BerylHealth: Everyone Deserves a “Thank You”
“I think that every employee at any company, in any industry, large or small, really wants three things. First, they want to feel like there is purpose beyond the job. Second, they want to feel appreciated for what they’re doing. And third, they want to feel like there’s the opportunity to learn and grow.” —Paul Spiegelman
A Brief History of BerylHealth
Paul Spiegelman calls himself “an analog man in a digital world.” And his success proves that when it comes to outstanding customer service, nothing beats old-school hospitality. He’s got the type of personality that immediately puts you at ease. When we met to discuss his achievements at BerylHealth, a four hundred-person “concierge referral service” he built from the ground up, there was a turkey sandwich and chips waiting for me along with a cold bottle of water.
Paul says his obsession with hospitality started with his parents. He noticed that his dad never forgot a face—even one from decades before—and that people would come up to Paul and his brothers and tell them their dad was one of the nicest people they had ever met. Their sincere praise and admiration for his father stuck with him, and he has spent his working life trying to walk in his father’s footsteps, he says. “I wanted to be somebody that people would talk about, not for what they did, but just for who they were.”
A California native, Paul began his career as a lawyer, working alongside his father, but after a year and a half, he and his two brothers (he’s the middle one) decided to fulfill a childhood dream to team up and run a business. Working together, they created a medical alert device to help frail elderly people who would need outside help if they fell.
In April of 1985, the three brothers took over one of the conference rooms in the law firm and created a device with a speaker phone that could be hooked up like a telephone answering machine and send an emergency signal. In the first of many strategically intuitive events, they decided to go to local hospitals and offer the service to patients who were being discharged with chronic, serious medical conditions.
From the beginning, Paul says, delivering good service came naturally, thanks to parents who raised three boys with good values, and who took to heart their father’s advice to “be nice, never burn a bridge, and treat people with respect.”
“People always ask me, ‘When did you decide you wanted to do business this way?’ The answer was, we never decided. It wasn’t a business plan. We were going out to eighty-five, ninety-year-old people’s homes and developing relationships with them. One of the customer service stories that comes to mind is an older woman who asked if we could get her some ice cream. She said she liked Häagen-Dazs butter pecan ice cream. So what did we do? We went to the store, got it, and brought it back for her.”
What happened next is what often happens with start-ups: they had a lot of work and not a lot of income. They started by charging people $25 a month for 24/7 service, taking turns sleeping on a cot they dragged into the office. In the end, they were bringing in only $2,500 per month, barely scraping by and working nonstop. Nevertheless, they kept at it because they really believed in the concept. (They even tried to raise a million dollars in $15,000 dollar increments. Only one person, a friend of the family, invested any money.)
“So, we said, ‘Let’s just put our heads down, work hard, and hopefully good stuff will happen. Then, a series of events started that changed the course of what we were doing. It was a Saturday night, and I was working when a call came in. There was a ninety-three-year-old woman that had been beaten and stabbed, and locked in a closet. We ended up saving her life. Two days later, we get a front-page story in the Los Angeles Times. So, it didn’t make us rich, but it kept the doors open. That was the first big thing.”
Scaling Up
Once the ball got rolling, it didn’t stop. Within the first year a hospital client asked Paul if he and his brothers would like to offer a physician referral service for people new to the area. Paul jumped at the chance and a new, much more profitable business was born.
“Two weeks later, we’re answering the phone, ‘Thank you for calling United Hills Hospital, how can we help you?’ We had names of the doctors on 3" by 5" cards. Come to find out, every hospital in the country has this type of service, and most of them were doing it in-house. They had an eight-person staff doing it in bigger hospitals. That’s really when our core business was born. We became an outsource provider of call center services to hospitals.”
After two years, Paul and his brothers catapulted toward their dream by winning a contract to outsource referrals for a company with 350 hospitals across the country. Because they were going to build an additional call center from scratch, in addition to the one in Los Angeles, they looked around the country before settling on the Dallas-Fort Worth (DFW) area. With a $10 million budget and a lot of technical help from Paul’s older brother, Mark, they set up shop in an old Walmart and BerylHealth was born. Although they lost the original client two years later, their company grew to service five hundred hospitals across the country. In just a few years, the brothers had transformed their early vision from a home health alert company to a fifty-person call center in LA to a four hundred-person “concierge referral service” called BerylHealth in DFW.
