Sometimes the best move
you can make is to admit
that someone else is doing it better than you are. That was
the case three years ago when
Larry Gerdes, chairman and CEO
of Transcend Services Inc., acquired a company that had some
very impressive customer-centric culture initiatives in place.
In a move that runs against
the grain of traditional management practices, Gerdes molded
his entire operation to fit the
culture of the business he was
acquiring. It wasn’t easy, and he
met with a good deal of resistance, but Gerdes made it happen.
“It is a CEO’s responsibility to
provide a strategic direction or
road map,” he says.
The medical transcription
company’s new direction has
improved customer relations
while continuing its pattern of
strong revenue growth, posting
2006 revenue of $33 million, up
from $25 million in 2005.
Smart Business spoke with
Gerdes about what to do when
the business you’re acquiring
has a better culture than yours.
Q. How did you build a
customer-centric culture?
I got lucky. I made an acquisition of a company in Florida
that had a very customer-centric
culture — much better than
ours.
So when we made that acquisition, we left that company
alone to only integrate as the
need arose. In no way would we
change the way they did business.
Slowly but surely, we
embraced their culture and
brought it into the entire company. It took about two years.
Now, the company is totally
focused on the customer. The
customer is our partner; we figure things out together.
Not only is it very different, it
required that I made several
management changes, as well.
Q. How did you identify which
managers would accept the
change and which would resist?
They told me. It wasn’t fun
at the time, but it was pretty
simple. We reorganized the
field operations around the
customer. We developed a field organization that was much
closer to our employees and our customers.
Then we had the good
fortune that one of the
founders of the Florida
company became our
head of operations. As a
result, she was able to
continue to make that
transition. Then it just
took just training, focus,
direction and a commitment to quality.
Q. How do you get
employees to buy in to
your vision?
First of all, you need to
pick the right people. Hold them
accountable, so they know they
have to deliver.
You need to give them enough
of a run where they feel like,
‘This guy’s going to let me do
my job and get it done. I’m
responsible for it, but at least he
respects me enough to let me
make the decisions I need to
make from a day-to-day standpoint and grow my team.’
Boy, the first time a leader
thinks he has to be involved in
every major decision and micro-manage, you’ve totally limited yourself and your ability to grow.
Q. How do you manage
business growth?
You have to stick to the basics.
You have to keep your focus on
your core business. You also have
to have a scalable model of field
managers that can handle the
growth. You don’t necessarily
manage growth through just
sheer numbers of people, but
it’s more or less teaching people
how to do the right thing the
first time as much as possible.
When you do that, it’s not as
hard to grow because you’re not
putting out fires, you’re anticipating them. That’s a much more
positive way to go. So we try to
inspect everything we do every
time we do it, so we can incorporate if we could have done it
better.
For example, every time a customer installs a system, we ask
the customer what we could
have done better. Many times,
customers are amazed we
would want to go back and get
their opinion … but that’s the
only way we get better.
Q. How do you stay focused
on your core business?
We’ve had to regain our focus
before. At one time we were a
broader outsourcing company
that outsourced all the activities in the health information
management department to
hospitals. That area handles
lots of disparate functions all
having to do with patient information. We attempted to re-engineer those departments
but also manage those operations in an ongoing way.
That became unwieldy and
hard to maintain a consistent
level of quality and commitment
to service. So we took one
major function in that area —
transcription — and shed all the
other aspects of the business
and decided to focus on transcription only.
Q. What effect did refocusing the business have?
It made it easier to make decisions; it made it easier to develop strategies. Then the final
thing our company had to do to
totally turn ourselves around
was make some changes to our
culture to be entirely focused on
the customer.
We wanted to become customer-centric, both from an organizational standpoint as well as
an attitudinal standpoint.
HOW TO REACH: Transcend Services Inc., (800) 555-8727 or www.transcendservices.com