In this episode, Kathleen Hildreth, a distinguished 2024 West Point Graduate Award recipient, discusses her journey from a cadet to the founder of M1 Support Services. Forbes recognized her as one of America's wealthiest self-made women in 2019 and every year since, attributing her success to leadership in the entrepreneurial realm. The episode highlights Hildreth's leadership style, philanthropy, and insights into government contracting, emphasizing the crucial factors of culture, employee management, safety, and strategic risk mitigation in building a successful business.
In this episode, we sit down with the extraordinary Kathleen Hildreth, the 2024 West Point Distinguished Graduate Award recipient. Kathleen shares her awe-inspiring journey from a cadet at West Point to founding M1 Support Services, a company that stands at the forefront of supporting the Department of Defense. Her story is one of unwavering dedication, from her early days in Army aviation to becoming one of America's richest self-made women, as recognized by Forbes. Her success is not just measured in financial milestones but also in her philanthropic endeavors, including her significant contributions to the Wounded Warrior Project and West Point's initiatives.
Kathleen Hildreth is West Point’s most commercially successful woman graduate to date. A member of the Glee Club and Protestant Chapel Choir as a cadet, Hildreth was commissioned as an Aviation officer. She flew VIPs in Korea and then served as a Maintenance Test Pilot at Hunter Army Airfield before choosing to remove the uniform in 1988 as a captain. While she left the Army, her service continued. After positions of increasing responsibility with Fortune 500 companies, Hildreth founded M1 Support Services in 2003. Through her leadership, M1, a nearly billion-dollar service company, has supported the DoD in over 43 CONUS locations and OCONUS in Iraq, Afghanistan, Chad, Djibouti, Japan, Korea, Germany, Lithuania, and 27 other countries. M1’s critical support earned the Army Aviation Association of America’s Material Readiness Award for Contributions by a Major Contractor in 2020, 2021, 2022 and 2023. With her entrepreneurial success and exceptional leadership, Hildreth was the first veteran named to the Forbes list of “America’s Richest Self-Made Women” in 2019 and every year since. In 2023, Forbes also selected her to the prestigious “50 over 50” list. Since 2020, she has served on the board of the Wounded Warrior Project (WWP). She was inducted into West Point’s Omar N. Bradley Lifetime Giving Society in 2023. Hildreth has addressed the West Point Entrepreneurs, cadet academic classes, and the Corbin Forum
The episode delves into her leadership style, the challenges and successes of being an entrepreneur, her philanthropic efforts, and her insights into government contracting and the future of innovation in this space. It also touches on the importance of culture, employee management, safety, and strategic risk mitigation in building a successful business.
Key Quote:
“Like any organization, having the right people in the right positions is one of the most challenging things that you can do, and hiring the right people. We're, we're fortunate that a lot of what we do is related to the military, so a lot of the people we hire are retired military, former military, they already have discipline. They already understand the mission. They're mission-focused focused and to a large degree, they're self-motivated and they don't require a lot of extra motivation. But, you know, we did something here, I was mentioning not liking the bureaucracy, a lot of large companies will set up a, you know, a framework for this position is a You know, grade 10, step 3, you know, whatever, and it's very bureaucratic and you hire a person into that position that you try to fit in that box. Taking the entrepreneurial view to it. We said, ‘Okay, let's go find good people, and let's figure out what their skills are, and let's figure out the best way to deploy them in the organization, rather than to put them in this, you know, grade three-step, whatever.’ And that has really, I think, paid dividends for, for our management team.” -Kathy Hildreth, Managing Director & Principal for M1 Support Services; Class of ’83
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(00:27) Kathy’s career accomplishments
(05:07) Kathy’s inspiration to attend West Point
(11:03) Launching the M1 Support Services and springboarding into Gov’t contracts
(20:35) Finding small business opportunities with the government
(28:55) Recruiting high-end talent to your organization
(31:50) Stepping into AI and Machine Learning
(34:55) Keeping small businesses comfortable as small businesses
(37:28) Engaging with contract officers
(39:15) Learning to grow from failure
(42:58) Mission first focused on culture
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Visit M1 Support Services Website
Support the Wounded Warrior Project
Announcer: Welcome to the WPAOG podcast. This special speaker series episode features Kathy Hildreth, class of 1983, as the 2024 West Point Distinguished Graduate Award recipient. Kathy was the founder of M1 Support Services in 2003, becoming nearly a billion-dollar company. M1 has supported the DOD in over 43 CONUS locations and OCONUS in Afghanistan, Chad, and 32 other countries.
Since 2019, Kathy has been listed in Forbes America's Richest Self Made Women and in 2023 was selected to the 50 over 50 list. In this episode, Kathy shares her journey from West Point, her life after military service in 1988, and how she became the most commercially successful female to graduate from West Point today.
Please enjoy this episode.
Nargis: Welcome, everybody. I'm so glad to see everybody in our audience. Really quick, if you haven't already said hello, let us know where you're all logging in from. I'm just curious. This is our biggest live audience. So we're really grateful for your attendance today. So today I have the distinct honor and privilege of introducing one of the official 2024 West Point Distinguished Graduate Award recipients, Kathleen Hildreth.
So Kathleen has a pretty impressive background, so I'm, I'm going to read a lot of this. First, I'd like to start off with, she is West Point's most commercially successful woman graduate to date. The accomplishments just go on from there and we keep going, so it's pretty amazing to have her with us today.
