Sidebar: The Alignment
Test
As CFO of a public com-
pany, Caroline Dorsa puts
great stock in team align-
ment, which she says starts
with agreement around a
common purpose. “If you
know that your mission is
safe, reliable, economic, and
greener energy, and you
know that your principles
are about operational excel-
lence, financial strength,
and disciplined investment,
you start there. Then you
can take different business
proposals and hold them up
to examination and ask, Do
they meet our principles?”
she says.
“You’d be surprised how
easy it is to have a good
2nd QUARTER 2014
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commercial organization at Quest on the
best use of a new cloud-based customer
relationship management (CRM) tool.
Although Rusckowski introduced it prior
to Guinan’s coming aboard, Guinan has
spearheaded getting high-quality data by
spending time in all eight regions to better
understand how the tool was being used
and offer refinements.
Helping Make Better
Decisions
With his people-centric approach,
Guinan might initially come at problem
areas by schmoozing, but once he sees a
pattern developing, he challenges those
“who know more about it than I do to
think about it and then lay it out” for
him. Next, he turns to process.
“Within budgeting and forecasting
we’ve made a lot of changes,” he says. One
example: The use of templates for the
weekly forecast meetings and the monthly
reviews in which all eight regional vice
presidents and financial analysts par-
ticipate. Five months after beginning the
monthly reviewmeetings, “we’re actually
having productive conversations, versus
meetings that go on longer than they’re
scheduled because we were not getting to
the meat of the issue.”
The templates, says Guinan, are
nothing magical, just tools, but they
corral relevant information (revenue,
cost of goods, general admin, head count
compared to the prior year same month
and to the prior month, and so on). But
these seemingly simple steps make a
company of 42,000 people providing a
menu of thousands of tests and other
services more efficient and make it easier
for those employees and business entities
to do business with each other.
Simplify the organization
is one of the
five points in the overall strategy, but as
Guinan says, it really exists in support
of the other four. “If you simplify things,
it’s easier to grow, it’s easier to become
efficient, it’s easier to make decisions that
will enhance the use of your capital.”
Asked to specify his role in restoring
growth, Guinan says it’s a combination of
“pushing for outstanding performance,
but balancing that against realistic targets.”
The tools inform the plans, which have
to be both aggressive and achievable, so
people stay motivated, he says, “and at the
end of the day, so that I can make com-
mitments to our shareholders and other
stakeholders that are realistic.”
In order to
refocus on diagnostic
information services
, Quest divested
several non-core businesses and sold off
drug-royalty rights that it had come by
as part of certain acquisitions. (“We’re
not a products company,” Guinan says.)
Financial metrics are now in place to test
the viability of all future acquisitions,
once they pass the “closer to core” hurdle.
He outlines three keys to an acquisition:
• The new business would have to be
earnings accretive on an adjusted basis by
the second year.
• There should be a focus on revenue
growth, but also Quest has to see a return
on invested capital by year three. That
ROIC metric is a substantial test.
• From a Net Present Value perspective,
shareholders should see a return of a given
percentage.
The metrics are focused on shareholder
value creation, and the company views
revenue growth and return on invested
capital as two indicators most aligned to
that focus. The business development and
finance groups run the numbers. Guinan
estimates that 80 to 90 percent of
potential acquisitions get screened out
before they make it onto his radar.
Strategic Questioning
On a chilly day in February, Guinan is
in his office in Quest’s sleek headquar-
ters, seated at a round conference table.
O
ne of the greatest
challenges in
today’s business
world is that people
have too much to do.
They don’t know where
to focus. So, lead-
ers have to make the
strategy clear, says Mark
Guinan, CFO of Quest
Dianostics. Beyond that,
“We’ve got to connect
what the individuals do
to that strategy.” Senior
management, of course,
faces its own difficulties
with focus, goals, and
objectives amid the day-
to-day distractions.
With a degree in
economics from Notre
Dame and an MBA from
Washington University’s
Olin Graduate School
of Business, he started
out at Procter & Gamble.
There, he absorbed
lessons about conflict
resolution and people
development. But even
before that, Guinan was
soaking up lessons from
his father, James, whose
experiences were
featured in the book,
What Works For
Me
, about the leader-
ship styles of CEOs, and
his mother, Beatrice, a
teacher who had also
worked in retail. (He’d
have loved to become a
teacher himself, and says
he may do that someday.
It seems that, based on
his business approach, he
already walks the walk.)
“What we have to do
is challenge ourselves,
and I’ve challenged
myself” to elevate the
ti e spent on co ching
and giving feedback.
Should you plit your
time 80/20, or 60/40, or
50/50? Whatever it is,
he says, “set your target
higher, because you’ll
always naturally be
pulled [back into your
individual contributor
role] and your success
entirely depends on the
organization.”
He helps the people
who e ort to him realize
that they are supported
and that seeking ways
to change processes is
healthy and desirable.
Managing & Coaching People
