A Man on an Unorthodox Mission

"Remember no man is a failure who has friends." --- It's a Wonderful Life

ATLANTA, June 24, 2003 - For nearly every working American, each payday is a cause for celebrating. A day of relief. Practically a holiday. That especially was the case for Ken Shumard.

Except in Shumard's case, he wasn't celebrating because he was receiving a big check. He wasn't saving for a new luxury sedan. He wasn't about to make a down payment on his dream home. Instead, payday meant that Shumard, the founder and CEO of Medical Doctor Associates, would have an excuse to interact with his employees.

Even when MDA, a medical staffing company based in Atlanta, grew in upwards of 200 employees, Shumard still personally delivered each check.

"That was a time for me to thank them for being here and it gave me that few seconds to talk with each person," said Shumard. He added with a grin, "I missed some of the interaction when many of our people started using direct deposit."

In Frank Capra's movie, It's a Wonderful Life, it's obvious that the main character, George Bailey, is the person to whom that quote about friends is referring. At MDA, it's not so obvious. The quote could refer to Shumard or it might apply to the company's more than 250 employees.

"His door is always open. It would be a foreign thought for him not to talk to any employee," said Anne Anderson, MDA's executive vice president. "Anybody in this company can walk through his door at any time and Ken will make himself available."

As one might have guessed, Shumard is not the typical CEO. Much like Capra's Bailey, MDA's Shumard is committed to helping others. Overall, helping others is more important to Shumard than the company's bottom line. (Don't roll your eyes. MDA happens to be a $100 million a year company.)

"From day one, we've been providing a service. We're not here to make money, although we have to make money to stay here," Anderson said. "If we provide a good service, that has value, then the money will come."

"It's not always about what's going to bring us the most money or what's going to be the best for our company. But, what's the right thing to do?" said Curt Shumard, Ken's nephew, and the vice president of MDA's locum tenens division.

"Each person around here wants to do more than just pick up a paycheck. They want to contribute and make the company the best that it can be," added Bryan Kovacs, executive vice president, who is in charge of business development. "Make no mistake, we like money, but it's more about helping people, having a good time and having fun building something."

Shumard has built his company on the basis of honesty and integrity. He could be considered an entrepreneur, a salesman, or an innovator.

To most of his employees, however, Shumard has become a friend and father figure. Besides hand delivering paychecks, Shumard has "given away" a bride (an MDA employee), helped MDA employees who have been stranded on the side of the road with car trouble, helped pay for an MDA employee to go to nursing school, and delivered news to an MDA employee that her child had been killed in an accident.

"Ken has a great burden on him," said Jim Ginter, Shumard's number-two man since the beginning. "Ken's one of those guys that takes very seriously the fact that he has a lot of employees around him. He probably takes a greater burden than most of us. I might be worried about my little entity, but Ken really had a visceral feeling for others, which is unique."

"You can talk to people throughout our company, and they would admit that we're close like a family," said Bob Shumard, Ken's youngest son and the director of client services. "I think nearly all of his employees would walk through fire for him. Getting that kind of loyalty is the mark of a true leader."

"Ken has taught me a lot about the importance of family. I see that as a family member, but other employees also see it," Curt Shumard pointed out. "An employee once told me that if his car broke down on the weekend or if his wife's car broke down on the weekend, he felt he could call Ken Shumard to come help. That pertains to anyone working here."

MDA, which started as a small locum tenens company, is the total package in healthcare staffing. It encompasses 10 companies, providing services from temporary and permanent doctor placement, to physician credentials verification, to licensure assistance. While building the company since 1987, Shumard, in many ways has used MDA as his mission field.

"There sometimes is a blurring between his personal and professional life," said Bob Shumard. "Family, religion and work all mix together, which has its good and bad sides. This place isn't perfect but it's very unique. The personality of the company has been hugely driven by Dad. His priorities are family and God before work. That's how he wants his employees to live, which leads to a unique balance of life, a correct setting of priorities."

"Arguably, he's probably one of the most spiritual people I've ever met. You wouldn't necessarily know it just by talking with him, because that's not his style. He leads by example, not by what he says," Kovacs said. "He's constantly trying to help people be the best they can be."

"His ethics are what got us here," Anderson pointed out.

MDA has a set of eight values, including doing the "right thing," valuing people, having fun, communicating honestly, and being "fiscally responsible." Even throughout the company's tremendous growth, Shumard has stressed the core values.

