Andrew Smith is co-founder and vice president of Impact Advisors of Naperville, IL.
Tell me about yourself and about the company.
Impact Advisors is a healthcare IT consulting firm. We’re dedicated to the provider space. For us, that’s medical centers, academic centers, children’s hospitals, and physician groups. We also do some work in the payer space.
We’re focused on the technology aspects of both planning and implementation. About a third of our business is associated with planning and assessment work, things like selections, Meaningful Use assessments, long-term strategy, interim management, governance modeling, and mergers and acquisition planning. Two-thirds to three-quarters of our business is focused on implementation work. A lot of our work is around the major inpatient vendors as well as the major ambulatory vendors.
I’ve always worked for a non-profit hospital, so I’m curious. The company has been around not quite five years. How do you go about starting a business in terms of money, research, and effort? How do you know what it takes to build a sustainable business?
Great question. I wish I would have known the answer five years ago. It’s basically School of Hard Knocks. The firm was started five years ago by myself and my brother, Pete Smith. Before that, we had spent 16 and 20 years plus at another consulting organization. For a lot of reasons, it was the right time to start up on our own.
When we started, we had very modest aspirations. We thought we would just hang our own shingle and do some work. But very quickly, other colleagues started to call, and clients started to call looking for a different kind of solution. We started to grow and have been growing ever since for the five years.
How do you form that company? That’s a great question. We hired some very experienced people to help us. We outsourced a good bit of our function. We just sort of figured it out.
In terms of the requirements to get started, I get calls fairly frequently from people that are looking to start an organization. What I tell them is that working for yourself is great and I highly endorse it, but you need to be prepared to learn a lot on the job, you need to be prepared to take a lot less money and maybe not get paid for quite some time, and you’ve got to be willing to take some risk. If you’re willing to do that and you’re smart and your motives are pure, it typically will work out.
Some consulting firms stay small and are happy with that, while others get huge and then hit the wall where they either need to be acquired or grow to the next level. You’re probably at least somewhat surprised that you got as big as you did over that time. How do you see that playing out and what do you look for to challenge you in the next five years?
For us, culture and quality trump growth. We have grown. Our clients have asked us to grow. They’re asking us to do more and more for them to solve more and more complex problems. But for us, we are way more interested in doing it the right way. We resist those growth opportunities where we don’t think they are directly in concert with what we’re trying to accomplish as a firm.
We want to be a world class consulting firm. We want to be the best place for our consultants to work. We want to do really high quality work for our customers. We want to partner with them. We want to take work when we think we can provide it and we want to turn it down when we think that we can’t do the best job possible.
That has been a barometer of our growth. We couldn’t grow much faster than we have. We’ve probably averaged 50 to 70% growth over the five years, but that’s absolutely secondary to doing it the right way.
We’re a culture-based firm. We hire on attributes like work ethic and content knowledge, but almost as important is attitude. We want people that are willing to support each other, that are empathetic, that are client-delivery focused and obsessed, and at the end of the day are somebody that you wouldn’t mind having dinner with. That is the very first gate you’ve got to pass.
Growth has been a very nice outcome. We like growth. Growth means you’re winning. Growth means there is more opportunity for people to move in different directions in their careers. But for us, that is absolutely secondary. We think we still got some track in front of us. We think we can still grow for the foreseeable future and continue to retain our culture.
Consulting companies aren’t always great places to work with all the travel and emphasis on billable time. You’ve won some awards and hired a Happyologist, which I’m sure I made fun of at the time. What are you doing that the other consulting and vendor firms aren’t?
At the end of the day, it really gets down to the Golden Rule. Treat others like you want to be treated. It seems so patently obvious to me. I don’t know why their firms don’t do it, but I think we’re pretty good at creating culture.
A lot of that comes upfront by making sure we have the utmost integrity during our recruiting process, and that we don’t overpromise during the recruiting process. We’ve got a wonderful recruiter who really is a wonderful gauge of that. It starts right up front at the first meeting and is constant communication through that person’s career. That’s the first thing we do.
Second thing, as you mentioned, we hired a Happyologist. His official title is director of associate satisfaction and culture. I think we’ve done a nice job of culture building. We won some awards. We were number three in Modern Healthcare’s best places to work this year. We were the highest-rated consultancy in the last two years. We take it very seriously.
