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Once health care reform was in the air, "cost containment" became the watchword of providers. PSS/World Medical, a Jacksonville, Fla., distributor of supplies for nursing homes, imaging centers, and doctors' offices, had to become a low-cost supplier while maintaining the top-level service that had made its reputation. Companies rarely make that kind of change easily, but PSS employees made it work. What motivated their cooperation?

PSS has long had a share-the-wealth, share-the-information culture. Every salesperson is a shareholder; some have more than a million dollars' worth of stock in their employee stock ownership plans. Branch offices paper a considerable portion of their walls with financial information: what each salesperson sold yesterday, how much gross margin each of them realized, and how the branch is doing, week by week and month by month. The P& L wallpaper, visible to customers, creates an environment that makes it impossible for employees to be cynical about the management's motives or actions.

Critical to the success of the strategic shift, contends CEO Patrick Kelly, was that he didn't just open the books when the crisis came; he'd had them open all along, so that when it came time to buckle down, employees were willing to do their share. When the government was considering health care reform, PSS customers, uncertain about the reform's effect on them, became very aware of costs. "And we had to become more conscious of costs," explains Kelly. "Our employees were willing and able to make that change because they had all the information they needed."

Last updated: Jan 1, 1998




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