Early in his career, Bill Petty had trained at the Mayo Clinic in Minnesota, when total knee and hip replacement were just beginning in the United States. He specialized in developing treatments for arthritis and joint replacement, eventually becoming chairman of the Florida College of Medicine Department of Orthopedics in 1981.
Four years later he went out on his own to establish Exactech in partnership with his wife, Betty Petty, who is now vice president of human resources and administration, and biomedical engineer Gary Miller.
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Petty says that beyond academics, he had become interested in the orthopedic industry as a business. He had read Forbes for years and always studied business as a hobby, but admits that in the early 1980s he "began to realize that some of the business models in health care really weren't sustainable."
Petty and his partners' idea was to start a company that would provide high value, be cost effective and develop products that would help surgeons provide better outcomes for their patients. He believes applying research to usable techniques and products is crucial in making a difference for patients. "Academic institutions will get research as far as they can get it, but then there's organizations such as ours that can then take that information and bring it to fruition," Petty says.
The company's expertise in medical technologies fueled great success in developing new orthopedic products, a trend they bolstered by placing strong emphasis on a continually learning staff and a culture that reinforces client and employee loyalty. However, by late 1996 Exactech needed to open more facilities and develop new products to continue their growth trend and meet increasing patient needs. They decided to go public, which raised the necessary funds to allow the company to open a new, 40,000 square foot facility.
Exactech is actually the only publicly traded company among the 2007 Top Small Workplaces Winners. Petty says the move made sense for them given their already mature culture of transparency and shared responsibility for performance. He argues that being public provides a certain discipline which blends well with their underlying principles of servant leadership.
"It creates an environment where everyone is accountable to achieving and delivering results," explains Marketing Director Darin Johnson, who's been with Exactech for six years. All new employees are trained in reading financial statements, helping every employee's individual accountability plan stay aligned with the overarching goals of the company.
"The visibility provided by the open-books policy enables employees to see how decisions they make on a day-to-day basis affect our financial performance," Johnson says.
Even with over 380 employees, Exactech operates as a surprisingly flat organization, held together by the autonomy and confidence that come with continual emphases in development and open communication.
"All employees are valued and titles don't create major separation," says Anacielo Vale-Grogan, senior forecasting manager and an eight-year veteran of the company. Vale-Grogan has taken advantage of many of the development opportunities offered at Exactech in addition to mentorship, including the very popular "Exactech University" – internally offered courses that allow employees to brush up on sales techniques and product training.
Technical training is diligently updated and documented, as Exactech is ISO certified, but sustained growth has come about through spending as much time building a culture that focuses equally on employee and customer retention.
"We believe that loyal employees are the prerequisite for loyal customers," says Betty Petty. "And we seek to create that loyalty through engagement in the business, an attractive and happy working environment and learning opportunities."
Faced with particularly hard times in 2005, Exactech's principles were put to the test. Having misjudged the market, the company had built up a surplus of inventory that was selling slowly, and there was a risk of the manufacturing staff sitting idle.
"Perhaps our bottom line would have improved in the short term if Exactech had laid off employees," recounts Johnson. "But our leadership team takes a long-term view." Bill Petty argues that employee loyalty and commitment were important enough to their success that they knew layoffs would not contribute to the culture they had shaped, and thus they decided to keep everyone.
Seeking to turn a problem into a future advantage, Petty says associates were tasked with making overall processes more effective. They responded by making them both better in quality and more cost-effective. In turn, leadership took no raises to ensure a 6 percent merit budget to provide salary increases for employees and acknowledge their commitment.
Compassion is also one of the company's core values, and Petty says that from the get-go Exactech was interested in being a significant and positive part of the community, providing a place for people to work where they could grow both personally and professionally.
"It may sound a little apple pie," he says, "but it is our strong belief that this kind of a culture in a company also leads to business success. Because when your people are more engaged, we believe they make better, stronger contributions to the success of the company. We believe in it from the standpoint of our personal values, but we also believe it's a very strong business proposition."
Company: Exactech
Web site: www.exac.com
Industry: Orthopaedic implant devices
Location: Gainesville, FL
Number of Employees: 387
Sales: $124 million
Read more in our Health Care Success Stories archive.