I think we’ve done a historically good job of creating and nurturing culture, but we wanted to hire somebody who is absolutely 24/7 obsessed with how we treat each other and a culture we’re creating as a firm. So we hired our Happyologist, Michael Nutter. He has done a fantastic job over the last year. He’s really responsible for three things. He is in charge of communication, internal and external. He is in charge of our professional development process or career coaching. He’s also in charge of our culture.
That’s the intangible, but we do a lot of things around that. We have our annual retreat, which we call Impactpalooza. Sorry – I think we might have used the name before you did, but we both stole it from Lollapalooza. You know we had an associate pet supermodel contest. We do winter dinners pretty frequently. We just finished a round of holiday dinners. Michael is really in charge of making sure that we celebrate ourselves, so that we celebrate our successes. We pick people up when they fall. That has left a very tangible impression about the firm.
Most of your folks are on the road, so I guess you have to make it bigger than life to make it memorable since you don’t see them often.
It is really hard. To win an award like Best Place to Work is really hard as a consultancy. We have some things going against us. We all travel like maniacs. We’re all pretty Type A-driven people. We’re working really hard at our clients.
It’s really a family commitment. That’s one of the things we stress when we hire. Hey, this is tough work. You’re away from home, you’re working hard, you got demanding clients, you’re solving really tough problems that they can’t solve on their own. Your family needs to be comfortable with the lifestyle and the amount of work. I’ve actually interviewed spouses that we brought in to the recruiting process just to make sure we’re all in the same page.
You beat out some pretty good competitors to win the Clinical Implementation Principal award from KLAS, especially considering that the company hasn’t been around that long. What are the secrets that companies who might have been the favorites to win aren’t doing?
We pay a lot of attention to clients. We’ve got an executive assigned to each one of our clients. Their job is to make we are paying attention to them.
We are certainly not flawless. We’ve had mistakes. But I think where we are exceptionally good is that if we make a mistake, we always overcompensate. I’ve literally flown across the country to give a client their money back on a job where we did just an average job. Quite honestly, I don’t think we are an average firm; I think we’re an exceptional firm. So I flew across the country, gave the gentleman a check, and lo and behold, a few years later, we’re back there working again.
Being private and small has allowed us to do some pretty interesting things and to stay really obsessed with overachieving our clients’ goals. I think that’s probably the thing we do better than others.
Who would you say are your most direct competitors?
We deal with the Big Five, the traditional ones. We deal with a number of vendors in the space that have similar profiles to ours. Depending on the job, we could compete with Deloitte or Encore or Aspen. We don’t typically do a lot of staff augmentation roles, so we don’t find ourselves competing with the staff augmentation firms that much. That’s a good business model; it’s just not the model we are in right now.
What we’re really doing is trying to hire the best people. We staff them from the leadership positions on down. It has become an interesting time because our clients are asking us to expand our services and asking us to supply a bigger and bigger footprint in their implementations. We’re starting to move in that direction a little bit, but I don’t think we will ever be a staff augmentation firm. If a client calls us and says, “I need 30 trainers for three months,” we very politely decline or we refer them to some trusted partners.
Opinions seem to vary about how many providers are chasing Meaningful Use money and how many of those are likely to get it. What are you seeing?
It’s absolutely been a catalyst for people to kick off large EMR projects, which has been great. It seems like there’s a bit of a gold rush going on right now. People are really focused on the money and maybe not so focused on the goals that are inherent of achieving the money. I totally get it. There’s money out there to be garnered; you might as well make sure you get it. I am hoping that there may be some tempering of enthusiasm over the next couple of years. All of our clients are very involved in planning for, reporting, and now cashing the checks.
Hospitals seem to be pacing themselves for a sprint, forgetting that after the sprint comes the long run. Do your clients understand that they’ll need more work than just going live, looking 5-10 years down the road to change their business?
I would totally agree. I don’t think as an industry we’re asking that question. What do we do when we get there?
What we see is the industry is moving so quickly that there is going to be a wave of optimization or a Phase Two of these implementations going forward. We’re very interested in that. We spend a lot of time focusing at what’s next after the next two years. We think that’s going to be the really hot service area.
We’ve got some methodologies already developed around how to attack that, but quite honestly the market’s not buying that right now. Our industry is really focused on foundational systems at this point, digitizing electronic medical records. After that’s done, I think there is going to be an entire wave of work about, OK, did the data we collect have integrity, what do we do with it, how do we turn it digital information? That’s the analytics – business intelligence wave of technologies we think will be very important in the coming years.