“We didn’t just take all the calls and hook people up with hospital services. Our real value was that we tracked the demographics of the caller to determine whether they became patients at the hospital, and could tell the hospital, ‘You spent this much on advertising (looking for new clients). Here’s how many people became patients. Here’s how much they spent. Here’s the ROI, and this is why you should advertise more, and all of that.’” In this way, BerylHealth redefined the value of a call center operation.
Increasing the hospitals’ ROI wasn’t the only goal. The call center industry is notorious for high turnover and low morale, but Paul saw that by creating a strong internal culture where employees were engaged and valued, he not only retained employees but also clients. As the business grew, employees were also financially and personally rewarded, and the company benefited from employee and customer loyalty with increasing profits.
“You think of a call center, you think of low morale, boiler room operations, a low-margin business, high turnover. We said we don’t want to be a business like that. We want to be a business that can create value, and we want to be able to charge a premium price for what we do. Well, that’s hard to do in an industry where generally lowest price wins. It wasn’t that far into our business—maybe we had ten, twelve employees—and they would start to make comments to us, like, ‘This is a really fun place to work,’ and we said, ‘Well what makes it fun?’ They said, ‘It seems like you guys genuinely care about us.’
“We were bewildered by that. Keep in mind, none of us had ever really worked anywhere substantial in our careers, but we were smart enough to realize that we had something there, and that if we created an environment in which our people really loved what they did, they were going to do a better job for us, and that was going to rub off on the customer.”
The brothers no longer work as a team. Paul’s younger brother died tragically of a brain tumor in 2005, and Mark left the business in 2000. At one point, Paul decided he wanted a partner, and in 2010 he agreed to sell BerylHealth to a private firm. Although he had signed a letter of intent to sell, he backed out, realizing the company’s unique culture would not survive its new ownership. It was, he says, the “best decision I ever made.”
Scaling Up—and Up
One year later, a large, publicly traded medical waste disposal company, Stericycle, wanted to expand, and approached Paul to see if he wanted to sell BerylHealth but remain as CEO. Long story short, he said yes and sold the company in 2012—before realizing he wasn’t interested in running his business within a larger company.
And that’s when the CEO of Stericycle agreed to put him in a new position, chief cultural officer.
“I wanted to see if what we did in a small company could apply in a large company. I’d never worked in a big company so I wanted to see if it was possible to scale a big culture in a large public company. And, ultimately, could leaders change the way they lead, from a more command-and-control style to a much more collaborative, team focus? I said, ‘If you’ll give me the opportunity to do that, I don’t even want to be paid, because I’ll be able to tell this story,’ and the CEO said, ‘Let’s start Monday.’ So, basically, that’s what I’ve been doing for the last five years.”
By the time we spoke, Paul had transitioned out of his role at Stericycle, leaving the chief cultural officer position intact and in good hands. He is not gone from the business world, however, and is still very involved in the Small Giants Community, an organization focused on purpose-driven leaders, which he cofounded with author Bo Burlingham in 2009. (The term “small giants” was coined by Burlingham in his 2005 book, Small Giants: Companies That Choose to Be Great Instead of Big.) Small giants are value-driven companies and are often profiled in Paul’s podcast, “Growing with Purpose.” The entrepreneurs who lead them believe that a strong culture provides its own ROI, and if employees are engaged and treated well, the company will also be profitable. It’s pretty much the opposite of a company whose only goal is meeting quarterly profits.
Cultural ROI
For Paul, as for so many leaders profiled in this book, hospitality—as defined by empathy plus action—must be applied internally and externally. This was the theme of his first book, Why is Everyone Smiling?: The Secret Behind Passion, Productivity, and Profit, published in 2007. He wrote about BerylHealth’s corporate culture and recounted specific instances of delivering “quality service” to internal stakeholders, from giving his car to an employee who walked to work to buying a plane ticket so another could visit his dying mother.
I find the story he tells about BerylHealth’s first CFO, Pat, illustrative. When Pat came onboard in 2005, the company already had a committed, loyal workforce, and Paul saw a clear connection between employee engagement and customer loyalty—core components of the company’s culture—and the financial success of the business. He wondered which of these components was the most important, while Pat wondered if the culture mattered at all.
“Pat came in and saw all the money we were spending on culture and events, and decorations, and all this kind of stuff. He was so cynical about that and said, ‘Paul, I know the company’s doing well, but I could really help impact our bottom line more if we got rid of some of that stuff.’”