As a cadet, she was a member of the Glee Club and the Protestant Chapel Choir. And she commissioned as an aviation officer [00:02:00] in, in 83. She ended up hanging up the uniform in 1988 as a captain, but that wasn't the end of her service to the nation. She worked with multiple Fortune 500 companies until in 2003 she founded M1 Support Services.
Under her leadership and as the founder, M1 has supported the Department of Defense in 43 CONUS, so Continental U. S. locations, and 35 OCONUS. Overseas locations. and has become nearly a billion dollar service company. M1's critical support has since earned the Army Aviation Association of America's Material Readiness Award for contributions by a major contractor in 2020, 21, 22, and 23.
And if I was a betting person, and knowing how you always put the mission first, I think 2024 will also be on the horizon here shortly. With our entrepreneurial success and exceptional leadership, Kathy was the first [00:03:00] veteran named to Forbes list of America's richest self made women in 2019 and every year since.
In 2023, Forbes also selected her to the prestigious 50 over 50 list. Since 2020, she has served on the board of Lyndon Warrior Project and is now the board director. She was inducted into West Point's Omar Bradley Lifetime Giving Society in 2023. She has addressed the West Point Entrepreneur's Cadet Academic Classes in the Corbin Forum.
She's established a 1 million Glee Club endowment and provide financial support to publish Hoops for Heroes, the History of Army Women's Basketball. Kathy is financially supporting the Dean's Initiatives for the 50th Anniversary of Women at West Point in the Mikey Preservation Project and serves on the ALG Campaign Cabinet.
Here we have a quote from retired Lieutenant General Michael Lennington, class of 80, Whom I believe is also on our call today. He is also the former Common Cadets and the current CEO of the Wounded [00:04:00] Warrior Project, and he says she is always asking how to help, how she can help and attributes to a true servant leader.
One more interested in those, the one who is more interested in those she serves than in any accolades available to her. I'm going to go off on a little bit of a tangent because I was just recently engaged with him. He was one of my mentors, someone I really look up to. And I want to paraphrase some of the sentiments he had about you.
And this was just a little bit more offhand. And really, I wanted to share this because a lot of what he said was what I wanted to include in your introduction, but he also just said it better than me. So he goes on to say, he is without question, one of our most important volunteers. As we all know, non profit board directors are uncomplicated.
She leads some of the most important initiatives, such as chairing the finance and investment committee, and gives back in innumerable ways, which includes warrior events, the fundraisers, and just bringing support and networking to the mission. [00:05:00] She's also extremely generous. And I, I have to agree, she's not just generous to her alma mater, but with her time and her mentorship and, and willing to teach others and bring people up with her as, as true exceptional leaders do.
He goes on to say, she personally contributed to warrior, Wounded Warrior families and me during COVID and even hosts some of them at her home in Texas and encouraging support for the mission. It always amazes me when successful people like Kathy with extremely full plate seem to find time to give back and to contribute. It proves the quote attributed in Benjamin Franklin's, in Benjamin Franklin who said, if you want something done, ask a busy person. Kathy Hildreth epitomizes that quote, and I was thrilled to see her selected as a distinguished graduate of West Point this year. So Kathy, just thank you so much for joining us.
And let's just, we'll just go right into it. Tell us about you. For those of us who don't know your background, I love the story about your dad being a pilot pilot. [00:06:00] and wanted to fly so bad that he had your mom get the license. So let's just like, let's rewind. Let's start from there and then just kind of talk about how that influenced you in your Tibet phase and obviously when you were commissioned as well.
Kathy: So, yeah, that's true. My dad had a real passion for flying and he decided, you know, back when I was, you know, a child about 10 or 11 years old that he wanted to get his own airplane. But to do that, he needed a co pilot, so he kind of, forced my mother to go get her pilot's license so he wouldn't have to be the only pilot.
But that introduced me to flying. And enjoying flying and, and we used it for family vacations in some cases, or sometimes my dad just wanted to, you know, fly a couple hours away, go have lunch and come back. So, it was just a small four seat Cessna 172. It wasn't a large airplane, but he really had a passion for it and instilled that in my mom and then in me, consequently.
Nargis: That's amazing. So now did your dad or and your mom, did they have your, was that kind of the springboard or inspiration to want to go to the academy?
Kathy: No, I didn't really know much about it. Nobody in my family was in the military and you know, kind of an unusual story. I had a, had a part time job.
When I was in high school at Sears and one of my co workers was a teacher and a football coach from another high school, not my high school, and he would continually ask me, where are you going to college? Where are you thinking of going to college? And he worked very closely with the West Point recruiter and he kept on encouraging me to go see the West Point recruiter.
So, I finally decided to go see the West Point recruiter, took my mother with me and it was very late in my, already in my senior year of high school and the recruiter was very supportive of me. He talked my mother into being supportive and called West Point the next day and said, you need to, you need to get this girl on and get her applied and kind of did a really quick kind of acceptance system.
And so, my joke is I was recruited by a football coach. That's how I ended up at West Point. Oh, I love that. That's hilarious.
Nargis: Well, tell us a little bit about your cadet days. Like, do you have a favorite [00:08:00] story, a memorable moment? Yeah. What was, what was
Kathy: cadet Heldreth like? You know, I guess I have a lot of, a lot of moments, I, you know, I've, I've said that a lot of my best moments were the moments that I spent with like the Glee Club or the, the Cadet Chapel Choir that were away from West Point because getting, getting away was certainly, certainly a break.
But I tell a story of the cadets. Because they don't do these anymore, but we used to, before football games, have these things be called rallies. Some of you old timers on there, like me, will know what that is, but, you know, kind of a spontaneous pep rally the night before a football game, and I, I had a secret pair of roller skates stashed in my locker downstairs, and so that was, whenever they did a rally, I'd break out my roller skates and go skating through all the areas, and it was a good way to let off steam and kind of fun to, to participate in that.
