Aribex (www.Aribex.com) is a Inc. 5000 company based in Orem, UT that has developed handheld x-ray equipment that is revolutionizing patient care across the world. Ken Kaufman (@_KenKaufman), President and CFO, took some time to sit with Ascent Advisor (@ascentadvisor).
Peter Wride – Ascent Advisor: Your book, “Impact Your Business” recently won an award from the Small Business Trends. How has the experience of writing this book affected your view on managing a company?
Ken Kaufman: What I found in working with literally hundreds of different businesses was that there were some constant themes that were not being adequately addressed. For the most part we found that business owners did not have the information they needed to gain clarity about their situations so that they could make the best decisions possible. All business failure really boils down to one thing: bad decision making.
What I’ve found is that when you improve your decision making, you improve the potential outcomes. The motivation for the book was to describe this common theme that I’d seen over and over again, explain what I found works to solve that, which is what the book calls the six scoreboards every business needs, and put it into story format so that it wasn’t like reading an accounting book.
Ascent Advisor: How have you implemented the scoreboards at Aribex?
Ken: The foundation for all of them is the monthly scoreboard that is comprised of the monthly financials, where the business is at, and where it’s going. In addition, we use the rest of them to obtain clarity around our key business drivers and how to improve them.
IMPACT is actually an acronym that represents the six criteria that each of the scoreboards needs to meet. It needs to be Insightful, Meaningful, Precise, Accessible, Comparative, and Timely. I like to stress intellectual accessibility of the scoreboards, meaning they’re very easy and quick to digest. So intellectual accessibility means 10-15 seconds – I get what I need to know and I can move on. The conclusion is easy for me to find and derive.
My core belief is that every business has twelve to twenty key metrics that need to be measured every week, and they need to be put into an intellectually accessible format to understand how are we doing in the business and what progress we are making. That’s a weekly scoreboard that we use here and it’s typically, in our weekly executive team meeting, the first thing we talk about. We print it, it gets emailed to everybody, it gets passed around, everybody can look at it, and we talk about every single one of the numbers and how the business is doing.
Ascent Advisor: You originally joined Aribex as a part-time CFO. What about that experience helped you make the jump to join full time last September?
Ken: I had a unique perspective. For 2 ½ years I had been representing Aribex in the investment community. I was very familiar with the story, with what was making the company successful, and certainly with the challenges that the company had. It was extremely influential in my decision. We have great disruptive technology, very powerful intellectual property around it, and we’re really just scratching the surface of what’s really possible. We’re a decent sized company in our own right, but there’s still so much more that can be accomplished.
Ascent Advisor: When you joined Aribex, you wrote a blog post entitled: “Change is good, even for me.” What have you learned through deciding to make this change?
Ken: Our default state is to follow the path of least resistance, like water, and settle into that lowest level spot and then you become stagnant. I wouldn’t say that I had reached that point, but change is just usually really good for shaking things up in a positive way.
Ascent Advisor: Aribex is hitting several milestones in 2012 (10,000th unit being shipped) and launching several new initiatives (including investing in other companies). These are big changes at an emerging company. How do you get your team ready for that?
Ken: It just takes a LOT of communication. And ultimately I think what we’re working to build a culture where we hire outstanding people who are leaders. These are opinionated people with deep and broad experience that have strong opinions about what this company should be doing to grow and succeed.
What we find is like anything else in life, we never lack for good ideas. We have so many good ideas about things we can do that it would take us the next century to try to execute on all of them. We use the expertise, the leadership, and the experience of our group to help us figure out which ideas we should pursue, and we have to discipline ourselves to stay focused on just those things.
One of the critical pieces of change is getting people’s input and helping everyone be a part of deciding what change will be best for us. Everyone doesn’t always agree. We have lots of strong opinions, and they occasionally conflict. That is a sign to me that we’re making progress. We work through issues, we make tough decisions, and then everybody decides to get on board. That’s a more difficult thing to manage than it may initially appear.
Ascent Advisor: What is your vision for Aribex? What would you like to accomplish in the next five years?
Ken: We will continue to change the x-ray experience, improving access to diagnostic care to a level never before considered possible. We are pioneers in this area. My team has heard me say this over and over, “Pioneers never have arrows shot in their chest, because there’s nobody in front of us. We are forging new territory, asking our customers, dealers, vendors, and even the regulators to accept new ways of thinking.”
