Amanda Davey

THEY told him he would fail. That doctors cannot run anything. That corporate pathology cannot

FAIRFAX

work that way. Three decades later, Dr Colin Goldschmidt has proven the naysayers wrong.

The CEO of Sonic Healthcare has stepped down, having built a $ 10 billion global empire from a company newly listed on the ASX whose share price, at

one point, had sunk to less than 10 cents.

“ Perhaps we might be allowed to say

that our model not only works but presents

a compelling case in favour of a

medically led management structure

for any healthcare organisation,” the

pathologist tells Australian Doctor.

He says he never intended to become

a CEO. There was no singular vision. He

chose medicine for altruistic reasons.

By the late 1980s, he had completed his

training as a histopathologist at Sydney’ s Royal Prince Alfred Hospital.

Against the conventional wisdom to

Dr Colin Goldschmidt.

remain working in the public hospital

system, he took a job at a small private

fragmented cottage industry and small labs

specialist pathologist and continued to do

pathology practice called Douglass Labo-

lacked the scale to secure their futures.

his CPD as a practising doctor.

ratories— later known as Douglass Hanly

But this meant that Sonic had a com-

For all the success stories( Dr Ed

Moir Pathology.

petitive advantage— relatively easy

Bateman creating the Primary Health

There he was one of three employed

access to bank and equity capital.

Care empire; Dr Sam Prince, a billion-

pathologists when the loss-making pathol-

And so began its acquisition journey,

aire who founded the Mexican restaurant

ogy laboratory was sold to a newly listed

something that The Australian Financial

chain Zambrero), doctors and business

public company called Sonic Healthcare.

Review( AFR) would later dub the Pac-Man

are not meant to mix well.

Sonic Healthcare’ s bottom line was

approach, as it gobbled up its rivals.

Dr Goldschmidt advises doctors consid-

struggling, he says, but he was content

There was even a strategy and internal

ering a corporate role to express their inter-

to stay put.

unit dubbed the Sonic Amalgamation Team

est in leadership and then apply for open

He had endured the“ tough years” of

to ensure the synergies worked, according

positions by highlighting the benefits of

making it as a specialist, and he found

to the AFR.

medical leadership.

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his clinical work fulfilling. Yet whether he liked it or not, change

This led to industry consolidation and then, under Dr Goldschmidt’ s leadership, an

“ The many Sonic doctors who have made the transition to management have

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was happening, and he was set to be the central player.

expansion overseas to New Zealand, the UK, Germany, the US, Switzerland and Belgium.

slotted in easily, particularly because they possess such a deep understanding

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The unravelling

Fast-forward to 1992, Sonic’ s financial

woes eventually led to the sacking of the incumbent CEO, triggering mass resignations by senior management.

With the share price falling below the 10-cent mark, an unknown engineer from Perth, called Barry Patterson, announced

He says, while other corporations stripped out the local identity and autonomy of their acquisitions, he maintained laboratory names and allowed clinicians to run them.

A genetic footprint

Today, Sonic’ s red-and-blue double-helix

logo can be found in cities around the

of the businesses they are running.“ The financial management skills required for these roles have been easily learnt and have not been a barrier to their success. As you can tell, I feel strongly that healthcare systems in general would benefit enormously if there were more medical leaders in the top management roles.”

Did he ever think he would sink, ever

he was planning a takeover of the business,

world— from Sullivan Nicolaides Pathol-

think he had bitten off more than he

but as he told Dr Goldschmidt,“ I know

ogy in Brisbane to The Doctors Laboratory

could chew?

nothing about pathology.”

in London and Clinical Pathology Labora-

“ While there were moments of fear of

He added:“ I am an engineer who believes that engineers should run engineering businesses and pathologists should run pathology businesses.”

So, Dr Goldschmidt, then a 38-year-old

tories in Austin, Texas. Yet none of these entities bears the name Sonic Healthcare.“ We decided early on to retain the trade names of the labs we acquired,” Dr

failure, the desire to succeed was more pervasive for me,” he says.

A career that comes full circle

After 32 years as CEO, Dr Goldschmidt

with no corporate experience, agreed to

Goldschmidt says.

stepped down in November, having

take charge.

“ It was about respecting the goodwill

laid claim to being the oldest and long-

“ I accepted the role as a reluctant,

built over time.”

est-tenured CEO in the S & P / ASX 50.

inexperienced new CEO.

There has been diversification, not

Limelight has been something he

“ Business management was nowhere

least in Sonic Healthcare and IPN, the GP

seems never to have sought. He is known

in my career plans, nor did I have any

corporate, where Sonic moved to majority

more for politely declining interviews,

formal business training.”

ownership in 2005.

even with the AFR.

The immediate goal was simply to

But pathology remains the primary

He says his successor, Dr Jim New-

save the practice, he says. But very

focus, making up 85 % of its total revenue,

combe— who runs Douglass Hanly Moir

early on, he says he adopted the term

with three-quarters of that coming from

Pathology— is also a pathologist and

“ medical leadership” to define Sonic’ s

overseas operations.

infectious diseases physician, a deliber-

approach and management style.

“ I would say without reservation that medical leadership is the secret sauce of Sonic Healthcare.”

The numbers capture the financial impact. The company is worth some $ 10 billion with a net profit of $ 514 million.

It has also meant that Dr Goldschmidt,

ate continuation of the model Dr Goldschmidt built.

But he says it is time for him to find new passions and slow the pace, spending

But not everyone was impressed.

someone who has remained wary of the

time with family, travelling and playing

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Dr Goldschmidt recalls several prominent healthcare figures telling him it would fail.

public eye, is a big-name CEO. He sits 16th on the list of highest-paid CEOs at ASX-listed companies.

lots of golf and bridge. For this reluctant corporate icon, it closes a chapter that began with low expectations

This was back in the early’ 90s,

Throughout his corporate career, he

and ended with one of Australia’ s biggest

when Australian pathology was a highly

maintained his medical registration as a

corporate success stories.