Nargis: You decided to go aviation.Tell us a little bit about your commission time and your, your Army experience.
Kathy: Yeah. So, you know, 1983 [00:09:00] was when I graduated was the first year that aviation actually became a branch. So, you know, it was sort of a, a, an, it'd been there. Everybody had still had to go to a carrier branch.
So my carrier branch was transportation because I was going to be a maintenance officer. So I went to the transportation officer base course, then to flight school. And then I went to Korea and came back and went to the advanced course and then, or, you know, what they call the captain's course now, but I was a lieutenant when I went through and the maintenance course, maintenance test pilot course.
And I spent my, the rest of my time in an intermediate maintenance unit as a maintenance test pilot, maintenance officer. And then I elected to get out after my obligation was up. My husband was a fixed wing aviator and our, our career paths really weren't going to be very compatible. So I decided to get out and he decided to stay in for about another 18 years.
So that was a little challenging. So I was traveling around being a. An army spouse in addition to try to keep my career going. And I know a lot of people can relate to that, that have dual military or, or a spouse that's trying to find employment or meaningful employment in different [00:10:00] places in the world.
And we went to some really interesting places in the world Peru, Columbia, Panama, and other, other places where it was difficult. So, but it all helped me be a better entrepreneur because I learned a lot of different things in a lot of different jobs, in a lot of different places. Wow, so as, as an officer, what would you say
Nargis: was some of your biggest leadership challenge and then carrying that solution into becoming an entrepreneur?
Kathy:
So you know, unlike, I guess more, more like business and the military. You know, taking people from diverse backgrounds with different skills and different capabilities and trying to get them all working towards a common goal, whether you're in business or in the military, is really the most important thing that you need to do to get a coherent organization.
And so I think, you know, starting in the military, working with those people from diverse backgrounds and trying to make them, you know, support your mission the best way you can. And [00:11:00] you know, when I was in the army, like a lot of people on this line, you know, we were still, had some of the post Vietnam.
overhang of some of our NCOs were from that era. The army had gone through a lot of rifts, a lot of bad times, and then you had the younger people coming into the all volunteer force, and trying to integrate those old timers with the new timers is not unlike what we face now with generational challenges of, you know, Generation X, Y, Z, whatever the generations are, and, and trying to make those different.
Different people with different frameworks of their life to work together to, again, a common mission. And so, that's not changed over the years, it's just a different type of dynamic in the workplace where you have, you know, different folks with different perspectives that all need to be guided into a common purpose.
Nargis: Yeah, absolutely. And, you know, so you did work for a couple of Fortune 500 companies before you started your business. So a few questions in between [00:12:00] there. What did you learn during that timeframe working for the Fortune 500 companies? And then what was the deciding factor to start your business? What puts you on that trajectory?
Kathy: You know, large organizations, you know, whether that be the Army or be Fortune 500 companies or, you know, they have their own set of bureaucracies. I didn't like a lot of those bureaucracies, and that was a motivating factor in a lot of ways to say, I learned a lot of things, and I learned how to do things well, and I learned how maybe not to do things so well, and you carry that forward.
When you start your own entity, you have a lot more flexibility in deciding. What are the good things I learned that I'm gonna take with me and what are the bad things that I don't wanna replicate? And that guides you on a path where, where you can be more successful. So that, that was kind of my, my theme is, let me take the best of what I learned and then.
take the worst and leave it out and see how that works. And it helped me to grow a [00:13:00] better organization, I think. And it also allows my employees, I think, feel a little more entrepreneurial because they're given a little more leeway instead of having a very bureaucratic organization. And, you know, we're still at the stage in our company where, you know, all of the management team or people can feel free to reach out to me anytime they want to, and we can solve problems.
very quickly because the decision making chain is very short. And large bureaucratic organizations end up getting mired in their own policies, procedures, and there's reasons for those, and there's reasons, but if you cut some of that out, you can be a lot more efficient and be a lot more effective. Cost effective, dynamically responsive to customers needs, and just doing things quicker, faster, and more responsibly.
Nargis: That's amazing. And, you know, that kind of went into my next question, you know, tell the audience more about your your decision to go into government contracting and really, I know it felt more or less of a natural [00:14:00] flow given your background and passion for aviation and then given the maintenance aspect, but tell us more about what drew you specifically to the government side of that industry.
Yes, you know, so you're right. You know, when I was in the Army, and maybe a lot of you were in the same position that I was, we didn't realize how big the defense industry is, especially the service component that I'm in. My country, my company doesn't make anything. We're completely 100 percent a service organization, so we provide technical professional people to augment, military people primarily.
I do work for some other government agencies, but I do 100 percent work for the federal government. And right now, most of my business is with the Department of Defense, Army, Air Force, a little bit of Navy work. I have done work for some of the other organizations, but it's a natural fit for your skill set.
And, you know, in particular, When when I started the company and going back to starting the company, I worked for, I was working for a large company. Some of the people on the line know which one that is. And I was the vice president of business development in a section of the company that did most of the aviation support.[00:15:00]
The government puts small business requirements on. large contractors as well as themselves for giving small business content to businesses in different socioeconomic categories, woman owned, veteran owned, service disabled, veteran owned, small disadvantaged businesses are all goals that the government puts on.
So many of these companies in those socioeconomic categories would come to see me and want to do business with our company and want to do it. And I repeatedly watched these folks come in and they were, they were fairly successful in starting their own businesses and being in a service organization, but.
