Sword & Shield CEO Shares Strategies For Sales Growth

Henderson knows inherently that his people are a huge asset, and works to educate them not solely on security, but about the business they work for. He will step down in January as CEO, but will remain as CFO. Current President and CTO John McNeely ill take over as CEO. Henderson recently spent some time with Senior Editor Jennifer Bosavage to discuss growing sales, motivating employees and trends in the security market.

VARBusiness: You saw excellent growth from roughly $26 million in 2005 to almost $39 million in 2006. What do you think was the main impetus for that growth?

Henderson: The main reason was our business in federal product contracts. We have the NASA SEWP [Solutions for Enterprise-Wide Procurement], which helped a lot. Last year, only 17 companies had that contract. That's a five-year contract that gave us a lot of opportunity. We had growth in other areas too. Both consulting and product sales have had good growth. Fast growth is not really our goal -- our goal is steady and profitable growth. We want to grow mostly locally and internally. If we do steady profitable growth, then, when opportunities come, we will be able to take advantage of them.

VARBusiness: So your philosophy is, more or less, that slow and steady wins the race?

Henderson: We always focus on there being profit on what we do in a controllable fashion. We have 27 employees. And we don't outsource anything. We are a small business; we closely control what we do. We're not against outsourcing, but it's not appropriate for what we do. Temps are ok for unusual surges. But usually our temps become full-time employees. Because we're only 27 employees, every person has to make an important contribution. The smarter people we hire the better we'll do. We try to get good people that are flexible to change. Our procedures need to be able change frequently.

We may be a little contrarian, yes. But we have a steady management philosophy. There is nothing wrong with an entrepreneurial company that starts up -- I have done that before and don't want to do it again. I want to build a company that will stay, and jobs that will stay. We are also in the process of becoming an employee-owned company. It's a long process; we started it about a year and a half ago. We plan to become 5 percent to 10 percent employee owned in 2008. That's our philosophy.

VARBusiness: Not many companies embrace employee ownership.

Henderson: It's not a predominant way to build a company. But some employee-owned companies are very good companies.

It's motivational to offer employees ownership and to enjoy what you do. The more employees understand the whole picture, the more they enjoy what they do. Employees are always going to make assumptions about profitability -- that are always going to be wrong. Employee ownership eliminates wrong assumptions. Why not educate them on the facts? There's an element of altruism, I suppose, but there is common sense in it. Yet, even while you are showing [employee ownership] is profitable, there are just some who can't stand to share ownership.

NEXT: The ever-changing security landscape