government customer right now, then at anytime in history. And we have to help them. We have to see them as… Enough about talking about ourselves. What’s their profound change? Threats move quickly. We were all INDOPACOM. And then what happened? Ukraine was invaded. I mean, we have to turn on a dime now. So we better be sitting there at our customer with that tenacity and breath.
So that’s a part I love about Avantus is the breadth of people, and watching a person grow through a career path of someone who starts at a public trust level and ends in a full scope poly, and might have done four clients. That’s winning in my eyes.
Jenn Wappaus: I love that you’re talking about your people, and people are often described as the most important part of any organization. Having success in the M&A game requires you to be able to blend cultures, and you touched on this a little bit as well. How have you been successful in creating a common culture for the companies that join the team?
Andy Maner: Well, I love the question, because I think it’s very differentiated for us. And I think we give so much care to M&A. We start very early. We’re very humble. We do not come into our acquisitions with “this is the way we do things.” We learn from them. We try and show them our core values even during the acquisition process. And once you’re at close, we just love to introduce them to the talent programs, the 16 to 20 that we have and say, “Hey, which ones work for your people,” or “We don’t like these four, we love these four. Great, let’s start there.”
One of our acquisitions right at COVID, couldn’t believe we had Udemy, which is great learning platform. Well, they were now working, Blue Gold shifts, like on one week, off one week. And they were doing Udemy training day one of COVID to get a new certification to up their clearance level, etc. As you can tell, we’re super detail oriented. We don’t kind of do big ideas. We integrate, but we integrate at a path that is comfortable for the acquisition, and comfortable for us.
Jenn Wappaus: And then to expand on that a little bit. How did you how did you learn to integrate like that?
Andy Maner: Well, a PhD in the school of hard knocks. I personally have done now 15 acquisitions myself over my career. And as important, I was also very much in charge of the integration of the Department of Homeland Security. And when you go through that 2003 to 2005…. I’ll give you an example. At CBP, bringing the border agencies together, when it finally became clear that what they cared about the most were things like, which gun? What’s the patch look like? What’s the flag? What’s the overtime system? Once we were able to get at what really matters? People let their egos get into M&A. And I think you have to be in an M&A ego free. I think you have to do custom. You have to be super steely eyed about certain things: cash, cash reporting, servicing your debt, of course.
Coach Krzyzewski, I just listened to a leadership podcast. And what the players will say about him is he cared about certain things, and the things he didn’t need to care about he let the players manage. We do that there. We say to the companies we’re buying, “what’s the most important thing.” They might say, “We want deeper recruiting, broader recruiting.” They might say, “We want talent programs.” They might say, “Wow, we’re really struggling on cash management.” Or, “We need a new facility.” We just had that happen. Well, that’s where we’re going to throw our time and treasure at. And we’re going to show that quick win because they asked for it.
Jenn Wappaus: Yeah. And you listen.
Andy Maner: You have to.
Andy McEnroe: You mentioned the school of hard knocks. And I did want to ask: how has this run up with NewSpring and Avantus been different than the DC Capital/NISC experience?
Andy Maner: Well, I mean, all of us, we’re just different people. I’m now 30 years in the business. And I learned from some of the most humble leaders, starting with President George Bush. Through great mentors in our own space. People like Sue Gordon and Mike Daniels, people who have crushed it over decades, you learn. And I think when you get to be my dinosaur age, you just learn to learn, and you learn to watch and listen.
But I will tell you, Andy, doing it now versus NISC. There’s almost no similarities. The market’s different. Talent is different. Millennials are different. The missions in the government are different. So I might have learned some core principles, but execution, I like to tell our people, I have abdominal pain 60 percent of the days, because what we’re doing is so important, and so fast changing. And that’s what gets me up every day. I love the rigor of trying to figure out this new market.
When we were growing up, our parents said, “We walked both ways to school in the snow.” I never wanted to be that guy. So I complained about Millennials for like three minutes and then I went, “No, I’m going to celebrate it. I’m not I’m going to embrace it. I’m going to figure out what matters to them. And I’m not going to make fun of it.” Are you kidding? It’s this is 45 percent of our workforce. They deserve that custom approach. And so I love my job because every day, I have to get up and I have to make Millennials happy, Z happy. Baby Boomers happy. We have four generations of people in the workforce right now. They all want something different. And I’m gonna give it to them.
Andy McEnroe: So let’s talk about the path forward, then. What are the central tenants to Avantus’ go forward strategy and mission? Or said another way, what makes you successful here in 2022? And beyond?
Andy Maner: I mean, first and foremost, we are a company that’s growing organically 20 percent a year. That’s very rare in our market. That is all being done on the backs of exceptional people being engaged, and then making their client happy. That is so number one. It is underlined, bolded, spotlight. People forget that in our market. You have to do the mission well. You can fake it, you can put stuff on your website, you can go, “Oh, we’re the best.” No. So one, we’re executing at clients and we measure that through our employee engagement, we went through retention. And believe it or not, we would measure it through organic growth. Are our clients giving us more work?
Second, technical differentiation, absolutely paramount, you cannot skip it, you cannot leave it for someone else to do. But you also cannot overwhelm your clients. So you got to come in, you got to offer usable, doable technology, get people comfortable. And then you can go from there. And then an M&A. We will always be doing M&A. That is something you can’t go to rehab for. I’m in it. We’re in a process of closing a transaction right now that’s going to fundamentally change a lot about our business. So that’s the model.
Jenn Wappaus: That’s fantastic. So you’ve worked in the public sector, as well as for leading public companies, you’ve run private and private equity backed companies. Can you compare and contrast working in those different environments? It seems like you bring both together?