You must be involved in quite a few system selections. What products are hospitals looking for and what factors are driving the decisions they make?
Yes, we are doing a number of selections. I would say the most traditional selection is a system that is looking for a single vendor across multiple disciplines — inpatient, ambulatory, clinical, and rev cycle. It would be great if there was a vendor out there that provided traditional ERP solutions along with those other modalities, but I don’t think we’re there as an industry yet.
They’ve been frustrated by a best-of-breed approach and the lack of information flowing across their continuum of care. That is probably the biggest driver we are seeing right now.
In terms of the sizeable accounts, is anybody beating Epic?
Not really. They are certainly the vendor to beat in the space right now. They do have a lot of that integration story to tell. They have integrated ambulatory, inpatient, rev cycle, and clinical product, obviously. You probably saw the KLAS reports as I did. They’re winning a majority of selections in the industry right now.
What does that mean for a business like yours? Epic offers their own implementation services and Epic-certified consulting firms are competing for the limited number of certified people.
We are a certified Epic partner as well. There is an incredible demand for a good implementation partners that know that set of technologies. That has been a major growth area for us in the last two years and will probably continue to be one for the next few.
I think we have a very good relationship with Epic. We absolutely challenge them, but I think at the end of the day, what we do is help implement their products more efficiently and to a better outcome.
I find that we typically provide a lot of leadership, subject matter expertise on their projects, but we’re not backing up the truck, either. We are a small firm. If a client comes up and says, “I would like to outsource my 200-person Epic implementation,” again, we politely decline. But if they come to us say, “Hey, we really need some trusted partners in some key positions to help us implement this more effectively,” that’s right up our alley. That’s where we’re best.
You mentioned that you don’t back down from Epic, but if getting on their bad side resulted in their not approving you as a consulting firm, that would hurt desperately. Do you think companies fear Epic in that way?
I don’t worry about that. I don’t think we really can worry about that. I think at the end of the day, if our intentions are pure and we’re trying to accomplish what’s best for our clients, all the rest is going to work out. That is Epic’s corporate philosophy as well. I find that we’re typically very synchronous in what we are trying to accomplish. It may just be the means to the end.
Having said that, we work very well within their methodology. They bring in an incredible amount of tools and skills to the implementation and I think we complement that very nicely. Our traditional person within Impact Advisors comes with probably a 10-year clinical operations background and a 10-year consulting background. We bring some real-world experience that complements very nicely their products and services, so I think it’s a nice fit. I don’t really worry about challenging them. I worry very much about being an advocate for our clients. The rest tends to work out.
What issue or actions are threatening hospital CIO job security?
Failed implementations are always at the top of the list. If you aren’t meeting the objectives you set forth and you spent tens or hundreds of millions of dollars in the pursuit of, that’s not a good thing. At the end of the day, you need to be able to prove outcomes. Our industry, I would say, has not done that great a job of clearly identifying the return on investment and then measuring it post implementation.
I think there will come a time where the CIO is expected to say, “OK, we spent $100 million and we achieved a 120 or 200 or 300 million dollars worth of benefit.” That would be the first thing I would worry about. The second thing is no different than any business — overpromising and under-delivering. If you can’t run a tight organization and have a staff that’s focused on client delivery and outcomes, that’s never good as well.
If you look at where the industry is today and where you think it might be 5-7 years down the road, what kind of things do you see?
I think it is going to be an incredibly fun ride. I think the next five years is going to continue to be dynamic and tumultuous. I think that the firms that do best in this industry over the next five years are going to be the ones that innovate with their clients, that hire the best, that are nimble and agile, that can move with the market. I think we’re good at that.
It is very difficult to predict what is going to happen over the next five years, but if we stay focused on the objective of good client delivery and helping our clients achieve great clinical outcomes and help them do that as efficiently as possible, we can’t go wrong no matter what happens in the regulatory environment or legislative environment.
Any concluding thoughts?
It has been amazingly fun to grow a company over the last five years. It has been really liberating. I’m very proud of what we have achieved over the last five years. I’m really proud of the culture we have built. I’m really proud of the people we get to work with every day.
I’m thankful for our clients. We get to work with some of the blue chip clients in our industry. We get to learn from them and help them achieve some great things. It has been a fun ride.