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‘Action and Accountability’ on the Path to Success as a CEO in Private Equity

An interview with Bob Segert, chairman and CEO of athenahealth
May 2023

Five times in his career, Bob Segert has served as CEO of a private equity-backed company — a clear signal of his success at the helm, but, as he noted in an interview with Spencer Stuart, not exactly a path he had planned out. Instead, it was a lengthy early career at Electronic Data Systems, amassing a range of experiences from P&L responsibility to oversight of various corporate functions, that demonstrated his abilities as a strong general manager.

Today, Segert is chairman and CEO of athenahealth, the Boston area–based healthcare technology firm. He has led the company since its 2019 merger with Virence Health, where he had been CEO since its carveout from GE in 2018. In 2022, he remained at athenahealth after it was acquired for $17 billion by Bain Capital and Hellman & Friedman.

“I love the challenge of private equity — the alignment, the push, the intensity,” Segert said. “It’s addictive. In the public sphere, you don't have the access or the ability to analyze a business like private equity sponsors. It's definitely a different level of introspection.”

Segert recently sat down for a conversation with Spencer Stuart’s Jason Hancock, where they discussed the keys to Segert’s success leading PE-backed companies and his strategies for leadership. The Q&A below has been edited for brevity and clarity.

Jason Hancock: So first and foremost, what's the secret to your success in building an organization? How do you create an organization with a strong culture and an environment that employees want to work in?

Bob Segert: It really starts with listening, engaging with passion and energy, and then trying to be as authentic and approachable as possible. One of the keys to building a team and followership is being approachable. You have to make yourself real. That doesn't mean you're everybody's friend or best friend; it means you have to be someone folks can build trust and affinity with. My approach is that I don’t ask anyone to do anything I'm not willing to do. I'm putting in the hours, I'm putting in the effort, I'm asking the questions, I'm making myself available. Ultimately, it’s being focused on what's best for the organization. Trust can break down when people start to think that maybe you're not out for what's best for the organization and for them.

The way you build trust is by constantly communicating and using different mechanisms to align everyone around objectives and strategy. If you can do that and be authentic in leadership, then you’ve got a good shot to have a team that not only buys into the mission, but also works extremely hard to pursue that mission.

In addition, I believe that the world needs a lot more energy givers and a lot less energy takers. How do you inspire? Do people see you actually doing everything that you can to make a difference? That's passion.

And at athenahealth, there's a mission. While every company has a mission, in healthcare there's a humanity element that is very powerful. We believe, and the athenistas I have the privilege of leading today believe, that we can make the world a better place, and that kind of commitment and mission is evident in the work that our teams do and the impact we drive. If there is a bigger and higher cause, make sure you're keeping that as a North Star in your communications and in your interactions. Not every business has that, but athenahealth has that in spades.

Jason Hancock: How do you maintain a strong relationship with the private equity partner or investment team?

Bob Segert: It’s fairly straightforward. One is brutal honesty. Good news travels fast, and bad news needs to travel faster. During my monthly reports, I start with the bad — here are the problems, the issues, the things we're working on. Then we talk about the good. It’s about transparency — that's the key. If they think you're hiding something or you're positioning, the relationship will sour.

Number two, you have to recognize that you're not necessarily the smartest person in the room — and that you don't need to be. You need to be open to ideas, to people challenging you, and not take offense to it. Unfortunately, many CEOs I've seen, when they get challenged or asked questions, perceive that as a lack of confidence in them. In private equity, that couldn’t be further from the truth, because they are intellectually curious, they just want to help grow the business. If they have ideas, they’re going to share them. And it’s okay to tell them you’ll take time to think about their ideas, and then get back to them.

At the same time, you can’t just say yes to everything. You’re hired to be a leader and to have business judgment. You owe your owners and your constituents your honest view and advocacy, even if it's against their opinion. I think private equity appreciates that. If it's well thought through and logical, they appreciate your thoughts because that’s what they’re paying you to do.

Jason Hancock: How much does the firm’s exit strategy drive your leadership strategy? Do you run the business to maximize the value within that period of time, or are you looking to build the long-tail business?

Bob Segert: In my five turns in private equity, I have always built for the long-term growth and prosperity of the business. It starts with delighting customers and driving top-line growth, because you can't cut your way to prosperity. A strong company gives you and your sponsors different options, whether that's selling the business, scaling through M&A, or going public. Long term is the right mindset and it’s the private equity mindset.

Jason Hancock: How often do you meet with your management team and with the private equity team?

Bob Segert: I have an execution playbook that I call my operating cadence, which has worked across industries and sectors. At the management team level, we put several operating mechanisms in place. For example, we have a two-hour weekly staff meeting to discuss major issues, and another hourlong update about big things going on and any potential issues. These are not supposed to be report-outs, but rather a way to get everyone on the same page. We also have a monthly three-to-four-hour operating review of business performance, key metrics and major issues; the executive leadership team is required at this meeting, to make sure they are up to date on the state of the business. About 200 senior executives also meet monthly to review the past month and look ahead to the priorities coming up. And then four times a year we have a day-and-a-half offsite retreat to review our strategy and plans. This level of management team alignment is critical to our ability to move fast and drive innovation at scale for our customers and their patients.

In terms of the board, how often you meet depends on the board itself. I've had private equity firms that wanted daily cash reports. Some want a three- or four-pager every month. Others are ad hoc, and we would connect during quarterly board meetings. For some, I’d be on the phone with the partners every two weeks.

Whatever the case, I try to make sure I’m overcommunicating. When there’s news or something I’m concerned about, I make sure they get a heads-up the moment I know about it. I don't wait two weeks. I don't let that stuff sit. Ultimately, it’s about being flexible — communicate as you need, but also ensure they get the information they want in the cadence they want. And that comes from creating a structured mechanism that works for me and works for them.

Jason Hancock: How has your experience on an outside board benefited you as a CEO?

Bob Segert: Being a director has been a really good broadening experience in seeing how a board thinks about its role, interacting with the CEO, setting performance objectives, conducting succession planning and supporting the strategy. It has helped me ask myself some key questions. How might my board perceive me and my organization? Does my board have the full context so they understand the decisions we make? How would a board director view a particular problem? Being a director has influenced how I think about issues and how I communicate them so the board sees and understands the value.

It’s a bit of a fallacy to say you just don’t have time to be on a board. Talented executives can do many things at once. In fact, being able to step out to get a different perspective, even if just for a couple hours, adds context and makes you a better leader and a better executive.

Jason Hancock: What lessons have you learned along the way, Bob, that you wish you knew when you started?

Bob Segert: When I first started out, I had a big chip on my shoulder. I felt I was smarter than I actually was. And I also felt like I had to do more than I had to do. Not that I had to be the smartest person in the room, but I had to out-prepare and outwork and out-everything everyone. I wouldn’t ask questions, because shouldn’t I know the answer already? If you can shift that mindset, start asking questions to learn more, it really helps free you up, especially as you scale up your career.

In business, you get what you inspect, not what you expect. You need to ask questions and you need to be curious. You can't just assume everything's going great, but at the same time you don’t need to be a micromanager. That’s why you have operating methods and check-ins and ways to learn what’s going on and talk about solutions with your people. Create a structure that builds your team and holds them accountable, because that accountability is so important.

I tell my team this mindset is all about action and accountability. Only action changes a business. You've got to do something. You can think about it, you can hope for it, but you can’t change the business until you actually do something different. And then you have to be accountable for that.

That starts with me. I'm accountable for our business decisions, and I'm accountable for getting smarter every single day at what I do.