“I said, ‘Pat, I can’t quantify this for you, but I’ve got to believe there’s a connection between all of these.’ Two years later, he had completely flipped. We were driving to see a customer in Indiana, and he said, ‘Paul, you know, I’ve been thinking. It’s kind of like a circle. If we get our employees to be loyal, that’s going to drive customer loyalty. If those customers are loyal, that drives profitability. As a privately held company, we’re committed to turn that profit back into our people, give them better tools and resources to do their jobs. The cycle simply continues.’”
And then, he expresses exactly what I said at the beginning of the book: that people are willing to pay a premium for outstanding customer service. “We were 30 percent more expensive than our next closest competitor. Why would anybody pay that much more for another company picking up the phone for their hospital? They paid because of our culture, because they knew that the environment would create a better experience for the moms calling in, and they were willing to pay more for that. That service mentality became our brand, and our brand is what really grew our business into being the leader, and ultimately was reflected not only in our pricing, but even in our valuation.”
Once BerylHealth became part of the much larger Stericycle, Paul had to prove that fostering a positive culture did indeed offer a clear ROI. And he did.
“I used to present to the board every quarter, and I knew that I was going to have to show the ROI. I was able to show that our employee attrition had gone down. We measured it. In 2012, employee attrition had cost the company somewhere between $25 and $40 million dollars. And, that’s just voluntary attrition. The next year, it went down by 5 percent. Well, that’s $2 million dollars, directly to the bottom line.”
“We were also able to show that our customer satisfaction scores were tracking exactly to our employee satisfaction scores, so they saw that relationship. Lastly, I remember looking at profitability by location. [Stericycle] had hundreds of locations in the US. Fifty percent of the most profitable locations were also the top ten most engaged. So happy people create happy customers and that creates more money.” Of course, Paul had intuited this all along, but his new role forced him to quantify the benefits of happy employees. “I knew that I wouldn’t have survived, nor would these efforts survive, if I couldn’t go to this board and say this stuff matters.”
The Customer Comes Second
Countless organizations say that the customer is their number one priority, and some, such as Zingerman’s and the Union Square Hospitality Group, truly mean it. Paul, however, has a different take, one that’s well expressed in the title of his third book, coauthored by Britt Berrett and published in 2013. In Patients Come Second: Leading Change by Changing the Way You Lead, the focus is on hospitals, but the insights can apply to any organization.
Before I get into Paul’s book, ask yourself the following question: “Would I rather have surgery at a hospital with engaged, happy employees or a hospital with dissatisfied, disengaged ones?” I think we’d all prefer the former, and that answer is exactly what Paul believes. In the description of his book he writes, “In any business, you can’t take care of customers if you don’t take care of employees. Healthcare is no different.”
The book’s premise is that hospitals must find ways to engage all their employees, from the nurses to the switchboard operators, so that they want to provide great service to their patients. Of course, patients are important, but he argues that there is a direct correlation between employee loyalty and customer loyalty. And, as the healthcare marketplace continues to face uncertainty, the pressure will continue to rise on patient acquisition and retention.
To Paul, happy employees lead to happy customers and, ultimately, more profit.
You’re Special
Paul has always believed that employees want to feel appreciated and personally connected to the leadership, so as CEO of BerylHealth he introduced multiple systems to ensure that that happened. For example, in order to keep track of all his employees’ life events—births, deaths, a child’s graduation or wedding—he asked each manager to send him an email with the information.
“That would be my trigger to act. I could immediately write a personal note, visit someone in the hospital, make a phone call, whatever. We never missed anybody that way. So, we had this sort of backroom way of finding out what was going on in people’s lives. And every month, I would write a handwritten note to everyone that had a work anniversary. I’d have the name of the person, how many years they’d been here, what department they were in, and then something about them personally that I might not otherwise know.”
Grinning from ear to ear, he continues.
“Now, I have on my desk my note cards and I would say, ‘Hey, Jane, congrats on seven years with Beryl. So great to hear that Jimmy won the softball championship this summer.’ So, she gets this note at home from the CEO, and she’s like, ‘How did he know that?’”
“Did I honestly know everything that was going on? No. But, it got to me because we had a system, and then I was able to create a close relationship with every employee because of that. They all felt like the CEO knew and cared about them. That was one example of how we institutionalized a culture of caring.”
Another way he kept communication lines open was to create an intranet site called “Ask Paul.” The idea was that any employee could ask him a question and an answer would be published within twenty-four hours to the entire company. He imagined he’d get questions like, “What’s the company’s five-year plan?” or “Are we going to open another location?” That wasn’t how it turned out.
