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Leadership Lessons from the CEO of $12.4 Billion Company Henry Schein. with Stanley Bergman Ep.184

By Anthony Taylor - November 19, 2022

SME Strategy is a strategy consulting company that specializes in aligning teams around their vision, mission, values, goals and action plans. Learn more about how we can help align your team with our strategic planning and implementation services.

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Anthony Taylor: Hey there, folks. Welcome to today's episode of the strategy and leadership Podcast. Today I'm joined by Stanley Bergman, who is the chairman of the board and CEO at Henry Schein. Stanley, how are you today?

Stanley Bergman: Good, Anthony. Thank you for hosting me on your program. I'm looking forward to this.

Anthony: I'm so excited. Why don't you tell our listeners a little bit about who you are about Henry Schein and we'll go from there.

Stanley: Henry Schein is the largest provider of products and related services to office-based health care practitioners. We have about a million customers around the world. That's about a million and a half dentists and physicians who buy their products and services from us, throughout the world. And essentially, it's consumable products, equipment, software, financial services, pharmaceuticals, anything that a dentist or practitioner may need in their practice. And if you go into a dental practice, you look around, the chances are you'll see Henry Schein products in that practice.

Anthony: Excellent. And how long have you been with the company for?

Stanley: I've been with the company for 44 years.

Anthony: That's awesome. And so being such an impactful business being with the organization for so long, maybe you tell me how did you get started with an AI? How did you get involved? And what will go from there starting at the top?

Stanley: I'm an accountant by background. And 44 years ago, this was a client of mine. And 42 years ago, I joined the company as the first CFO of the company. And my job was to put in a computer system. The rest is history. Today, we're the most automated company in our field. digitally. We drive digital dentistry, we drive all aspects of the healthcare profession, using technology and started 44 years ago.

Anthony: That's awesome. So if we think of that 44-year trajectory summarized in a few sentences, what has that been like for like the ebbs and flows just internally, with the economy and the market? Can you give us a quick synopsis of what that's been like?

Stanley: We started out actually, as the first company to offer a complete list of dental products. In other words, whatever dentists may need, we price those products, and if you ordered them from us, we deliver them. So we were like a kind of Amazon 40 plus years ago for dental products. And from there, we took the company to adding different kinds of equipment, entering the medical space, going abroad, and in software, and in various services that we offer to help run the practice. And a whole bunch of activities that help dentists and physicians operate more efficient practice so that they could provide better clinical care. You can imagine where we went from, I think it was $40 million in sales when I joined the company formally in 1980. And we're going to do somewhere around 12 and a half billion dollars this year, you can imagine it didn't go as a straight line. There were ups and downs, the world's economy had some challenges along the way. Not every system is going store. Not every customer loved what we did, but ups and downs. And I'd be happy to share some of those lessons. Absolutely.

 

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Anthony: Well, what I find fascinating, just in a brief time we've been together is like you're so laser-focused on not only the value that you deliver for the customer, even 40 years ago, and then the focus on the customer and say, This is who we're serving, and everything we do is to add value to them. Do I have that? perspective, right?

Stanley: It's all about helping the practitioner operate a more efficient business practice, because we're in the free market, so that they can provide the best clinical care. And in order to do that, we have to delight our customers with experience. And that's what it's all about.

Anthony: One of the other undertones was innovation. But you said it fairly matter-of-factly. You know, was it 20 years ago when you installed that computer system, where people just saying, Yep, let's jump on to this computer thing. And let's jump on to this director at livery thing. What was the kind of path that you had to go through and are probably still going through as you look at implementing those innovations and exploring innovations as you focus on that value stream?

Stanley: But I'm glad you mentioned innovation because Anthony, most people think innovation takes place in a lab. In other words, in a chemical situation, you are making a drug, you put a little bit of this group in to come up with a new drug, you come up with a new technology. With us innovation is really in helping our customers succeed in their practice. And we're always coming up with new ideas to help our customers really drive efficiency in their practice. So that They can provide better clinical care. That's the innovation we bring to the marketplace. For example, we went to the dentist in 1980 and 1990. And said, You need to put a PC in your practice. They used to play games with their kids, or they used it as a word processor. We said you can use the PC practice at the personal computer, in your practice, to drive efficiency in the practice. And you know what, you can even put up an electronic medical record that was highly innovative. It wasn't traditional technology innovation, but it was using the tools of technology to improve how healthcare is delivered.

