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Turning the Ship
In 1983, Richard H. Chandler was thinking big. A former Sara Lee Corp. executive, Chandler had also been the CEO of Abbey Medical, a health care equipment retailer that he and a group of investors had acquired from Sara Lee and had recently sold to American Hospital Supply Corp., which later became Baxter International Inc.
Chandler decided to create a new company. With venture capital financing and his own money, he snapped up five medical equipment makers, which he combined into Sunrise Medical. Before the end of the year, Sunrise picked up a European subsidiary and went public as a $50-million company. With these units, Sunrise made everything from crutches to respiratory equipment; operating in North America and Europe, it was selling its equipment in 85 countries under such brands as Quickie and DeVilbiss. Sunrise eventually acquired more than two dozen other companies. Revenue grew to $675 million.
Then something hit the fan. In 1995 an accounting scandal at the company's Bio Clinic unit forced Sunrise to restate earnings. The result: Several executives' careers ended, and an SEC investigation was triggered. In 1999 the Sunrise board forced Chandler out, replacing him the next year with Michael Hammes, a board member and former executive at Ford Motor Co. and Black & Decker who had helped turn both companies into global brands. The new CEO put together an investment group that took the company private in a $365-million buyout deal.
Hammes then set out to reinvent the company, starting with IT. "When we took over the company, it was not an international company," Hammes says. "It had operations overseas, but it was not psychologically or physically an international company. I thought we should make a truly international company. You've got to have the organization set up to do it. The second thing I did was get information systems on the road to being international. If you change the company without changing the ability to communicate -- meaning IT -- you're dead in the water."
This was good news for Geoff Cooper, who had joined Sunrise as CIO in 1998. Born in the U.K., Cooper has spent most of his career in the U.S. but still speaks with a brogue (and was spotted at a CIO conference over the summer in a kilt). A veteran of large multinationals such as Unisys as well as startups, Cooper was frustrated with the tangled structure at Sunrise, which was divided into 17 divisions. IT directors in different countries had dotted-line reporting to Cooper. He wanted direct reports.
"We'd have meetings about standardizing," Cooper recalls. "But I didn't have a strong fist. We'd have 12 months of meetings and make very little progress. There wasn't any strong structure to get things done. When the new CEO came in, he very rapidly made changes. He thought there was a fair amount of waste in the way we were structured."
Cooper got his direct reports.
"I really felt strongly that the right approach for IT was to have direct lines," he says. "I became passionate about change. It's something I believed in for a long time. It's been exciting to see all the technology and architecture make that possible for a midsized company."
The number of divisions shrank to two -- with IT leading the way in consolidation.
"In the steering committee, IT was held up as an example of how to make these global enterprises work," says Cooper. "It wasn't any brilliance on my part. We couldn't accommodate the new business architecture with the silo systems. We needed to make dramatic changes to support that. In IT you have to look ahead a little bit. Your customer base doesn't appreciate how hard it is to turn the ship."
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