As the defense industry faces increased scrutiny, DynCorp International’s Steve Gaffney is emerging as the right leader, at the right time. His differentiator: bold self-assessment — and accountability — that starts at the top.

“Do you get this?

Do you feel this? Are you onboard with me?” Steve Gaffney is walking around the room, with Sharpie in hand. He’s just sketched out a corporate vision on a flip chart. And he’s looking for feedback. Off the cuff. To the point. Now.

The look on his face and the pace of his walk sends the message loud and clear: This won’t be just any program manager meeting. It’s all about interaction. And consensus building from within.

He stops before each person in the room. “Who are you? What do you do? What do you think?”

Gaffney isn’t a manager. Or motivational speaker (not officially, anyway). He’s a defense industry veteran, who recently took on the role of a lifetime: CEO of DynCorp International. And this meeting, which Gaffney has supercharged into an impromptu brainstorming session — versus what could have been your typical “CEO meet and greet” — is all about sending the message: Every voice matters here, from the top on down, at one of the top defense companies in the world.

Indeed, Gaffney is the kind of leader who leads from the center of a circle. And values the wisdom of the entire tribe. It’s an approach that gets more than a little attention this morning. One person in the room says, flat out, what may well be on everyone else’s mind here: “I have never met a CEO before.”

But then, not every CEO is a Steve Gaffney.

Transparency First

Ever since Gaffney took the helm of DynCorp International in August 2010, he’s been helping the company build upon its 60-year history as a global government services provider in support of U.S. national security and foreign policy objectives — just as the industry stands at the crossroads of challenge. And change.

Gaffney is candid on both counts.

“Clearly, we live in challenging times,” Gaffney says, one recent morning at his office in Falls Church, Va., where a plaque beyond his door honors DynCorp International employees killed in action. “With Iraq winding down, our changing role in Afghanistan, coupled with all the budgetary pressures, there are a lot of variables.”

Fueling those variables is the government’s push to reassert its presence in areas such as contract oversight, while government contractors continue to outnumber U.S. forces in military hotspots. That reality raises more than a few questions about the very nature of military engagement and accountability. As a recent study by the Center for a New American Security pointed out, industry’s response needs to come down to one thing: transparency, first and foremost.

Gaffney has that ground covered. He’s the kind of leader who lives his life out loud — no red light outside this CEO’s office. If anything, his door stays open, the blinds pulled up.

“It keeps me grounded,” Gaffney explains. Surveying the woods beyond his office window, he adds: “It reminds me, ‘It’s not about me. I’m just here trying to make a difference in my little neck of the woods.’

That groundedness is something for which Gaffney is well known.

“Steve has a long and well-deserved reputation in the defense services business for being a ‘what-you-see-
is-what-you-get’ kind of patriot,” says Dean Popps, a former U.S. Army acquisition executive. Popps first got to know Gaffney during his days at another defense giant, ITT Corporation. At one industry event, Popps recalls, Gaffney leaned over and said, “Stay humble.”

“That shows you where his values are centered,” Popps says.

Gaffney also has a knack for making ideas relatable. Within days of coming onboard DynCorp International, he had a white board put in his office.

“I’m a doodler,” says Gaffney, who’s just as likely to email you a picture to illustrate a point as he is to give you call. He’s also a natural storyteller. He speaks in stories. Lots of stories. About life, and family, and sports, and fishing, with more than a few insights on what it takes to do better, and be better, in work and in life.

The resulting presentation can be pretty disarming, as DynCorp International employees discovered at that recent program manager meeting.

The Eyes Have It

It’s those employees — more than 17,000 in all — whom Gaffney is focusing on the most these days. His approach is based on one simple philosophy: Focus on people first, and the rest will take care of itself.

“You can’t skip that step,” Gaffney says. “You can’t say, ‘I’m going to focus on productivity or profit first, because then you haven’t spent the time or energy on the foundation, which is values and leadership.”

At the same time, he knows the score.

“Of course, I’m the new guy,” he says, with a good-natured laugh. During his first 60 days, he visited more than 1,500 employees at company operations in Texas and Virginia. In November, Gaffney also planned to travel to Iraq and Afghanistan to meet with DynCorp International employees over the course of two weeks.

Those preliminary meetings are all about building awareness and trust. And looking into employees’ eyes, Gaffney says.

(Like we said, not your typical CEO.)

“Early on, all you’re really trying to do is look into their eyes, and have them look into yours, and leave them with the feeling of, ‘Hey, I can trust this person, he’s one of us,” says Gaffney, who grew up in New Jersey under pretty humble beginnings. His mother was a school bus driver, his father, a gas station owner and World War II veteran, who raised Gaffney and his two sisters in an 800-square-foot house. Also living under the same roof were his maternal grandmother and paternal grandfather.

That background helps explain Gaffney’s unique combination of assertiveness and humility. Especially, among employees and colleagues.

“One of my strategies,” he says, “is I don’t want people to guess. I don’t want them to Google me and waste energy. I’m going to tell them exactly where I’ve been and where they can go for the playbook, so they can quickly get back to the mission, which is satisfying our customers and growing our business.”

