The champ Featured

8:00pm EDT May 22, 2006
It was an innocent question, really: “Why do smokers get extra breaks?”

The blunt query, asked by a front-line employee, made Dave Bianconi think. Then it made him act. The results were dramatic: Bianconi’s company no longer hires smokers.

“We have enough things to manage and worry about without managing people’s addictions,” says Bianconi, president and CEO of Progressive Medical Inc. “I really thought this was more of a distraction that we probably, hopefully, shouldn’t have to deal with. So I asked the HR department, ‘What would you say if I said I didn’t want to hire smokers anymore?’ The first answer was that they thought it would be discriminatory. I said, ‘Prove it to me.’”

Long story short, they couldn’t.

It may have been a gutsy move on Bianconi’s part, but the 53-year-old entrepreneur has never been one to sidestep a problem. Perhaps that is why his company has grown so dramatically — and consistently — through the years.

Progressive Medical is among the fastest-growing, privately held companies in Central Ohio, expanding an average of 43 percent during each of the past five years. And for the past seven years, it has been named to the Inc. 500, a list of the fastest-growing privately held companies in the country.

In 2005, Progressive Medical recorded $140 million in sales. This year, the Westerville-based company is on pace to surpass $170 million.

“It could be over $200 million, depending on if certain business opportunities materialize,” Bianconi says.

Here’s how Bianconi has conquered some of his biggest challenges as he’s guided Progressive Medical to new levels of sales and success.

Watch cash flow carefully
“Cash is king,” Bianconi says. “With cash, many things are possible. Without cash, few things are possible.”

Bianconi knows of what he speaks.

“We’ve had situations here in the past where there may have been a communication breakdown or an electronic breakdown or a billing breakdown,” which led to a cash flow problem, he says. “As with many things in life, the relationships you have with your customer is vital in that.”

Progressive’s first big cash crunch hit around 1999, when the company was growing at a breakneck pace.

“Our largest customer had a breakdown of its internal processes,” Bianconi says. “It took longer than normal for us to connect the dots because we thought they would fix the problem long before they did.”

When the majority of the roughly $1.5 million owed to Progressive was 60 days overdue, “We really started to wake up,” he says.

It was time to take action.

“We all make plans based on what we are expecting to receive from people who owe us money,” Bianconi says, so he decided to leverage his relationship with the customer to see how or if he could help fix the problem.

“In the area of owing businesses money, it is critical that you allow them to become part of the solution and not simply remain part of the problem,” Bianconi says. “People want to know exactly what you’re going to do for them. It may not be what they want to hear, but it’s critical that you tell them what you’re going to do and that you actually do it.”

In the end, Bianconi got the company to bypass its normal protocols and cut Progressive a check to cover most of the past-due amount.

“Most people who owe other companies money typically do one of two things: They fail to communicate at all with those companies, or they miscommunicate with those companies,” he says. “And when they miscommunicate, they tell them things that aren’t accurate or aren’t true or know they can’t fulfill.

“In the times that we’ve been cash-poor, we’ve communicated with the people who are important in our business relationships. We have not told them that we’re sending them $100 if all we can do is send them $20. If everyone is dealing in reality and not fantasy, it makes everyone’s life a lot simpler and easier to manage.”

To help avoid cash flow problems at Progressive, which relies on payments from the notoriously red-tape-laden health insurance industry, Bianconi has set up a system to help ensure bills are channeled to the right people for payment.

“We recognize, No. 1, who it is that is actually paying us,” he says. “We provide services to an injured worker and we may get the request from a rehab nurse, but it may be a totally different entity that’s going to pay us. So we have to pay attention to that when we receive the order — not after we’ve provided the service.

“The other thing that we really looked at in our business model was we contracted and negotiated with providers that they allow us the time to collect money, basically on their behalf, so we can turn around and pay them for services rendered.”

In addition, Bianconi has learned to keep careful watch over company expenses.

“Managing your overhead is critical,” he says. “You must try to eliminate costs that you will be forced to keep regardless of what direction your business ends up going in. Examples of that are computers, office furniture and equipment, and leases that people get themselves into that you cannot just wish away. Once you sign a lease, if it’s a three-year lease, you are tied to those payments for three years.”