Anthony: Yeah. Some from a practical standpoint, when we think about communication, we think about change management. Obviously, you have that commitment to your mission and purpose within that, you know, behind the scenes, what was it like trying to convince people to get a computer into their businesses? Were they adoptive of it? Were they resistant? What are some of those conversations you might have had to had with your team to help make that transition happen?

Stanley: Oh, it was like a fish out of water. I mean, the competitors laughed at us. That was the biggest player at the time who said we like a three-legged ostrich. You know, we have consumable products, we have the equipment, but you're going to introduce software to dental practices. That's ridiculous. That comes from software companies anyway, the software is not the kind of thing that dentists are going to actually use in their practice. So we always tease, always joke a little bit and we say that you know, that some three legged ostrich because every practice in the world, that dental practice in the world has some form of digital technology that they practice today. We began that revolution, how we did that we had a committed team. At the end of the day, it's all about the team. And number one asset is our team, and the team are committed to it. We got it done.

Anthony: Yeah. It's one of the things that you mentioned Amazon earlier, and one of their big like kind of breakthroughs. Because innovation obviously doesn't happen instantly. Over time, one of their breakthrough things was AWS, they brought AWS in and it created this whole you no revenue, ridiculous amount of revenue for the company through that innovation. It sounds like your three legged ostrich, that third leg probably created part of that 40 to one point whatever billion in revenue, because it was such a sizable innovation within your business were there. And or were there other big innovations that led to that successful growth.

Stanley: Of course, that was one innovation. But I'll tell you another innovation that is so simple and obvious today. But in the 80s it was not important. The way dental products were sold in the 80s. And even into the 90s you had little distributors throughout the world. And they would have everything in the back office. And they would send out salespeople to collect the orders. We said you know what? We're gonna set up five in the United States giant distribution services systems, so we can deliver products the next day. That was unheard of. And then we said, You know what, if you have an audit, call a central tell us center to take your order. And you know what, you can even place an order to click those orders. And we revolutionized the way distribution was distributed. Then we said, you know, what, doesn't only have to apply to the US, let's take this concept global. We did that. Then we added the software. And then we added all sorts of services to it. And basically, the revolution was adding incremental ideas to help the practitioner operate in more efficient business. And today, we even manufacture our own specialty products. For example: A dental implant, we make the bone regeneration that goes into after a tooth is extracted, we make that stuff, but we package that stuff. So the whole idea of one stop shop for everything a dentist or physician may need. That was innovation that was revolutionary. All simple. Each one was just a little bit of an add on. But you add it together. There's no one in the world that has done what we've done.

Anthony: I think that's really cool. And again, for like our listeners, you know, obviously as a facilitator of strategic planning, that alignment with the vision and mission is critical. It's really like, Well, why do we have to focus on the mission? Like why do we do that stuff? It's like a buzzword or a marketing thing is no, because when you're so clear on what you're delivering, then it helps you say is this going to add value to our customer or not? If it's not going to add value, don't do it. And sometimes they're big and sometimes they're small, instantly it sounds like that again, hyper focus on it incrementally and transformation only adds massive value and the service to your people. So let's maybe switch gears a little bit. I see that you've got an extensive books shelf behind you, which I asserted means it's contributed to that 43 years 44 years of leadership? What are some of those, you know, leadership principles? What are some of those guiding ethos that you would want to share with our young leaders listening so that they can, you know, support a company into, you know, the next years of success?