"It's been very important to have those values but it hasn't been very hard. Not all the people here share the same spiritual direction as me, but they all respect it and I respect them," Shumard explained. "I've told them that if they're Catholic, I want them to be the best Catholics they can be. If they're Mormon, they need to be the best Mormons they can be. And so on. I want them to seek values in their family and their faith. The business will be OK after that.

"The last 10 years, we have provided Christian counseling to anyone who wants it. I've never seen the list, and I don't want to know who's going to it. I just know that a counselor comes two half-days a week and sets up shop in the back building. And, he's busy. That's great because I've always felt the healthier we are as people, the healthier we are as a company.

"We've taken the long view with people. We're not quick to pull the plug on somebody if they've had a bad month, or are dealing with a problem or their production is down. We spend time with them and try to understand what they're doing. That doesn't mean that we haven't let people go or they haven't let us go, but we've chosen to look at this thing as a family and not just a profit center."

"Our motivator is affecting people's lives in a positive way," Anderson affirmed. "Ken wanted to build something that he could use to affect people and to give them a place where they could grow spiritually and professionally."

MDA now faces a future without Shumard at the helm. In 2000, he decided to start a transition into retirement. That concluded in June 2003.

"I felt like the best I could do for this company and our employees, was to plan to leave at a right time. I didn't want to wait until a sickness or any type of problem might jeopardize the company," Shumard said. "So, (in 2000), I started looking at all phases of this business. How do I stabilize this business if I get hit by a Mack truck? How do I take care of the people for the long haul? I interviewed folks from the outside, people from public companies, and I brought in an outside consultant to help advise me."

Instead of hiring a CEO from another company, Shumard developed a succession plan with an executive board made up of three CEOs — Ginter, Anderson and Kovacs.

"These are all people I trust. They are top people. They share the same vision on which this company was built — integrity, keeping the company private, keeping it focused," said Shumard. "We are not an acquisition company. We've acquired only one company during our history. Everything we've built has been organic growth. I've enjoyed seeing this group mature together through the growth."

NECESSITY BLOSSOMS INTO AN INDUSTRY LEADER

Today, MDA is one of the largest privately held medical staffing firm in the United States. MDA is led by its locum tenens division, which provides several services and benefits to healthcare providers in all 50 states plus Canada.

Nobody could have predicted that MDA would become the giant in the medical staffing industry, especially considering the company's meek start. In early 1986, the company for which Shumard was working became involved in a lawsuit. The owner went into Shumard's office and delivered stunning news.

They didn't have enough money to pay Shumard anymore than his current paycheck. That was it.

Ken and Joyce Shumard's daughter, Julie, was less than six months from getting married. Their oldest son, Kenny, was getting ready to attend college in the fall. Their youngest son, Bob, was going to a private high school. Now, Ken was unemployed.

Faced with upcoming expenses and no type of severance pay, Shumard put his entrepreneurial spirit to work. He decided to work with what he knew best — medical staffing — and he set up office at the family's kitchen table.

"I was scared when we started," he said. "I told Joyce that I didn't have time to go look for a job, I just needed to sit down and start putting deals together. We were fortunate that the first deal we put together fed us for a year."

That first deal was with a hospital in Cleveland, Tenn. The hospital was going to close if it didn't get more business. Surgeries were down to about three cases per week. Shumard figured a way that he could help.

"I told the administrator that I had a plan if he trusted me," explained Shumard. "I told him that I was going to bring in two top-drawer anesthesiologists. They're going to go out and take every surgeon out to lunch every day and dinner every night. They're going to ask the surgeon for one shot. The surgeon could come in at any time for that surgery and have priority.

"Within a month, we were up to three to four cases a day. After the second month, we were doing eight to 10 cases per day. That was a turning point to keeping that hospital going."

The hospital is still open.

"That community is better off having that hospital there," said Shumard.

As with many of Shumard's dealings with people, when he talks about that hospital deal, sure it helped his family, but he's happier that he helped people meet a need.

In 1987, things were going well enough that Shumard decided to take the next step: hire an employee. He got in touch with his old friend from Jackson & Coker, Jim Ginter, who was in Ohio at the time.

"Ken sent me a letter asking me what I was doing and explaining everything that was going on with his new company. We got together in Ohio in September and then I joined him in November," Ginter remembers. "We took off the week of Christmas that year and I remember thinking that this was going to be a great company!"

