Orion Health founder Ian McCrae has dismissed calls for him to stand down as chief executive, saying he will instead reinstate the business principles that saw Orion flourish as a privately-owned firm.
Orion’s software is used to manage the health records of more than 100 million patients around the world.
But some business commentators have suggested McCrae move into a more evangelical role following a string of disappointments that has seen investors lose on paper three-quarters of the $125m cash they invested in Orion’s 2014 NZX sharemarket float. The Auckland software firm shocked investors this month by revealing it had only $2m to $6m in cash on its balance sheet following a $32m to $38m annual loss.READ MORE: * Orion Health trajectory ‘not sustainable’ analyst warns * Orion hires US sales star Craigs Investment Partners wealth manager Mark Lister said there was a feeling in some quarters that it was time to consider whether McCrae was the “right guy from a CEO leadership point of view”.
“The right person to be leading the charge from zero to $50m is not always the right person to be taking it to the next level,” he said.
But McCrae said he would do “exactly the opposite” of what had been suggested by taking a more hands-on role overseeing Orion’s sales and financial performance, and had “no intention of stepping down in the short to medium term”.
“Anyone who is close to Orion will know that after the IPO I delegated a number of areas and focused on r&d and product management,” he said. “I did exactly what has now been suggested. But from the start of April, I have stepped away from the r&d area. My primary focus is going to be global sales and profitability.” McCrae, 58, said that would mean he would be working closely with Orion’s newly-appointed vice president for sales, marketing and strategy Teri Thomas, a former executive at United States rival Epic, and would be racking up the air miles.
“I am going to be living the dream,” he joked. “You are stuck in a city over the week and think you are going to be seeing the sites. But, no, you are in your hotel room banging away on emails all weekend.”
McCrae said it was time to get back to the way Orion was run when it was a private company, and averaged 27 per cent annual growth and a 7 per cent operating profit margin.
“Historically, we grew this company organically prior to listing and invested once we had secured sales.
“We are going to get back to basics and run this company the way we used to.”
Orion employs 1200 staff and McCrae said decisions had yet to be made on any restructure.
Commenting on the stresses of the job during the past few weeks, McCrae said: “These jobs are pretty tough jobs. Anyone who says otherwise wouldn’t be accurate.
“I accept we have lost the confidence of a large number of shareholders. When that happens you have got to expect some negative commentary.”
But he dismissed “troll articles” that had painted him as arrogant and overly-controlling as “completely ill-informed”.
McCrae said Orion would probably draw down on a $40 million facility from banker ASB as it sought to bring in new investors.
But he was “totally comfortable” with the prospect of losing majority ownership of the company he founded 25 years ago.
Inevitably someone would take over as CEO “in due course”, he said.
“Would I be expecting in 10 years’ time to be running Orion? I really don’t think so.”
“I would love to have someone from within the company take over at some point, although I am sure we would do an international search as well.”
Orion had undershot its forecasts because of the challenges it encountered re-engineering its software so it could be rented online, and fluctuations in the North American market, he said.
“We did also invest ahead in r&d and that is going to taper back now.”
The company “was and remains a New Zealand success story”, McCrae said.