“I got, ‘Paul, when are you going to fix the toaster in the break room?’ or ‘The birds are pooping on our cars from the wires out in the parking lot. Can you fix that?’ At first I thought, ‘Wait a minute—I’m the CEO, why are you asking me that?’ Then, I realized those things were important to them. What’s important to them is important to me, and that’s why I’m here. We gave people all these different ways to feel heard in the business.”
External Customers—Taking Care of Business
Providing outstanding customer service—empathy and action—to internal employees (also called “internal customers”) is the first step in the overall service process. The next step is giving outstanding service to external customers.
But how do you give outstanding customer service to a VP of marketing at a hospital a thousand miles away? One way was to get them to tour the facility so they would feel as appreciated as the employees.
“Before they even walked in the door, they get to their hotel, and they’d have a beautiful basket waiting for them, with a handwritten note card from me saying, ‘Hey, we’re so happy to have you here.’ Our receptionist had business cards that said “Director of First Impressions,” so they would see that right away. From the moment they came in they were treated specially. We had a photo booth in the back and we’d take a photo with them and send it home in a frame with them. Just all these little things that say, ‘You’re part of our family, too.’”
Coming from the restaurant industry, this kind of stuff seems like a no-brainer to me. Little extras like a piece of cake on someone’s birthday or a free glass of wine to make up for poor service is pretty standard. What I don’t understand is why more companies don’t get that spending a little in the short run will pay off with increased ROI in the long run. Paul has wondered the same thing. He thinks the reason more companies don’t “get it” comes down to leadership style and the current focus on quarterly profits at the expense of long-term goals.
“The traditional command-and-control leadership style was really what created many, many successful businesses, and it worked for many years. Then, I think it just got to the point where financial pressures were so much that companies really had no choice but to keep doing what they were doing and are now very slow at making the change. I do believe and hope that moving away from command and control is the trend of the future. I still think we’re early, but fifteen, twenty years from now, especially with millennials coming in, I think that it will be more of a standard way of doing business. This is the way business needs to be done.”
Best Hiring Practices
I was curious about where Paul stood on the “nature vs. nurture” customer service debate. Does he think empathy can be taught, like Steve Hindy and Jerrod Melman (who are profiled in later chapters), or does he feel it has to be there from the beginning, like Richard Coraine (who is also profiled in a later chapter), Nick Sarillo, and Susan Salgado? It turns out he’s pretty firmly in the “nature” camp, although he’s also a strong proponent of building systems to keep employees—from the leadership team to the line employees—focused on service.
For Paul, it all goes back to his parents and the importance of applying the golden rule. In his opinion, teaching technical skills is easy; teaching emotional intelligence is not.
“We created an extremely robust hiring practice to do our best to try to get compassionate people, because we didn’t feel like we could teach them that. We could teach them to use the computer and how to navigate the software. We could teach them the skills, but we couldn’t teach them to have a heart.”
“It takes a special person to do this job. In this case, they take eighty to ninety calls a day, six or seven minutes a call on average. How are they going to make that person calling in feel that compassion? The only way that we found that we could do that was to find people that came with compassion. I’d rather spend more time looking for that slice that gets it than feel like we’re going to teach them how to do it.”
He then launched into a story that demonstrated this point. It involved some of the sales managers he had met at Stericycle when he took on the role as chief cultural officer, including “Steve,” an executive with more than one hundred disengaged, disenchanted employees who reported to him. Steve and people like him exemplify an all too common phenomenon in the corporate world, a phenomenon that led Paul to think, “What assholes—how did they get these promotions?”
He found that while the sales managers were hitting their financial targets, they were also making their direct reports miserable and causing high turnover. Thus, Paul set out to try to convert some of them, including Steve, a senior vice president with a terrible reputation. Since big companies are data-driven, Paul knew he had to use facts and statistics to prove the value of establishing a better culture.
“We started doing the employee engagement surveys [questionnaires in which employees give feedback on various issues], which Stericycle hadn’t done in years, and Steve saw the results. So, I approached him one day, and I said, ‘Steve, I know last year, you had another great year, but it can’t feel good when you read these comments of the people under you.’”
“He said, ‘You’re right, Paul. I actually felt really bad. I thought I was a good leader, but evidently, I’m not doing things the way I should.’”
“I said, ‘Would you be open to the idea of simply [instituting] some subtle changes in style in the way you act, interact, and communicate every day? You’d not only continue to see the results, you’d get even better results. And you’d also get this warm and fuzzy feeling you’ve probably never had because you’d be having a positive impact on somebody’s life and career.’”
