Smart Leaders

Cultural evolution

By Mike Cottrill

Robert D. Kerscher
chairman and founder, Lexi-Comp Inc.

---

Robert D. Kerscher has seen the way that bad leadership can kill a company.

Years ago, Kerscher was part of a start-up that he loved. But when the company was sold to a venture capital group, things went from people first to profit first.

“That’s the first time that I had experienced working for someone that really didn’t care a whole lot about our customers or our employees but was focused more on their personal net worth,” he says.

So Kerscher and a few others broke away and founded Lexi-Comp Inc. in 1978. They decided then that the focus would be on culture first to push people to better results. Today, the 130-employee provider of medical information and clinical content solutions is focused on employees’ needs and concerns every day — including during the recent transition in which Kerscher turned the CEO chair over to his son, Steven, while staying on as chairman.

Smart Business spoke with Kerscher about how to use communication to keep up your company’s culture and why it’s important to have a smooth succession plan in place.

Make a smooth handoff to the next generation of leaders. What we did is we announced that the next five-year plan was going to include a strategy that would basically provide for a younger management team to come in and be properly trained and be in a position to run the next generation.

So when you say how do you train successors, in this particular case, the training was really through the exposure and experience that my son had working in the business.

I gave him various assignments to head up this group, head up that group and ultimately become part of the management team. So the exposure to the strategic planning and all the activities associated with running the business was something he’s been exposed to for a total of seven years.

And what I chose to do is not totally bow out but take a backseat role and just try to be there to support the business. In the fourth year, I stopped running the management meetings and basically began that transition so that the beginning of the sixth year, everything was kind of operating, and there was never an abrupt date that things dramatically shifted.

Remember the big hype that took place when we were going into the year 2000? The anticipation of this whole thing, then all of the sudden it came, and there was really never a dramatic end — the clocks continued to work, and everything continued to go. Well, certainly, this was not on that scale, but there was an anticipation that something was going to take place.

But in truth, the transition took place very smoothly in that we were already operating in the new structure for basically the last year.

Use several avenues to reinforce communication. We create a vision, we try to communicate that vision and constantly reinforce it. We have monthly company meetings, we have a company newsletter, and we are really focused on providing great communication around the building so as decisions are made, even though they’re difficult, we try not to do anything overnight.

As you grow from a handful of people to more than 100 people, it becomes more of a challenge. Even when you have company meetings, you know that there may be 15 to 20 people in the business that are not there and that are not capable of hearing the latest message.

That’s why these things must be reinforced, because if you are not at the company meeting, then you’re certainly going to read about it in the company newsletter.

What we encourage our management team to do is communicate (the vision) to their group. I encourage myself, and now my son, to sit in on departmental meetings on a quarterly basis.

The real thing here is we’re still a small company, and the people that work want to feel like they can walk in and have dialogue on any topic they would like, and certainly, that’s encouraged when we show up for these meetings.