SAIC Founder J. Robert Beyster Calls Moving Company HQ from San Diego to D.C. ‘Inevitable’—But Says He Probably Would Not Have Done It

9/29/09Follow @bvbigelow

The timing of my lunch yesterday with SAIC founder J. Robert Beyster was pretty close to impeccable, since it came just four days after the defense contractor formally announced the relocation of its corporate headquarters from San Diego to McLean, VA.

The departure of a Fortune 500 headquarters with a 40-year history in one city used to be the stuff of wounded civic pride—and great newspaper copy. I expected to hear at least some wailing and gnashing of teeth among San Diego’s economic development leaders, municipal elders, and other community kingpins. Big companies with established roots are often a crucial source of corporate philanthropy and financial support for symphonies, museums, and other cultural centers—so the loss of a Fortune 500 company headquarters is not just about bragging rights, either.

Yet San Diego heard barely a discouraging word about the announcement last week, while the governor of Virginia was crowing about SAIC’s arrival as the state’s fourth-largest company. So I was curious to hear what Beyster had to say.

“I felt it was inevitable that the move would occur because so much business is done in Washington,” Beyster tells me. He adds, “I’m not sure I would have done it if I was in charge,” and says the reason SAIC kept its headquarters in San Diego is because this is where he and his wife wanted to live. But he also notes matter-of-factly that he no longer has much say in the matter. “The important thing is that something stupid isn’t being done,” Beyster says. “It’s not at all a bad thing.”

Beyster, who is now 85, retired five years ago from the company also known as Science Applications International Corp. He was working as a nuclear physicist at San Diego’s General Atomics when he founded his own company in 1969 to provide government agencies with highly specialized services—such as calculating the yields of nuclear weapons. He’s told me previously the business was so specialized at first that he expected it to remain small. But he expanded SAIC by recruiting other prominent scientists, enticing them with offers of stock and leadership roles in an employee-owned company. Beyster went to extraordinary lengths to maintain SAIC’s culture of employee-ownership and entrepreneurship, creating a federation of high-tech business units that nuclear scientist Harold Agnew once described as “a farmer’s market with central heating.”

In many cases, the scientists Beyster recruited came with the government-funded projects they were already working on. So the company, which generated $250,000 in sales in its first year, has expanded over the past 40 years into a $10 billion-a-year juggernaut of government contracts.

Most of that business is conducted with government agencies in and around Washington, D.C., where SAIC now has about 17,500 employees. Only about 4,300 of SAIC’s 45,000 employees live and work in the San Diego region. As the San Diego Union-Tribune reported last week (and Beyster tells me he was accurately quoted) SAIC’s new CEO, Walt Havenstein, had called him to assure him that the company would retain a strong presence in San Diego.

Although he walks slowly and with a cane, Beyster still maintains an active life of the mind. He continues to write his own Internet blog—he’s done two guests posts for Xconomy, as well—about topics that interest him, especially innovative trends in science, entrepreneurship, and employee ownership. He is a tireless advocate for using employee ownership as a way to both motivate and reward employees, and his blog generates a lot of comments from both current and former SAIC employees.

In recent weeks, amid blog postings about global politics, industry awards, and ocean cruises, Beyster has issued articles on weightier subjects. Last week, he published the first installment of a three-part series called “A Long-Term Energy Solution,” which was preceded by a similar three-part series on cybersecurity.

When I asked why he’s writing about cybersecurity, Beyster tells me, “I think of all the things that might be a problem for the Internet in the future—that is the one.” Beyster’s longtime interest in the Internet also stems from SAIC’s acquisition of Network Solutions, and the company’s early role in the phenomenal growth of the Internet. He wants to write a book on the subject.

Beyster explains that his current series on the energy problem is the result of his lifelong interest in the field. His approach so far is realistic and even-handed, explaining that fossil fuels currently meet about 83.5 percent of our energy needs, while renewable energy sources such as wind, solar, and hydroelectric power account for less than 5 percent. As a nuclear physicist, he’s not about to disregard the potential of nuclear energy. But he also acknowledges that political support for nuclear energy in the United States is problematic, to say the least.

Beyster’s daughter Mary Ann also tells me that the Foundation for Enterprise Development, the non-profit group established to emulate SAIC’s approach to solving problems of national and global importance, also has provided funding for several energy-related initiatives. They include funding for “The MIT Sustainability Initiative,” which is intended to evaluate new business models that are emerging among clean and green technology companies—and to what extent broad-based ownership is part of those models.

Bruce V. Bigelow is the editor of Xconomy San Diego. You can e-mail him at bbigelow@xconomy.com or call (619) 669-8788 Follow @bvbigelow

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    I think moving the company from San Diego to D.C. could be alright if it is manages correctly. Anyhow thanks for sharing the story Bruce.