2001 Fantastic 50:Cherokee Information Systems and Tech

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Fantastic 50
Complete listing of the 2001 Fantastic 50

Technology winner
Sometimes slow is the best way to go

by Robert Burke

The reason Cherokee Information Systems has grown so fast, says CEO Michael Hodges, is that it started out slow. The fledgling firm’s first hurdle after Hodges formed it in 1990 wasn’t finding customers, it was clearing the red tape involved in doing government contract work. "I wouldn’t let the company grow," Hodges says. "What I wanted to do was build all the infrastructure," such as gaining security clearances, "before I ran all over town telling everybody I could do everything."

Company founder Michael Hodges left a 22-year career with the Army hamdling computer networks and systems to found is own successful government contracting firm.
Photo by Mark Rhodes

Then, in late 1995 — after gaining certification in the Small Business Administration’s 8(a) program for minority-owned businesses — Hodges got aggressive. His efforts paid off: revenues in 1996 were a modest $355,580, but rose to $6.1 million in 1999, a rate of 1,612 percent.

That’s not even the best part, Hodges says. The Arlington-based company just won its largest contract ever — a five-year, $80 million job with with the federal Defense General Supply Center in Richmond that will help push its revenues this year to more than $20 million. It opened its first satellite office there and has hired 160 people to support the project. "My goal by 2004 is to have $100 million a year in revenue," Hodges says. "We are very much on track for that."

He credits the effort of those early years for the current success, and says that conservative style is still part of the company’s character. "One of the keys to our success is that we’re very straightforward and honest with our customers and employees. We try not to say something that isn’t going to come to fruition," he says. Sometimes that means walking away from a potential contract, but Hodges says that’s better in the long term. "I think an honest and open team spirit is what really comes through when we talk to our customers." The company has built a reputation for reliability, he says. "We’re not going to IPO, we’re not a dot-com. We’re going to get to the end of the race in a very conservative, well-thought out process. I think our customers see ... that we’re really looking to provide solutions in a long-term relationship."

Hodges has the right background for this work. He holds two advanced degrees in computer-related fields, taught computer science at the University of Hawaii and served 22 years in the Army working on computer networks and systems before retiring as a lieutenant colonel. His time in the service showed him the opportunities for private-sector computer support of government and military missions.

In a nutshell, what Cherokee does is give clients use of advanced technologies without the hassle of building that expertise from the inside, Hodges says. Its government customers include the Department of Defense, the Federal Aviation Agency and the Federal Emergency Management Agency. Commercial clients include TRW and Unisys. And the firm is cleared to work on highly sensitive projects. It’s currently developing new programs to help the federal government track its stockpile of nuclear weapons.

The company’s status as an SBA 8(a) firm — as well as its name — comes from Hodges’ Cherokee ancestry. Both his parents have Cherokee roots, and his father grew up next to the Cherokee reservation near Tahlequah, Okla. The SBA program is designed to help small disadvantaged companies compete for federal procurement contracts.

Hodges’ ambitious growth plans are likely to bring major changes that could include opening more satellite offices — in Philadelphia and maybe Ohio — plus new rounds of hiring. The old guard of ex-military and retired civil-servant employees who built the firm is being joined by refugees from dot-coms. This mix of backgrounds creates "a conservative but a very flexible and open-minded company" and Hodges credits them for Cherokee’s success. "I would like to say there’s some magic formula but there isn’t. It’s just hard work."

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