Stanley: Well, the books you see behind my library are all about history and biography. So, I love to study what people have done in the past and apply it to the future. I'm not a big fan of reading leadership books, because I think at the end of the day, leadership is about common sense. It's about engaging the team. And if you can create an authentic relationship with a team of outstanding people that are committed to what we call, doing well, by doing good at Shine, but we're very committed to advance the needs of society, while committing while advancing our business. If you can get that kind of commitment from a team, you could do anything you want. Because you're trusted. So but you're asking now another, what are some of the big lessons and for me, I would say a tough lesson is being flexible and nimble and innovative. We've discussed that and you've come from Vancouver, I don't want to mention a person that may upset you. But there's a hockey player Wayne Gretzky, I think he didn't play for the Canadian teams as my understanding the Edmonton Oilers, he won several Stanley Cups with them. But go on, is that the end, Wayne said go. I grew up in South Africa. We didn't do much hockey there. I saw he said, but he said, figure out where the puck is going. And that's where you should go. And I think that's what it's all about. You've got to be flexible. You have to figure out where the puck is going and try to get there. And that's to me the top lesson. But also, I would say, as we said early on, get everybody to get engaged. Now. To me, the most successful leaders are the ones that actually could run a great summer camp. Can they get everyone to play in the game? To me, that's really critical. And there's no room in the world any longer for bosses. It's about coaches, facilitators and mentors, and a lot of celebrating of achievements. Because in order to get things done, you have to make a lot of mistakes. And then you celebrate the achievements. Absolutely.

Anthony: It's interesting that you had said, hey, you know, I don't learn from those typical books. You use the Wayne Gretzky analogy about going where the puck is. And then at the same time, you said from a leadership perspective, not just moving people forward, being flexible, nimble, innovative, and celeb, celebrating those wins. But advancing society, and arguably, all of the leaders or I'm sure you've learned from many, but the four that we just discussed, not including Wayne Gretzky, they all advanced society. And I think that that's what the opportunity that leaders have now is not just to do good business, because anybody can make money, I believe. It's, Hey, how can you make a difference in the lives of people and the well being of people in the betterment of the planet? And just be good? And so I'm excited for that. I think our listeners resonate with that. I know I certainly do. And, on that note, I'm just grateful to have you in a conversation here. So he said, celebrate the wins. Learn from the mistakes. So Stanley, what are some lessons that you learned potentially the hard way that stuck with you is that well, I'll never do that again. And if you've got a story or anecdote without, you know, putting yourself too far out there, I'd love to hear.

Stanley: Well, to me, there are two big overriding lessons that I learned the hard way. One is you have to tolerate risk. Not easy. You know, you have to give young people a chance to fail. So long as they don't fail too often. You just got to stand back and let people fail. Because at the end of the day, it's through failure and learning and experimenting, that you advance any cause. And that's particularly important now on the, if you want to do business on the internet, for example, you know, you've got to be prepared to test and test and test and test. And it's very hard to absorb the losses. But you have to be able to do that. I think that's a critical challenge to advancing any cause, the ability to tolerate risk, ambiguity, and fail. And the second is, to me, I suppose the biggest challenges I've had is when you see a great manager, who knows the strategy perfectly and knows what to do, but doesn't share the values of the company to move quickly on moving that manager out, even though it may cause a huge cost, short term, but long term, it's the right thing to do. So tolerating risk, tolerating mistakes, and making decisions on management that doesn't share values are two things that are very hard, but critical to focus on.

Anthony: Absolutely. And I can definitely see the tie in with the two. So, one, you can't innovate without failing, because it's a prerequisite to being willing to go through that process and suffer some air quotes, losses, you know, learning to say, hey, how can we do this better. And I think, again, as you had mentioned, that the moving society is advancing society forward, if you don't have the same values, then you don't have the same drivers and motivators. And so it's impossible to create a company as successful and as impactful as yours. Without values alignment. So, listeners, as you're going through your strategic planning off site, you know, don't skip out on that, because it's the building blocks for everything. And, you know, grateful, Stanley, for you to share that perspective, like lived in action. Since you talk about shared values, and obviously, you've got, you know, the company is global. What's it been like, operating in 30 countries, and having to adapt like that one mission, that one mindset hasn't been easy? Has it been challenging? Lessons, anything you can share from leading a global company?

 

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Stanley: Yeah, well, everybody wants to advance their career, put food on the table for the kids’ quality of life, everybody wants to make a little bit of a difference in the world if they can. And our job as a company is to give our team the platform to advance the needs of society, everyone wants to participate. You know, we are in a particularly advantageous position from that point of view, because we serve us in healthcare, who doesn't want to help people that are sick. So everybody has this in common, of course, there are particular needs in particular countries because of cultural differences. And one has to be respectful of the differences in cultural needs. But the desire to be successful and to advance the needs of one's family and help society in general, our overriding and there is opportunity to be forgiveness, to provide forgiveness for people that don't quite appreciate maybe the societal differences, and we come from the United States, we have very clear views on the way the world should be run. And, you know, there is forgiveness that we come across very strong, so long as people believe in that we support the common values that are outlined, which is to have a decent living, to take care of your family. Our society in general, so the values are there, and there is forgiveness on the there's a tolerance for ambiguity on misunderstanding or misalignment in cultures and language gaps. But it is important to understand these various cultures to be successful internationally.

