Making a big impact with small margins: Andy Garlington

The data-driven approach Andy Garlington followed in the for-profit sector still applies in his new job as CFO of Centerstone, a not-for-profit behavioral health care system. Because “what gets measured gets done,” he said, it’s important to consider data even in a not-for-profit organization that uses its revenue to sustain and further its mission rather than to generate profits paid to individuals. Garlington holds dual bachelor’s degrees in accounting and finance from Harbert. 

Transcript

Narrator:

Welcome to The Harbert College of Business Podcast with your hosts, Sarah Gascon and Currie Dyess. Today's guest is Andy Garlington, chief financial officer of the behavioral health company, Centerstone. He holds dual bachelor's degrees in accounting and finance from Harbert.

Currie Dyess:

Andy, War Eagle, welcome to the show.

Andy Garlington:

Thank you. War Eagle.

Currie Dyess:

Why did you choose Auburn? And what did you enjoy most about studying accounting and finance here?

Andy Garlington:

I didn't have much of a choice. I feel like it was chosen for me. I grew up in Montgomery, Alabama and actually played soccer growing up, pretty competitively, played travel soccer and thought that was actually going to be my career. I got a scholarship to Wake Forest and some other places, ended up breaking my leg the night before prom my senior year of high school, and so all my soccer dreams got crushed. And so I had to take a step back and look where I wanted to go, and Auburn was an obvious choice. We had 13 Garlingtons before went to Auburn, my parents, grandparents, cousins, brother, everybody. So yeah, I ended up at Auburn for that reason, didn't really have much of a choice. Glad I did.

Sarah Gascon:

So you work for Centerstone. Could you tell us a little bit more about Centerstone's mission and purpose?

Andy Garlington:

Yeah, absolutely. Centerstone is a not for profit behavioral health company based in Nashville, Tennessee. And what we do is we offer a variety of services, mostly outpatient services in the behavioral health space, and it's a wide spectrum. A couple of the services we offer are to our veterans. We have military services. We have substance abuse services that we offer, school based therapy, addiction recovery. Suicide prevention is a big area of Centerstone, and research and treatment plans for those. So yeah, lots of services, a wide breadth across the behavioral health space.

Currie Dyess:

And Centerstone is not for profit, but your background is extensively in the for profit sector. You've been the bigwig at several hospitals in the for profit area. What's the biggest difference in working for Centerstone versus the other facilities?

Andy Garlington:

Yeah, I don't know about the bigwig part, but good question. My 15 years of prior experience before Centerstone, like you mentioned, was in the for profit healthcare space. I've been in long-term acute care, surgery center businesses, and then most recently, and most of the time spent in the hospital setting. And going from the for profit hospital setting, where it's: What have you done for me lately? What numbers have you hit this quarter? And the pace of things being so fast, to the not for profit world, has been eye opening for me, but I've really enjoyed it. The pace is slower in the not for profit world. It's a tax status being not for profit, and in a lot of ways, I think people think it's vastly different. And my experience is the pace of things is slower, but the care for patients is the same, if not more. And so that's what really attracted me to this opportunity.

Sarah Gascon:

And as a CFO, what are some of the challenges that you're experiencing now that you didn't experience at the other organizations?

Andy Garlington:

That's a great question. Most of the issues are similar, but one of them that I have found is within what I'll call the spectrum of the for profit world being so fast paced, focused so much on financial performance. The not for profit world, especially in behavioral health, being focused on emotion and care of the patient above all else, sometimes we lose focus of that financial component. And so you've got this full spectrum of financial stewardship, and then also high quality care, and I know as a CFO, I'm going to be on one extreme end of that spectrum. I'm numbers driven, focused on results. And behavior health and at Centerstone, I feel like at times we're on this extreme other end, where we're so focused on care at all costs that we probably need to both move towards the middle.

I've said it's a coin that has two sides, the financial stewardship and operational high quality care really is two sides to the same coin. And I know personally, that's where I'm trying to move more towards. I probably need to be a little more emotional and in touch with my emotional intelligence and awareness. And I think as an organization, we probably need to be a little bit more financially aware of decisions we need to make.

Currie Dyess:

So being a numbers guy in an emotion driven organization, how do you forecast your budget? Do you look at previous data? Or is it based on current social trends? How do you do that?

