Culture is key to success. When I started the business, people could come into the building, sit down at their desks, eat lunch at their desk and leave at the end of the day without talking to anyone. But in 2012, we morphed our company into a team oriented, highly engaged organization with self-directed work teams and a very positive culture. We’ve invested about $700K in an intensive, two-day employee training program that enforces that culture, and we have seen our productivity go up 10 to 20 times what it was before. I used to be happy to walk into a room of a hundred workers and be able to hear a pin drop. Now there’s a constant rumble of people laughing and cheering and all kinds of fun things going on throughout the building, which I realize now is a better environment for our workers to produce.
I had the pleasure to interview David Stern, Chief Executive Officer of the urgent care-focused software company, Experity. As a medical doctor, David learned firsthand that providing a remarkable patient experience is the key for healthcare clinics to stay relevant and be profitable. That insight drove him from treating patients in the clinic to developing urgent care-specific software solutions that put patients first and enhanced their experience. With Experity, he remains focused on patients, helping to shape the urgent care industry, and developing solutions that ensure the success of clinics coast to coast.
Thank you so much for joining us David! Can you tell us the story about what brought you to this specific career path?
I started as a physician working in an urgent care center before I became the owner of a chain of six urgent cares. In that time, we discovered we had a significant issue: $1 million of revenue was missing from the clinics and the cause of the problem boiled down to improper documentation and coding. We attempted to correct it and capture all our revenue by training physicians and staff on our software, but we simply couldn’t close the gap between knowledge and execution. That’s when my partners and I decided to start a separate company that would automate that process with our own software platform.
I was well known in the urgent care space as a certified medical coder — the only certified medical coder I knew of who was also a physician. That gave me the necessary authority to speak to the problems people had with coding, and it lent credibility to our product right away. Initially, we offered a one-month free trial and if they didn’t like it, they could opt out of a contract with us. We had almost no customers opt out after that first month because most of them found they significantly improved the speed and efficiency of their centers and they increased their revenue by a much greater amount than what they paid us because their coding was more accurate. It was a win-win for everybody.
Can you share one of the major challenges you encountered when first leading the company? What lesson did you learn from that?
I didn’t know the software business when we first started, so I brought in the right minds necessary for us to succeed. But with all the new hires, I didn’t realize the importance of making it clear who reported to whom. For instance, I hired an engineer who had tremendous industry experience, and he wanted the title of president. I told him that was fine, and I will be the CEO. No problem. He promptly took the corner office and I realized about a year into our relationship that he really thought he was in charge of the whole company and I was just sort of a figurehead. So, the big lesson there is: Make sure you take the corner office and make it clear who’s running the company.
What are some of the factors that you believe led to your eventual success?
I think the biggest factor has been a positive outlook, especially when everything may appear negative. There have been multiple times where the company faced a challenge, but we turned those obstacles into opportunities to make the company better. The first instance was when we went through an investigation into our compliance and coding. It turned out we weren’t doing anything wrong except depriving ourselves of money. But the investigation inspired me to roll up my sleeves and become a certified medical coder, as I mentioned before, and fix our problems with revenue capturing.
We went through a second investigation for compliance issues, and once again received a clean bill of health. But the investigation actually increased the value of our company by about $90 million because it exposed some areas that we could improve as a business. Both times we took a very hard look at what we may have done wrong, and in those instances we wanted to make sure we cleaned it up.
Both investigations served as opportunities to improve our company even more, and I think our positive approach going into those processes helped quite a bit.
What are your “5 Things I Wish Someone Told Me Before I Became CEO”? Please share a story or example for each.
1. Culture is key to success. When I started the business, people could come into the building, sit down at their desks, eat lunch at their desk and leave at the end of the day without talking to anyone. But in 2012, we morphed our company into a team oriented, highly engaged organization with self-directed work teams and a very positive culture. We’ve invested about $700K in an intensive, two-day employee training program that enforces that culture, and we have seen our productivity go up 10 to 20 times what it was before. I used to be happy to walk into a room of a hundred workers and be able to hear a pin drop. Now there’s a constant rumble of people laughing and cheering and all kinds of fun things going on throughout the building, which I realize now is a better environment for our workers to produce.
