Tim Conver, chief executive of fast growing unmanned aircraft maker Aerovironment, has presided over the ascent of the company from a small niche enterprise to the market leader in an increasingly popular field. Monrovia-based Aerovironment designs lightweight, hand-launched airplanes that can provide reconnaissance to troops on the battlefield.
The Defense Department this month revealed that its unmanned aircraft had logged more than 500,000 hours in flight and it expects flight time to soar higher in the future. This year alone, the military expects to use Aerovironment’s popular Raven plane for about 300,000 hours. The popularity of the aircraft is evident not only among the military, but also on Wall Street. The $200 million company went public last January, with an initial offering of $17 per share. On the eve of its one-year anniversary of trading, its shares are at about $23 a 35 percent jump. Conver credits the enduring vision of company founder and aviation icon Paul MacCready for the success of Aerovironment. MacCready, a pioneer of human-powered flight, died of
cancer last summer, at which point Conver took the reins of the company. Conver recently sat down with the Business Journal at his office
at the company’s production facilities in Simi Valley to discuss the outlook for Aerovironment.
Question: Do you have an aviation or aerospace background?
Answer: I had a business education and really a business background. But I’ve always been involved with technical product companies. I had the sense early on that I was the lone business weenie in a group of brilliant engineers. With as many brilliant engineers as we’ve got, they don’t need me giving them any technical advice.
Q: If you’re not stepping in to tinker with the products, what is your role here?
A: My involvement is more a matter of looking at our R & D; as a portfolio a portfolio that’s ultimately headed toward commercialization of large new businesses. That tends to start with a lot of ideas. Some ideas come from customers, some ideas come internally. There’s a lot of time in that process and there’s a lot of attrition. My involvement there is really oversight and facilitation in the portfolio management of that technology.
Q: What’s an average day like for you?
A: I don’t know that there really is an average. We really have three parts of the business: The first is the unmanned
aircraft systems business. The second is the efficient electric energy business. And the third is what we call the energy technology center, which is the research and development area. We support a number of customers. From my
perspective, I’m looking at where the company’s going and how are we getting there and how do we integrate all of those parts. Each one of them is focused on their set of customers and their set of products and their set of technologies. So staying No. 1 with those customers, competing for market share and developing new solutions for that customer base is what I do.
Q: Do you travel much?
A: It runs in spurts, but I can end up moving around quite a bit for different customers.
Q: What skills do you think it takes to run a growing company like this?
A: A key part of it is understanding what got us here and what our strategy is for continuing on and enabling those aspects of the business. For example, we pretty much have boiled down the pillars of how we operate to innovation, being No. 1 with customers, being a good place to work, and trust and integrity. If that’s the how, the what is doing what we think is important work and what our customers think is important to them.
Q: So what about this company drew you in?
A: I was working at a company called Whittaker, which was a conglomerate based here in L.A. I met Paul MacCready in a business organization that we both belonged to and we just got to know each other. He had a fellow on his board that was the token business-operating guy who took a job as a deputy director of NASA, so he had to divest his stock in private enterprises and I ended up buying his stock and I became the token business-operating guy on the board.
Q: MacCready was an aviation pioneer and a well-known name in the industry. What do you think his legacy will be?
A: That’s probably like with presidents you won’t know for 20 years because of the gestation period of innovative technology. He was a real visionary. He looked at the
human-powered flight challenge and came up with a solution that had been evading people for centuries. Overall, I think his worldview led to conclusions about efficiency and balance and practicality and a propensity to solve problems in a
fundamentally different way, all of which have become part of the culture of this business and attracted and motivated people in the organization.
Q: You recently took over for him as chief executive. How does your style of leadership differ from his?
A: Not many of us can see over the curvature of the Earth, but he did a pretty good job of it. I think Paul was a real, live visionary. Where Paul’s primary focus was what are the global problems that we’ve got and how might those be addressed with very few constraints on defining the problem or the solution, I tend to be more focused on implementation and getting from where we are up to the horizon.
Q: As different as the two of you were, I imagine you must have butted heads a few times over the years.
A: I joined the board of the company in the mid-’80s and then I joined the company as president in the early ’90s. So we essentially had been partners for 16, 17 years or so. I don’t think we ever had a single disagreement on a business decision.
Q: The military recently announced that use of unmanned aerial vehicles, particularly your company’s Raven, has surged. How is the company doing?
A: It’s a pretty dynamic time for Aerovironment. We’re growing pretty rapidly. The company has a long history of developing innovative new technologies a lot of things that had never been done before and they range from some of the smallest and largest wingspan unmanned airplanes and
solar-electric-powered cars, things of that ilk. That innovation has evolved into the business that’s housed in this facility, which is small, unmanned aircraft systems. We’ve become the leader in that segment of the defense market.
Q: The company has been around for decades, but unmanned aerial vehicles haven’t really been used on a large scale for very long. When did they start to catch on with the military?