Andy Garlington:

What I've said, and I've said often here at Centerstone is what gets measured gets done. And so first and foremost, we've got to measure. If we're going to be successful, how do we know if we're going to be successful or are heading in the right direction if we don't measure those key metrics, indicators? And so what we've done here is try to incorporate as many data driven decisions as possible to avoid some of those gut reactions or gut feelings that sometimes can lead you astray as a business. And so yeah, it's tough because again, the nature of behavioral health is very touchy feely, and the nature of the work that we do on the finance side and what I do is very data driven, data centra. It takes time, and so we're melding those two thoughts together.

Sarah Gascon:

So what are some of your favorite KPIs? And how do they differ from a for profit?

Andy Garlington:

A lot of them are very similar. Right? The bottom line is the bottom line. Either you're profitable or you're not. But what I try to do is take some of the best metrics or KPIs that you mentioned that I've learned at prior stops and incorporate them here at Centerstone, and so if you bucket those into a couple, it's: What are our volume indicators? Right? How many clients are we seeing? How many hours of care? What's our productivity? And then also, measuring those financial metrics. You've got your income statement, your balance sheet. Again, those are going to be across all companies.

What I think is unique at Centerstone and behavioral health is how much of our results are productivity driven, as well, hours of care. You've got a whole host of other metrics that you're looking at from a behavioral health standpoint, so there are some unique attributes that we're trying to incorporate, but also take some of the best practices from other places.

Currie Dyess:

Obviously, the pandemic has thrown quite a few curve balls, especially in the business world. So as a CFO, what's one of the greatest lessons you've learned from the pandemic?

Andy Garlington:

It's been a doozy the last two years. We have learned a lot, and we still have a lot to learn. I think first and foremost, we learned what we can do when given a sense of urgency. I remember being told, "Hey, let's be prepared to have our teams work from home, and we think it'll be about a two week time period that we'll be at home." And we're two years later, and we're still remote. So our ability to adapt is critical. And I read a book called Team of Teams, and it kind of talks about this. Up until this point, it was the most efficient, efficiency was the key goal. Right? It was the most important. Who could produce the most with the least amount of labor or work?

Now it's not only efficiency, but adaptability. Who can change with this changing business world? We've got a labor shortage that's come out of COVID. We've got all these additional steps needed, especially in the healthcare world. And so we've got to be able to adapt quickly. And whoever can do that while keeping that efficiency, I think that's who wins. And so we're constantly trying to evolve with our changing business environment.

Sarah Gascon:

You have a labor shortage with your counselors and therapists?

Andy Garlington:

We are struggling to hire, to find those folks that are willing to ... Again, early on in the pandemic, it was who was willing to go and meet with patients face to face. So many of our services are in schools, or in patients' homes, or in clinic setting, in person. And so coming out of this, a lot of folks were hesitant to jump right back into that with the uncertainty of the various variants. So yeah, we absolutely have, and what it's done is just typical supply and demand. The demand for our services is still very high. The supply of folks that can provide those services has decreased.

We are seeing positive signs, more labor indicators are trending positively. However, we're not back to pre COVID levels. So again, we're trying to think outside the box on how we can attract, recruit, and retain our labor force, again, mostly on that clinical side.

Currie Dyess:

I'm really surprised to hear you say that you're not back to pre COVID levels. From everything that I've read, COVID and the pandemic really exacerbated or brought to light a lot of mental health issues and a lot of substance issues. My assumption would have been that these professionals would be eager to get in there and get their hands dirty. Why do you think you're having a hard time getting back to pre COVID levels?

Andy Garlington:

It's a great question and it's one we're trying to figure out because you're exactly right, we've got demand. We've got people waiting at our doors. Right? And it's almost that Field of Dreams analogy of, if you build it, they will come. As soon as we put up a clinic or open up a space, we're filled to the brim. But again, we're limited with the amount of labor and the resources, the clinicians. I believe just the lag there in getting trained and all the certifications that our clinicians have to go through, there's just a lag. So we're obviously pushing that and thinking outside the box of going offshore and potentially looking at different resources and seeing if we can attract and retain talent from other places. But absolutely, coming out of COVID, behavioral health has only increased in needs in our communities.

