Douglas Freeman Featured

10:04am EDT March 30, 2006
Newark-based MedBen was innovative, profitable and growing quickly. To many CEOs, that might seem like an optimal situation, but not to Douglas Freeman.

Freeman, president and CEO of the $47 million benefits management company, was concerned that MedBen’s fast growth was hurting its quality — something he was determined not to lose.

But Freeman was having a tough time defining quality — what might pass for quality according to one of his employees might not seem like quality to him. To create a uniform definition of quality, Freeman decided to work toward the company becoming ISO 9001:2000 certified, uncommon in the service industry.

Three years of hard work later, MedBen is certified and Freeman has a system in place to define, create and maintain superior quality.

Smart Business spoke with Freeman about the importance of corporate values, how he maintains quality as the business grows and how he measures performance.

On measuring performance
As much as we wanted to be great, we didn’t really have processes that created the framework to make sure we were doing the right thing and correcting mistakes and finding problems. [Now] we have daily performance measures for anything that we consider part of our core business, which are functions that are critical to our clients. Everything we do now, because of ISO, we do in the pursuit of customer satisfaction.

We have a metric that is what percent of our customer service calls we resolve on the first call. And we monitor things like call abandonment, which is if we leave people waiting on the phone too long and they hang up. That’s a key measure of whether someone is going to get angry with you .

They are posted on boards. They are updated throughout the day. They are also logged on our intranet.

We have other metrics that we measure on a monthly basis. That might be checks issued in the accounting department or mail that goes out or other kinds of things that are not key daily issues.

On client satisfaction
We do client satisfaction surveys ... about every six months. It’s one thing to say we are great and we think we know what we are doing, but the next thing is, how does your client feel about it? That is what this is about.

We have regular dialogue with our clients. Each of our clients that is on our self-funded side, which is most of our business, has a team of two people. They are in constant contact with the client by phone and by e-mail, and then we conduct annual reviews where they go out and visit and look at their experience and what they are doing.

On corporate values
We didn’t have much in the way of a corporate values statement. We had corporate values, but it was kind of instinctual as opposed to structural. We tried to create a statement that gave our corporate values and create some guidelines and working doctrine.

The way that (Cindy Steen, MedBen’s VP of marketing) approached it was to come up with this icon (FRED — Flexible Respectful Empathetic Dependable), which is a way to remind our employees what they have to do in order for us to provide customer satisfaction. It gives somebody the opportunity to grab on to something and say, ‘This is what MedBen is all about.’

We have FRED certification, which is a test you take to make sure you understand what FRED is about — that it is not a joke, that it really means something. It’s not uncommon to hear people say ‘that’s not very FREDlike.’ It’s become kind of an icon for the way we want to deal with each other and with our clients.

On maintaining quality
Growth is about new business and new products, but a huge part of our growth is also not losing the base we are growing on. We put a huge emphasis on retention. The ISO process and everything we do puts a great deal on retaining the clients that we have. We have to continually evolve in order to retain clients.

The way that we grow and add services while maintaining quality is by using careful planning and involving every department. ... We follow standards for design and development in much the same way an auto manufacturer would follow them to develop a new model of cars — years and years of planning go into testing before it ever hits the streets.

We have clearly defined what attributes we are going to incorporate into a new product or service, and we make sure that those attributes have a solid rationale and are what the customer wants. That part is validation.

We do all the research — research the software, research what’s out there and research how it’s priced — and determine whether or not it makes sense for us to go into it. Then we have to prove that it actually meets what the customer wants.

As we do that, we are taking care of a lot of the issues of quality before it ever hits the street. Once it hits the streets, then you go into the whole cycle of the continuous improvement process.