Q&A: Jen Herdler, Impact Health CFO, on keeping pace with skyrocketing growth

Businesses make strategic pivots all the time to tap into new growth opportunities. However, very rarely do companies see their growth skyrocket immediately after in the same way that US-based healthcare firm Impact Health did.

Prior to 2020, Impact Health was a small firm providing biometric testing to corporate America. When the pandemic hit, the company chose to strategically pivot taking advantage of the new opportunity to step into the Covid testing market and later, administrating coronavirus vaccines. This saw sales in 2020 grow 10 times that of 2019 and saw 2020’s numbers triple in 2021.

Speaking to The CFO at Oracle NetSuite’s SuiteWorld 2022, Impact Health’s CFO Jen Herdler shares what impact the phenomenal growth had on the finance department, how she maintained the team’s morale in a high-pressure environment and what life after the pandemic looks like for the company.

Impact Health made a strategic pivot at the beginning of the pandemic. You’ve previously referred to the level of growth the company saw as “explosive”. Could you explain what that meant for you and the finance team?

Sure, we went from 300 nurses to 20,000 nurses across the nation. Our sales in 2020 were 10 times that in 2019. Our sales in 2021, were three times that of 2020. It was phenomenal but as a small little company, they had no IT infrastructure at all. Not only did we have to manage the growth, but we also had to create all of the IT infrastructure for the company.

You come into a situation where you are sort of building a 747 in the air. You’re going through such explosive growth without any structure so you’re trying to build structure and manage all of this growth at the same time every day. It was the most challenging experience I’ve ever been through.

You have to look at your long-term like we had to implement an ERP, which is very time-consuming and a lot of work while you’re doing this huge growth. You’re constantly band-aiding, band-aiding and building. Each day, you have to prioritise your time, so that you’re making sure those long-term initiatives are happening, the future success of your business, but then dealing with the fires.

How did the requirements of your processes change and where did Oracle NetSuite come in?

At the beginning, we had a manual system. You can imagine nurses faxing in their time cards and you can imagine the chaos that was around payroll every two weeks was a nightmare. My first priority was to automate the payroll system and we did that. We use software to do the timecards and integrate that into our payroll system but I was still on QuickBooks and certainly, QuickBooks doesn’t give you the information that an ERP does. At the end of the month, we would have to run our gross margin reports manually with Excel spreadsheets and it would take us a week to generate all that data because we’re just basically pulling all of this payroll data into spreadsheets, and then doing pivot tables to create our information.

The problem with that was that you’re only looking at margins at a point in time, which is usually three weeks after it’s occurred and it’s over a month period. We really needed more timely information. I would like to know every week how we’re doing on our gross margin projects. And so it was really because of that we knew we needed to be in an ERP and that really drove the decision. We knew in order to scale and grow, you also needed an ERP and we certainly couldn’t stay with the software that we had.

One of the big reasons we ended up going with NetSuite is we needed an accelerated implementation. I couldn’t wait a year to get my ERP in, I was getting crushed with information.

What impact did this hypergrowth period have on your finance team and how did you maintain morale?

When you’re part of something like that, it’s exciting. Our team, now things are quiet, say, “I never thought I would say this, but I miss the good old days when we were working crazy hours and it was super stressful”. I think there’s something about [being] a part of something. We had a really young group of people […] and for a lot of them, it was their first real corporate experience so it was an exciting thing to get behind.

It’s not all rosy. I had lots of disappointments or things that would happen where my team didn’t function the way it needed to and there was fallout from that. You have to address it and then correct it. We had a hire that ended up not working out and unfortunately, that hire did some things that were really unhealthy for the team. It’s easy to see how a dynamic can get eroded quickly by dysfunctional behaviour.

Looking back at the changes you made to your finance function, is there anything you would have done differently?

Sometimes it can feel like you are driving a plane and you don’t have any of the controls or anything, so you’re just really using your gut. That was the reality of it at the very beginning. We pushed as hard as we could, I can’t say that “oh, I wish we had done things sooner”. We adapted pretty quickly and we were forced to deal with things.

If I was to say one thing, it would be the implementation. The only thing I would have done differently is I thought I brought on additional resources because we were doing an accelerated implementation but I would have brought in even more. If I were to do that again I would have brought double that, even though I thought I had brought on a lot of resources to do it quickly. The implementations are so time-consuming that I just wish I had done more which would have saved us a lot more time on the back end.

The company pivoted at the start of the pandemic taking advantage of new opportunities that presented themselves. As things settle down, what’s next for Impact Health?

We’re currently sort of pivoting again. A bunch of our workforce transferred over when we moved contracts over to a wellness company. We did the deal back in August and we’re now looking at how we’re going to go forward and growing this business. It’ll certainly never achieve the heights it did during the pandemic.

We’re looking at a different company. Certainly, the owner is looking at starting a much smaller organisation with a more localised strategy.

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