This is the fourth installment of a multi-part blog series by Hart Williford, CEO and president of Ingenious Med.
Ingenious Med has a tremendous expansion of scope well underway with a bold new product launch. I’d like to give you a look at some of the business concepts fueling the processes I follow to make sure it’s a success.
One of my favorite best practices is the way that I’ve learned to approach strategic planning with explosive growth, early to mid-stage solutions companies. You’ll hear a lot that, “To be successful in business, there is no silver bullet that lets you out invest and out deliver your competition.” I tend to disagree, and in the five solutions companies that I’ve managed, I’ve spent a ton of time in strategic planning, finding that one strategic imperative, or one thing that, if we became better at that than anybody else in the market? We could grow at least twice as fast as the market itself, from a revenue perspective. If you can find that one thing to focus all your resources on, in dollars, in people, you can out invest and out deliver the competition every time.
I first got the idea to approach growth in this way based on how Bain Consulting does strategic planning. They go into large corporations and follow the money to find the strategic imperatives to focus on. A small company cannot do three strategic imperatives, generally they can’t do two. So, I’ve tended to focus on one single thing that, if we became the best at it, we’d outgrow the competition.
This has helped me direct five companies from start-up to established enterprises through explosive growth in both revenue and profits. As an example here at Ingenious Med, when I came in in late 2008, we were focused mainly on the hospitalist market and we sold mainly to physician practices. At that time, we served 600 facilities across the United States, and we had 3,500 users, 3,200 of which were hospitalists. We looked at the landscape and realized that the best opportunity for us was to focus on large hospitals and health systems employing large physician groups. By focusing on those, we could get substantial growth if we were successful.
Now, to expand to serve the multi-specialty hospital/health system enterprise market, it meant we had to change all kinds of things. We had to go after multi-specialty groups, build the back end tools for billing in large organizations, we had to become security experts, and we had to scale the application to handle extremely large groups while still providing world class service for our existing clients.
Fast forward to 2014. We serve 900 facilities, with 25,000 users. We’ve gone from hospitalist focused to working for basically every specialty out there. Over this same period of time, our customer satisfaction actually increased. Even though we experienced explosive growth, because we remained focused and became the best at what we did, we invested properly, bringing in a highly secure, scalable, ergonomic, reliable solution.
Bain tells you that most companies aspire to outgrow their markets. And their definition of that is growth rates double the market in terms of revenue, quadruple in terms of profits. They’ll also tell you only one in ten sustain that growth. I personally define sustainability as consistent growth in terms of revenue and profit over a ten year period. 95% of those that meet those standards become core business leaders. It’s proven that if you can become the leader at your target focus, you always earn higher returns long term and deliver a product with high quality, deliverability, and satisfaction.
As someone who has run business for now forty years, I can tell you that there’s no greater tool in your box than focus and, from my perspective, it creates the virtuous circle that allows you to out invest, out execute, and out earn your competitors.
To succeed, you have to first study your core business, honestly evaluate and truly understand the potential for growth. Too many people, when they realize they can’t get the growth they desire out of their core, take too large of a step strategically. They take on projects too far from where they’re already succeeding, and lose focus. Growth is most successful when businesses move into one or two step adjacencies. I call these steps strategic imperatives.
There’s a proven 35% success rate when you move to a one step adjacency, compared to a less than 5% success rate for a multi-step diversification. I’m not afraid to dare mighty things, but I know bad odds when I see them.
Now, when you combine that with the story above, you’ll see that our one step adjacency was transitioning from hospitalists and practices to multi-specialty enterprises. We offered the same core application; we just scaled and optimized it to serve a wider market. A whole new application to a new market would be a multi-step.
So, from early 2009 through 2013, we focused on one strategic imperative, moving to the enterprise. Early in 2013, we started planning for a second. What we’ve decided to do is focus on the right side of healthcare, lowering the cost of care through improved quality. It’s something we as an organization have really come to believe in and let drive us. At HIMSS this year, we released a next generation of our solution, a natural, one-step adjacent expansion taking advantage of our presence at point of care to do some good for both hospitals and patients: offering the same great core, while adding functionality for care coordination and high risk patient identification, unified with our real time business intelligence suite, really supporting our clients in their efforts to reduce costs and strengthen their revenue while improving the quality of care.
Come back next time, and I’ll get into the process details of adopting a strategic imperative. Trust me when I tell you, it’s quite the learning experience.
Other parts in this series: