Episode: Doug Burke

Doug Burke of Cognitive Medical Systems, Inc.

Doug Burke, CEO of Cognitive Medical Systems, talks about what best practices got his company named on the Best Places to Work list published by the San Diego Business Journal.

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Outline:

Tell us about Cognitive Medical Systems

  • Cognitive Medical Systems is six years old
  • The company was started by four people: two entrepreneurs and two people who came from careers in Navy healthcare
  • It began with a bootstrap business model: started with the four founder’s own cash, land contracts with government healthcare IT services (i.e. the Department of Defense and the Department of Veterans Affairs), and use those contracts to build the company and talent base. Hopefully, with time, the government would fund the fundamental research and development for the technology they would need to bring a series of healthcare products to the commercial healthcare marketspace. This plan has worked.

What’s the makeup of your team?

  • 50 employees on staff, most in San Diego but some all over the world
  • 70% of business with Veterans Affairs, 30% with DOD
  • 100% of business is professional services–custom software development in healthcare IT
  • Those two departments pay for some of that R&D
  • Cognitive has begun building first commercial software product

How did building a company around the bootstrap mentality affect the way you built your team?

  • All employees are given stock options. Because Cognitive is building to sell to a bigger company, once they sell those options will be how they get liquidity. That’s one way they find motivation to build the company.
  • Very passionate about company culture, competitive benefits, salary, 401k, healthcare, life insurance, etc. There are also company fun events, happy hours and painting projects.
  • Communicate regularly with monthly “All Hands” meetings.

Why those ideas?

  • Helps everyone get to know each other outside of the context of work
  • Help management get feedback
  • Assist in soliciting feedback from the employees. They bring great ideas from former places of work.
  • Much of it comes down to searching for the best practices that other companies are doing, and figuring out how to bring them here.

How do you source those ideas?

  • We always keep our ears open.
  • Networking groups made up of other CEOS who get together to talk about what problems they’re having, what works, and what doesn’t work are invaluable.

Have you always been transparent with the details of the company?

  • I started being more transparent about it three companies ago.
  • Every quarter there will be a report with KPIs and a dialogue about what went good and what didn’t. The board of advisors will receive a summary, and then that same summary will be presented to the staff and allow them to ask questions.
  • Their stock makes them owners, so they should have full information.
  • One of our greatest passions is to create other entrepreneurs, we love to show how it’s done.
  • Six or seven people have gone on to make their own companies. It’s a great feeling to help mentor the next generation of entrepreneurs.

Do you think that’s a risk?

  • Some people view it as a threat, it’s enabling our future competition…but if an employee is an entrepreneur they’re going to leave anyway. All you can do is enable them to create a better company and a future partnership.
  • What goes around comes around. We work with the same great people again and again.
  • They way you treat your employees speaks volumes.

What do you hope that your employees are saying to their friends?

  • I would hope that they say it’s transparent
  • That they’re given opportunities to learn
  • That we treat people well
  • That we do what’s best for employees and for future growth
  • They know we’re resource limited, so we can’t do everything…but we love to survey our employees and figure out what we could be doing better.
  • There are wish lists that we can’t do yet, but we think we will be able to do some time in the future.
  • I hope they would say it’s a hard working group that’s passionate about innovation–a team oriented place.

What are other hurdles to achieving these things? How have you overcome them?

There are a few areas that are challenges

  • Sales
    • We’ve hired a dedicated sales team and sales partners
    • Because we have federal contracts, we’re at the whim of federal budget spending, and we feel that directly.
    • We’re working hard to diversify, but that doesn’t happen overnight  
  • Hiring people
    • There’s no secret sauce for hiring people
    • We have a 100% internal dedicated recruiter who looks for talent.
  • Not many career paths because it’s a small company
  • Lots of work from home questions–being a startup requires having the majority of bodies in the office…we’re working on ways to be more flexible on working from home.

What are the day to day mechanics of maintaining a company culture?

  • We have a 3 person executive team…each runs a small team based on expertise: medical research, finance and HR, sales and networking.
    Then there’s the next layer of management. Each person is a director with their own direct reports. Every week we have a meeting with the management team where we discuss the issues, and then also things like where are we going, values, what’s working right, what’s not working right, how do we scale the staff and culture. What are things that we want and need to invest in.
  • There are also the monthly “All Hands” meetings
  • The management team has taking a larger role in the briefings to the board and to the employees. Enabling the management team to take on responsibilities in the future will get the management team involved in the strategic planning.

Anything else?

At Each level of growth you see lots of changes in culture, and in problems that you have. The problems you have at 10 people aren’t the same as 50 people or 100 people. In every company I’ve been in it’s the same sort of problems. Get an external board of advisors and a strong mentoring group so that you can anticipate problems as they arise.

Topics:

Culture

Corporate culture

Company culture

Team

Transparency

Entrepreneur

Entrepreneurship

Hiring

Working from home

Relevant links:

http://bestplacetoworkpodcast.com/

http://cognitivemedicalsystems.com/

http://www.bestplacestoworksd.com/index.php?option=com_content&task=view&id=67