In the 1990s, Steve Lindseth and a group of partners founded a company called County Line Ltd.
They sold high-end products in not-so-high-end consumer markets. County Line offered the best birdfeeder in the world and the highest quality Christmas tree stands.
When microchip voice technology was introduced, County Line designed, manufactured and distributed a battery-operated CPR training and rescue device that talked users through cardiopulmonary resuscitation. Lindseth and his partners saw that device as an opportunity worth pursuing in the commercial product market.
The device failed in the retail market, but Lindseth and his partners were convinced it had potential. They acquired medical training companies and established offices nationwide to provide large organizations and hospitals with CPR and related training services, and in 1997 they formed CPR Prompt LLC.
CPR Prompt grew, but not enough to meet its goals, admits Lindseth.
”The cost of customer acquisition was too high, and the people and facilities infrastructure we had to maintain was killing us,” he says.
To ignite growth, Lindseth and company bundled training, equipment service, medical direction and process management with a product that had recently been released to the commercial market — automated external defibrillators (AEDs). They also decided to expand out of just medical training and into a variety of health and safety compliance topics. They renamed the 45-employee company Complient to reflect the greater breadth of services. The idea worked.
Today, Solon-based Complient is infused with $70 million in investments and boasts more than 400 employees working in two distinct divisions. The company designs and implements software-based compliance business process automation solutions that are used by such high-profile clients as Amtrak and Gillette, as well as by 30 malls nationwide.
It’s been a fast ride for the bespeckled and highly driven Lindseth and his team. But as he’s embraced change and helped craft a business model poised to carry Complient into the 21st century, there’s been one constant — Lindseth has left nothing to chance.
The power — and distraction — of compliance
Approximately 600 Americans die every day from cardiac arrest. An estimated 95 percent of those die before reaching a hospital. When defibrillation is provided within five to seven minutes, shocking the heart back into rhythm, the survival rate increases to 49 percent.
Raising that statistic is just one of Complient’s missions. Developing and implementing software to get and keep a business compliant with laws, policies and procedures is another. It does so through software similar to that which allows companies to automate such systems as accounting, sales and customer relations.
”Compliance is like friction in the organization,” Lindseth says, adding that every minute a manager is focused on compliance issues is time taken away from what that person was hired to do. ”If you can minimize that, you can turn compliance into a competitive weapon because you can allow your resources to be focused on getting and keeping customers, not on staying out of the penalty box.”
That’s the idea behind Complient’s products. Its software takes the guesswork out of staying within regulatory guidelines and even notifies administrators when regulatory deadlines approach and employees do not follow specific procedures and workflows, whether it is reading and understanding a policy, taking training or performing an incident management protocol.
And, because it is people who must comply with regulations and people who jeopardize the health and reputation of an organization when they fail to do so, compliance falls on the shoulders of the people managers. But those duties are only one piece of a manager’s total responsibilities, and while high on the list of priorities, compliance often plays second fiddle to day-to-day revenue-driven activities, a risk no manager purposefully chooses to take.
That’s why Complient’s products are designed to reduce the time needed to devote to compliance issues and to improve the process as a whole, including the ability for a corporation to measure the effectiveness of its compliance programs and improve them where they are not effective.
Kenneth Frato, environmental, health and safety manager at Lubrizol Corp.’s Painesville plant, says meeting federal, state and local regulations is an all-encompassing task. Four engineers work with Frato to integrate regulatory requirements into the 200-person work force that manufactures high-performance chemicals, systems and services for industry and transportation.
Frato agrees that electronic access to information is an important part of monitoring environmental requirements and corporate success.
”You used to be able to take a three-ring binder and put all the information that you needed to know on the regulatory side in this three-ring binder,” says Frato. ”Now, you’d have to have a couple CD-ROMS to contain all that.”
Compliance, Lindseth stresses, does more than cover environmental health and safety, disaster recovery and business ethics such as sexual harassment and the Foreign Corrupt Practices Act. Following legal regulations is just a single cell within the total organism of a business.
