QinetiQ was established in the United Kingdom in 2001 when the Ministry of Defence split its Defence Evaluation and Research Agency into two organizations. The smaller of the two organizations stayed in the public sector and evolved into Defence Science and Technology Laboratory, while the larger of the two was privatized and became QinetiQ. Now, the company is expanding its footprint in the United States as a rising player in the GovCon market.
GovCon Wire spoke with Eugene Chang, chief strategy officer for QinetiQ’s U.S. arm, to learn more about the company’s history, the impetus behind its recent acquisition and how the company’s strategic priorities are shifting in today’s ever-changing federal landscape. In his Executive Spotlight interview, Chang, who recently joined QinetiQ from the Airbus Group, also revealed the motivation behind his move and the key components of his M&A decision making process.
GovCon Wire: Eugene, you’ve been chief strategy officer at QinetiQ U.S. for about four months now. What attracted you to the company, and what do you hope to accomplish in this role?
Eugene Chang: “What attracted me to the company is the heritage of the QinetiQ Group. They came out of the Defence Evaluation and Research Agency (DERA), under the United Kingdom’s larger Ministry of Defence, and that legacy and heritage goes back over 100 years. The ‘Q’ in QinetiQ actually references ‘Q’ in James Bond, so that to me is very interesting. Then there’s the mission and customer focus of QinetiQ. This is an organization that once was the mission and the customer, and I think that culture has carried through in the group and has been imposed upon QinetiQ U.S.
If you think of what QinetiQ does — innovation, engineering, cyber, autonomous systems — these markets and areas of opportunity really resonate with me. The group leadership has the ambition and the conviction, and they’ve given us the support to build a billion-dollar, disruptive mid-tier U.S. defense company. These opportunities don’t come around very often. With the ambition and leadership of Shawn Purvis and the rest of the leadership team here in turning QinetiQ U.S. into a true modern enterprise mid-tier defense business, this was an exciting opportunity I couldn’t turn down.”
GCW: QinetiQ recently announced its agreement to acquire software provider Avantus Federal. Can you talk about why Avantus is a good strategic fit with QinetiQ?
EC: “From a capabilities perspective, we wanted to pivot the portfolio into cyber, data, software and intelligence, and diversify our customer base; Avantus provides all of this. They’re a high-end business platform to execute that pivot and, more importantly, to take on investment that drives future growth in these market segments. And Avantus has a great alignment with QinetiQ in terms of not only strategy, but culture. The Avantus management team and employees are very high-performing, mission-oriented, customer-focused and people-focused. This alignment of values was a key factor in our conviction to pursue and sign Avantus. Looking forward, Avantus will be a major business unit for QinetiQ U.S. We plan to continue to invest so they can continue their phenomenal growth path.”
GCW: What can you tell me about QinetiQ’s strategic growth plans? Are there any new markets or capabilities the company is looking to tap into as part of its US expansion strategy?
EC: “In addition to Avantus, which will be the platform for our Cyber and Information Advantage offering, we want to build our core offerings around engineering and innovation, ISR solutions and robotics and autonomous systems.
In engineering and innovation, we have a great technical engineering and rapid prototyping capability. We want to take that and pivot into domains and customers that are well-aligned with the Indo-Pacific challenge and focus on technically sophisticated, highly engineered next-gen products and capabilities. We also want to broaden out our intelligence capabilities into an end-to-end ISR solution. We’re still thinking through how much we want to specialize into specific domains and modalities, but things like sensors, sensor integration, intel PED and intelligence analysis are definitely part of our strategy.
Then finally, in robotics and autonomous systems, this is the legacy Foster-Miller business in Boston. That company also has a great innovation heritage. CRSi, RCV-L light, OMFV — these are all great foundational opportunities and programs in our portfolio. Over time, we’re looking to scale the autonomous management system capability that underlies all of the programs that I mentioned above into future wheeled and tracked land vehicles. In the long term, we’d consider pivoting into other domains like maritime or aerial.”
GCW: What’s the most important factor that goes into target identification? What do you look for when making M&A decisions?
EC: “Similar to Avantus, we’re always looking for strategic fit and cultural fit. Considering where QinetiQ U.S. is in our growth path, the targets that we’re prioritizing are ones that can act as a business platform and that fit strategically. We’re really assessing how much more we can accelerate the growth in this target if we invest, and what are the strategic outcomes of that growth. And then culturally, Shawn, myself and the leadership team here highly value culture. We want the integration to go well and we want the future operating model to be optimized, so we really are looking for companies that fit and that more importantly, operate with core values similar to QinetiQ U.S. and strive to differentiate on an employee value proposition basis. We want to instill a culture that facilitates growth, innovation and collaboration; one that rewards performance and entrepreneurship. That’s a major soft element in terms of our assessment of potential M&A targets.”
GCW: What advice would you give to people pursuing executive-level positions in today’s highly competitive GovCon market?
EC: “For me, it was really finding what I was passionate about. I’m passionate about supporting the mission. I love the technology, and I love the variety of technologies in the defense and broader aerospace and defense market — it ranges from cyber and information systems to fixed wing, rotor wing, space, ISR, ships, submarines, robots and more. I really love the robotics and autonomous systems business we have up at Foster-Miller. And ultimately, I love strategy. I love executing that function. I think of myself as a strategist that does mergers and acquisitions, and I appreciate that I’m afforded the opportunity to shape the future success of an organization
I would also say take chances in your career. Going to Airbus in the U.S. and then coming to QinetiQ, coupled with my consulting background, gave me a varied suite of experiences that was a bit non-traditional. However, it gave me knowledge that I lean on heavily in my day-to-day decision making. It enables me to lift my perspective up from running a program or a contract, to running a function and driving strategy for a multinational defense company. Maybe for others, it’s lifting up the perspective from running a program or a contract to running a portfolio of programs or a site or a business unit or whatever is appropriate or relevant to their career.”
