The Business of Defense

Smart growth helps Guidehouse deepen capabilities in support of defense, national security clients

The management consultancy, which began as a carveout of PwC’s public sector practice in 2018, today has revenue of $3 billion. Find out about its M&A strateg...

Since Guidehouse spun off from PwC in 2018, the management and technology consultancy has charted an aggressive growth strategy through mergers and acquisitions aimed at adding depth to core and complementary capabilities.

The original carveout of PwC’s public sector group let the nascent company “further invest in our government consulting business. In a global accounting and tax firm, it was getting difficult to make that a priority,” recalls John Saad, partner and segment leader for defense and national security at Guidehouse.

But also from the start, the plan was to build on the deep public sector experience and expand into commercial, Saad told Rich Brady, CEO of the American Society of Military Comptrollers, during ASMC‘s The Business of Defense podcast on Federal News Network.

Today, the business is roughly split 60% public sector and 40% commercial across five industries: defense and national security; energy, sustainability and infrastructure; financial services; health; and state and local government.

In just five years, Guidehouse has reached revenue of $3 billion, largely driven by the M&A activity, he said.

“Each of the acquisitions brought new capabilities as part of our investment thesis but also somewhat changed the scale between commercial and public sector depending on their backlog in their business,” he said. “But it’s all part of our plan to be relatively equally weighted in commercial and public sector.”

Collaborating across public and private sector

The business strategy prioritized sharing knowledge across Guidehouse’s public sector and commercial clients as a key differentiator.

“You can go through each of our verticals and see that we’re able to take advantage of our scale and bring that knowhow both back and forth between commercial and public sector,” Saad said.

It works because of the complexity, sensitivity and scale of much of the business’s federal work — in financial management, in cybersecurity, in operational management. That provides credibility with commercial clients, he said. And particularly around transformation, there are opportunities to apply commercial practices in government, Saad added.

“There are ways to bring in elements, if not wholescale ideas, from the commercial side … or bring in stakeholders from commercial clients of ours to speak to our public sector clients to give them a different lens to which to look at things through,” he said.

On a microcosm scale, Saad brings that same approach to his own practice area of defense and national security. Guidehouse runs these programs as an integrated whole rather than distinct business units. It’s a change that happened in late summer 2022, not long after the latest acquisition — of the Grant Thornton public sector practice, which specifically added skills and solutions to the defense and national security group, Saad said.

Factoring in the people side of M&A

The Grant Thornton acquisition also typified another chief approach that Guidehouse has taken toward growth. And that’s culture and people. “Synergies on paper are different than synergies in practice,” Saad pointed out.

With Grant Thornton, the company diligently evaluated the cultural fit along with the capabilities that the acquisition could provide, he said. “They’re driven by teamwork and collaboration, as are we. And so we were able to really infuse the talent rapidly across the organization.”

When hiring, the emphasis is on diversity and mission focus. Saad’s team looks for people that want to work in defense and national security and are excited about those missions. “We start with mission first,” he said.

Diversity helps drive innovation, Saad said. “Once you start to build a foundation, you start to attract talent from different places that you might not have thought that are attracted to your platform, and then he or she brings their own perspective to the table and allows us to continue to expand.”

More M&A growth to come at Guidehouse

And Guidehouse isn’t done yet with its mergers and acquisitions activity, particularly as it can help deepen skillsets across defense and national security, Saad said.

“When I think about M&A from a growth perspective, we’ll continue to fill in where we have needs. We have a nascent capability in digital in the defense and national security space. But there’s tremendous upside in that area,” he said. “We have tremendous advisory capabilities. But now we’ve got to continue to go deeper into the mission sets.”

To listen to the full discussion between John Saad of Guidehouse and Rich Brady, CEO at the American Society of Military Comptrollers, click the podcast play button below:

Discover other The Business of Defense podcasts here.

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