”It (compliance) reaches into everything you do, into every business process,” including training, managing policy documents, workflow and crisis management protocol, Lindseth says.
Compliance includes all activities associated with meeting or exceeding regulations, policies, procedures and best practices to create a safe, ethical and productive workplace. Following regulated guidelines keeps employees, customers and the environment safe. Haphazard processes left to chance can mean the success or failure of an entire organization or, worse, the life or death of an employee.
And, the billions spent by American businesses to comply with federal regulations can grow exponentially when state and local requirements are included.
Adapting a holistic approach
Complient was born four years ago as a products-oriented business, but as business leaders embraced the idea of creating a safer work environment, it has evolved. Lindseth was quick to recognize that a safety program was more than a CPR device.
He and his team identified a vast opportunity to help clients create an overall safer workplace by managing health, safety and OSHA compliance with Internet-delivered software.
A little due diligence uncovered that American businesses spend $688 billion each year on various aspects of compliance management. Lindseth and his team wondered, ”What if there were a software management system that tied together all the splintered programs?”
By 2000, an expanded version of the firm’s initial software that had been developed for internal use was introduced. It allowed for continuous training, documentation, availability of data for an audit trail and means to monitor the program’s success. When it became clear that the software tool was a potential product that could be sold to large organizations on a stand-alone basis, Lindseth segmented the company into two groups — the eBusiness Group, which focuses on continuing to develop and market Axess, the company’s business process automation software, and the Services Group, which provides a variety of health- and safety-related solutions, including the company’s emergency medical response system.
Together, the two create impressive synergy and offer support to 140 health and safety trainers across the nation. Utilizing their own process and monitoring program to assure consistency and up-to-the-minute data, more than 240,000 people have been trained in more than 100 compliance areas.
”We’re interdependent and leverage one another’s strengths,” says Robert Thompson, president and COO of the Services Group. ”Our core competency within the services group is our ability to take any health and safety topic and produce an integration solution for our clients.”
Under this scenario, Complient does not have a true competitor. Instead, fragmented parts of the whole are offered by consulting services or equipment companies. One may offer safety equipment and training; another may have software to monitor programs already in place; a third may have consultants to look at weak policy links and offer advice. None had pulled it all together into a single source solution.
”In order for us to create this total solution, we had to find automation … otherwise, it’s just adding bodies, and that’s not a very good business model,” Lindseth says. ”For business software, there are a variety of kinds of professional services that need to be wrapped around it.”
Further development of the Web-delivered software allowed for automation of federal, state, local, industry and association-driven regulations that define, distribute, administer and measure every internal business process — much like the lifeblood of a business.
The same software helped Complient build its turnkey management solutions, which last year attracted $70 million in investments from key health care industry players such as The Cleveland Clinic Foundation and Healthcare Equity Partners, and from leading financial partners such as JP Morgan Partners, Goldman Sachs, Chase Capital Partners, Cleveland Pacific Ventures, Roundwood Capital, Medtronic Corp., BancBoston Ventures, National City Ventures and Primus Venture Partners.
The metamorphosis from 45 employees to 400, a supporting infrastructure and the division into two distinct, focused business groups was a process that contained its share of bumps in the road.
But, as Lindseth says, ”Those companies that remain agile remain successful over time.”
A string of hirings in early 2000 set up the current management team. In January of that year, Thompson joined Complient. He had been the COO of DentalCare Partners, the fourth largest dental practice management company in the United States, and had held several executive management positions with Revco D.S. Inc.
To handle the new eBusiness Group, Theodore Frank was appointed president. As co-founder of PlanSoft Corp., Frank brought extensive experience in sales, marketing and business and software development.
To shore up the board of directors, Lindseth attracted John Connolly, president and CEO of Mainspring, now global head of IBM’s eBusiness consulting, and Robert Lauer, retired global practice manager for Accenture’s high-tech change management practice. And in January of this year, Michael Bukuts was lured away from LuK Inc. to be Complient’s CFO.
eBusiness — the true value proposition
With laws supporting the need for regulatory compliance, perhaps the riskier part of Complient’s business model is the eBusiness Group. In the 18 months since its conception, it went from zero revenue to signing several multimillion dollar contracts.
