Citybizlist Exclusive - Q&A with John Belcher, Chairman and CEO of ARINC
John M. Belcher
Citybizlist: As a global company with more than 120 locations worldwide, what advice would you offer to other fast-growing organizations that are considering international expansion? What are the biggest operational challenges and risks to consider up front?
John Belcher: In the past 13 years we have built a global company with products and services in over 140 countries by introducing our core businesses to an international market. These were business platforms that had been the backbone of our services offered in the U.S., in particular our aviation, airports and networks platforms. We started with a regional office in London then concentrated in placing a sales team throughout Europe. Within two years the EMEA Region became a major profit/loss center for the company. Nine years ago we deployed the same strategy for Asia/Pacific opening up our Asian headquarters in Singapore. Key to our success was the establishment of International HQ’s in countries that have sound legal systems, are politically stable, have good infrastructure, an educated workforce and are easily accessible by major international airlines. It is important to hire local nationals in each country as they best understand the culture, local business and regulations. You need to be sure you are setting up the right legal structure for your company as it will be different in each country.
Citybizlist: As a veteran of the aviation, IT, and defense industries, what do you see as the biggest challenges—and opportunities—facing your marketplace in the coming years? How does this influence your company’s future vision and strategy?
John Belcher: We have built a global solutions company with engineering excellence by providing mission critical systems using our communications, IT and systems engineering capabilities across seven major platforms - Aviation, Airports, Rail, Security, Public Safety, Aerospace and Defense. There is no doubt that the global economic environment is challenged and is facing severe issues. There are downturns in many parts of the world economy which the media report on a daily basis. Here in the USA, the Department of Defense has obvious challenges with the present political/budget crisis that will impact the number of opportunities available for defense companies to bid on. The aviation industry historically is cyclical with the financial health of major airlines varying depending on circumstances, but globally the industry is growing overall. I believe that our globalization and diversification of engineering platforms will see us through this tough economic environment. Today our airports business is flat in the USA but growing very well in South America, Asia and Europe. Our solutions for the business jet marketplace continue to grow throughout the world but in particular in Brazil, China and India.
Citybizlist: In 2010, ARINC sold SKYLink airborne broadband service to ViaSat. How did this strategic move help refocus your core products, services, and priorities moving forward? What results were realized?
John Belcher: Over the past four years we have closely looked at our new startup businesses and felt that in this economy we should focus on our core platforms and in particular stay with B to B operations vs. B to C which is not where our strengths or expertise lie. We shed and/or delayed some of our new start up initiatives with the result being a large increase in overall profitability through the managed extension of new applications in our core platforms.
Citybizlist: Can you describe a pivotal, game-changing decision or moment that led the company to where it is today?
John Belcher: I would say our decision to become a global company combined with building new platforms in the rail, security and public safety sectors was a turning point in moving the company forward. Over the past five years we have also instituted two 100 day plans that focused on increased productivity, reduced unnecessary costs and streamlined our operations. These plans had positive impacts on the bottom line during a time of global economic uncertainty. You have to be ready to change to meet a changing climate.
Citybizlist: How did ARINC strategically decide where to establish offices? How do your regional offices throughout the U.S., Europe, and Asia allow you to better serve customers?
John Belcher: As mentioned in question 1, we selected Crawley (near Gatwick Airport), UK, and Singapore as our international headquarter locations because of legal systems similar to the USA, excellent labor markets, and being centers of commerce in their respect regions. We also have in-country offices that allow our staff to be close to their customers . Local offices also allow us to hire local nationals who understand the culture of that country and speak the language.
Citybizlist: In your opinion, which business processes are most critical when expanding internationally?
John Belcher: Single back office systems that can be accessed from any location in the world are important baseline infrastructures that allow for proper business management. There is more emphasis now due to increased regulation and laws regarding foreign corrupt practice acts in the US and UK that we are investing a large effort in educating our entire workforce. ARINC takes very serious its role as a trusted provider of products and services to the international community and will often refocus its efforts away from areas of the world with questionable procurement practices.
Citybizlist: Whether dealing with M&A or overseas expansion, how can fast-growing companies successfully adapt to new cultures?