I looked at them and I said, they weren't very well equipped, I didn't feel, to be business people. Some of them weren't very smart. Some of them weren't very capable, but they were, they were succeeding. And so I kind of looked at those folks and said, wow, if those guys can do it, I can do it. So I say to the audience on this call, all of you, you know, have the tool sets that that I have from, from our education and our background to be able to go, go do things.
And so, you know, I, I would encourage anybody who, who [00:16:00] isn't an entrepreneur, who has a, has a desire to be an entrepreneur to use those skills, because if you look around you at some of the people that have built businesses or built small businesses, you're very well, more well equipped than a lot of people that are out there succeeding.
So that's really was the impetus for me to do that. And you know, I was fortunately in a good position. My, my, my husband was retiring as an 06. He had a retirement job. I didn't have to worry about putting bread on the table, so I could go out and take some risks. A lot of people are not in that position where they can take some of the risks that, that I was able to take and go without a salary for, for many years until my business took off.
But I, I was able to do that and then, then built a business. And for those of you that, you know, that, that, that are going to think about starting a business from scratch, in the, in the government space, the government's the largest buyer of goods and services, so it's your biggest marketplace. However, you know, to get contracts to a certain degree, you have to have experience as a company performing those, And that's how the government rates your past performance as a company.
So [00:17:00] building that is really the hardest part about getting started. As you're thinking about getting started. Some of you are already in the business and you'd be just looking at, at getting started. kind of divesting your commercial experience into the government space. And, and that's a little easier because you're already doing something.
So, you know, there's, there's a lot of ways to go about it. I will just say the way that, that, that I went about it is I took my experience working for these Fortune 500 companies and I took it to large prime companies and said, I know how to win business. I know how to help you win business. And if you do that, and I help you win.
I want some content as a small business subcontractor on the contract when you win it. That enabled me to kind of jumpstart the business because six months to the day after I left my day job, at a large company, I had my first subcontract. Very small, it was only, you know, seven people, but they were test pilots.
for the Air Force, so it was directly related to my experience in the Army. That started out and we used that to keep on [00:18:00] growing and, and we just deployed that with other large companies until we were big enough to start bidding prime contracts on our own. So that was a springboard that I used to, to get into that.
And I know that, you know, not everybody has, has that, you know, capability to springboard, but there's a lot of other avenues to get in it. And, you know, you can, You can also, you know, procure another company, acquire another company that is in the space if, if there's that. But again, the marketplace is very, very large and in the federal space and it's, it's, it's limitless, I'll say.
Nargis: I did some research on numbers and I saw with, as you mentioned, the The contracting side, they look for small business, for SBAs, and I think last year's budget alone, correct me if any of this is just wrong, but last year's budget for small businesses was 150 billion. which I think was about 43 percent of what they had offered.
Now, that, you know, that's accessible, that information is free for anyone who wants to start. So if we have, [00:19:00] maybe just by a raise of hand or a thumbs up, I'm forgetting which, you know, assume what platform does what. Raise your hand if you're either considering starting or doing government contracts or if you've already started and you're just in the early phases.
Because that's where Kathy's going to help us, right? Like knowing what they want, how they write the specific contracts, doing the market research ahead of time. So, and, and for our audience, if you don't already know the background, I sure you mentioned, she started with just seven employees.
Kathy: And now
Nargis: she has over, or slightly under 700, 000 employees.
7, 000. I'm sorry. 7, 000. 7, 000. Yes. And she went from 1 million, 1 million dollars in annual revenue to now close to 2 million revenue a day. So she's clearly identified those opportunities in those specialized sectors. Please explain to the audience if they're just kind of struggling and figuring out how to get their foot in the door, explain to us how you, you're able to identify those opportunities.
Kathy: Yeah. So, [00:20:00] you know, there's a lot of federal government publishes opportunities, you know, through a website called sam. gov. And you can go out there and register and you can put in different industries in different it doesn't buy industry code, North American industry codes for those who are not familiar with that.
So there's thousands of them that say, okay, if you're, if you're, so if you're selling something, if you're providing a service, they're, they're all by code. So you can go out and register in SAM. gov and they'll send you opportunities that are coming up. In addition, there's a lot of commercial services that do the same thing.
There's GovWin. These services have to be paid for. SAM. gov is free. Anybody can go out and look at it. There's GovWin. There's a service called Dasis. There's, it's, I think that Bloomberg has a service that you can pay for that'll push opportunities to you. In addition, if you're selling a product, if you have products that you want to sell to the federal government, The Defense Logistics Agency has a, a bidding board that you can go out and it puts what it's buying and you can go out and bid on those.
They're mostly competitive, [00:21:00] but a lot of them are set aside for small businesses. And so you, there's the opportunities, whether you're selling a product, selling a service, there's, there's a lot of ways to assess what the opportunities are. know, for, for, for, for me and my organization. A lot of our opportunities, the, the contracts are five to seven to ten years.
They've been out there for a while, and so they come up every five to seven, ten years, so you know they're coming up. Some of them are new opportunities, there's when new technology is fielded or new capabilities are needed by the federal government. Those are done in, in other ways, and the government also does market research.
Before they, they even procure a contract, they have to go out and look at sources, and they have to determine, first, if there's small business sources that are, that are capable of doing it. If they identify that there's at least two small business sources, it has to be set aside for small business. So, they do a capabilities assessment based on sending out requests for information.