Anthony: Yeah, right here that the tolerance and forgiveness is again, going back to that risk, risk tolerance. And the ambiguity is it's a it's a learning and that the key part is that you're willing to progress for it forwards within it versus it being entrenched in your in your rightness or correctness about your way is the way to go. So I think that's a great even in a similar culture in the United States, which is a melting pot, of course, dealing with other managers who have different perspectives, you know, successful managers get it.

Stanley: But you have to be trusted, people have to believe that you have common values. Today in the United States - I don't know, it's not quite as bad in Canada - but the country is divided on this practically any issue, you raise this. And it's very hard for anyone to thread the needle these days, having said that, if people believe that your values are good, they'll forgive if you're on one side of the equation or another that they may not agree with.

Anthony: Yeah, absolutely. So as we finish up here, I'd love to is there an organization mission based, like not Henry Schein, but like a mission based organization that you'd like to give some awareness to I just give you the opportunity, most high profile people are involved in in great organization? So is there an organization that's close to your heart that you'd like to, you know, give a shout out to and bring awareness to today? Before we finish?

Stanley: That's the most difficult question to answer, because I have so many. Organizations that in the end, provide vehicles for education are really important for disadvantaged people. So I would say up supporting the major academic institutions that provide access to care, to to education, and then if it's an app is to be in the medical area, to care in general, I think those are very, very important. But there's also organizations that serve the needs of those that are challenged. So for example, there's an organization called Physicians for Human Rights. They take care of physicians that are going into areas where governments don't want to, but taking care of people's lives, which, you know, they take their political oath, and they're committed to saving lives, although people may be in disagreement on the political issues. I think they do very, very good work. So overall, I would say, educational institutions, of course, serving and helping to support those that are serving, unpopular, if you will. Healthcare, causes in particularly challenged regions are important. I also think the arts are important. I'm very active at the Metropolitan Opera in New York. So you got to balance the two, but educational institutions access to care, there's so many organizations that are doing good work in that area.

Anthony: Awesome. Well, I appreciate that, I find that there are so many great organizations that do well. And a lot of times you just don't hear about them, but they're, you know, close to people's hearts.

Stanley: I'm a big fan of smaller organizations to people close to, you know, for example, in this current crisis in Ukraine, with the refugees, there are organizations in Ukraine, but there are organizations on the borders where all the refugees are coming, doing phenomenal work. The big ones, the UNICEF for this world, etc. They do phenomenal work, they get some government funding, but these little guys who are grassroots helping families that are just crossing the border from Ukraine into Poland, or to Romania or something like that, these people are doing great work and need the support of society.

Anthony: Awesome. Thank you, Stanley. I appreciate that. Welcome, can people learn more about Henry Schein? Where can they learn more about you? Where can they connect? And if you have any parting words of wisdom for us? To me?

Stanley: Yeah, our website provides information, I'm sure. You know, for those that are listening, and have vision, and you know, worried about implementing the vision, I would leave them with, you know, this neon light that is in my mind every day. And that comes from Nelson Mandela, who wants it. It always seems impossible - until it's done.

Anthony: Thank you, Stanley. It's been such a pleasure. I really appreciate the time today. A lot of things to take away a lot of years of learning condensed into 30 minutes. I so appreciate you being on our podcast today.

Stanley: Thank you, Anthony. It was great.

Anthony: Folks, my guest Stanley Bergman, who is the chair of the board and CEO of Henry Schein. So much wisdom here. I really think that as to be a leader, not only looking forward for your business, or your organization, but really being a benefit to society. As Uncle Ben once said, With great power comes great responsibility. So I encourage you to use the response to your ability to move it forward in the right way. So appreciate you watching. Appreciate your listening. We'd love some comments and feedback on what you took away from today's episode. Thank you again, Stanley for being our guest today. My name is Anthony Taylor. This has been the strategy and leadership podcast. I'll see you next time.



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