Leadership from Within

To understand Gaffney’s leadership approach — you might call him equal parts hawk and shepherd — you have to go back to a dinner in Colorado Springs.

The year was 2004, and Gaffney had just sponsored a NASCAR race team (Armando Fitz, Terry Bradshaw) on behalf of ITT Corporation, the large multinational defense company, where he was serving as president of its U.S. systems division.

Later, over dinner, Gaffney found himself seated next to Flip Flippen, founder and president of The Flippen Group, who’d recently been recruited by the Speed Channel to build team performance.

“So, Flip, what do you do?” Gaffney asked.

“I build high-performing teams,” Flippen answered.

That surely got Gaffney’s attention. “We’re corporate athletes, can you help us?” he said.

The rest, as they say, is corporate history. Pick up a copy of Flippen’s New York Times bestseller, The Flip Side: Break Free of the Behaviors That Hold You Back. The book rests upon the premise that no organization can rise above the personal constraints of its leader. It includes, among its case studies, a candid assessment of what it personally took for Gaffney to bring about group change at ITT. The first step: He engaged in bold self-assessment. He also showed a pretty thick skin.

“Steve doesn’t get his feelings hurt, he’s tough enough to handle feedback — that’s the one thing that I wish I saw in more corporate leaders,” says Flippen, who “easily” counts Gaffney among the top 2 percent of the 10,000-plus executives he’s studied worldwide.

Gaffney’s openness — really, self-effacing candor — becomes quickly apparent in conversation.

“I’m sure it’s hard to believe, but sometimes I can be aggressive,” Gaffney says with a slight grin. “When I would try to teach my kids algebra or calculus and they would shy away from me — now I know it’s because I wasn’t managing my constraints.”

That same introspection comes into play on the job.

“Here I am, pretty competitive, somewhat dominant on days, which masks my nurturing skills. My job is to manage my constraints so that others can rise above them.” The stakes of not doing so, he adds, are just too high.

Recently, DynCorp International was named one of the 50 fastest-growing companies in the Washington region, an impressive feat for a 60-year-old, $3.6 billion company – the oldest and largest on the list. Gaffney plans to keep it that way.

“People don’t leave companies, they leave people,” Gaffney says. “It’s leadership that builds satisfaction and loyalty in employees. That’s the only time you get productivity — productivity is what customers care about, it’s necessary to be able to grow.”

Building Relational Capacity

Managing personal constraints isn’t a one-person job. That’s been Gaffney’s message since day one.

“Personal development is not personal; it’s a team sport,” he says. “I need you to know my constraints so that when I’m not managing them, you can give me immediate feedback.”

Granted, it’s not easy to tell a CEO what he can improve upon. Gaffney concedes as much. Which is why he recently told his top team: “You’re drinking from the fire hose right now, but eventually, you’re going to feel safe enough where you can say, ‘Time out, Steve, let’s reset.’”

It’s all part of building what Flippen explained to Gaffney as “relational capacity.” The Flippen Group’s process of building a “social contract,” meanwhile, underpins that approach.

That was the case previously, at ITT, industry colleague Chris Bernhardt says. One of the top challenges Gaffney faced when he became president and CEO of ITT Defense in 2005 was to help departments better coordinate across divisions.

“Quite frankly, we didn’t really have a leadership model,” says Bernhardt, president of ITT Defense Electronics. “Steve saw an opportunity to make ‘one plus one equals three.’”

Or, more precisely, $3.5 billion equal $6 billion.

That’s exactly what happened over the next three years, as the company grew through a combination of organic and acquisitive growth. The first step was a leadership training session, in which Flippen served as facilitator. Each division leader signed a social contract in which they committed to behaviors that could fuel collective success. (And those who didn’t, you can figure out the rest.)

“Steve is a very good change leader,” Bernhardt says. “He’s very good at assessing who can create the future, who can build teamwork and who has the relationship capacity to collaborate across the boundaries of an organization.”

Beyond 360 as Usual

Gaffney is now applying those same principles at DynCorp International. At the time this article went to press, the company’s top 250 leaders (Gaffney, included) were slated to undergo a 360-type assessment. Feedback — as well as action plans to “close the gaps,” as Gaffney puts it — would then be provided over the course of a leadership development exercise: two-day sessions, with 30 people per group.

Those platforms can be a “major milestone” in an executive’s development — if they allow it, Gaffney says.

“It’s a little bit different than other techniques where you get 360 feedback and say, ‘I’ll take care of it, don’t worry about it,’” he says. “Once you are aware of how you’re wired, it’s my job to make sure it’s always out on the table — and that we’re always trying to manage those constraints — so that each level of the team can outperform.”

Using a color-coded system to assess talent and leadership qualities is one key goal. “We have blues, greens, yellows and, hopefully, at the top we don’t have too many reds,” Gaffney says. “If you do, let’s talk about them, try to convert them to a yellow or green. If you aren’t willing to move your red, then maybe you need to go work for a competitor.”

