One-on-One With Allscripts CEO Glen Tullman, Part III

TULLMAN: I think you raise something that will be an issue going forward. There’s going to be more and more demand as the market grows and accelerates, more and more demand for qualified people with experience. That said, if you had listened to our last few earnings calls, one of the things you would have heard was that we had “stockpiled some people.” When we did the merger, could we have eliminated more people? Probably. We didn’t do that. What we did was basically said to those people, “Hey, help us work on some of our initiatives, spend more time with customers, do a variety of different things.” Now, as the market’s starting to accelerate, we have those people already on board.

In addition, as I mentioned, we’re continuing to hire. Consequently, we are, from that perspective, getting a little bit of a choice of the people we want. I think it also helps that we’re regarded as a leader, we’re regarded as innovative, we’re regarded as entrepreneurial, so people want to work here, as opposed to some of the other companies in the market who I think are good companies, they just don’t have the same spark that we have.

GUERRA: How do you not succumb to the natural tendency to take on every deal that comes along? Do you have to be careful not to outstrip your resources and promise more than you can deliver?

TULLMAN: When you grow, you have to grow the right way and you have to find great customers. I mean, if you look at the announcements that we made, those are very, very strong relationships, they’re high-profile customers (#1) and (#2), the quality is important because healthcare is a small place, so you want to stay focused on your clients.

But growth is tricky because we’re adding people in advance of when we need them. We’re focused on building systems that will make our people more efficient, we’ll make implementations more rapid, so all of those are the components to growing a great company.

We’re very, very focused on two pieces I’ll mention. One is we’ve added some high-level management capability. First is Eileen McPartland who came from Oracle and SAP. She was with those companies and helped them go through their growth stage. She’s now our chief operating officer. Second is Diane Adams who came to us from Cisco. She joined Cisco when it had 4,000 people. They have 67,000 now. Diane was responsible for most of those people in her HR role. Coming to us, she has the opportunity to do it again.

So we’re building on the success we’ve had in every area by adding more experienced people who have been through growth, by investing record amounts in resource and development, by continuing to stay focused and close to our clients, and finally, by ensuring that we do what we say we’re going to do for those clients. That’s one big piece.

There’s another piece, and that is how do you create leverage? So, how are we going to go out and sell all these new physicians? Well, we created something called the Allscripts Distribution Network. We went to the best players in the market, folks like Henry Schein who have enormous sales forces and client representatives or client relationship managers. They’re in these offices every week. We have a strategic partnership with them. Cardinal Health is, again, another referred name in the industry. These are two of the most highly regarded names in healthcare. Both have become partners with us and their sales forces are selling our products now.

And so we went from having a few hundred salespeople to having well in excess of a thousand, and that gave us an expansion of capability, but it wasn’t just anybody selling the system. These are high-quality organizations, they’ve gone through our training and they’re tightly managed with us. So we have aligned objectives. So again, how do you grow? You invest in people, you invest in systems, you get the right partners, and last but not the least, you focus on your customers.

GUERRA: Whenever you enter into a deal, I would imagine want to make sure the customer is bringing the proper resources to the table. How do you handle that?

TULLMAN: That’s a very perceptive question. In some cases, a client’s objectives, goals, and budgets change after the deal is signed, so they can’t adequately pay attention to the project. I think, in those cases, you have to do a few things. One, first and foremost, you have to call it out. You have say, “We have a partnership, we both have to do our parts, and if one party doesn’t, it won’t work.” No vendor can do it all themselves and no client, of course, can do it all themselves. So first and foremost, you have to be honest.

Second, you need a relationship and you need a close monitor on the pulse, so to speak, of the project. Are we making progress? We have a program called the Executive Sponsorship Program. That’s where our executives all take on accounts where they are actually on those account calls, and I’m on account calls every other week. What I hear is there are real issues that come up with those accounts. But at the end of the day, you need client leadership, and by the way, you need executive leadership, you need physician leadership, and you need technical leadership.

When you go into an account and ask, “Who’s the physician leadership or who’s the physician leader?” and they say they don’t know or, “Who’s the executive sponsor?” and the don’t know, that’s an immediate indication of risk. You have to have a partnership to make these things work. It’s a big part of what we do, and that’s why I think it’s so important that we have the best people in the industry.