Chief executive officer and chairman of the board, Computer Sciences Corporation
Nationality: American.
Born: 1945, in Virginia.
Education: Franklin University, BS, 1971.
Family: Married Diana (maiden name unknown); children: one.
Career: Computer Sciences Corporation, 1975–1983, regional marketing director for time-sharing and value-added network; CSC Credit Services, 1983–1987, president; CSC Industry Services Group, 1987–1993, president; Computer Sciences Corporation, 1987–1993, corporate vice president; 1993–2003, president; 1993–1995, chief operating officer; 1995–, chief executive officer and chairman of the board.
Address: Computer Sciences Corporation, 2100 East Grand Avenue, El Segundo, California 90245-5024; http://www.csc.com.
■ Although he was one of the world's most powerful businessmen, Van Honeycutt was quiet, somewhat withdrawn, and unpretentious. He was the type of person who would pour his own coffee out of his own thermos at work. Yet presidents, prime ministers, and potentates worldwide sought Honey-cutt's advice on business, information technology, and security. When the United States created the Office of Homeland Security, Honeycutt was one of the first advisers to the new agency. During the presidency of Bill Clinton, Honeycutt had been a chief adviser on keeping America's communications systems secure. Honeycutt built Computer Sciences Corporation into an international powerhouse with more than eight hundred offices around the world. The company aided businesses in creating and maintaining information systems, business software, and networking. Honeycutt achieved success for Computer Sciences by making the company flexible enough to be able to find any sources needed to help its clients, even when those sources were companies other than Computer Sciences.
In 1971 Honeycutt received the degree of bachelor of science in business administration from Franklin University, Columbus, Ohio. He joined Computer Sciences Corporation in 1975 as a regional marketing director. At that time Computer Sciences was primarily a government contractor, emphasizing software solutions for information management. In 1983 Honeycutt was promoted to president of CSC Credit Services, a division of Computer Sciences that assisted commercial enterprises in the processing of loans. In 1983 CSC Credit Services had revenues of $22 million. By the time Honeycutt left the division in 1987, revenues had increased to $105 million, and CSC Credit Services was the largest Computer Sciences commercial operation.
In 1987 Honeycutt was made president of the CSC Industry Services Group as well as a vice president of Computer Sci ences Corporation. In 1993 he was named president and chief operating officer of Computer Sciences, and he was elected to the corporation's board of directors. From 1987 to 1995 Honeycutt led Computer Sciences into information technolo gy outsourcing, making outsourcing an $800 million business for the company. He also negotiated a 10-year $3 billion outsourcing agreement with the defense contractor General Dynamics.
In October 1994 William R. Hoover announced his retirement as chief executive officer, and in April 1995 Honeycutt was named CEO while retaining his position as president. Also in 1995 Honeycutt was appointed by President Clinton to serve on the National Security Telecommunications Advisory Committee, which advised the president on policy and industry-related issues as well as on the government's preparedness for national emergencies. In 1995 Computer Sciences had $3.4 billion in revenues. Honeycutt pressed hard for Computer Sciences to take on additional commercial outsourcing—the process whereby a business pays another company to handle some of its work. For example, Computer Sciences provides computer services for a company or perhaps manages a company's billing process. Honeycutt wanted to expand Computer Sciences outsourcing to encompass any service a client needed so that the client could focus on its core business. In 1996 Computer Sciences revenue increased to $4.7 billion.
In 1997 Honeycutt created new divisions for healthcare and financial services consulting and outsourcing, and Computer Sciences made deals to assist Johns Hopkins Healthcare and the J. P. Morgan company. In addition, Computer Sciences developed outsourcing services for hospital supplies distribution and insurance claims processing. Computer Sciences revenue for 1997 was $5.6 billion with a net of $192 million, almost double the profits for 1996. Honeycutt developed a corporate culture that journalists, employees, and colleagues alike considered "friendly." Hoover had been a gregarious, personable man, whereas Honeycutt seemed withdrawn, but Honeycutt was attentive to clients, and he was great at making deals. Even so, the friendly atmosphere at Computer Sciences and Honeycutt's gentle, withdrawn personality made Computer Sciences management seem weak to some outsiders. In late 1997 Computer Associates International, a software services company, made an offer to buy Computer Sciences. When the offer was turned down, Computer Associates International launched a hostile takeover bid, creating one of the most public and nastiest battles between major corporations in the late 1990s.
