Streamlining Hospitals: Omnicell CEO Randy Lipps (Part 5)

SM: You are now at the $250 million range in revenue. That has taken you approximately 15 years. What is it about you that lets you grow to the next level?

RL: Every couple of years I have to reinvent my management style and business philosophies. Most entrepreneurs don’t last with their companies because they keep doing the same things. I have learned how to let go of areas of responsibility and entrust them to others.

Every day the company gets bigger. It is important to realize that you are running a bigger company today than you ran yesterday. The people you bring in have a lot more insight into what you need to be doing. As a CEO you have to be big enough to let go of things and say you don’t know. If you have a management style that is not so founder-centric you are going to be better off.

Everyone admires good performance, but the chemistry and culture has to be the right mix as well. Your job as CEO is to hire the absolute best people you can. If you stop hiring people who are smarter than you are, you will fail.

Another thing that is very important is to be transparent and admit your mistakes.

SM: That is very hard for most people to do.

RL: I think so. When the stock went down to $1, I admitted that I put us in that ditch. We had to do a layoff so I took no salary until I had the company profitable again. I told my employees that I felt I had let them down.

SM: When you went public, did your board counsel you to get a CFO who was experienced with the Street?

RL: We had a CFO who had some public experience, but a smaller company needs to have a really aggressive stance on the Street. You have to tell your story over and over. When any bad news comes out, you need to have people on hand who love your company and want to buy your stock if it discounts itself a little. Those are folks who are waiting for the stock to dip to get in. That is what a true market is. It took me a while to figure that out. Every quarter I do a non-deal road show. I go see investors for two days. They are not folks who own stock, but I get on their screen. Our stock is still a little low right now, but everyone’s is probably a little low right now.

I remember when our stock was $1. I went into the board meeting and put a $20 bill at every board member’s place before they came into the room. I told them that was my personal money and that I wanted to get the stock to $20 a share and that I would not take a salary until we were profitable. I then explained what the upcoming changes were going to be. I gave them my lessons learned from what we did wrong.

Another thing is that I love consultants. I bring in short-term consultants for a week or two and learn 80% of their tricks. You can learn a lot from that. That is a good way to see your blind spots.

SM: Something I am hearing in your story is that the board was smart enough to not be trigger-happy. That is a big problem with other boards.

RL: I think so. I think some were reluctant, but good CEOs have to do things that almost get them fired or they will not be good CEOs. When you succeed everyone will forget. It is all about exceeding expectations and correctly allocating resources.

This segment is part 5 in the series : Streamlining Hospitals: Omnicell CEO Randy Lipps
1 2 3 4 5 6 7