In 2011, the McKesson Corp. hired CEO Kraig McEwen to jumpstart McKesson Automation’s growth. And just over a year into his tenure running the company, he and his team came up with a solution — sell the business.
The largest drug wholesaler in the U.S. had bought the technology automation company in 1996 to integrate the drug distribution process in hospitals. But McEwen and others came to believe the only way to grow more rapidly and achieve a vision of perfecting medication management was going back to basics as an independent company.
And so Aesynt Inc. was formed — or reformed.
“McKesson asked me to come in and work with the team to create a strategy, given the economic downturn, on how do we get the business back to growth,” McEwen says. “The business had grown dramatically for a period of 14 or so years, and over a three-year time period hit a tough economic spot that was driven by the overall economy, but also by health care reform.”
When you step back and look at getting medications to patients, it’s an assembly process, McEwen says. Medications are brought to a hospital pharmacy, bar coded, then picked and packed by a robot for patient orders, which saves money and reduces errors. Afterward, orders are shipped across the four walls of the hospital, or within a health system.
Like in the industrial automation world, where McEwen started his career, it takes physical hardware and software to complete that process. Unlike other industries, however, health care companies haven’t integrated electromechanical systems to work with all health care IT providers.
McKesson’s technology worked best with its hospital information system. As an independent company, Aesynt could develop new technology that would integrate with all providers, helping all their customers.
“We were independent for the first 10 years or so of our existence,” McEwen says. “We felt we could more dramatically innovate in this market as a private company again.”
Here’s how McEwen shepherded Aesynt through extensive change with a new name, owner and product portfolio to increase growth and customer and employee satisfaction.
Managing change with focus
The company went through an unbelievable amount of change from divesting the company in 2013 to new owner Francisco Partners, a private equity firm, to changing the product development strategy — all in a tough economic climate, McEwen says.
“When you’re going through that amount of change, it’s impossible to focus the organization enough,” he says. “So, getting down to the very basic few things the organization has to be aligned on is probably the most important thing.”
McEwen says they found a simple strategy was better than a complicated-sounding one, so they spent a lot of time determining what to focus on.
Aesynt’s management eventually outlined six priorities that needed to be accomplished over 12 to 24 months.
They had to make sure everyone in the 800-person employee base knew what the priorities were, while ensuring the right structures and systems were in place to deliver them. This was critical as the company redesigned its product portfolio and developed new technology to better meet customer needs.
It’s also important to remember that the leadership team is comprised of employees of the company, McEwen says. Change also has an effect on them.
Communicating across all channels
With the amount of uncertainty change brings, a policy of transparency is one of the best approaches a company can take. In order to stay transparent, Aesynt followed an incredibly open communication strategy.
“Our employees knew that we were trying to sell the company,” he says. “They knew every step of the way. We had 23 companies that were interested in buying us initially. We told the employees that we had 23 companies. We told them when we were down to nine companies. We told them when we were down to four potential buyers. We told them when we were down to two. And so they were involved in the entire process.
“We felt that to be really important, because we’re going to be successful if we have a dedicated and passionate employee base,” he says. “And you can’t be passionate about something unless you believe in it.”
Each person in management, including McEwen, had a written and disciplined communication plan to personally execute, while holding each other accountable.
A communications employee was responsible for measuring different communication points with customers and employees throughout the entire process.
A team was created within the company that understood the culture of the organization. These people not only helped carry the messaging, but also provided counsel back to the leadership team, giving rapid feedback if the employee base was growing concerned about something.
In addition, Aesynt used technology to keep in close touch with its remote employee base, which is about half of its workforce.
“The best thing you can do is take the fear of the unknown away from people so they can focus on driving the organization forward. So, that was a key lesson for us for sure — I mean we’re still learning that,” McEwen says.
This strategy also applied to Aesynt’s customers.
Based on the company’s customer satisfaction metrics, McEwen says they learned health care providers felt the organization wasn’t communicating intimately enough with them.
“We were acting too much like a large company,” he says. “And so we put processes in place and investments in place, adding additional people to help our customers, because our customers are going through a really difficult time.
“If you’re a hospital, this is an incredibly stressful time for you right now. The way you care for patients has to change. The way you get paid is changing. Everything about it is changing, and so they require a lot more support.”
Team building by way of practice
As part of the process to make change as seamless as possible, management teams often dedicate time to team building.
“If you’re coaching a sports team, you practice eight or 10 times more than you play the actual game. In business, it’s the exact opposite. You very rarely practice as a leadership team,” McEwen says.
By formally practicing how to solve problems and different situations as a team, Aesynt management discovered two things. It created an incredible amount of trust, and as events occurred in the market or with the divestiture, they’d already been through them, so they were able to make decisions more effectively and quickly.
It also showed them their strengths and weaknesses and enabled the team to openly discuss them.
“I’m a pretty outgoing person, and I’ve got a driver personality. It’s natural for me to like to make decisions,” McEwen says. “But that’s a problem in very complex situations where my natural behavior is to make a decision.
“The right thing to do is recognize that it’s a complex problem, and to ask two team members who are more patient individuals to take a lead on solving that problem for you because they’ll be more thorough.”
On the flip side when you’re trying to turn around a business, in many cases with commercial decisions, having the exact right answer wasn’t as important as moving the organization forward, he says. In that case, you’d turn the lead over to team members who have experience making rapid decisions with less information.
That strong leadership team is helping Aesynt today as it heads into the future, launching new technologies geared around helping hospitals and health systems consolidate and improve quality of care, while dramatically cutting costs. The company also hopes to grow through new acquisitions in 2014.
“Intellectually, it’s an amazing time in our health care system in this country right now,” McEwen says. “It’s a challenging time, all right. If you’re a health system CEO, you have a really tough job right now.
“But with all that change, if you’ve got a good core technology platform and a focus on what your space is, you can really thrive,” he says. “It just requires you to stay focused.” ●
- Control change by focusing on top priorities.
- Disciplined, open communication reassures employees and customers.
- Practice handling different scenarios as a leadership team.
The McEwen File:
Name: Kraig McEwen
Company: Aesynt Inc.
Born: Monroeville, Pa.
Education: Bachelor’s degree in finance/international business from Penn State University and a master’s degree in business administration from the University of Pittsburgh, Joseph M. Katz Graduate School of Business.
What was your first job and what did you learn from it? I was a bus boy at Birdies Bar & Restaurant in Monroeville, and I learned to cook. I’ve worked since high school. Overall, I’ve learned you need to be lucky, but you tend to have more opportunities to be lucky when you work hard. I don’t think that’s unique to me; it’s just engrained in the Pittsburgh region.
What is the best business advice you ever received? The best advice I ever got was from the CEO of GE Fanuc, where I started my career. I was there for a couple of years, and I was going to do my first acquisition, buying a company in Seattle. I’d never bought a company before, and he gave me advice that has served me well my entire career.
The essence of it was, he said, ‘Fly out and have the management team sit down and talk with you for an hour and a half. Have a piece of paper and put a line in the middle of paper. On the left side put “statement,” and on the right side put “question.”
‘And every time the management team asks you a question, put a little tick mark. And when they make a statement, put a tick mark. And at the end of that session, if there is not at least twice as many questions, don’t buy them, because they are not a really good management team.’
The lesson was basically, as the leader of the organization, you have a lot that you have to do, but the most important thing you have to do is to learn. And if you’re making statements, you’re not learning.
Someone who asks more questions has an immense advantage, and far more information to make thoughtful decisions.
If you weren’t in business, is there anything else you’d like to do? I still want to teach some day. I’d like to teach junior high or high school.