Pretty tough talk. And yet, Gaffney is also known as a leader who goes to bat for his employees. It’s enough to make you think it really does take a tender man to make a tough company.

That impression is echoed by John Tilelli, a retired U.S. Army four-star general who served as vice chief of staff of the Army, and later, on the senior advisory group of ITT Defense when Gaffney ran the division.

“Without naming names, I’ve seen Steve deal with some personnel issues that were very sensitive and which he handled very well as a leader,” says Tilelli, who now serves on DynCorp International’s board of directors. “I’ve also seen him go to bat for his subordinate leaders to ensure they’re well taken care of in terms of upward mobility, job security, and compensation.”

Gaffney, for his part, stresses that the best organizations hire from within.

“Some leaders believe that it’s easier to hire from outside to solve problems — it doesn’t always work that way,” he says. “The probability of success on acquisitions is probably less than 50 percent — the same is true with people. You have to develop them.”

“In the past,” he adds, “I’ve made it a point to measure how many leadership positions we fill from within the company — that is the true measure of the health of your leadership development plan.”

Employee Development

In his first two months, Gaffney read each and every employee survey comment — more than 1,000 in all, conducted in the months before he came onboard.

Gaffney’s not surprised by what he’s found.

“The feedback is consistent with what I’ve seen at other companies, where I’ve had a leadership role … the employees would like more opportunities to grow and move into other projects — we’re going to make sure we give them those opportunities,” he says.

Gaffney knows firsthand what it’s like to be a given shot.

“I’ve always worked with great people who’ve allowed me the opportunity to grow,” he says.

Among them was an early mentor, Bill Talley of Smith Industries. It’s from Talley Gaffney learned a critical aspect of leadership: 70 percent comes from experience, 20 from feedback, and the rest from the classroom.

“[Talley] gave me lots of opportunities early on, so that if I stubbed my toe, it didn’t bring down the whole division,” Gaffney says. “I learned that experiential learning is important, and you’ve got to have job rotations … you’ve got to move people around.”

At the same time, Gaffney has his eye on growth.

“We have a piece of our business that supports the Department of Defense, the State Department and diplomacy, the Intelligence Community, as well as USAID and other agencies,” he says. “If you look at the segments inside those areas, we have large programs and we have others in their early lifecycle — we want to continue to invest in them.”

DynCorp International’s acquisition by private equity firm Cerberus Capital Management, for $1.5 billion this year, is a big step in that direction; it spells greater opportunity to achieve that growth. Meanwhile, the company’s recent acquisition of Phoenix Consulting Group, Inc., and Casals & Associates, Inc., expands DynCorp International’s inroads into intelligence and developing nations work.

“These are different than the core [services] of years past,” Gaffney says.

DynCorp International: Next 60 Years

Looking ahead, Gaffney is confident and, naturally, cautious. As he speaks, he looks out his office window. What does he see?

Gaffney doesn’t skip a beat. “I see that hawk over there,” he says, pointing to a bird circling above the woods, just beyond. “[That’s] my competition.”

Speaking about his competition, Gaffney adds: “The market is flat, at best, so that means the only way you can grow is to take share. Everybody else is sitting in their boardroom saying the same thing. What they’re not talking about is how to build high-performing teams and how to manage their constraints — that’s our differentiator.”

So, it seems, is transparency. Which explains why Gaffney leaves nothing to chance. Not his office door. Not the pulled-up blinds. Not his coaching partnership with Flippen, which remains an ongoing collaboration.

When asked what lasting legacy he would like to leave, Gaffney nods knowingly. You can tell this is something that’s been on his mind.

“That’s a great question —that’s the ultimate question,” he says. “I want to leave the company better than I found it.” He grows silent.

Suddenly, his eyes light up. “Let me give you an example!” he says. Gaffney’s just found his next story. Here’s how he tells it:

He was down in Florida, fishing. He pulls up to the marina, after catching a 50-pound Oahu, and he’s feeling “really good.” Walking through the marina, he notices a boat a lot like his that has a logo: a flag with an eagle. He remembers that logo; it’s part of an acquisition he did at ITT. He looks up at the boat’s owner and says, “Hey, that’s a great logo!”

“Yeah, I’m a defense contractor,” the owner says.

“Really? I kind of do that, too — what company do you work for?”

“ITT.”

“I used to work there, too.”

“What’s your name?” the man asks.

“Steve Gaffney.”

“Mr. Gaffney! Thanks for making a difference!”

Gaffney pauses. “That’s what I want. To make a difference in companies, and in people’s lives … and to lay the pipe for the next 60 years here at DynCorp International.”

“If I could get all employees in our company to be aligned around the mission,” he adds, “to be committed to each other’s success, to be transparent in who they are and how they behave, so they can truly act as one and lock shields, we’ll win. You see it in sports. You see it in business. You see it in life.”

And, if Gaffney’s past performance is any indication, we’ll see it at DynCorp International, with this CEO making a difference.