Morrison Management Specialists: Rx for successes

Nation's Restaurant News, August 13, 2001 by Jack Hayes

Acquisition of the health-care company leads Compass into acute-care hospital market

ATLANTA -- Selling his company to Compass Group was the farthest thing from Glenn A. Davenport's mind in 1998 when the chief executive of Morrison Management Specialists approached Michael Bailey, then the chief executive of Compass Group North America.

In fact, Davenport was in a buying mode.

"My real interest then was in acquiring the Bateman health-care business for Morrison," Davenport recalls. As head of the largest food management firm specializing solely in health-care foodservice, Davenport wanted to solidify Morrison's position with the senior-care market, which was Bateman's strength. "But I guess I knew from the start there was a risk that Mike Bailey might turn my thinking around."

Indeed, three years later, on April 5, Morrison became the latest member of Compass' growing family -- a move that has given Compass the last important piece in a large and widely diverse organizational puzzle for contract feeding.

Bailey, now chief executive of Compass parent Compass Group Plc, admits that he had coveted Morrison for years and in the past had made several overtures of his own toward buying the health-care company so that Compass would have a strong entry into the acute-care hospital market.

Morrison is a $555 million company with more than 560 accounts in 27 states. It has been the fastest-growing company in the contract industry, with an average 30-percent increase in revenue over the last two years, according to Nation's Restaurant News Top 200 data.

"Glenn came to me and said, basically, 'You guys have been messing around with the healthcare business, and you're not being very successful at it," Bailey recalls. "And he was right. So we talked about selling Bateman, and in the end I said to Glenn, 'Why not sell to us, become a part of our board and have a brighter future?'"

Why would Morrison, only five years removed from being owned by one public company -- Morrison Inc. -- be willing to give up its relatively newfound freedom in favor of another corporate umbrella?

"We sold not only because it was a great value for the shareholders but because we could bring all of the Morrison people with us," explains Davenport, who sold the company for $563 million. "Their expectation was that we continue to grow our company, and we gained from Compass the leverage of increased purchasing power, resources, training programs, marketing retail programs and benefits for employees."

Even though the company's revenue doubled to $441.1 million during the five years Davenport led Morrison as an independent entity, he says he gets excited when he realizes that Compass wants to see the hospital- and senior-dining groups continue that aggressive expansion. He points out, for example, that Compass' initial goal was to see Morrison exceed $500 million in revenue before the middle of this fiscal year.

Given that goal, Morrison's push for growth during 2001 will focus on acquiring new accounts in both its health-care and senior-dining divisions. According to

Right: Morrison's push for growth during 2001 will focus on acquiring new accounts in both its health-care and senior-dining divisions.

Below: Glenn A. Davenport

Davenport, contract companies currently service only about 30 percent of the total health-care market and an even smaller share of the senior-dining market.

"Health care has a lot of opportunities," he says. "It's a very large, underpenetrated market. The challenge is convincing hospital administrators that by outsourcing with us they will reduce costs and increase patient satisfaction. As for senior dining, the elderly is the fastest-growing segment of our population. There will be a lot of growth in this segment."

Morrison employees and clients believe that the company's nurturing style of business relationships is a key to its success. Ed Morris, food and nutrition director for Morrison at Candler Health System, Savannah, Ga., says Morrison's success is rooted in its service philosophy, which the company calls "Clients For Life."

"We have what we call expectation meetings with everyone from the chief-executive level down, and from those meetings we build action plans that we review with the same group on a quarterly basis," Morris says.

Ken Samett, president and COO, Columbia, Md.-based Medstar Health, says Clients For Life works.

"At its core the strength of our relationship with Morrison has been far more than vendor-client - it's people to people," says Samett, whose organization has contracts with Morrison for all of its hospitals. "The issue is that, when a situation arises where we are not completely happy, we can pick up the phone and get someone who is committed to making it better. Glenn Davenport and his team at Morrison have been as good as their word."

Steven Cohen, Medstar's senior vice president for integrated operations, praises the level of technological and clinical support his group receives from Morrison.

"When we wanted to move into a cook/chill environment, they had the experience to help us do that," Cohen recalls. "Morrison has a commitment to the customer and a willingness to work through difficulties that I haven't seen in their competition. At the corporate and the bedside level, they want to make contact when problems are small -- before they build up and become too large and difficult to handle."