So, that's one way to get your foot in the door, too, is to respond to some of these requests for information, because It will let [00:22:00] you know if those, those opportunities, you know, fit into your, your capabilities of what you're trying to sell the federal government or not federal, any, any federal agency not, not just DOD, but any federal agency.
Is there a way that
Nargis: contractors can help shape how those contracts are written so that like, for example, if, you know, disabled owned or women owned, like, is there a way that the contractors can help shape that before it's done?
Kathy: Produced out there for, for the rest of the competitors. Yeah, there, there is because some agencies, the VA is a good one.
The VA has a veteran's preference. So, they seek out veteran or service disabled veteran owned businesses before they award a contract to anyone else. And if there's any of those veteran owned businesses, that's, that's who's going to get the business for the Veterans Administration. For some of the other agencies, they all have their internal goals.
And so, They're seeking to [00:23:00] fulfill them, and you can usually go out and do research and find out, you can look up like, for instance, the Air Force. How are they doing against their service disabled veteran owned goals? And if they're not doing well, you can approach contracting officers or people in the government and go in and say, Hey, I'm a service disabled veteran owned company, and I can do this service.
And then they'll, if they do the market research again, they'll, if they find another one, you and that other one can compete. Some, some agencies do this better than others. The Air Force was really service disabled, veteran owned friendly when we were small, and we did a lot of Air Force contracting. The Army, less so.
The Navy, even less so. So it really depends on the agency and, and how their leadership approaches. Small businesses in particular and how they do those, those contracts, but it can be the, there's also some preferences for other Alaska native owned companies is a good example. There's a lot of preferences for those.
And unfortunately, those companies can [00:24:00] be multi billion dollar companies and still be classified as small because they spin off little companies underneath there. Tribal status. And so you're competing sometimes with multi billion dollar corporations. This doesn't seem very fair, but it's how it's classified under the Small Business Administration.
But, but all of those socioeconomic categories can, can help. So, for example, when I was small, obviously I was woman owned, veteran owned, service disabled, veteran owned. There's HUBZone, which is historically underutilized business zone. Those are determined by the Census Bureau when they go out and do their census every 10 years.
They're areas that the, the average gross income is lower than the national average. And if you locate your business in a hub zone and 35 percent of your employees reside in a hub zone, it doesn't have to be the same hub zone, that gives you another category that helps you. And then if you're a minority, you can get, they call it 8A status.
Or, or small disadvantaged business. So that's many, [00:25:00] many types of minorities, whether it be African American, a Native American, sometimes Asian Pacific, there's a lot of categories that, that fit in there that might get you 8A or small disadvantaged status. And so the way the small business rules work, if you meet more than one of those categories, It counts towards all of them.
So, the more categories that you can sort of collect on your, your small business, the more valuable you are to the federal government or to a large prime who's trying to get their small business credit because you cover all of the same categories with less subcontractors.
Nargis: And then, at the end of the chat too, we'll put the resources down where people can You can find that information and look more into those socioeconomic categories.
So a question from our audience, could you tell a little more of the story of how you got the first few subcontracts? I know you said you got your first one within six months. And what were the pushbacks from the prime contractors? How did you
Kathy: overcome those? I mentioned that, you know, our, our sort of our market entry.
business plan was to go to [00:26:00] large primes and say, we can help you with these contracts. So, we went to, but they, government hosts industry days typically at locations where they're going to let a service contract. So, there was an industry day out at Kirtland Air Force Base, where, which is where we run the contract.
And we were able to interface with a lot of different prime contractors and, you know, say, hey, well, we can assist you with winning this. And so, we were approached by a couple. We decided on, on one. And so we helped them write their proposal. We gave them enough information to bid the program. And this was unique that they allowed, sometimes they don't allow individual past performance, if you will, an individual's past performance as a person or as a career person to count.
In this case, they did. They actually used my personal experience as a maintenance test pilot as past performance for our company to, to win the contract. So the, the company that we, that we bid with. They provided the maintenance for these helicopters, and then we provided the maintenance test pilots and flight engineers [00:27:00] that went with it.
And so we won that subcontract, so we, so we were getting paid by these prime contractors to provide Professional business development services to help them write their proposals. And then we won the subcontract, then we were being paid for our subcontract. So we did that first, then we bid another program with another prime, and we won about twenty eight, More people that same year.
And then we had past performance enough to start bidding as a prime contractor. So that was 2003 was our first year in business. We started late in 2003, 2004. We won the first subcontract 2005. We won. the next one, and then we won our first prime contract with the Air Force, which was the service they call Transient Alert.
It's the people that reside at an Air Force base who service aircraft that are not stationed there, that just come through to get gas or get some servicing or are just there temporarily. They keep the people there that do that and help them get [00:28:00] Get, you know, park and get whatever they need and help the pilots get what they need.
There's a lot of those at different Air Force bases. Most of those are service disabled, small business set asides. So, I was mentioning the Air Force is friendly to that. That's, we got a lot of those early on as prime contractor. Then I mentioned we want to contract with the VA early on because they have a VA preference.
So, once you start building some experience, you can use that then to, you know, To bid larger and larger contracts and a lot of them do, look, government agencies look at the scope and complexity and magnitude of what you are doing, so it's, it's takes a lot of finesse to describe that I know I only have seven people over here, but I can go do your job with 107 over here.
And kind of drawing a parallel between those services and your capability to be able to do those. So in, that's 2005 and in end of 2006. I know you were asking about [00:29:00] kind of watershed moments or moments that were really important. So in 2006, we won our first contract, they call it full and open, which means we competed with all the large businesses.
