MedTrak Services
Any honest assessment of working at a small company vs. a big business would note that each has its plusses. And minuses.
But somewhere along the road to success, small companies must set aside some of the things that define their smallness.
Larkin O’Keefe can tell you about that. He and Kermit Fendler, the man he would replace as CEO, became the first two employees of MedTrak Services in 1999, when it was easy to establish goals, make adjustments and execute. That becomes a lot harder when you’re 88 employees strong and generating 2011 revenues of more than $230 million as a pharmacy benefit manager for major companies.
“When I look at our company, we’re very, very goal-oriented,” O’Keefe said. Not that goals alone do the trick—they have to be realistic, they have to be achievable with the resources you have, and they absolutely must be measurable. The foundation, though, is the goal-setting. “Every year, we establish goals and every quarter we look at our goals to make sure we’re meeting our goals and if we’re not, we try to evaluate why and figure out a way to make that happen,” O’Keefe said. That means planning retreats twice a year with the board of directors, and setting specific one-year, three-year and five-year plans.
“I don’t think there were many companies out there that had written goals as sophisticated as ours or as lengthy as ours and did more planning retreats,” he said. “For big companies, two a year probably isn’t a big deal, but for small companies, there are not a lot of people who do that.”
Fendler, who isn’t quite as retired as that job status might indicate, said one particular a-ha! moment influenced his thinking on how to synchronize the efforts of a growing staff. In 2002, he said, “we were still small, but we were starting to hire people who didn’t know all about the business. Up to that point, everybody did everything, so it was easy to know what I was thinking or what Larkin was thinking all the time. As soon as you become a bit compartmentalized, how do you get people on the same page?”
Rapid growth, it turns out, isn’t all good: Fendler said that in managing it initially, “we got to a point where it was apparent we had a lot of inefficiencies in how we went about doing business. A lot of small businesses put processes in motion, but never go back to evaluate if they can be improved. So we did begin a continuous process improvement program. To be honest, we still have a long way to go, but at least we’re developing that culture to be more efficient than we are now.”
So with goals in place, what’s the ticket to getting the staff on board? Some of it is carrot, some is stick. “We hold all of our employees accountable,.” O’Keefe said. “We have performance standards with all of our employees, whether they’re a customer service rep, an account manager—it doesn’t matter what department they’re in, there are measureable performance standards, and they have to meet those. Their bonuses are paid based on whether they met those standards or didn’t meet those standards.”
Those who doubt the power of goal-oriented processes might note that MedTrak was doing just fine through its first five or six years, when it had gone from startup to $65 million in annual revenues. “In the early years, I think that we weren’t as performance based,” O’Keefe says, but the realization came that more structure could yield greater success. Nearly quadrupling that over the next six years wouldn’t have been possible without an operational shift, Fendler and O’Keefe say.
O’Keefe says it’s important that any small business owner draw lines. To truly succeed, he says, you can’t let the day-to-day battles take your eye off of what truly matters.
“Ultimately, establishing goals and reviewing the goals is important, but the leadership of the company can’t get caught up in the minutia,” O’Keefe said. “It’s very important that they delegate whatever they can to the people below them, and focus on growing the company, because any small business owner can get caught up doing a lot of things that they really shouldn’t be doing.” The more you do that as a business owner or leader of a company, he says, the less successful you’re going to be. “Just ask yourself: Is this going to help our company be more successful and grow? And if it’s not, you need to delegate it.”
Return to Ingram's November 2012