When Barry W. Karlin visited a program that treated chemical dependency in 1995, he walked away moved by the staff’s commitment to help people and resolved to change his career.
He acquired what is now the forerunner of CRC Health Group Inc. and created a business strategy. He realized that in the mid-1990s, more than 80 percent of the population who needed treatment did not get it, and on top of that, there were no national or regional companies in the market.
He decided to grow mostly through acquisitions, but he wanted to do it differently than most roll-up strategies. Instead of focusing on cost-efficiencies, he instead strived to maintain those programs’ legacies and add value through revenue-enhancement strategies.
This chairman and CEO also didn’t want to stay just in the chemical dependency market. He sold the company to a private equity firm in early 2006, and then he led an acquisition of Aspen Educational Group later that year.
With this acquisition, CRC is now the market leader for programs addressing and dealing with underachieving and troubled youth.
Today, CRC has 5,500 employees assisting about 30,000 patients every day in 145 locations around the country. <<
How Gary Lauer has helped grow eHealth by caring for customers and employees When Clinton Severson arrived as CEO of Abaxis Inc. in 1996, the company’s future looked bleak.
The company makes small, portable blood analyzers for physicians and veterinarians that require minimal training and yield results in less than 12 minutes. Despite this remarkable product, it was trying to do something that hadn’t been done yet in marketing these devices for use in physicians’ offices. In the veterinary realm, it was also up against a much larger company that controlled 90 percent of the market. If those weren’t big enough hurdles to jump, Abaxis was also losing money and barely had enough cash to stay afloat.
Despite all of this, Severson had confidence in the product. He found more investors in less traditional investment firms and raised capital from 1996 to 2002. With the cash he needed, he transformed Abaxis from a losing company to a force in health care. He asked his manufacturing director to reduce the cost of making one component of the product from $22 to $4, and he was told this was impossible. He disagreed and found a new director and management team to make this and other improvements. Today, that part costs $4.13 to make.
Under Severson’s leadership, Abaxis has grown from margins of negative 50 percent to positive 65 percent and now has 20 percent of the veterinary market, proving that sometimes you just can’t take no for an answer.
HOW TO REACH: CRC Health Group Inc., (408) 998-7260 or www.crchealth.com