Computer Associates International offered $108 per share, a total of $98 billion, for Computer Sciences. It turned out that Honeycutt was not weak; he was an unpretentious person, but he was, as he described himself at the time (Lubove 1998); a "pain in the ass." To Honeycutt, Computer Associates International and Computer Sciences were antithetical companies. Honeycutt viewed Computer Associates International as a rigid company that insisted on having all services for clients developed in-house, whereas Computer Sciences had a flexible business model that encouraged finding solutions for clients even if those solutions were to be found in an outside company. Honeycutt was proud that Computer Sciences was objective in its analyses of its clients' needs, whereas he viewed Computer Associates International as a vendor that always tried to force clients to fit the services Computer Associates International itself had to offer.
The CEO of Computer Associates International was the computer-industry pioneer Charles Wang, who along with the company's president, Sanjay Kumar, had built the company into a corporate giant through acquisitions. Wang saw Computer Sciences as a good fit with his company because Computer Sciences had a worldwide sales force and success in financial services. Honeycutt sued Wang and Computer Associates International, asserting that Wang and Kumar had tried to bribe him into going along with the takeover by offering him $50 million in cash and stock. Wang insisted that talks with Honeycutt had focused on how much Computer Associates International would pay per share, declaring that Honeycutt had asked for $130 per share and that negotiations had eventually focused on $115 to $125 per share.
Honeycutt insisted that he had never negotiated with Wang and that Computer Sciences was not for sale at any price. Wang and Computer Associates International sued Computer Sciences in Las Vegas, Nevada, because Nevada laws favored the takeover bid. Wang declared that Computer Sciences was violating the law by not presenting the takeover bid to Computer Sciences shareholders for a vote. Computer Sciences changed its bylaws to require that 90 percent of its board members had to vote in favor of a takeover before it could be brought to a vote of shareholders. Wang accused Honeycutt of racism, because someone at Computer Services had said that Computer Sciences was at risk of losing its defense contracts, which were 29 percent of Computer Sciences business at the time, because Wang was a native of China and Kumar was a native of Sri Lanka. Computer Sciences quickly apologized.
Honeycutt took his case to Computer Sciences shareholders, arguing that a takeover by Computer Associates International would harm Computer Sciences customers because Computer Associates International lacked the flexibility and objectivity of Computer Sciences and that the takeover would harm employees because Computer Associates International had a history of firing large numbers of employees after successfully taking over a company. Wang promised that such firings would not occur. Honeycutt promised that Computer Sciences shares would soon be worth more than $108 apiece and that Computer Sciences would have an 18 percent increase in earnings for 1998. Journalists considered Honeycutt's promises difficult to keep because the U.S. Department of Defense was cutting spending, lowering potential income for Computer Sciences.
On February 10, 1998, the value of Computer Sciences shares increased to $106.94 each. On February 17 Computer Associates International officially initiated its hostile takeover bid. On February 19 Honeycutt pressed his case that the hostile takeover would damage customers and employees, two points recognized as a legal defense in Nevada, and that shareholders would lose money. Shareholders supported Honey-cutt, and on March 16, 1998, Computer Associates International let its offer expire, but not without Wang's writing a scathing public letter chastising Honeycutt for harming shareholders.
By May 1998 the value of Computer Sciences stock was near $108, and the stock was split. In a display of lack of flexibility that summer Computer Sciences turned down an outsourcing deal with the telecommunications giant BellSouth because at a consultant's urging BellSouth wanted to share the outsourcing deal with Andersen Consulting and EDS. On September 10, 1998, President Clinton appointed Honeycutt chair of the National Security Telecommunications Advisory Committee, which was then working on the year-2000 computer problem, which would have had millions of computers resetting their dates to 1900 on January 1, 2000. With help from Computer Sciences and other technology companies, the government managed to adapt its software and computers in time to avert the resetting to 1900. Later in 1998 Computer Sciences signed a $3 billion contract with the U.S. Internal Revenue Service to help manage the service's flow of information. By the end of the year Computer Sciences had 45,000 employees in seven hundred offices around the world and had won a reputation for toughness. By then three-fourths of its revenue was coming from commercial businesses.