Sarah Gascon:

What is the great need of the community right now?

Andy Garlington:

There's a lot. I'd say two that really stick out to me at least is we're doing a lot of work, as I mentioned earlier, on suicide prevention. We work a lot with military vets and military services, and it is sad to hear some of the stats that are coming out from our various states. The amount of suicides, the amount of issues with our youth, again, being isolated and having to do some of the things we did during COVID, we're seeing an uptick in our school based therapies, dealing with anxiety type disorders. So yeah, lots going on in behavioral health space, and people are hurting. And so what I appreciate is being involved and being with a company that's making a difference. So we're trying to find ways to increase capital to improve financial results, so that we can offer more services to more people because our communities need it.

Sarah Gascon:

That was going to be my followup. What options do you have, especially a person in your position as a CFO? You're looking at numbers and data. And then you have the other aspect, which you alluded to earlier, which is the human side of it. So how does that work?

Andy Garlington:

Yeah. So again, it's a blend of both. We've got to deliver financially and we've got to deliver positive results so that we can create that capital and additional resources for us to pour back into the business. Again, being a not for profit allows us to pour those resources back in and hopefully snowball and meet more needs of the business. But at times, there's tough decisions. That emotional side is looking at the communities we serve. And sometimes what Centerstone is doing is acting as a safety net. There's not another provider in those communities, and we may be the only one offering behavioral health services. And so it's tough to say, "Hey, financially, this program's not doing well."

And so from a financial standpoint, the answer absolutely is to exit. But from a care, quality, community service standpoint, it's not so easy because you want to find a provider that you can transition them to and not just completely leave those patients high and dry. So it is a blending of both. And again, as the financial side, this is tough for me. This is where it gets hard as CFO to make those decisions. And that's where I have to rely on my peers and other leaders interesting organization to make sure I don't have blind spots as a CFO.

Currie Dyess:

You had mentioned that you're not profit driven. Right? You also mentioned that if you build it, they will come. So my assumption is that being not a profit driven organization, you have slimmer margins. Right? How do you find the capital to go out and build it, so they can come?

Andy Garlington:

Yeah. Great question. So we're not for profit, which is again a tax status. Right?

Currie Dyess:

Right.

Andy Garlington:

And so we still need and can turn a profit. We still need to be profitable to grow the business, and like you said, create capital for us to reinvest. But we can't obviously do that all the time. Our margins are very thin, especially compared to the for profit space. And so what we have the ability to do is apply for grants, either state or federal grants. And what's great is we're starting to see a lot of positive legislation trends. I think our legislators, folks are really speaking up and saying, "We've got to increase reimbursement rates, funding for these behavioral health companies," especially those that are, like I said earlier, the safety net in a lot of our communities. So we do have the ability to apply, and we do receive lots of grants.

We also have a foundation where people can make donations. We've got a large part of our military services is funded because of donations, so lots of different ways to get access to capital, but it is tough going, as you can imagine.

Currie Dyess:

Whenever you expand into a new area, a new market, how do you determine which one to choose?

Andy Garlington:

We try to make it again as data driven as possible, to see how many other ... Do we have competitors in that space? Are there other clinicians that we can partner with? Are there demographic data that'll help us get an idea of what the marketplace will be? Because again, we've got so many places that we can go, but making the ... And they're all good choices. But what's the best choice? How do we optimize this limited amount of resources that we have? That's the age old question. And so again, we try to use as much data as possible. A lot of times, it comes down to relationships. Who is aware, either through legislators or other peers that we've worked with? What do we know about the states that we're in? We're in a four state footprint, Indiana, Illinois, Tennessee, and Florida. And so we've been in those markets for many, many years. So those relationships were in place, so that really helps us direct us in where we should go.

Currie Dyess:

Sure. And do local or state governments, do they provide any incentives to bring an organization like Centerstone in?

Andy Garlington:

They do, which is critical. Right? There's a lot of grants that are federal grants in nature, but there are a lot that are state, and even local municipalities. We're starting to see a lot more local focus from the states that are saying, "Hey, the people, our constituents in the state are saying, 'Hey, we need help.'" People kind of are aware, and they have some kind of personal experience with folks, or personally experiencing struggles from a behavioral health or mental health standpoint. And so what I really appreciate now is that shame, it was almost taboo to say you were getting mental help therapy or behavioral health type services. And now that stigma's going away, which I really think is helping folks reach out and get help. I think the NFL even had a program saying, "It's okay to not be okay." Right? They had a sponsorship program like that, which I love. It's just saying, "Hey, let's just be real." We're all dealing with a lot of issues before COVID, definitely after COVID. It's okay to reach out and get help.

