McDonough: How to make the jump to industry

Some tips on how to find a satisfying and financially rewarding job in the private sector

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About 4,000 political appointees and 3,000 career officials will leave the government during the 2008 presidential transition season.

Almost all of those who need jobs will find them with government contractors somewhere in Northern Virginia, the secondary capital of the federal government.

Former government officials come with recent government experience and contacts at high levels, giving the contractors that hire them an edge in widening current procurements.

With large or small companies, you can expect total pay as high as $250,000 per year, with bonuses of as much as $50,000, if you can help to meet certain procurement goals. The total initial salary depends on the last government position held, experience, contacts and public presence.

You might get hired by a small company or a big one. Although there are similarities, there are also some subtle differences.

In a small company, you can meet with the boss every day. In a large company, you will be far down in the hierarchy and might have a top boss who never leaves California, except for dinners at the White House.

In a small company, you must be a self-starter and do everything yourself. A large company will have mature management processes and a broader and deeper base of skills to draw upon. In addition, there will be full-time marketers. As a result, you will be able to spend more time on agency requirements, the real work.

But at any size company, obtaining new or repeat business is the primary goal. You need to arrange appointments — including breakfasts, lunches and dinners — attend events, and, in general, be out and about to maintain your contacts. One lunch can take half a day, not just one hour.

Most senior officials in companies spend no time on real thought pieces because the average agency customer cares only about a specific problem. Don’t expect to spend much time on visionary big-picture work. Agency customers are interested only in solving an immediate problem.

In a small company, you must perform many roles. Large companies support more specialization. The most prevalent jobs offered by large companies to former government officials are door-opener jobs.

These jobs come with many titles, but the bottom line is that your new employer expects you to take advantage of the contacts that you made in the government and bring company officials to meetings in government offices. These meetings can be productive because information is often shared that will be useful to both parties in planning. Government officials will be careful to provide similar meeting opportunities with other companies that make the request.

Door-opener jobs have a life span of about two years because by then your contacts will also have often left the government. In addition, you probably will wear out your welcome by the end of the two-year period. Some talented individuals will demonstrate additional skills in two years and will rotate into other jobs in the company.

Meanwhile, another option is becoming an independent consultant.

Marty Zimmerman, a West Point graduate and former senior official in the Army, is a role model for independent consultants who have helped clients understand how to win information and telecommunications business from government agencies.  

Zimmerman was outgoing, perhaps a Type A personality, and he knew and was liked by many people. His insights were available in a newsletter that he sent to clients for a fee. The information was current and valuable, so companies wanted it; even if they had their own sources, they wanted to know what their competitors were getting from Marty.

Many people are not good candidates to become consultants because they can’t look for new business and, at the same time, perform for current clients. Eventually, one’s knowledge becomes stale, the contacts drift out of government, and the business dries up.

My recommendation is to go for the gold and start your own company.

Recognize that you will need to come up with some $2 million in working capital for your start-up. Don’t be overwhelmed. There are people who can help you raise the money — for a price, of course.

Link up with one or more people eligible for the special procurement advantages awarded by the Small Business Administration to veterans, women and various ethnic groups. By law, you cannot own more than 49 percent of the company.

Nevertheless, under SBA rules, it will be much easier to grow the business to $50 million and sell it. Forty-nine percent, your share, of a typical $13 million sales price is about $6 million. If you take this route, be prepared to spend 10 years developing the company. Then you can join other entrepreneurs living on one of the five-acre horse farms in Great Falls, Va.

McDonough led GSA’s then-Office of Information Technology Policy. He has been a leader in watching how governments worldwide use IT. He can be reached at frank@frankamcdonough.com.

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