John Belcher: I believe we have created a good model for growth across the company . It is important to continue with the model that has given us success. Internationally we hire the best local people that will grow with us and contribute to the vision we have for growth. We have very few ex-pats overseas and rely heavily on this approach for success. Today we provide communications technology for over 300 airlines around the world. Over 10,000 aircraft take off and land each day with ARINC’s help. 350 Million passengers per year use ARINC airport products and services somewhere in the world.
Citybizlist: Are mergers or acquisitions on the horizon for ARINC? What factors or business needs might influence your M&A considerations?
John Belcher: For any significant business expansion ARINC always undergoes a buy or build evaluation. Sometimes it is more efficient and can increase your speed to market of the technology is acquired. For example, our rapidly growing security of key infrastructure business line was fueled by a key acquisition of technology. We have also greatly succeeded by building our own technology out for a business – our ARINC Direct Business Aviation Service Center was locally grown here in Annapolis and is now one of our fastest growing, most profitable businesses. ARINC continues to look for key M&A targets that would provide new capabilities to our established market positions.
Citybizlist: What’s next for ARINC? What opportunities do you see to further scale your business, and how are you using technology to fuel growth and revolutionize your industry?
John Belcher: ARINC continues to scan the emerging technologies for new areas of growth and has a group dedicated to that purpose. As a communications service provider and technology company we are looking at new areas of broadband, cloud computing, near field communications and enhanced network security systems. It has been a goal for ARINC over its 83 year history to maintain a technology leadership position in all of our markets.
Our level of achievement reflects the commitment of our employees in all areas and at all levels of our company. Their dedication to our customers and their continuous drive to deliver meaningful products and services fuel our success.
John M. Belcher
Chairman & Chief Executive Officer a
John Belcher came to ARINC in 1997 as President and Chief Operating Officer, and in 2002 was appointed Chief Executive Officer of ARINC Incorporated. In 2004, he was also named Chairman. John has more than 30 years of experience in the aviation, information technology, and defense industries.
Previous executive positions include President and CEO, Hughes Aircraft of Canada, Ltd.; Vice President, Hughes Aircraft Company; President and CEO, Thompson-Hickling Aviation; Senior Vice President, SPAR/PRIOR Data Sciences; Executive Director, Transport Canada; and Director General, Supply and Services Canada.
A leading authority in aviation and air transportation, John served as Chairman of the Canadian Advanced Technology Association, President Advisory Board University of Waterloo, and on the Board of Directors for numerous national trade associations and aerospace technology companies.
In 2005, he was selected as one of Maryland’s top business executives, receiving the annual Maryland International Business Leadership Award, and was named the 2005 Business Leader of the Year for Annapolis and Anne Arundel County. Previous honors included the Canadian National Transportation Award. In 2012 he was named the Outstanding Volunteer Fundraiser of the Year in Maryland.
He received a BS in applied science from the University of Ottawa and a postgraduate diploma in communications systems engineering from Queen's University.
Mr. Belcher is deeply involved with his industry and community and believes in giving back. He is a graduate of Leadership Maryland, Vice Chair for Historic Annapolis Foundation; Chairman for the Anne Arundel Medical Center Foundation; Chairman for the Anne Arundel Medical Center Capital Campaign; Board of Directors Anne Arundel Health System; Board of the Greater Baltimore Committee, Maryland Governor’s Workforce Investment Board and the Governor’s Federal Facility Advisory Board; Vice Chair for Maryland Theatre for the Performing Arts (MPTA); and Board Member World Trade Center Institute Baltimore. He is a past member of a number of organizations, including: St. John’s College Board; the Advisory Board for North Western University Transportation Centre; National Chamber of Commerce Presidents Council; Board of Directors, International Aviation Management Training Institute; Board of Directors, Advanced Toll Management Systems Corporation; President of the Advisory Board, University of Waterloo; RTCA Policy Board; Federal Government Advisory Board on ATC, and the Greater Washington Initiative Board.
Nationality: U.S. Citizen
Languages: English; French (secondary)
• B. Sc. in Applied Science (Eng.), University of Ottawa
• Post Grad Diploma, Communications Systems Engineering, Queens University
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