We’ve got decades ahead of us of opportunity. We’ve barely cracked the code in dentistry in the U.S. We need to do the exact same thing in international markets. Then we need to look up and say, “How about that medical space? How about all of the hundreds of applications where our device can improve the patient and clinician experience?” There’s hundreds and hundreds of opportunities, so for us it’s not about having enough opportunities; It’s about picking the ones that make the most sense, and then executing on them.
Five years from now we’ll be at least twice our size, we could be four or five times our size depending on how certain things go and how certain things happen. But more important than “What’s our revenue?”, “What’s our profit?” or “How many employees do we have?” is that we stay true to the values and to the core set of principles upon which this company was founded, and which continue to be the key components of how we build success.
We’re going to take care of our people, our people are going to take care of our customers, and our customers are going to take care of us. And we will do whatever we can with however we’ve been blessed to try and give back to our community and the world. We will continue to be a catalyst for bringing care to people that have never had it.
Ascent Advisor: What is driving this growth?
Ken: There has been very little innovative change in x-ray technology in the last 50 years. Specifically, when you look at a dentist’s office, the same type of x-ray unit is attached to the wall. Our technology is disruptive in that it completely contrasts with the widely accepted principle that you cannot hold an x-ray source in your hand. More importantly, the dentists are starting to realize all of the benefits that this can bring to their practices and their patients. There are dentists, in practice over thirty years, who will tell you on one hand they can count the number of devices that have changed the way they practice and all of them will tell you that the Aribex Nomad [the flagship product at Aribex] is one of them.
Ascent Advisor: With growth comes new employees. What do you do to attract, engage and retain great employees? How do you get them to buy-in to the vision?
Ken: It doesn’t take us much to get prospective employees to understand and quickly catch the vision of what we’re doing and the opportunities that are still ahead of us. Usually if they haven’t bought in by the interviewing process, they’re done. We are not an organization that is hires people looking for a paycheck. We hire people who are looking to make a difference and want to give everything they’ve got to helping us all get to where we want to go. You know, a lot of companies use 30-40% of the capacity of their employees. You walk around here and you’ll find people telling you that we use 120% of their capabilities. We’re asking people to do things they’ve never done because that’s what happens when you’re a pioneer. You’re facing new things, you’re discovering new challenges that no one else has ever solved, and so that’s the reason people are here. They are passionate about it.
We’re in the process of writing a company history, a book, that captures these values and these principles that have been, and need to continue to be, a driving force in our organization. We’re going to keep growing fast and we need to integrate people into the culture and this is going to be one tool for helping them catch the Aribex vision. [The book will be titled Rays of Hope.]
Ascent Advisor: You’ve been on the Inc. 5000 list for the last 3 years with 157% growth over that span. What’s the biggest challenge that has come from growth?
Ken: Keeping up. I don’t know if that adequately describes it. It really comes down to the fact that the company hasn’t always been killing it. It hasn’t always been profitable. And we are, by our nature, conservative in making sure we never get too far ahead of ourselves. So the biggest challenge for us is timing: how quickly do we ramp; do we hire to expect the same level of growth or do we go a little slower and ask some of our people to help us while we wait and see? We have a conservative approach, so balancing fiscal prudence, just good management prudence and leadership prudence with trying to keep up. The biggest challenge, and where we always are the most careful in our decision making, is the timing of when we bring new employees and resources on. We don’t want to get ahead of ourselves.
Ascent Advisor: What do you see as the next hurdle for growth and development at Aribex?
Ken: I have several initiatives that are in the works for 2012 but there are two that are very visual and that I’m very vocal about. One is Aribex Europe. We’re in the process of establishing a physical presence in Europe that will dramatically expand our footprint and potential. The other one that I’m very vocal about is what we call “Team Canada.” We’re not allowed there. An FDA cleared device, with free unrestricted use in over half the states, with a JQA (the Japanese equivalent of the FDA) approval in Japan, and approvals in dozens of other countries. Yet our neighbors to the north will not let us sell our devices there. We are focused on helping Canadian regulators realize that by taking this negative position they are denying access to care to thousands of those who desperately need it. We can help change lives if they’ll let us.
The idea for Aribex evolved because there were two people sitting down talking who were trying to find a way to help those that were less fortunate, who needed care, and who couldn’t get access to it. That will always be a major piece of who we are and what motivates us to move forward.