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Press Kit

Sticking to the plan

An expensive mistake taught Stoltenberg Consulting to focus on its core strengths

A lesson learned six years ago taught Stoltenberg Consulting to focus on what it does best, rather than trying to diversify into areas outside of its area of expertise.

In 1999, Stoltenberg, a health care consulting group, tried to branch out into selling a stand-alone product it had developed -- a software system that helps reduce duplication of medical records by alerting personnel if there's more than one file on record for the same patient.

However, in its haste to bring the product to market, Stoltenberg, which works with hospitals to implement information technology systems, didn't account for two important factors. Not only was demand lacking for the product, but its introduction angered longtime partners who felt the software was too similar to products they sold and preferred that Stoltenberg stick with the consulting business instead.

The mistake cost the company about $1 million.
"It was too early to market," said CEO Sheri Stoltenberg. "There was no compelling reason (to market the product then)."

Following the failure, Stoltenberg spent the better part of the past six years focusing on building relationships with its customers, she said. Those efforts have been successful, as the firm has grown to 80 clients nationwide and $5 million in annual revenue.

Core Values
A national movement toward consolidation of paper patient medical records into electronic files has made Stoltenberg's product more attractive these days, and the company has been tempted to start selling the product again, Stoltenberg said.

However, even though the company has begun to package its software as part of the consulting services it offers, and it would be willing to partner with a company to sell the product separately,

Stoltenberg does not have any plans to actively sell it on its own.

"We already made that mistake, and we don't intend to make it again," Stoltenberg said.
Stoltenberg said her company has learned the importance of not jumping into something new too quickly.

"Stick with your core values," she said. "Don't veer or look for a quick hit. Do what's right even if it might be for less money. And develop long-term relationships."

Part of that relationship-building process has been listening to customers to better address their needs.

For example, the three-hospital University of South Alabama Health System hired Stoltenberg to upgrade software in its nursing stations. Stoltenberg, noticing that system's IT department was small, took it a step further. The company came up with one solution that would work in each of the three different hospitals, making it easier to use for everyone, including the IT staff, which only had to be familiar with one basic system.

"It really comes down to listening," Stoltenberg said. "What was the client saying? What's the desired outcome? Listen, recheck with them, and work hard to accommodate their needs."

Dan O'Connor, project manager at the University of Rochester Medical Center and one of Stoltenberg's clients, said the company "hits the ground running" and described Stoltenberg herself as someone who is skilled at forming relationships.

"She keeps in close contact with us," O'Connor said. "She knows what we have going on. She tries to keep people available that will meet our needs."

'Fail Fast, Adjust Fast'
Stephen Wayhart, managing director for BrandMill, a Carnegie-based marketing firm, and someone who has helped market product launches in the past, said companies trying to launch products too quickly is a common pitfall.

He said it's important for a company to first determine whether there is a need for a new product it wants to release before it actually goes through with marketing and selling it.

Using small market beta tests can allow a few users to try out the product first. Based on their feedback, a more informed decision can be made about a full launch.

"There's no doubt people launch products maybe a bit too fast," Wayhart said. "(The key is to) test fast, fail fast, and adjust fast. That's how you can get the traction and launch something on a bigger scale."

Bruce Downing, vice president of integrated marketing at Pipitone Group, a North Side-based marketing firm, said it's important that companies create good business plans when launching new products and consider first selling the products through licensing arrangements or going through a third-party administrator.

"Look at different ways to get to market," Downing said. "Figure out where the best chance is. Build a strategy." JENNIFER CURRY may be contacted at jcurry@bizjournals.com.

Media Contacts:
Jennifer Curry, jcurry@bizjournals.com

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