Impact of Sales Leadership: Eclipsys acquires Premise

In Mass High Tech article entitled Report: Venture capital suffering from IPO, acquisition drought on April 1st cited that "the venture capital industry in the U.S. is suffering from the worst liquidity drought on record, according to new data released by Dow Jones VentureSource. With no IPOs in eight months, the report also concludes that M&A activity isn’t much help either." It noted that the largest M&A deal in New England in the first quarter of this year was Premise Corp. of Farmington, Conn., a medical software firm that was bought for $38.5 million by Eclipsys Corp. of Atlanta.

I had the privilege of leading the SVP Sales & Marketing search for Premise Corporation that resulted in the hiring of a new sales leader. Below is a case study that demonstrates the impact sales leadership can have during a recession. Upgrading talent can be a risk worthtaking when you have the right search partner.


CASE STUDY
The Impact of Sales Leadership Eclipsys acquires Premise

“I would recommend Ross & Company to anyone looking to build its management team in the healthcare space.” – Adam Grossman, Principal - Health Evolution Partners (former Managing Director, Aetna Ventures)

BEFORE
In the Fall of 2007, Ross & Company (www.RossSearch.com) was retained by Premise Corporation (www.premiseusa.com ), a healthcare information company and one of the leaders in the emerging sector of clinically focused patient flow solutions. Premise had established itself as an engineering and product/solution stand-out, but its commercialization efforts had stalled and, despite outstanding referencable customers such Mass General, UCLA Medical Center and Yale-New Haven Hospital, the Company was not getting sales traction in the marketplace. Backed by Aetna Ventures, Connecticut Innovations, Inflection Point Ventures, and Milestone Venture Partners, the Company’s Founder/CEO was being pressured for sales results and a liquidity event. As Adam Grossman, lead investor from Aetna Ventures stated, “our company was at a critical stage – proven technology, large addressable market, competitive environment – but we needed to super charge the sales force and sales pipeline.”

SOLUTION
“Ross & Company took the time to truly understand our organization’s needs, objectives and culture as we embarked on a critically important executive search”, noted Eric Rosow, CEO of Premise. “What impressed me most was that the Ross & Company team did not simply salute and start introducing VP Sales…following their assessment of Premise, our existing team, the Board dynamics and the power of our product, they stressed the importance of reaching higher and targeting the very best sales, marketing and business development leaders in the HIT space; even those with some P&L management experience. Ross & Company sold our Board on the risks/rewards of this strategy, and then did a superb job.” From the finalist pool, Premise ultimately selected Jim Maher, former Vice President of Sales from ChartOne. Joining as EVP Sales & Marketing, Maher assumed full revenue responsibility and would work with the Company’s Board, CEO and senior management team in planning for and managing an aggressive ramp-up of the Company’s business. “Ross & Company took a very systematic approach to identifying both the tangible and intangible needs of the senior management team”, observed Adam Grossman. “In a short amount of time, the firm presented us with a strong list of candidates and we were able to quickly hire the perfect individual. Ross & Company helped us find the right person at the right time.”

AFTER
Jim Maher “hit the ground running”, said Eric Rosow, “and in just thirteen months, he made a significant impact on the sales organization which dramatically accelerated our growth and enterprise value.” In fact, Maher almost doubled revenues in his first year on the job. He hired a new sales team that started by the middle of February and by year end the Company had deals with 5 out of 8 top hospitals in the United States. On January 5, 2009 Eclipsys (www.eclipsys.com) acquired Premise in an all cash transaction valued at $38.5 million cash. As Eric Rosow put it, “It is not an exaggeration to say that without the contributions of Jim Maher, the Eclipsys deal would not have occurred…working with Larry Ross and Jim O’Sullivan has been an absolute pleasure. I would not hesitate to recommend them for any investor or company who needs to identify and recruit top talent in the healthcare arena.”

Reflections on HIMSS

HIMSS may have been a good start, but I thought it could have been better. Expectations are higher for the healthcareIT industry than ever before and there was a buzz. But the buzz amounted more of a mix between confusion, concern, and hope whether it was with CEOs or VC/PE investors. As an executive recruiter, who mainly serves venture capital and private equity clients, there appeared to be more first time investors in attendance at this conference than in my four previous conferences. This is good for young companies looking for financial support. This is good for a segment of the software industry so often overlooked. When healthcare is over 15% of the GDP; a U.S. government is providing for a $19 billion "jump start"; and, healthcare IT spending this year according to a Gartner report will grow slightly more than 2% versus all other business IT spending either being flat or non-existence may be an opportunity or has fueled irrationale exhuberance during this Great Recession.

I will be spending a significant amount of time this year and beyond speaking with leaders in the healthcareIT arena. I will confidentially share their insights and lessons in leadership that can be applied to others hoping to tap into a rare opportunity for our healthcare system's history. Let's hope these leaders can make the impact necessary to assist in a positive change for providers, payors, and patients alike.