Steve wanted to give it a try and began meeting with Paul on a regular basis. It started slowly. Paul first taught him how to talk to people in a new way and then encouraged him to become more engaged with the people around him. If his reports told him about bowling night, for example, he could stop by and give it a try. Slowly but surely, Steve began getting positive feedback from his reports, who couldn’t believe he was the same person.
Unfortunately, Paul’s “poster child” reverted to his old ways when the work became too intense and the demands seemed too insurmountable. He was ultimately fired—not because he didn’t meet his financial goals, but because of the way he treated his colleagues, demonstrating that not everyone is capable of change, despite efforts to help them “get with the program.”
Millennials: “I Think You’re Trying to Boil the Ocean Here”
When Paul talks about millennials, it sounds a lot like he’s observed some of the same things as Lee Caraher, author of Millennials & Management, and Chip Espinoza and Mick Ukleja, authors of Managing the Millennials.
Like them, Paul has noticed millennials’ confidence and the importance they place on finding a workplace that openly promotes values they find intrinsically rewarding. He also acknowledges some of the challenges in managing them, like their propensity to job hop.
“I’ve started to speak at local colleges and MBA programs, and I hear a lot of negatives like, ‘Oh, those millennials. They jump ship every couple years. They’ve had this many jobs.’ I look at it in a positive way. Good for them. I think that in general, they want something more than just a paycheck. They are, in general, looking to make the world a better place, have some impact on society, and more likely to rail against a command-and-control style leader. They’re holding us accountable for being the kind of leaders that we all really should be.”
Paul’s desire to mentor people also fits nicely into the millennial worldview. As Caraher notes, millennials want and expect more access to senior management than previous generations. This access has resulted in what Paul jokingly refers to as his “millennial stalker,” a young woman he’s been mentoring who is brimming with confidence and chomping at the bit to make a difference.
“I’m already coaching her, [and] I’ve known her for a half an hour. I say, ‘Whoa, whoa. Slow down. You know what? I think you’re trying to boil the ocean here.’ I tell her, ‘This is all going to come. You’ve got plenty of time.’ But I think I’m like an analog man in a digital world.”
Being an analog man means continuing to write personal, handwritten notes and mailing them to people’s homes. It means, Paul says, focusing on face-to-face interactions, not digital ones. It’s not that he naively thinks having a conversation will solve every problem. But he does believe that emails and text messages are not an ideal way to bring people together. For him, a lot of the old school rules, especially the golden one, still apply.
“I still go back to looking for people who have an innate sense of empathy and compassion and want to be in a place for the right reasons. Then, I think it’s upon us to give them purpose beyond the job, appreciation for what they’re doing, and opportunity to learn and grow.”
Paul Spiegelman’s Recipe for Success
For Paul Spiegelman, like many others profiled in this book, there are several steps to ensure that a company’s investment in its employees pays dividends with their customers and shareholders.
1. Take feedback seriously. If leaders ask for suggestions, they must deliver on them. Birds pooping on cars may seem beneath the job of CEO, but if it’s a significant problem for employees, it should be as important to the CEO as any other issue.
2. Demonstrate a commitment to employees. Paul wrote notes, visited employees in the hospital, and showed he cared about them in multiple ways. This sincere concern for the people working for him engendered intense loyalty and helped BerylHealth achieve its financial success.
3. Use statistics to show the ROI of treating employees well. Paul proved that a decrease in employee attrition saved Stericycle $2 million in one year and that the company’s customer satisfaction scores tracked exactly to its employees’ satisfaction scores. He also demonstrated through an internal survey that 50 percent of the company’s most profitable locations were among the top ten locations with the most engaged employees.
Perhaps equally important to Paul’s emphasis on his employees are his authenticity and consistency. The two qualities go hand in hand when you are talking about the kind of attention to detail that occurred on a daily basis at BerylHealth. As I never tire of saying, great leadership cannot be a slogan or memo—it has to be lived and exercised every day. You cannot expect to run a marathon without consistent practice, and running a company is no different. Moreover, employees, especially millennials, are not just looking for but expecting that kind of commitment from their leaders.
When I toured the BerylHealth call center with Paul, even though he had not been there in months due to his new responsibilities at Stericycle, one employee after another stopped to talk with him. At one point, he was cornered by a couple of excited people on a break telling him how their kids were doing and asking Paul about his family in turn. The magic was there, and it’s no surprise that BerylHealth was ranked for several years as “One of the Best Places to Work” in multiple categories. The rankings came from Modern Healthcare magazine, the Society for Human Resource Management, and the Great Place to Work institute. Not bad for a call center!