Trying to overcome Blackwater: the case file on ACADEMI CEO Ted Wright

Traffic out of DC was at a standstill on the Tuesday before Thanksgiving, but it wasn't a bad thing for Ted Wright. The newly-hired CEO of the company once known as Blackwater, (and later renamed Xe Services) could use the time to think. Wright had taken the helm of the world's most notorious private contracting company less than five months earlier and was about to make an incredibly bold move: changing the name of the company to help revamp it's tarnished image.
Before the company was sold to a group of anonymous investors a year ago, Blackwater had earned a public reputation for breaking the rules.

"It was just this huge sense of arrogance that I don't have to follow the rules of the United States government, I don't have to follow the rules of business, I don't have to follow any of that crap," said Wright. "That was my initial impression from the outside looking in and I knew that is behaviors, that is not culture. Their culture was, they're darn good operationally. And they cared about what they were doing. Their behaviors were what made them appear to be arrogant. It's a lot easier to change a behavior than it is to change a culture."

A lot of the heavy lifting when it came to changing the culture had been done by the time Wright arrived this past June. A name change had been tried to create distance from Blackwater. The company was renamed Xe. Most of the company's original top management team had been relieved of their duties when the new owners came in, but many of the people at the lower levels stayed.

Some of them had been there almost since the beginning a decade earlier, when Blackwater got its start a training business. Owner Erik Prince, a former Navy SEAL, used a sizable inheritance to start the company and then started pressing for more government contract work. The first financially significant customer was the U.S. Navy, which came knocking after the bombing of the USS Cole in 2000, when the Navy realized how poorly its seamen were prepared at warding off, or responding to terrorist attacks. Then came the wars in Iraq and Afghanistan and business boomed. Prince found success providing private security teams for some of the top U.S. Diplomats working in Iraq.

But Afghanistan and Iraq in the early days of war, were the epitome of the wild west, and Prince's men were seen as acting as if they were the new sheriffs in town. Effectively accountable to no one in those early days, because of an incredibly complex legal and oversight structure, some of Prince's men began earning a reputation for being heavy-handed in their actions against Iraqi civilians.

Even if large numbers of his men were highly respected and appreciated by their government clients, the few who caused trouble were enough to ignite a public relations firestorm. The reputation problem was only compounded in September 2007, when a Blackwater team unleashed a barrage of firepower in a Baghdad neighborhood traffic circle that ended with the deaths of 17 Iraqi civilians. The bloodbath was too much for the company to overcome. Prince tried changing Blackwater's name to Xe Services, but eventually gave up and walked away after years of trying to reinvent. Even under new ownership, remnants of the cowboy image remained. It would be tough for anyone to turn that around.
Wright knew what he was getting into when the headhunter called earlier this year. Still in his 50s, he had built a career as a defense contracting executive. He had served as President of Technology Services and Solutions at BAE Systems before moving to KBR, where he was the Business Unit President for North American Government and Defense. Now he was taking the helm of a company villified by some members of the press, and some members of Congress. It wouldn't be easy, but the challenges he had faced in some of his previous positions, quite frankly, left him bored.

"I was just another guy," said Wright. "I was a guy in a huge ocean running a little pond,"

It was his wife who encouraged him to take on Xe, even though he'd only been at KBR for 9 months. According to Wright, she had told him "KBR doesn't need you, they'll just put another guy like you in there."

"The challenge with Xe is to me, they've got a lot of similar issues to KBR, problems with the press, problems with the Hill, problems with their reputation," said Wright. "But the future is about security, its a dangerous world."

As Wright made his way to the company's training facility in Moyock, North Carolina, to hand out pies ahead of the Thanksgiving holiday, he thought about the challenges ahead. He had commissioned a New York public relations firm to come up with the company's third identity, and he liked the name. 'Academi' wasn't his idea, but it portrayed a sense of knowledge and training that he found consistent with the direction in which he wanted to move the company's image. So far, the few clients he had shared it with seemed to like it, but he was worried about the detractors, and wondered whether the people who really mattered would accept it.

"The biggest thing in my mind is 'Will the press, will members of Congress, and others continue to say its just a name change? Will they accept this as real change now?'" wondered Wright.

There would be other challenges ahead for the company, like getting staffing levels on some of their contracts from 80% to 100%. It was tough, there were only a limited number of experienced people willing to pick up and head to Afghanistan, and they were being heavily courted by other companies competing in the same arena. He knew that there would be a need for trainers and that's where he had his eye when it came to new business.

A couple of days before the name change announcement, Wright sat in his high rise office space in Roslyn, Virginia, offering a perfect view of the nation's capital.

Wright and his wife had gone back to Moyock the previous weekend for a children's Christmas party.

"A half dozen employees were wearing Blackwater paraphanalia," said Wright. "My first instinct was to tell them not to wear that anymore, but I decided not to. I don't want to insult what they think of the company. You gotta earn it over time. The day I see this logo on jackets more often than the Blackwater logo, I'll know that employees have gotten the message as well."