The story of Standard Management Chairman and CEO Ronald Hunter and his company is one of reinvention. Everything within Hunter’s reach — Standard Management, his employees, the community, even himself — is liable to change when Hunter sees opportunity for improvement.
Hunter quickly learned that reinvention is key in business.
“I have recognized one common bond among truly successful people,” he says. “All of them have lived through adversity. No matter who I’ve met, the person has lived through some kind of adversity and overcome it. We’re all given the opportunity to fail. Success is never certain.”
Hunter’s own dose of adversity came when he was 38 years old.
“After having helped a New York Stock Exchange company, I leveraged a buyout of a company in 90 days,” he says. “Twenty-six days later, I was $90 million underwater — I had bought a failing company.”
Hunter filed for bankruptcy but didn’t give up.
“Looking back, I would have sought deeper and more diverse advice before I bought the company,” he says. “But the experience gave me skill sets, like patience. I learned a side of business that few learn. I saw the dark side of how greed and lack of responsibility by others enter the picture. It was every man for himself. It took real discipline and ability to get through it. I received an MBA in the school of hard knocks.
“But I do not believe that people fail because of lack of talent, money or desire. There is only one reason that the majority of people fail, and that is they quit too soon — they don’t want to pay the price. I firmly believe that is true.”
Rather than quit, Hunter tried a different approach to business. Instead of buying an existing company, he decided to create his own. Hunter left his successful career with a New York Stock Exchange financial services firm to found Standard Management, a financial services company that offered retirement savings programs as its primary product.
Hunter’s main strategy was to focus on encouraging sales. He developed a business model that delivered the product to the consumer and the commission to the salesperson within 24 hours of purchase. This, coupled with excellent service, gave the company its competitive edge. Under Hunter’s leadership, the company grew from $60 million in assets to its current value of more than $2 billion.
But over time, Hunter began to see a different future for his company, one not in financial services, but one in health care.
“Guiding every company’s life cycle is the need to recognize and address change to attain a higher level of success,” Hunter says.
So, two years ago, Hunter and his executive team decided it was time to reinvent Standard Management. He went to the board and asked for more than $14 million to invest in a new project — U.S. Health Services, a national pharmaceutical and medical supply service that would function as a subsidiary of Standard Management. The board agreed, and Standard Management shifted gears.
Hunter chose to enter the health care industry, he says, because “Risks are more controllable with higher gross margins [such as those in health care], and we believe improved operating results can be achieved in a shorter period of time. We are optimistic that through a combination of organic growth and acquisitions, we can achieve $300 million in revenue by year end 2008.”
To complete its transformation from finances to health care, Standard Management is in the process of selling its financial services company, Standard Life Insurance Co. of Indiana. At press time, the sale had been approved by shareholders but was not yet finalized. When complete, the sale will free up time and resources to devote to U.S. Health Services.
“That is rarely done,” Hunter says. “It really took someone with a strong background and the intestinal fortitude to do it.”
But Hunter isn’t worried that reinventing Standard Management as a health care services firm might be the wrong choice. He’s confident that he can make the right acquisitions and continue to grow the business.
“We just bought a very large optical company with 300 employees that makes $40 million a year in revenue,” he says. “We were able to be the winning bidder for the company because we were able to articulate our culture to the management of the company. We were able to get them to buy into my philosophies of internal and external sharing, and our value system. We will build the company on this value system. You cannot expect an economic system to work if you don’t have a value system that works.”
Outside endeavors
Hunter’s value system revolves around not only improving his company, but also changing and reinventing communities. And these aren’t isolated endeavors. According to Hunter, being a good corporate citizen and community member is good business, and caring for others just makes sense.
“The most important characteristics I have are my work ethic, commitment and ability to care for other people, attitude and faith,” he says. “This is the core foundation I’ll live with the rest of my life.”
Even when Hunter was just a young salesman, he made it a point to try to improve his community.
“When I was 23 or 24, I was selling insurance in the inner city making straight commission,” he says. “My first year I made $8,000 and I bought the kids in my area baseball cleats.”
One way Standard Management incorporates Hunter’s philanthropy philosophy into its culture is through its Founders Week celebration.
“During that week, we recognize employees for their community involvement,” Hunter says.
Hunter encourages involvement by giving every employee four hours of paid vacation time each quarter to do community work.
“I consider it another business expense,” he says. “It’s all the same to me.”
The company also runs a foundation, and each year hold a celebrity golf tournament as its major fund-raiser. The tournament uses 500 of the company’s employees and takes eight months to plan.
“It brings in $170,000 a year in revenue,” he says. “It’s a great effort for as young as this is. And that’s just one example. We have other fund-raisers. Employees contributed over $5,000 with their own endeavors into the charitable giving efforts.”
That spirit of helping people extends to his employees, as well. The company also offers several training programs that help employees get more involved with the company’s culture and improve their skills. And Hunter keeps the line of communication open with employees.
“I talk to everyone — everyone is equal,” Hunter says. “I ask them to open up, and we talk about why we do what we do. True leadership operates with a dialogue, not a monologue.”
How to reach: Standard Management Corp., (800) 222-3216 or www.sman.com