Currie Dyess:

I've heard that rescheduling and cancellations affect the budget, from friends that work in traditional or hospitals. Is it the same for y'all?

Andy Garlington:

It is. And this is something that I didn't really experience in the hospital setting. Lots of cancellations and lots of rescheduling, and so many times, we actually double book to make sure that we have a full capacity and full productivity. Right? We have a lot of folks. Sometimes we double book patients and clients to make sure that we're seeing as many as possible because of this anomaly of cancellation and not showing up for appointments.

Sarah Gascon:

Talk to us a little bit more about your research institute.

Andy Garlington:

Yeah, absolutely. Again, this is something that's unique, or at least to me, because of a not for profit status. We've actually got a pretty large research institute here that does a couple things for us at Centerstone. One is really research and help come up with treatment plans. We've got a simulation treatment plan around suicide prevention, again, one of the largest areas that we focus on. And what I love is they use evidence based treatment plans, evidence based medicine. Right? Again, coming from the financial side, I love data. We love metrics and we love numbers, and that's just the nature of what we do. And I've always wondered on the clinical side. How do you attach numbers to especially behavioral health? Right?

You go into a hospital, or if you've got a heart attack, or you break your leg, there's certain numbers to get your vitals. And it's very quantified. On the behavioral health side, it's not as easy to measure a lot of those. And what I'm learning and what our teams do a great job of is where we can measure things, making it evidence based so that our treatment plans can be proven out over time and help more and more people.

Sarah Gascon:

Are you collaborating with any universities or NIH with your research and your data?

Andy Garlington:

We do. We share a lot of data because again, at the heart of what we want to do is help as many people as possible, provide care. And there are a lot of lessons. We haven't cornered the market on research by any means, and so a lot of academic institutions are also diving into this world and doing a lot of great research. So wherever we can, we absolutely share data and we share treatment plans, success stories, to increase the quality of care to our communities.

Sarah Gascon:

How does the data help you in your position as a CFO?

Andy Garlington:

Yeah, it's the crux of everything we do. I started my career at Home Depot, and they actually offered a Six Sigma training class. Right? So I took them up on the opportunity for continuous education. And later on in my career, I went back and got a PMP, project management professional certification. And they're both very similar. And at the core of them, it's using data to make data driven decisions. Let's take out the gut feel decisions that we so often make, and so often can lead us astray. And let's rely on data to help us. Right? Now what I've also learned in my career is business definitely is an art and a science, and so that the data is definitely more on the science side. So I'm probably 90% science and maybe 10% art.

And what I've noticed is our clinicians are probably the inverse of that. They're 90% feeling based and non data, and maybe 10% data driven. So it is really good for me to see both sides and to see how I can personally learn and develop and become a better CFO, become a better coworker and serve other people. But again, it's probably good for the company to move more towards a data centric model. So it's been a great experience so far at Centerstone, and look forward to learning.

Currie Dyess:

Andy, after listening to you and having this great conversation, looking at your LinkedIn, your resume, everything that you've done, it's quite easy to tell that, one, you're a hard worker. But you've accomplished a lot, a lot more than most people. And the things that you do, the things that you have done, that's the goal and the objective for a lot of our listeners. They're coming out of the Harbert College of Business. They're wanting to be CEOs. They're wanting to be CFOs and COOs. What are some of the things that you've learned along your journey that our current students and recent grads would benefit from as they navigate through their careers?

Andy Garlington:

I appreciate that. I feel like I've fallen forward a lot of ways, and I feel like a lot of times, just a mix up in paperwork, and I'm just waiting for them to figure it out. But no, you hit on it. Hard work is at the core of everything. Right? Certainly a lot of things that I've learned, maybe just a couple I'd share with the team is, first and foremost, humility always wins. My favorite CS Lewis quote is, "Humility is not thinking less about yourself. It's just thinking about yourself less." Right? Let's put others in front of ourselves. That has really proven true for me.