Andy Maner: Well, I would need to give you a couple of George Bush-isms. The most important thing he taught me, and I have spoken down at the school down at A&M at his school several times…. And they always ask, because now he’s deceased, people always want to know him. And I said, “He taught me something at age 22, which was treat celebrities, like people and people like celebrities.” I’ve never wavered from that. I’m the same person then that I am now. I will never change that. Being my authentic self, being a servant leader. It doesn’t matter if I’m in government, or private sector. Heck, I hope I’m in government again, in my life. I hope I constantly am able to have the privilege to go back and forth.
What do you get better at though? I think you get better at being calm. And everything that’s thrown at us, what really matters? Well, where do you learn that? We might learn that from being a parent, you might learn that for being in the workforce. But what really matters? Is your son’s B- at school… Do we need to tear down the whole family to figure out the B-? Maybe you do, maybe you don’t. So I think I’ve learned context a lot better. And then I would also say back to my point in the beginning, we have to do the things that only we can do.
One of the things that I’m responsible for doing for this company is providing a vision. A vision that everyone knows. And I go to onboarding of our people every single Monday, because I want them to know the vision. I sat with our whole recruiting team yesterday, I talked about our vision there, because I want them talking about it. I don’t want people to get here and go, I wonder what Avantus is up to. I learned that transparency very early in life. I did go to business school to hone the craft a little bit. But these are core principles I’ve learned from great people.
Jenn Wappaus: So help us with your vision. So what are the plans that you have for Avantus moving forward?
Andy McEnroe: I think we’re trying to get some, you know, secrets into the market. An M&A plan You know, we’re recording this today. And I see Sam Manis lurking over there. He’s the managing director at Raymond James. You know, taking some copious notes
Andy Maner: Sam’s never far. We know he’s gonna be there. Look, we in our market had to rebuild the middle market, but a lot of M&A had happened. I think customers are absolutely demanding the nimbleness of the middle market. So I believe so strong in building these muscular $300 to $600 million companies that can take on hard problems as we’ve done in cyberspace data, etc. So I think there is a just a robust opportunity to do bid there. So we will never stop acquiring.
And we will never stop taking reinvesting more than $5 million a year back into ITM, talent programs, and technical differentiation. So I’m wildly comfortable talking about it on this podcast, because I always tell people, if you want to copy the strategy, you should because it’s hard to do. You can’t wake up every quarter and go, “Hey, what are we doing about it?” You got to do it every single hour of every single day, and it is very hard. So look for us to continue to grow organically, to do M&A rapidly, to be very interested, in order to be very interesting.
Andy McEnroe: There has been a lot of great life lessons in our conversation here today. But if we were to boil it down to one lesson that you’ve learned on the job, that you think everyone should learn at one point in their life, what would it be.
Andy Maner: Every single success that happens to us is because of other people. And the faster you learn it, and the faster that you celebrate those people, support those people, let them know they were part of that success. We’ve all been guilty of going into phases of our lives where we think it was us. It’s never us. Not ever is it a single person.
And I have built Avantus, I’m proud of where we are. We’re starting to nudge towards $400 million. Top line. That’s a metric. What I love is 54 percent of our hires in the first quarter were referrals. What I love is we hired 440 people last year. What I love is that we had $400 million at TCV. Those are metrics. I love that our employee engagement scores continue to go up. That doesn’t mean they’re perfect. In fact, sometimes they’re not even approaching good. But they’re trending up. That’s the stuff I want to be measured on.
Are our employees building their careers here? We had 60, high end engineers at high end classified customers move programs last year. That’s called career velocity. That’s not parking a butt in a seat. That’s going, “What’s interesting?” “Oh, you want to be in the data mission? Oh, no, you want to be in the space mission, or you want to be in the cyber mission?” These are high end practitioners in our business, and they have to be treated like that. And that is why I get up every day.
Jenn Wappaus: Andy, we end all of our interviews with maybe the most important question, and that is what is the most important thing we should know about you Andy Maner?
Andy Maner: Well, I am just in an epic journey to never take myself too seriously. I try very hard to mix the right amount of seriousness with a lot of fun. I give myself crazy personal challenges each year. One of them didn’t go so well. I was in a very serious horse accident in Peru in 2012. Left me hospitalized for a long time in South America. Last four years ago, I went dog sledding in the Arctic. I am a rocking avid hockey parent that watches every single game all around the country. So I love the blend of personal and professional, and I love to be there to support my family. Watch them grow. But I also love to constantly challenge myself.
Andy McEnroe: Well, this has been a very enjoyable conversation. Certainly appreciate you Andy taking the time.
Andy Maner: This was fun. Thank you both.
Jenn Wappaus: Thank you.
Andy McEnroe: Well, that was a great conversation, Jenn. Andy, very passionate about the mission, about the country and about his company, Avantus Federal.
Jenn Wappaus: I think we could have talked to him all day. He was fantastic.
Andy McEnroe: Well, thank you again to Andy Maner, CEO of Avantus Federal for joining us for this episode of “Beyond Strategy,” an ACG National Capital region podcast. We also want to thank you for joining us today and hearing everything that Andy had to say about the marketplace, his company, as well as his leadership strategy. For Jenn Wappaus, I am Andy McEnroe, reminding you to subscribe to this podcast wherever you get your content. We look forward to having you join us next time on “Beyond Strategy.”
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To listen and read a transcript of Episode 1 of “Beyond Strategy,” a conversation with Parsons President and CEO Carey Smith, click HERE.