2. Every job is your job. When I started my company, I was the webmaster of our site, completing SEO work at night when my kids were in bed; designing the product, working on compensation plans; and approving every aspect of the business as CEO. That was an amazing amount of work, and I think if you had told me how difficult it would be in advance, I probably would have passed. Perhaps my experience in residency prepared me for the long hours and high pressure, but I would still say starting a company and bringing it to success is the hardest job you’ll ever love.
3. You have to change as a CEO. Over the time I’ve gone from a startup CEO to the CEO of a company with a valuation of over half a billion dollars, I’ve really had to change, and I had to train the people around me to change. Up until 2014, every single person that bought our products received a demo from me personally — I’m not lying — for 12 years, every single customer worked directly with me. Now, we have a team that does demos way better than I ever could. You have to evolve over time so that you don’t have a hand in every single aspect of the business. It’s simply not sustainable, and at a certain point you need to trust the savvy professionals you’ve hired beneath you drive success.
4. Over-communication is the only communication. If you’re not over-communicating to the point that you’re sick of saying it, chances are you’re not being as thorough as you need to be. An example that comes to mind was when we hired a consultant to help us formulate our company values. Two months later, he came back and said, “Okay, let’s write those values on the dry-erase board.” Not a single executive — including me — could name one of our values. This reinforced the need for repetition and reinforcement.
5. Values are critically important. They are expected behavior for every employee, and they should be unique to the company. You need values that set the company apart that aren’t just aspirational and aren’t accidental but are purposeful and real in the company. Strong company values should be a guiding light and part of every company process. You have to know them so well that that you can’t not live up to them.
What advice would you give to your colleagues to help them to thrive and not “burn out”?
Number one, make sure you hire for growth for the future. You need to hire executives that can take your company to the next level that can handle all the tasks you need to delegate and trust they will execute appropriately.
Number two, when you hire those people, they have to be very competent and fit your company values. To know that, you have to spend time with them to ensure they understand expectations you’ve set for them.
I am not working as hard now as I did when we started the company even though we’re much bigger now because of the great supporting staff I have surrounded myself with.
None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story?
When my partner Dr. John Koehler and I were managing our own urgent cares, I looked at all the software solutions out there and told him nothing could really meet the specific needs of on-demand care facilities. He said, “Well, let’s start our own software company. You can do it.” And I had to say, John, I can’t do it. I’m not a software guy. I don’t know how to do software. And he said, “I believe in you and I’m sure you can do it.” If he hadn’t said that and if he hadn’t believed in me, the company would never have come into existence. I would never have been crazy enough to start the company on my own.
What are some of the goals you still have and are working to accomplish, both personally and professionally?
One of my goals is to really allow employees to share in the growth of our company’s equity and to take home more than just their regular paycheck. We have a synthetic equity plan that is available to every employee that has been here for at least a year. The average value is around $40,000 right now and some people have gone over $100,000 in equity, and that’s only in three years since we started.
I also would like to see Experity become the de facto choice for urgent care software in the same way that Google is the de facto choice for a search engine. Our name is highly recognizable in the industry already as we service about 40% of all urgent cares in the U.S., but we have a way to go before reaching Google’s level of ubiquity.
What do you hope to leave as your lasting legacy?
A cool lasting legacy for me would be to leave the company, and 10 years later it is still known as a unique place where employees are still treated and act as owners, both financially and as stakeholders. That would signal to me that I created something sustainable through the culture we established. I believe we’ve already built the company DNA that will continue to make it successful long after I have left.
You are a person of great influence. If you could start a movement that would enhance people’s lives in some way, what would it be? You never know what your idea can trigger!
I am writing a book right now telling the story of our company, and I expect it to be out next year. I’m writing it because I think a lot of people — company founders, CEOs, et cetera — can learn from my experience and from my mistakes. I think it would be really cool if companies out there could look to my experience with Experity and want to pattern their company after us. I hope more companies will want to treat every employee as though they are co-owner and will want their employees to actually benefit from equity in the company. I think other CEOs and founders will find value in seeing the company culture we’ve built with highly engaged and highly valued employees.
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