Many entrepreneurs dream of growing their companies big enough to go public. Many fewer succeed.
Tee Green has. As CEO of Greenway Medical Technologies, he took his Carrollton-based company public earlier this year after 14 years as a privately held operation. The company, which sells an array of software products and services to health care providers, needed to raise capital to keep on its growth trajectory. It’s been taking advantage of a wave of conversions from paper records to electronic ones, so hospitals, doctors and nurses can more efficiently and rapidly communicate with each other about patients.
Greenway’s annual revenue rose to $124 million in the 2012 fiscal year, up from $39 million four years before. It posted $2.9 million in net income, while growing to 730 employees. (The company was launched as a $10 stock in February and is now trading in the $15 range.)
Green, 40, and his father didn’t start out in health care, but switched out of financial services after listening to a small group of investors 16 years ago — doctors in need of IT help. He talks about that move, as well as what he learned from going public.
Q: Your business changed course fairly dramatically. Would you please discuss?
A: My father, myself and one other gentleman started in 1994. We developed a check-imaging application for the banking industry. We received a patent on processing checks on the Microsoft Windows platform.
We had a group of investors that were doctors and health care executives. In 1996, the doctor investors came to us and said, “You guys are doing some really cool stuff in financial services. Why can’t you do something in health care?”
We began to look at why they were so frustrated. That’s where the concept came to integrate the financial, clinical and administrative processes of their business into a single software platform.
In 1998, we spun out Greenway Medical and sold the financial company to our largest competitor.
Q: What did you learn in your financial services business that helped you in this new one?
A: In 2000, we looked back on those financial service days and said we didn’t think long-term about the banking industry. We were trying to solve one problem — how they processed checks. We didn’t think about taking that check in the digital format and routing it to the Federal Reserve, or publishing it to an Internet site. We didn’t think it all the way through.
Well, in health care, we knew what application the doctors needed now. But then we said, “Time out. This is deja vu. What is going to happen in health care over the next 10, 20 or 30 years?”
Isn’t it awesome to see a company think in decades, not quarters?
If you’re building a business plan over three decades and asking people to invest in it, they think you’re crazy. But we backed up and identified the major trends that are going to impact health care. In 2000, we identified three things — that the world would electronify in health care, that the consumer would emerge as a more important force, and that there would be a real thirst to improve health.
Then you build a platform that allows your customers to address those trends as they unfold.
Q: You’ve been right about those trends, and your company’s revenue has grown rapidly. Would you please discuss what you learned while going public that others might benefit from?
A: We talked about if from Day One, since 1998. To build a multibillion-dollar, worldwide, IT health care company, we knew we would probably take it public. We knew we wanted to compete at the highest level against very large organizations like McKesson and GE.
You have to practice going public before you go public. We had our board structured the way a public company did. We had the type of meetings and minutes that public companies did. We were not completely compliant with public company rules, but we were building towards that.
We did not want the act of going public to create such a disruption in the organization, like it can. So about three years before we went public, we started to enter that cadence of quarterly financial reporting with our board. I brought in a CFO who had done several IPOs before, so he could help navigate this process.
We raised nearly $70 million. It gave us liquidity for our shareholders. And it gave us a presence. It put us on a stage with other publicly traded companies. In the southeast, a lot of people knew us. But in California, they didn’t. We needed to change that. The IPO gave us an opportunity to do that.
Q: Any other lessons from going public?
A: We solicited a lot of advice from consultants and others before we went public. We began building a relationship with our investment banking team years before we went public. I knew the investment bankers in our space and I knew the ones we wanted to work with. I think that is key.
You have to have amazing talent with your CFO, your general counsel and your auditing and accounting partner.
And one other key thing I would not have known — the relationship between outside counsel who represents Greenway and the counsel who represents the investment bankers is very important. If those two have worked together in the past and get along, that is a key tactical thing that made our process go much smoother.
Q: Public companies face daily and quarterly financial pressures that private companies can avoid. Have you changed your leadership style since going public?
A: You have to take a long-term view. Take a look at my cellphone. This is my stock portfolio. You can scroll through here and you won’t see my stock listed. What happens on a daily basis is totally out of my control. What happens strategically long-term is in my control.
When I look at things a decade down the road, that helps the leadership team know that the most important thing is making sure that our long-term vision is accurate. Are we on the right track?
We have to have a vision for our team that says I can partner with Greenway, build my career and provide for my family. When you do that, the team will serve your customers in ways that companies that are short-sighted can’t or won’t.
If you do that, the customers will, in turn, serve your shareholders. It’s going to work in that order. If we ever get out of that order, we’ll never be in this business long-term.
Each week, Sunday Business Editor Henry Unger has a candid conversation, called “5 Questions for the Boss,” with a top executive in Georgia. Some remarks are edited for length and style.