F or small and midsize companies, Calgary-based MediDirect Inc. is a lifesaver, offering a single online platform that handles a variety of human resources functions, from payroll to benefits to management. CEO Murray Malley purchased the business 12 years ago over cocktails at a bar during the Calgary Stampede, and at the time it was struggling. Here he tells Advantage how he turned it around.
I’ve been known as a troubleshooter. I spent 20 years as a turnaround architect on the finance side of the business world—a tax expert, then a CFO for hire for small to midsize companies. I’m good at it because I see things differently. When I look at a desk or chair, I see the pieces all spread apart. I build houses as a hobby. Similarly, when I sit down and look at a business problem, I can see it from however many ways it needs to be seen. I am able to argue any viewpoint, which allows me to understand the different perspectives.
I bought MediDirect from an insurance group I was trying to turn around in 2002. They weren’t sure what to do with it. I thought I could make it something by going after small to midsize companies. A few bigger ones have come to talk to us, but usually they have whole floors of people who do what we do.
The first thing I did was create a single database that drives everything. Most companies I had worked with had multiple systems for payroll and benefits. So if you had an employee change their address, you had to enter it in multiple systems. I thought it would be neat if everything was driven from a single database. We call it a human resource information system.
We also addressed the problem of turnover. In smaller companies, the HR department is often nonexistent. They can’t afford a dedicated HR/payroll employee, so payroll is done by an accounting clerk or an assistant in some other department. When that payroll clerk leaves, who does payroll? We can provide personnel backup when needed, so if a client’s payroll or benefits clerk leaves, we can provide someone to do it.
Another key to our success is that we answer the phone. It’s as simple as that. Other companies simply push money. You phone a 1-800 number and get a voicemail or someone in a foreign country. I’ve had to deal with that myself, and it’s extremely frustrating. So I said, “If we’re going to provide this service, we have to be there to back it up.”
How Are You Growing?
7 employees today compared to just 2 when Murray bought it in 2002
1,400 clients today compared to 50 in 2002
$15 million a month in MediDirect today compared to $40,000 in 2002
We work with our clients to make their employees happy. When your employees get peeved because a benefit wasn’t paid or they do not understand something, they want answers today. Often this happens three months later, and they’re venting to whomever they can get in front of. We intercept that. I say, “Let’s just be straight up about it when it happens.” We communicate with them when it may be an issue. We’ll answer the phone, tell you why it wasn’t paid. We deal with it when it happens. We won’t make you wait three months. As a result, we have lost only six clients in 12 years.
We communicate with our clients’ employees so that they understand their compensation packages. Normally, HR departments report to the finance office. When HR is managed by accountants and insurance brokers, people resources are being diminished to numbers. Things get paid, but employees only understand that they receive money. They don’t understand the benefits. I personally rewrote a brochure that explains key benefits. You don’t need paragraphs that explain vision coverage; you need to say your plan will pay for your glasses. We only get 5–10 calls a day from our clients because we’re so clear up front.
We’re not on the cloud. If you’re a little guy and don’t want to spend money on software, the cloud makes sense, but it’s not where we want to be. Most public companies won’t do business with you if you’re on the cloud because of their governance models. No one knows where the information resides. Good governance requires you to know where your information is at all times.
I don’t ask people to do what I won’t do. That’s not leadership. If you’re sending someone into war and you’re not willing to lead them, you don’t have much conviction in what you’re asking.