And we won that in 2006 and we were only a three year old company. And only had about 50 employees and we won a contract with about 200 employees. So we, we tripled the size of the company that year and, and we had some other watershed moments but that was a big one because we were so young and we were able to convince the Air Force in this case that even though we, our contracts were only this big that we could perform on a much larger scale.
Nargis: That leads right into our next question from the audience. As you just said, you tripled your size in three years. What are some of your recommendations for identifying, hiring, and employing top talent for your organization? I know you already said you appreciate autonomy or at least you give autonomy.
Kathy: So what are your recommendations? So, you know, like, again, like any organization, having the right people in the right positions is one of the most [00:30:00] challenging things that you can do and hiring the right people. You know, we're, we're fortunate that a lot of what we do is related to the military. So a lot of the people we hire are, are retired military, former military.
They already have discipline. They already understand the mission, they're mission focused. And To, to a large degree, they're self motivated and they don't require a lot of extra motivation. But, you know, we, we did something here I was mentioning, not liking the bureaucracy. A lot of large companies will set up a, you know, a framework for, you know, this position is a, you know, grade 10, step three, you know, whatever, and it's very bureaucratic and you're, you hire a person into that position that you try to fit in that box.
Taking the entrepreneurial view to it. We said, okay, let's go find good people and let's figure out what their skills are and let's figure out the best way to deploy them in the organization rather than to put them in this, you know, grade three step, whatever. And [00:31:00] that has really, I think, paid dividends for, for our, our, our management team because we have people that are multi skilled.
That, you know, you ask them, you know, what's their job title, and it may be one thing, but they, they do a hundred other things because they're really good at it. And, and we're able to, to use them in those different roles. And we don't limit people by saying, well, you know, you're, you're in the accounting department.
You can't do, you know, this or, or that. And a lot of times, especially in the contract, service contracting world, we have surges of things that need to be done. And for instance, when you win a new contract, you have to go deploy to that location. You have to hire all the employees that are on the contract, you need to get their fringe benefits in place, you need to get the insurance in place, you need to get your payroll system set up, you need to do inventories, it's just like a change of command inventory, you're doing inventory of equipment, you're assessing the condition of the equipment, that requires a lot of different people with a lot of different skill sets, you're purchasing equipment, vehicles, equipment, putting copiers in place, you name it.
The [00:32:00] setup, it's like setting up a whole new business at a whole, at a location. So you need people that can do those things. And I think by not constraining people into, you know, this is your role, this is your box, you know, don't get out of it. I think it's, it's really been beneficial to us as an organization and, and people, you know, in a large degree, we, we've hired some people that have come from other large Fortune 500 companies and say they came to our organization because they had the opportunity to do more.
They were being allowed to do, and they were frankly surprised when they got outta the military, how bureaucratic some of these corporations can be. Yeah. So that, that's on
Nargis: the people side. Now, technology wise, how do you approach innovation and adapt to the changes, you know, and regulations or, and technology just so you stay relevant and ahead of the curve?
Especially with our, you know, the
Kathy: dining. It's very competitive, very dynamic,
Nargis: very fluid. How do you stay
Kathy: on top of it? So the government is constantly changing [00:33:00] their requirements. Those of you that work in this industry or with the government, know, know that that's, that that's true. But let me focus on the innovation side first.
We have a lot of customers in the DoD who say they're seeking innovation. And a lot of times we, we propose things that are innovative. And a lot of times we have won contracts because they like the innovations we propose. The difficulty gets when you go to implement some of those innovations. There's a lot of people that want to say no because it's never been done before or it's something new.
So it can be very frustrating that They ask for innovation, but then when you go to implement it, they say, oh no, can't be done here. We got to do it the way we did it before. So even when there's ways to achieve efficiencies, save time, you know, give the government back, I'll, a good example, give the government back, you know, flight hours on a, on an aircraft because we're able to fix it more quickly or do do other things.
A lot of times we get challenged with those things. In a technology arena that's always evolving and right now I'd say we're really [00:34:00] getting the speed of light with this artificial intelligence and machine learning and those things that are That are popping up that it's being embraced in some segments and, and being completely discounted in others.
We're trying to, I'll call it, baby stepped into some of the artificial intelligence and machine learning and also some of the other tools that are out there as far as training tools, using VR, AR, mixed reality. To help us train employees on new technology or even old technology, the old technology, you know, the training methods are, you know, you get in a classroom and then you take somebody out in our case, mostly to, to an aircraft where a mechanic can be learning and can break something very easily while they're trying to learn and you're using some of the AR, VR, mixed reality devices.
We're, we're trying to get them into a lower threat environment and learn the tasks and be able to do that. And so they are more efficient when they go out there. So the innovations that we take are external and internal. So internal to us to make us [00:35:00] better and then external to our customers to try to make them get more product, more service, get more mission effectiveness out of the resources that we have.
So the overarching question is.
Nargis: How do you see the future of the government contracting evolving, but specifically in the chat, there's, you know, given the recent Supreme Court's ruling on minority consideration for admissions, do you have any fear that the category preferences for government contracts are to change in the future?
So we'll start with that one and I'll move up to the other
Kathy: very similar question as well. Yeah, I don't, I don't see any movement towards, you know, kind of changing some of the, the socioeconomic categories for, for the government. Those are, you know, have been pretty set for a long time. I know on occasion they'll, they'll throw in a new category if it, if it makes sense.
But, you know, the, the bottom line is, you know, they're trying to help bootstrap some small businesses and give them opportunities to, to get in the government space. As I said, you know, it's the biggest, You [00:36:00] know, procurer of, of everything, products and services in the world. So there's no better way to get started.