Even though, Ginter admits, he had some concerns early, Shumard convinced him that everything would be OK. Of course, he did this through example.

During one trip from Atlanta to Macon, Ga., for a presentation to Charter, Shumard and Ginter were traveling in Shumard's 1984 Lincoln Town Car on a hot summer day. Driving down Interstate 75, Ginter noticed the gas gauge was moving close to empty. He suggested to no avail that they should stop for a fill up.

"I told him, 'That E is for empty, not excellent.' I thought he knew the car better than I did," Ginter says, "but he evidently didn't. We ran out of gas. Luckily, we were heading up the exit ramp. When we got to the top, we had to push the car to the gas station. Of course, I was doing most of the pushing.

"I told him that I hoped no one from Charter saw us. If they did, we might as well turn around, because it wouldn't look good for the two execs of the company to be pushing a huge Lincoln Town Car. He told me not to worry about it."

Of course, no one from Charter saw them, and the meeting went fine.

"As usual, he was right," Ginter added. "It was one of those times that everything turned out fine."

For Shumard, there were plenty of rough times in the early days of MDA. There were times that he could have wondered if everything would turn out OK. For many years, Shumard ran the business at a break-even point, trying to get market share. He reinvested his personal income in the company. Still, he told himself that he always wanted to have a better current year than the previous year.

At his retirement 16 years later, that plan remained in effect.

"I don't know if I have the wisdom or the ability to have mapped this company better than what has happened. This thing has methodically grown every year," said Shumard. "We've never had a year worse than the previous year. We've had some rough years. We've taken some risks. Some have played out well and some haven't, which is the way risk goes. You have risk and reward, and you don't know what's going to happen unless you try it. We've tried lab companies that didn't work. We've lost money on some operations. Some haven't turned but some have."

Two of the more successful companies in the MDA family have been Miracle Workers, an online medical job source, and CREDENT, a full service credentials verification organization.

Miracle Workers originally was the brainchild of Bryan Kovacs, who had competed against Shumard and MDA for several years with his own locum tenens firm. Kovacs first developed Medical Jobs Source, job-posting boards for the healthcare industry.

After Kovacs sold his locum tenens firm in 1997 and waited out a non-compete clause, he approached Shumard in the fall of 1999.

"I sat down with Ken and told him I was developing a vertical website in the healthcare space that is an Internet-based job-posting board," said Kovacs. "I told him that I needed some infrastructure to build it. If he'd give me the space, I said, and come in as an equity partner, we'd get this thing rolling. Ken called some contacts, and people were just blown away. So, we brought to market the first vertical website in the healthcare space.

"We raised nearly $3 million in the fourth quarter of 1999, launched in the first quarter of 2000. By the fourth quarter of 2000, it was acquired by headhunter.net, a publicly traded company. By August 2001, headhunter.net was acquired by Knight-Ridder Tribune, i.e. Career Builder.

"But, here's the salesman and visionary part of Ken Shumard. He doesn't even have a computer on his desk. He still doesn't have a computer on his desk. But he built the largest vertical website in the healthcare space."

CREDENT started out as a credentials verification process for doctors that MDA used. MDA was the only company with the foresight to do comprehensive background checks on doctors, which gave Shumard an idea.

"The credentials verification department was a necessary evil all along. It was something that our sales people had to get through to do their jobs," said Anderson, who is the CEO of CREDENT. "Ken realized that we could provide a service, focus it as a service, instead of just a set of hoops that you have to jump through. That has gone from just a call center to a revenue center."

Looking back at the early days, Anderson, who started with MDA in 1988, remembers days when, to save money, they would buy day-old croissants. Ginter remembers their lab coats. Lab coats?

"We used to wear lab coats, like we were fake doctors or something," Ginter said, laughing. "Ken felt good in his, but the rest of us felt uncomfortable because we had to explain that we weren't doctors. We tried to hide them whenever Ken left the office. Ultimately, he'd find them."

In spite of lab coats and day-old pastries, Anderson and Ginter, the senior members of MDA's staff, understand that Shumard's vision helped them reach the point where they are today.

"He knows how to make everything fit together," said Anderson. "For example, in our malpractice insurance, he made a decision 12 years ago to change our form of insurance. That has turned out to help us get to the top, and set us apart from our competitors. But, it wasn't that big of a deal 12 years ago. There are plenty of other examples like that."