Frank says the deals validate the opportunities that exist.
”You’ve got to be able to define a market opportunity, act against it and modify it as quickly as humanly possible to go with the market shifts as you refine value propositions,” he says.
Complient’s business process technology is designed to mitigate a company’s risk factors. By defining best practices, members of management can understand how they affect various departments within an organization and business partners and customers outside the company. They can then design protocols to launch training, reporting and analysis to understand how the current processes affect the company’s success.
”It’s the ability to come from that perspective and bundle the appropriate technologies to make and address a business process that makes us unique,” Frank says.
The prepackaged, pre-integrated applications offer a learning management system, document management system, workflow management system, risk mapping and organization mapping.
”The question is, do you want your people focused strictly on administration vs. the measurement, the analysis and the improvement, which I like to call organization performance?” Frank says. ”Right now, they’re spending 90 percent of their time administering.”
Because of this dilemma, one of Lindseth’s focuses as CEO has been on efficient delivery methods.
Thompson agrees and believes the company’s software solutions create a competitive advantage for Complient in the marketplace.
”The technology (we use) provided us a differential with our customer,” he says. ”We can provide a suite of services through the Web-based technology that others can’t.”
Lindseth recognized the market opportunity to sell enterprise software like Axess was large and that Complient had the chance to be the first in this market. In addition, by utilizing the application service provider (ASP) model of delivering a hosted application on an annual license, the company could create a recurring revenue model with more predictable future revenue streams.
ASPs require no special servers or configurations, and upgrades are automatic. By using a Web-based application, it can not only be shared within the company but also with business partners, vendors or customers. Under the Right to Use license, customers enter into annual agreement contracts. This, says Lindseth, allows Complient to use the Web as a business tool instead of as a basis for the business itself.
”The days of looking for a pure Internet strategy, per se, are already over,” he says. ”It’s a very important tool, but if you don’t have a sound business with real revenues and real gross margins, you don’t have a real business.”
And, while Lindseth has surrounded himself with experts in their respective fields, he admits they are not in the regulatory content business. That’s one reason he chose PricewaterhouseCoopers as a delivery partner.
PricewaterhouseCoopers is a worldwide consulting organization that employs more than 150,000 people in 150 countries. Its consultants sell knowledge and business process improvement services. Together, they market Complient’s software and PricewaterhouseCoopers’ consulting services as a total solution.
According to Dion Sheidy, PricewaterhouseCoopers partner located in Pittsburgh, his company has begun utilizing Complient and its software platform to provide integrated solutions to its clients.
”The biggest opportunity initially appears to be in the pharmaceutical industry subsector because of the current regulatory environment and the fact that these are very globally focused organizations,” says Sheidy.
Although still in the infancy stage of development, Sheidy says, ”I think Complient’s platform is a great platform and can bring significant value to our clients.”
Lindseth says that as laws or compliance-related practices change, he’s ready to react in a heartbeat. In November 2000, President Clinton signed the Cardiac Arrest Survival Act and The Rural Access to Emergency Devices Act. The Cardiac Arrest Act requires AEDs be placed in all federal buildings.
The Rural Access Act authorized $25 million in federal funds to assist rural communities in purchasing AEDs and receiving the required training. Both could translate into windfalls for Complient’s products and services, an opportunity of which Lindseth is well aware.
Remember, it can be a day like any other. You may be working, shopping, riding a bus or watching a football game. Your mind is elsewhere when you first feel lightheaded, then feel pain and pressure. Within seconds, you are out, unconscious, and now your fate lies in the hands of co-workers or strangers.
Will someone know what to do to keep you alive when cardiac arrest stops you in your tracks? Steve Lindseth certainly hopes so.
How to reach: Complient, (440) 498-8800