And that, you know, and I, I guess I will say that on just from, from, from our perspective, you know, a lot of people ask us if we want to get involved in, you know, commercial aviation or other things related to tangentially to what we're doing. And the marketplace, frankly, is so large in the federal government that we haven't really explored more of the commercial segment because there's just so many opportunities and so many needs that the government has.
The marketplace is very large. Which is also the reason I know that some people were asking, you know, have you considered acquisitions? You know, we considered acquisitions, but we frankly got so busy bidding and performing on the, the work that we could do organically without going out and making an acquisition.
That's not to say that we don't in the future anticipate that that might be a good thing, especially a technology company that, that might give us an edge in AI or machine learning or things that are trending. To help us, you know, not create it from scratch when we can go out [00:37:00] and buy that capability. So there's lots of opportunities out there, but I don't see the small business issues going, going away.
And I think they're very important to, to give some small businesses. You know, the edge and I'll say, you know, it did, it did for, for my business. So, you know, if there wasn't those requirements, I couldn't have talked to some of these prime contractors and putting us on a subcontract because there's no value to it.
I don't add any value unless I'm meeting their small business requirements. So you can use that to your advantage if you are a small business to grow your business. And then if you want to be big, you can grow like we did, like we did. But a lot of companies want to stay below the small business threshold because they find that that's.
a comfortable place to be and they can, they can have a, you know, a fairly sizable business and yet still be a subcontractor in some cases or a small prime contractor without all the big business headaches that come with some of those regulations that you were talking about and some of the other technology requirements that come with, with being larger.
And getting [00:38:00] more scrutiny, getting more scrutiny from government audits agencies or other folks like that. And thank you for
Nargis: that last part as the other, the tail end of that question was, what kind of pressure do you
Kathy: think
Nargis: realization goals will come under? So I think you answered that. The other question we had here is, what's your advice for engaging with contracting officers?
Yeah, you know, a lot of
Kathy: contracting officers are very open to having discussions with, with contractors and others, frankly, aren't. So, it, it really is important, I think, if you can get out and go to industry days that are published on SAM. gov and advertised on SAM. gov because you'll interface with the contracting people.
Sometimes they offer up to have one on ones with companies that attend these so that you can have that interface. But it's, it's really very dependent on the, the personality and the risk. risk averseness of a particular contracting officer to have discussions. So, that's why a lot of them will do things during, during a more formal process, like ask for a request for information in a written form, and then they'll talk with you [00:39:00] afterwards.
Some will, will have small business industry days. The SBA, if you're a small business, they do some classes and some things that will, you with that. Will help you and sometimes they do matchmaking events and they'll bring in large companies and try to get small companies in so that you can meet each other.
And sometimes agencies will do matchmaking events as well. And then trade shows, if you go to trade shows that are geared towards you know, government contract gunners, you know, there's a zillion of them, but the big ones, you know, AUSA, Quad A Air Force Association. There's a Air Force Logistics Officer and then, you know, things like a tail hook for the Navy, very infamous, infamous one.
But those are all opportunities to go interface with large primes in particular. But sometimes you meet the government people there because they attend some of those events as well. So those are more informal. And a lot of times they'll do open forums or invite people to sit down one on one with you.
Nargis: Our next question was, how has your company's culture evolved as you scaled your services and [00:40:00] personal headcount? How would you describe where you started from where you are now with the 7K employees? And I, you know, I would just add to like, what are some, what are, you know, all
Kathy: successful people have had many
Nargis: failures, some hopefully not as big as others.
But as you, you know, answer that question, please tell the audience an example of where you failed and how that has impacted
Kathy: your, your future decisions as well. Yeah, so, yeah, every, everybody has failures and, you know, in, in, in this business, you know, it's, you had to bid a contract and win it and you're competing all the time.
It's very competitive, very cost competitive. There's a hundred things that go on to try to, to win business in the government space. But early on in our company's life cycle, we weren't significantly focusing specifically on aviation, even though we had a lot of aviation things, and there's also a big market in facility maintenance.
And [00:41:00] I know some of you on this, this call have been involved in facility maintenance types of jobs. And there's a lot of those too, because every base has to be maintained, all the, all the housing, all the property. Real property. So we looked at getting into some of those, and I mentioned we were HUBZone certified.
There was a job, it was actually at Fort Belvoir, that was a HUBZone set us up so we could bid on it, and the incumbent was a long time incumbent, large business, and they knew they were going to lose it, so they teamed with us put us in the prime role and said they'd bid with us. We thought we had a really good approach.
We were teaming with an incumbent that knew that work and understood how to bid it. We had the HUBZone certification. We had some government contracts and it came to the end and we got trounced on price, just trounced, which is hard to understand. And it was also a blow to us because we thought we're going to get into this new segment of business and this will get some, you know, breadth and depth and we won't be solely focused in one industry.
And the company that won it. got terminated from the contract like a year [00:42:00] after they got the contract because they just underbid it so significantly they couldn't perform. And so we were sort of validated, but at the time it was an extreme disappointment that we, we thought this was a perfect springboard and we were perfectly positioned to go in and, and win this contract and get into a different line of business.
But looking back, and I would just tell you, somebody asked a question about employees. You know, a lot of our employees, this is a very blue collar world that I live in because I do blue collar skilled work for the most part, and the aircraft maintenance folks, the aircraft mechanics, logisticians, they're mostly semi professional.