"We've been fortunate in being able to recognize the space, stay in it and continue to try to innovate and tweak what we're doing to stay on this wave," Ginter explained. "A lot of things had to happen, but that's the way it is with any business."

Through all of MDA's trials and successes, Bob Shumard says he learned a valuable lesson from his dad.

"It's been a long road with a lot of effort to reach this point. If you went to most companies this size, you'd see that the founder made sacrifices in his family and personal life, and ethics. We didn't make those sacrifices," Bob Shumard says. "Dad wasn't absent while we were growing up. He's always kept the balance in his life that I've tried to keep. I could be gone 20 days a month, but I choose not to do that. I'm home with my family as much as I can be, just as Dad was with us. Quite possibly, my competitors are outworking me, but that's the cost. I'd rather do that than to turn around and not know my wife or kids."

Despite leading MDA toward the top of the medical staffing ladder, while touching hundreds of lives, Shumard has remained humble and appreciative of what's happened during his career.

"I don't mean this to be a trite statement, but when the company started, I was just trying to feed my family. I wish I could say that I had the wisdom that this growth would happen, but I can't. I don't have any great wisdom or skill," he says. "The triteness I don't want to leave, but the first day we got together as a business away from my house, was a day that we stopped and prayed for each other. This group has kept that momentum to some degree since that day.

"There's no doubt in my mind that God has been in more control of this business than I have been. The blessings from it will continue well beyond my death. That's why I encourage our management team to use our resources to that goal. I don't have any feeling that I've had a great mind to build this. I just was at the right place at the right time. I've certainly had a lot of great things happen.

"The best part of what I've done has been the ride. I've enjoyed pretty much everyday."

A PROMISING FUTURE

"Time has flown by. When I first announced my retirement, I thought about how I had 3 ½ years to get ready," Shumard said. "In that 3 ½ years, we've almost doubled in size and we've become a good, stable company. It's made my last few years a real joy."

As Shumard pointed out, if there is a good time for him to step down, this turned out to be it. MDA seems poised to remain an innovative leader the healthcare industry. And, they are constantly seeking new avenues to help people solve problems.

"Everyday that we come to work, we don't know what's going to happen but we know that we're going to have fun," said Kovacs. "There's always something creative going on here. This isn't a static organization."

In the company's hierarchy, Shumard is retired, but he's still an integral consultant. Kovacs continues to oversee business development. Anderson still is focused on CREDENT. Ginter oversees the locum tenens division and, in essence, fills Shumard's shoes.

"We won't let this company get into a retirement mode," Ginter pointed out. "We're going to keep working and trying to improve. The shoes will be tight sometimes, loose sometimes, but they'll be different. I'm not worried about it.

"We've got a good group. Barring anything biblical, the business should roll on pretty good. We've got good managers and we're set up nicely."

Shumard is confident in the abilities of MDA's leadership group. But, he has offered some parting advice for the three that can apply to anyone running a business or a family.

"I'm confident that this business will do great, which proves that it doesn't happen with the CEO," Shumard said. "You have good people and they make it happen. I tell the three new CEOs here to stay out of the way sometimes, but be a good cheerleader. Encourage people. Build them up. Let them know that they're important. Give them hope. Give them a feeling of family and a feeling of safety.

"People think that a leader needs to be perfect. I think that's a false sense of security. Whether you’re an elder at church, a leader of a business or the leader of a family, you need to be able to admit mistakes."

Undoubtedly, whatever Shumard pursues away from Medical Doctor Associates, he'll be successful. As one might expect, Shumard knows he doesn't need to worry about his future.

"I feel that God has been in control of this company in much the same way that He is in control of my retirement," Shumard said. "I have a feeling that a lot of things will happen that I don't know about yet. Already, opportunities are coming to me that I never dreamed would happen."

But, for the real-life George Baileys of the world, such as Ken Shumard, that's how things work.

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About MDA
Founded in 1987, MDA is one of the largest privately held medical staffing companies in the U.S. MDA is the largest national multi-specialty locum tenens company that offers Occurrence Form malpractice insurance to its providers.
The company is headquartered in Atlanta, GA with a regional office in Dallas and satellite offices located throughout the United States. MDA provides recruiting expertise for all physician specialties, allied health, and healthcare professionals. For more information about MDA call 1-800-780-3500 ext. 2168.