Inside Sun Healthcare

CORNER OFFICES

Team Includes Healthcare, Nursing Home Veterans Spread Across Country

The corporate culture at Irvine's Sun Healthcare Group Inc. is found in frequent-flier miles and BlackBerrys.

Executives of the operator of nursing homes, rehabilitation centers and a medical staffing unit are spread across three time zones at the company's headquarters in Irvine, a hub in New Mexico and offices in Boston and Dallas.

On top of that, the company has facilities in about two dozen states.

"We have a displaced leadership team-I guess that would be the way I'd say it," said William Mathies, Sun's chief operating officer in Irvine who also runs SunBridge, the company's largest subsidiary. "We have to continue to reach out, involve (people), get on a plane and go meet people."

Sun relies on travel, meetings, phone calls, emails and BlackBerrys to run the company, which has yearly revenue of about $1.6 billion and a recent market value of $650 million.

Chief Executive Richard "Rick" Matros said he runs the company based on a decentralized culture: "I don't like having a top-down kind of environment So I really count on people to do their jobs."

The company's executive core is in Irvine with Matros, No. 2 Mathies, Chief Financial Officer L. Bryan Shaul, general counsel Michael Newman and Heidi Fisher, executive vice president of human resources.

In New Mexico is Chauncey Hunker, chief compliance officer and chief risk officer.

Sue Coppola, senior vice president of clinical operations, works in Boston.

Sun came to Boston after spending $350 million last year to buy Harborside Healthcare Corp., another nursing home operator.

Matros said he's put together his team by looking for smart, passionate people.

"Knowing that everybody's always going to have different personal styles, I just look for some basic characteristics," he said.

Executives have to "care about how they treat other people-we're a very touchy feely business," Matros said.

Company Operations

Sun runs about 215 nursing homes and other facilities in 25 states through its SunBridge Healthcare subsidiary. The facilities treat people recovering from illness or injury or who have Alzheimer's disease or other forms of dementia. Some of its facilities care for mental health patients.

The company's SunDance Rehabilitation unit offers physical, occupational and speech therapy. The company also provides medical workers through its CareerStaff Unlimited.

Much of the interaction among the executives takes place electronically.

"Sometimes, I feel like we're our own children where we're instant messaging on our BlackBerrys," Mathies said.

He joined Sun in 2002-on the day the company emerged from bankruptcy reorganization.

Sun filed for bankruptcy protection in 1999, two years after the government slashed Medicare payments to nursing homes. At one time, five of the top seven nursing home operators sought refuge in bankruptcy court.

Matros took over Sun in 2001 after leading two other bankrupt nursing home operators to recovery.

On Mathies, Matros said, "He's the only operator that I've worked with who I trust as much as myself. I know exactly how he's going to execute."

Coppola, a former Harborside executive who joined Sun in October, said she interacts with her counterparts "in a variety of ways."

"I spend significant time on the road traveling among Albuquerque, Irvine and the other states in which we operate," she said. "Depending on what the topics are, it may be by teleconferencing or video, or it may be that I hop a plane and go meet my associates in another state."

Sun recently started videoconferencing between Irvine and Albuquerque.

"We all do take the opportunity to meet face-to-face when we're in the same place," Fisher of human resources said.

Accessible CEO

Executives call Matros easily accessible.

"In terms of interacting with Rick and the executive team, (it's) fairly informal-I walk down the hall if he's around," general counsel Newman said.

Matros and other executives in Irvine are on one floor in an office building near John Wayne Airport.

"We're kind of catty comer. He's on one side and I'm on the other," Mathies said of his proximity to Matros.

There are formal meetings, including once a month among senior managers.

"As a senior management team, we've always really worked well together," Fisher said. "Nobody kind of runs off and does their own thing in a vacuum."

There's occasional tension.

"We don't always see things the same way," Fisher said. "But I think we have the kind of environment where we can talk about it and in the end we might say, 'OK, I still don't see it the way you see it, but now how do we figure out how to move forward."

The team's biggest challenge is balancing the varied interests of its executives, which range from day-to-day operations to dealing with government regulation.

Sun is in a highly "regulated environment, more regulated than nuclear waste," Coppola said.

Grooming Leaders

The executives are expected to develop leaders from their own teams, Hunker said.