Much of what Bianconi learned about managing cash flow came from another company he worked for before starting at Progressive Medical in 1986.

“This other company was in dire straits from Day One,” he says. “While I was there, I had an opportunity to learn what not to do in many cases. But I also learned how people will work with you in the darkest of situations if you are forthright and honest with them.”

Keep it personal
Another challenge Bianconi has conquered along the path to success is maintaining good internal communication as the size of his work force has swelled. His mantra: Keep it frequent and face-to-face, and go easy on the e-mail.

“Some of the things that have allowed businesses to become more successful have also been their Achilles’ heel,” Bianconi says. “E-mail, for example, allows us to communicate information faster than we’ve ever been able to communicate in the past, but there is a price for that. When you speak with someone behind closed doors, the conversation is only heard by the two parties involved, and there is little chance for things to be taken out of context. E-mails, on the other hand, have a tendency to be the genesis of the corporate gossip column. People copy them along without regard to the fact that the content may have been meant for the original recipient’s eyes only.

“The best way to communicate with someone and share information is to allow them to receive it first-hand.”

That’s also why Bianconi is careful to include all levels of management in as many face-to-face meetings as possible.

“You have to communicate the information to these people anyway,” Bianconi says. “So you can either do it very efficiently by having them included in the meeting, or you can count on someone to translate what was said in the meeting, and it may not be as accurate.

“In addition, inclusion in meetings seems to be the knighthood to importance. People often ascertain their value to the company by whether or not they are invited to attend meetings.”

In a similar team- and esteem-building vein, Bianconi encourages all his direct reports to be visible and accessible to workers at all levels.

“I, for instance, every several weeks, I will take six or eight employees — bottom-line employees — to lunch,” Bianconi says. “It’s an opportunity to ask questions and to provide answers. It is amazing the situations and the information that gets communicated — both ways.”

It was following one such lunch that Bianconi had his epiphany about employees who smoke. During another lunch, he discovered the gratitude a couple of ice machines could yield from employees.

“We had about 200 employees, and we only had two ice cube trays in the refrigerator,” Bianconi says. “And I thought, ‘Well, that’s just unbelievable.’ It’s those little things that make the life of the staff so much easier. It’s not brain surgery. It was a very simple thing. And the staff was completely thrilled.

“The biggest thing really is communication.”

Hire the right people
More than once during the rapid growth of Progressive Medical, Bianconi tried to reward loyal, long-term employees with advancement into positions they either were not ready for or did not have the skill sets to succeed in. The results were disastrous.

“The skill sets and the challenges we have at the level we’re at today are very different than what we were at 10 or 15 years ago,” he says. “You have to attract the right kind of personnel whose skill sets align with the growth module.”

That’s why Bianconi has faced the sometimes-frustrating fact that when a company is growing as quickly as Progressive, promoting from within isn’t always a good move. The same can be said for allowing CEOs to get involved in the interviewing and hiring process for anything other than direct reports.

“I have always subscribed to what I call The Mother Duckling Rule,” Bianconi says. “In nature, the first thing the baby duck sees — whether it’s somebody’s boot or a human being or the actual duck — that gets imprinted upon the duck’s mind that that is the mother. It’s called mental imprinting, and I’ve tried to carry that forward in a business setting.

“Typically, most people have this conception that the person who hired you is the person who can fire you. People start forming their allegiances and loyalties first to the person who actually offers them the job. So I try to refrain from, myself, offering people positions to work here if they don’t have to report to me.”

After all, the hiring supervisor is the one who ultimately has to live with the decision he or she makes. And with the employee count at Progressive more than doubling from 135 to 360 in the past three years, it’s all Bianconi can do to make sure HR is simply screening out smokers.

“We are challenged every day to hire the very best people out there to bring into this company,” Bianconi says. “It’s all a way to increase our odds of being successful.”

HOW TO REACH: Progressive Medical Inc., (800) 777-3574 or www.progressive-medical.com