No stranger to the pages of Consulting Magazine, the Claro Group has seen explosive growth since it was named one of our annual Seven Small Jewels in 2008. Since then, the owner-operated legacy financial, economic and management consulting firm, started by former Arthur Andersen partners in 2005, has been aggressively growing its healthcare practice, tripling revenue from $5 million in 2010 to $17 million in 2012 with projections to reach $25 million by the end of the year. "We have chosen to focus on hospitals and health systems, and we provide services to help them to meet one of their most critical strategic issues, which is to make money on Medicare," says Venanzio Arquilla, a Managing Director with the firm. "We help our clients in three main areas of service: cost reduction, demonstration of quality and revenue cycle. We can help hospitals with large, comprehensive and integrated transformation projects that deliver $20 to 50 million in annual bottom line impact or we can also deliver point solutions in our core delivery." Consulting One on One spoke with Managing Director Mark Hargis about the firm's growth, future prospects, and the ever-increasing demands of clients.
Consulting: Talk about the time since the Claro Group was named one of our Seven Small Jewels in 2008.
Hargis: Obviously we went through a fairly significant recession, but we were able to grow pretty steadily and significantly through that entire period. We've refocused and expanded our healthcare practice to include more offerings, added the government contracts practice we've increased the depth in our disputes claims investigations business. We were around 55 people in 2009, I think we're probably close to 130 and plan to add another 15 to 20 this year. It's been a pretty positive story.
Consulting: Where do you guys see opportunity on the horizon this year?
Hargis: We've got three primary service lines: disputes claims and investigations, which covers a pretty broad area of expert testimony, damages, and fraud investigations. We've got our government contract space that focuses on helping companies, not necessarily the Boeings of the world, but the companies for whom government contracts are significant but not the majority of their revenues. We've added more market-facing managing directors who are out there developing business. It's not as electric growth as the healthcare business but it's still significant in both of those businesses. Key staffing adds I think are due to our structure and the way we're set up. We have no outside debt, the managing directors own the business, we don't answer to shareholders, we answer to ourselves. I think there's a certain level of managing director performers out there in the marketplace that find this model very attractive. You have to grow or die in any business, so we grow, but we grow on our terms. We don't grow because the shareholder wants us to; we grow because it's the right thing for our business.
Consulting: What are clients demanding these days?
Hargis: More! [laughing]. I like to tell managing directors that every year the only thing we ask of each other and the only things our clients ask of us is more. That fundamental hasn't changed in the 20 to 25 years I've been doing consulting. The bar is constantly being raised, they expect more, they expect better service and you have to step up and reach those demands.
Consulting: What does the future of the firm hold?
Hargis: I think last year we did 36 million in revenue; we're budgeting to do close to 50 this year. Obviously that's pretty significant growth. In order to be a successful owner-operator legacy business I think we need to have enough offerings and market-facing people where it becomes a self-generating prospect, you're out talking to a client, they bring up another issue and we can help them solve it. We're going to continue to grow organically, I hope to add a few managing directors over the next two years, I think we'll continue to add external-facing market directors. We'd like to have three things from a managing director that comes to us: same commitment to client service, same commitment to stewardship of our people and to sign on and agree to our owner-operated legacy model. For us it's about enhancing our current offerings and capitalizing on the opportunities with our clients.
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