People, technical people, the people that you have to hire to mow the lawn, claim things. It's a very different demographic from the workforce perspective. It's hard to hire. There's a lot of turnover. So looking back on it, it was probably a blessing because we would have spent all of our time trying to recruit and hire, replace, and a lot of employee relation [00:43:00] issues.
They go on in that demographic of a workforce. That's also a consideration when you go into, you know, what kind of business you want to be in. And what kind of employees are you hiring, and those businesses, just like food service, it's just a very hard business to be in from an employee management perspective and keeping good people and working.
So it was a failure. But looking back at it, it wasn't a failure that, that, Really had a drag on the company and probably was a blessing in disguise. Our culture, you know, really has not changed and, you know, you mentioned that, you know, M1 support services, the M1 stands for mission first. And, you know, kind of our company, our company tagline is mission first, customer always, safety above all.
And that was derived from a military phrase that I had when I was in, when I was in the army that was actually mission first, soldiers always, safety above all. So we just took that and deployed that into the commercial world And we have tried to embrace the mission first kind of [00:44:00] culture and say, you know, we're not solely focused on making money.
Sure, we're a commercial entity, we have to make money to, to survive, to exist, and we have to have, have profit. Right. If you perform, performance is the first aspect of being successful. So if you perform well, you, first of all, you, you make more money because in some contracts you get incentivized or there's like award fees.
That's when you perform and you get assessed for your performance. You get assessed more financial incentives in that manner, but then you also get good performance so that you can bid and win more work. So that has always been part of the culture is let's not worry about. Yeah, the making money part of it, let's worry about making our customers successful.
And meeting their mission, and that will result in us performing well and then, and then being successful as a, as a company. And so we try to instill that in, into our workers. And a lot of times, and this is probably heresy to some people that are on the line, but [00:45:00] we have for many years, We didn't even give financial information to the people that ran some of our contracts.
And we said, that's, you don't worry about that. Don't worry about that. You worry about performance. You tell us every week how you performed, what resources you need to perform better, and what do we need to do to make sure we can meet the mission? And it wasn't until like the end of the year that we would provide them, you know, how well they were doing from a financial perspective.
So they weren't worried about the dollars and cents. And a lot of companies in our business, that's not the way they operate. Yeah, that's, that's a very
Nargis: unique approach. Obviously, it sounds like it benefited them. So going back to the, the contracting side of things, the question here is how do we get governments to shift from contracting by requirements to contracting by outcome?
And then they go on to say energy, AI, robotics, and other techs are progressing much faster than bureaucracies to foresee how
Kathy: to define. It's an unfortunate thing that a lot of the very experienced government contracting people, the [00:46:00] government contracting workforce. has largely gotten old and retired, a lot of the various people that have a lot of experience.
And what happens is younger people come in that don't have the experience and that results in them being, excuse me, a little more risk averse. And when you're risk averse, you're not, not able to think outside the box of what's the outcome I want versus, you know, here's the requirement, just perform the requirement.
So, until the, I think the government is able to figure out a way to incentivize people to be, or not punish them for taking on more risk on the government side. There's a large push to push all the risk to the contractor, unless to, you know, to the government. Is there any, you
Nargis: know, I don't want to say last piece of advice because this entire, you know, this entire segment's been extremely helpful and I know I'm going to go back and re listen to all this advice.
Oh, we do have a [00:47:00] question here pertaining to safety. What's, what is your strategic
Kathy: approach to risk mitigation? Yeah, and I know who asked that question, so thank you, Jeanette. So, you know, again, mentioning our tagline, you know, safety above all is the final thing in our, in our culture. We have, we're fortunate to have much lower than industry average safety record.
A lot of that is, we, we have safety people that work on all of our contracts that, that are out inspecting reinforcing safety practices, checking to make sure everybody has their PPE on. So there's a large focus on that and when we see trends that we don't like in, in safety or quality, you know, we, we get everybody together, have town halls, try to refresh everybody that this is the most important thing, the safety and quality.
We put pilots in cockpits. every day, multiple times a day. We want everybody to be safe, want everybody to have a [00:48:00] safe, quality aircraft, go out and do their mission and come back, you know, without, without a mishap. We don't want any property damage, any people damaged, any employees damaged. And it's, it's tough sometimes as the workforce gets more mature.
Because things happen with mature people that don't always have youngsters. They're climbing down off a ladder and they miss a step and they fall or do other things. And trying to reinforce that every day. You know, the other thing is, you know, people watching out for each other. We try to make sure that, that people are watching out for each other.
Again, it's not, it's not unlike you do in a military unit. But you're trying to make sure that all those things are. are reinforced, but we're fortunate to have a focus on, on safety and to have, in effect, from a business perspective, it also is costly when you have, you know, safety incidences and it, you know, drives up your workers compensation costs.
It can drive up, it can, you know, create lawsuits if people are unsafe and do things in the workplace that are unsafe. We really focus on that, and it's not to [00:49:00] say there aren't accidents and incidents. There are. We have a large workforce. They work in an industrial area, but we try to, as much as we can, remind everybody.
We have safety meetings. Some of the locations have a daily safety briefing kickoff before they even go out to the hangar and work in the workforce, workplace.
Nargis: Thank you for that. This is, that was going to be the last question. We have unfortunately run out of time, although I feel like this is interview could easily go for over two hours.
So first, Kathy, again, thank you so much for taking the time out of your extremely busy schedule for being such an integral part of our alma mater. I also want to thank the listeners. We really appreciate you guys chiming in from all over. And then just if you guys make sure you're, you know, staying tuned with the Facebook Entrepreneur page, we will put updates for upcoming events.
Kathy: for
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