Another thing that I say often is, it's not our fault, but it is our problem. So many things that we deal with, we weren't at fault, but taking ownership of it, it's not our fault, but it is our problem. Right? So a lot of things right now post COVID is, this is our reality. So what are we going to do about it? Let's just dive in and try to solve some of these problems. It's not our fault, but it is our problem. I said earlier, "What gets measured gets done." Right? You can apply that to your personal life, to your workout, to your professional career. What gets measured gets done. Again, try to make as much data driven as possible.

Last thing that I'd say, what's really helped me in my career, and I've been fortunate to build teams and lead teams, and be a part of that process, and I developed pretty early on a hiring criteria. And so I have three things when I interview anyone, I try to use the same criteria. The first one of the three legged stool is: Will you do the right thing? High character. It's not on a resume. I can't see that on a resume, but it's a nonnegotiable. Will you do the right thing? Will you raise your hand and hold up the line and say, "Hey, something doesn't look right"? So that's the first one, it's a nonnegotiable.

The second one. Will you work hard? As we mentioned earlier, you've got to put in the work, put in your time. Again, it's hard to see that on a resume. So one, will you do the right thing? Two, will you work hard? And then the third thing's kind of this outside the box, and this is the other skills. Would I enjoy a four hour car ride with you? Right? And I think we all can kind of relate to that of a person that has a skillset to be able to communicate effectively.

Can I put this hire in front of my board, and can they communicate effectively? Are they going to be all focused on themselves and all those kinds of things? Do they have that it factor? Do they have the ability to deliver results? All that kind of stuff would come out in a four hour car ride? Right? So would I survive, or would I enjoy a four hour car ride? That's a big part of the hiring criteria. And so that way, you're getting high quality, high character individuals that can also deliver results. So those things have served me well in my career up to this point.

Currie Dyess:

That is incredible advice. I love it. I feel like I'm listening to a football coach or basketball coach give a halftime speech right now. This is great.

Andy Garlington:

You got to run through the wall.

Sarah Gascon:

I don't know if I've ever heard a question like that. Would we enjoy a four hour car ride? That's a good one. I might steal that one from you, Andy.

Andy Garlington:

Please do. Yeah, I won't charge you any extra for that. It actually is really good to kind of give those criteria to the person you're interviewing, and even to your own team, and so knowing that's what the criteria for it is. Are you comfortable in that setting? Right? And you get a lot of really good dialogue. And you get to really get a peek into: What do they feel like is most important? So yeah, feel free to use that as you need.

Currie Dyess:

I had a coach. He used to say, "It's not our fault, but it is our problem," except he would say it like, "If you have the ability, you have the responsibility."

Andy Garlington:

Oh, I like that. I like that. Where I got that saying from, it was from a peer of mine, Dennis Dean. He was a coach of a little league baseball team. And so second baseman, little bitty boy, little league, he catches the ball. He throws it over first base and just sails the first baseman, sails it over the little kid's head. And the first baseman goes and gets the ball from the fence, and he walks back. He's all dejected. And the coach goes up to him and he goes, "I understand. That was a bad throw. It's not your fault. But it is your problem because you've got to adjust and you've got to adapt." And there's so many things that are true with that saying, both professional and personally. It's not your fault, but it is our problem. And so that has always stuck with me.

Sarah Gascon:

So how could our listeners keep in contact with you and follow along with what's next in your story?

Andy Garlington:

Yeah, yeah. I'd love to connect. I am on LinkedIn, so I think that's probably the best place, just feel free to connect with me there. Send me a message, and be glad to follow up. I mean, so many people have helped me along the way. And I mean that. I hire people that are smarter than me. Right? That's the key to my success, which is a very low bar. Everyone I feel like is smarter than me. But people certainly help me along the way, and if I can help others, be glad to. So please reach out through LinkedIn.

Sarah Gascon:

Andy, it's been an absolute pleasure today. Thank you so much for your time.

Currie Dyess:

Thank you for your time.

Sarah Gascon:

It's been great. War Eagle.

Currie Dyess:

War Eagle.

Andy Garlington:

War Eagle. Thank you, guys.

Narrator:

Harbert, inspiring business.