Dr. J. Robert Beyster is a La Jolla pioneer and success story.
Back in 1969, Beyster founded and became the CEO of San Diego’s Science Applications International Corporation.
He started the company in La Jolla in modest offices on Prospect Street behind a dance studio and overlooking La Jolla Cove.
Today Beyster is fully retired from the company and enjoys writing, philanthropy, investing and sailing.
During those 35 years, SAIC went on to become an innovative and cutting-edge corporation.
“I think it is helpful to understand the start-up of the company in the context of the American business environment in the late 1960s,” Beyster said. “There were two principles we employed that were radical at the time. One was employee ownership. This was a time when ownership in privately held companies was generally considered a privilege granted only to the founder and a very close circle of top executives. From the very beginning, we used company stock to recruit, retain and motivate employees. As the company grew, the value of their stock increased accordingly.”
Although now retired, Beyster is far from inactive.
He has written a book titled “The SAIC Solution: How We Built an $8-Billion Employee-Owned Technology Company.”
The book details his experiences during the start-up and success of the corporation.
Little did Beyster know, but back in 1969 he was about to embark on a phenomenally successful business venture in which a small group of nuclear physicists with just a few government contracts would grow into a success story.
SAIC became one of the largest technology integration companies in the world, a major defense contractor and San Diego employer.
“I believe we were successful because we focused on work that we enjoyed and could do well. We concentrated on serving our customers and making the customers happy, and we were not motivated strictly by making money,” Beyster said. “I think anyone can be successful in whatever field he or she chooses if they follow those simple principles.”
The book was written with the assistance of business author Peter Economy and was published by John Wiley & Sons.
“If I had to write the book entirely by myself, it might have taken forever, but fortunately Peter Economy, a noted author of business books, joined me, and that was a big help in getting a manuscript prepared,” Beyster said. “As it turns out, we were able to finish the book in six months with input from many people.”
Published this past March, the book is based on 12 business principles that Beyster followed to build SAIC into an $8 billion business.
“I learned a great deal during my tenure at SAIC,” he said. “Some of the lessons I learned I thought had lasting value and deserved to be told.
“I was particularly concerned that other companies are not pursuing employee ownership, and I thought the book might interest more people in building employee-owned companies.”
At SAIC, Beyster not only gave employees a financial stake in the company but the freedom to participate in the day-to-day decision-making within the organization. Employees acquired new contracts and managed them.
When Beyster retired from SAIC in 2004, he held only a small percentage of ownership in SAIC.
This is a tribute to his belief in employee ownership, the balance of which was already granted to employees, managers and directors over the course of the previous 35 years.
“SAIC was also unusual because we created a culture where employees were encouraged to experiment constantly,” he said. “This was a time when the ideas espoused in the book ‘The Organization Man’ were in full bloom. Corporate managers and employees were rewarded for conforming rather than for thinking outside the box.”
At the time, Beyster put a lot of decision-making authority and financial resources in the hands of the people working at the company.
“We worked closely with them to make sure no one abused this privilege, but we were fairly open to ideas in a lot of areas,” Beyster said. “It turned out that our employees liked to work on exciting and challenging projects based on their merit, and the company took off based on that approach.”
“The SAIC Solution” has enjoyed a successful launch.
“Sales have been excellent,” Beyster said. “We have held several book signings in San Diego and the Washington, D.C. areas, where there are large concentrations of SAIC employees and former employees, and hundreds of people turned out to greet me and have their books signed.
“We have been gathering comments from people regarding changes and additions they would like to see in the book and are now planning for a second printing that would include input from the readers.”
Along the way, it wasn’t always easy for Beyster.
“I overcame a career crisis that led me to found SAIC,” he explained. “I was working at General Atomic, a San Diego company, where I was chairman of the Accelerator Physics Department. I became frustrated because over time it became clear that the management of the company only cared about profits and were not particularly interested in the work my department was doing. A few people joined me. We received some government contracts and grew and were profitable in the first year. Changing careers was a risk, but it turned out to be the best thing that ever happened to me.”
As with his career and starting SAIC, there were challenges in getting the book done as well.
“We had to decide if we were going to do a chronological presentation of the history of SAIC or make it a more topical presentation,” Beyster said. “We chose to discuss important issues facing the company and management rather than writing a decade-by-decade history because we thought it would be of more value to a greater readership audience who are interested in applying our experiences to their own businesses.”
Twenty years ago, in 1987, Beyster wrote a pamphlet called “The Principles and Practices of SAIC,” describing 12 important principles that were used to guide SAIC.
“Later, those became chapters in the book,” Beyster said. “And, I added a chapter on my view of the future also. If I started a company today, the company would be employee-owned and would address nationally important programs, specifically in defense and counterterrorism, energy, health, and the environment. There are tremendous challenges and opportunities in all of those areas if we are going to maintain our quality of life.”
In retirement, Beyster remains interested in competitive sailing. He is an avid supporter of the U.S. America’s Cup yacht racing team.
“My interest in sailing developed when I was about 50,” Beyster said. “The whole family had an interest and we took our sailing lessons at Mission Bay learning in Sabots. I bought a used boat and spent many Fridays sailing. I really enjoyed the relaxation. My interest peaked when the U.S. lost the America’s Cup in 1983 and I felt it reflected a weakness in the naval architecture technology selected by the New York Yacht Club.
“I felt that the naval architects at SAIC could discover where the boat design was wrong and make sure the U.S. did not repeat the mistakes of the past. We talked to Malin Burnham and Dennis Conner and they felt we had a point.
“They gave us a role as a major participant on the technical team. After the San Diego Yacht Club beat Australia in Freemantle in 1987, I became even more enthusiastic about sailing and built a new motor sailor, from which we watched the races in 1988.”
In early June of this year, Beyster and his family were off to attend the America’s Cup matches in Valencia, Spain.
“We attended previous Cup matches in New Zealand and, of course, in San Diego,” Beyster said. “SAIC was a big sponsor of the races during the 1980s and our hydrodynamics engineers, who had been working on hull designs for the U.S. Navy, helped design some of the boats that won back the Cup from Australia for the United States. We were very proud of our involvement in the America’s Cup and the success we had.”