In February 1999 Computer Sciences split stock was trading at $64 per share, the equivalent of $128 before the split and $20 dollars more than Computer Associates International's offer the previous February. Earnings had increased 24 percent. These numbers were above Honeycutt's promises of the previous February. For 1999 revenues were $7.60 billion. In January 1999 Honeycutt negotiated a $300 million deal with AT&T to manage AT&T's billing processes. More remarkable was Honeycutt's making peace with Computer Associates International through a deal whereby Wang's company would participate with Computer Sciences in outsourcing work.
On March 5, 1999, Honeycutt and Janet Reno, the U.S. attorney general, announced creation of Cybercitizen Partnership, an organization for teaching children the ethics of computer use, under the auspices of the Information Technology Association of America. The organization resulted from an encounter between Reno and Honeycutt at a technology meeting during which Reno had said that she was concerned about the lack of ethical behavior on the part of children online. The comment struck a chord with Honeycutt, whose 14-year-old daughter was learning impressive computer skills at school but seemed not to be learning how to behave online.
In the late 1990s the dot-com crash caused hundreds of high technology and Internet businesses to lose money or go out of business. During this difficult period, which extended into a worldwide recession in the early 2000s, Computer Sciences consistently turned a profit. Part of this success was a result of Honeycutt's communicating his vision for his company. On November 15, 2000, Honeycutt presented his view of what Computer Sciences was and what he envisioned it would become. This vision was not a by-the-numbers view but was more an exercise in classical philosophy. Honeycutt believed that success in e-business (electronic business) required inter-connectivity of customers, suppliers, and suppliers' partners and that the mission of Computer Sciences was to create that connectivity for its clients. As of November 2000 Honeycutt believed that Computer Sciences had been only partly successful and needed to do a better job of reconciling "legacy systems" of its clients with the new systems of commerce demanded by emerging e-commerce. Among the changes in which Honeycutt foresaw Computer Sciences playing a role was a shift in how business was conducted. "What's taking place now is that leading corporations in a handful of industries such as chemicals, automotive parts and even healthcare insurance are aligning with one another as they collectively capitalize on the Internet. These efforts will drive global e-commerce," said Honeycutt (2000).
By the end of 2002 Computer Sciences had 67,000 employees in eight hundred offices worldwide. Its revenue for 2002 was $11.426 billion with net earnings of $344 million. Clients included the U.S. Department of Defense, DuPont, the Massachusetts Institute of Technology, and Rolls Royce. Outsourcing accounted for one-half of the company's revenue. Computer Sciences was known as a good place to work because of its friendly, creative corporate culture, which included generous maternity leaves. Negative aspects of working at Computer Sciences were the grueling travel required for consulting with far-flung clients and a large corporate bureaucracy. On March 7, 2003, Computer Sciences acquired Dyn-Corp, strengthening its government services business and adding 26,000 employees to make the total Computer Sciences workforce 93,000 persons. On March 12, 2003, Honey-cutt transferred the office of president to Mike W. Laphen, who had been corporate vice president and president of the Computer Sciences European group. Honeycutt retained the offices of CEO and chairman of the board.
See also entry on Computer Sciences Corporation in International Directory of Company Histories .
Lubove, Seth, "A Pain in the Posterior?" Forbes , May 18, 1998, pp. 98–99.
Martin, Mitchell, "Firms Trade Barbs over Takeover: Computer Sciences Tries to Fight $9.8 Billion Bid," International Herald Tribune , March 4, 1998.
"New Levels of Connection, Integration Key to the Business of 'E': Focus on Business Process, Not Technology, CSC Exec Says," November 15, 2000, http://www.csc.com/newsandevents/news/172.shtml .
—Kirk H. Beetz
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