A: I think the real impetus for the large-scale market adoption of this technology happened in Afghanistan, when special forces units had the systems with them when they initially went in on Operation Enduring Freedom. They were so significant to the effectiveness of those forces and they saved so many lives from Day One that the demand-pull from the users went all the way up the chain of command and over to Congress and back down. They then moved from special forces to Marine Corps and Army and Air Force troops. It has now become really a standard tool in the U.S. Defense Department across all services.
Q: The United States has significant military operations in the Middle East. If the fighting were to stop, how would that impact your company?
A: There are currently two active programs that we supply. I think if we left Iraq tomorrow, every one of those programs would continue. They’re in the budget. It’s how they train, it’s how they operate. Now, night vision goggles, helmets and rifles are in that same category. I think the procurement would continue unabated because there are acquisition objectives.
Q: What does that mean?
A: Each service has decided in its programs of record that they’re going to need a number of Raven systems per combat brigade and they bought about a third of those already. They’re going to keep buying those until they fill that out, so whether they’re in a hot war or not, in my opinion, that procurement will remain unabated. And as they buy, they have to train. And as they use them, they have to buy spare parts and repairs. That will continue.
Q: How many unmanned aerial vehicles are in use by the military?
A: There are thousands. We have supplied thousands of airplanes to the Defense Department and that rate is continuing. We think it’s still in the early stages of adoption.
Q: If this is still the early stage, what is in the future for Aerovironment?
A: Certainly for the next five years or so we think we’re in a position to continue to grow at 20 to 25 percent a year compounded. The compounded growth of the company for the last four years is 54 percent.
Q: Do you have any new airplanes in the works?
A: We’re developing an entirely new high-altitude, long-endurance unmanned aircraft system called Global Observer. It’s a large airplane, designed to fly for about a week at a time in the stratosphere, about 65,000 feet. It flies up, parks over any part of the globe that one would want it to be and just circles there. So it acts like a geosynchronous satellite, except it’s much closer to Earth. Applications would be the kinds of things you might otherwise do from
satellites: telecommunications, intelligence, reconnaissance, surveillance, communications relay.
Q: And aren’t you developing a weaponized plane?
A: It is referred to as Switchblade. It operates with the same kind of cameras that these airplanes operate with. It’s controlled by the same ground-control system. But it also is designed to carry a small explosive device. If all of a sudden some snipers are on the backside of that building someplace and we can’t get to them, we can literally pull this 4-pound tube out of our backpack and stick it on the ground and shoot a 2-pound airplane out of it. And with our ground control it can fly over there and find them. Then the plane flies into whatever was in the picture, and blows up when it gets there.
Q: You must have played a key role in getting Aerovironment to where it is today.
A: My preference is to talk more about the company and less about myself.
Q: Are you just being modest? Do you think an individual person can or should have much influence on the direction of the company?
A: I think my reluctance to get into that stuff is the propensity for the results of an enterprise to be tied around an individual. I think it detracts from the reality of enterprises and the significance of everyone else in the enterprise that ultimately contributes to what it is. I just don’t like that concept, so I’m not really amenable to playing that game.
Q: So how do your employees impact the direction of the company?
A: I think the fundamental thing that I found compelling about this group of people was not only had they been doing things that had never been done before, but once they finished one thing, they would consistently set out to do something else that had never been done before and they inevitably did what they said they were going to do. A lot
of companies could do something that’s
never been done before, but not too many make a living of that for decades. The group of people here in this organization is still the best in the world at what they do, and that’s one of the pillars of how we operate.
Q: How do you find people that can maintain a legacy of innovation?
A: That’s an obvious ongoing question. But amazingly, we have been successful to continue to attract that level of talent. Even seven, eight years ago, when technical people were extraordinarily scarce in the market, we continued to have a unique opportunity.
Q: True innovation takes effort and ambition that some workers might not be willing to invest. What do you think it is about these employees that keeps them dedicated to the work?
A: Believing that what we do is important. A lot of them are passionate about that.
Q: Have you taken any of the unmanned aerial vehicles out for a spin?
A: I actually have not flown the airplanes.
Q: Never? Wow, that’s surprising.
A: I’m not a competent pilot. Our guys that fly them are so good that I figure it’s academic for me to learn. They probably don’t need me testing the lower bound of the operating system. I’ve gotten some customers and several congressmen to fly them.
Q: Congressmen?
A: David Dreier represents us here in Monrovia and I got him interested in the company 15 years ago with our electric car work. He came out to look at the airplane part of the business. We took him out and he was successful on his second launch.
Q: His second launch? What happened the first time?
A: We picked the airplane up off the ground and put it back together.
Tim Conver
Title: Chief executive
Company: Aerovironment Inc.
Born: 1943; Long Beach
Education: B.S., business, University of
Montana; M.B.A., UCLA
Personal: Lives in Chatsworth
