The only possible criticism you might level at Gregg is that there isn’t an obvious successor
Primary Health Care’s Peter Gregg was a pragmatic and successful CEO who had managed to navigate rocks that would have sunk many an experienced business leader.
In a very short amount of time Gregg managed the following:
• the re-organisation of a company dominated for 20 years by a strong and tightly controlling founder, Ed Bateman
• a strategic hard left turn away from a long-term dependence on a business model which days were numbered (high-volume, bulk-billed medicine)
•the rapid repair of a haemorrhaging balance sheet, in large part through the sale of the Medical Director business for a sum generally regarded as at the very high end of the scale
• moving the share price from its lowest point of $2.50 to a high of over $4.20
Gregg resigned earlier this month after being charged with two counts of falsifying books and records while an executive at Leighton (now known as CIMIC).
That the share price went rapidly into retreat, to below $4, after news of Gregg’s resignation broke says something about what industry analysts think, and how worried shareholders should be.
But how worried should doctors who work for Primary be about their short to mid-term futures at the group? There is no escaping the fact that changing CEOs, especially changing from one who was doing so well and was so early in his tenure, is far from an ideal scenario.
Gregg was steady, smart and had the confidence of the markets. As a former chief financial officer, he was making the chief executive role look like a doddle. There’s always some luck involved, but there’s also art. Primary was, for all intents, headed the wrong way fast before he turned up.
Gregg’s groundwork at Primary in terms of establishing a roadmap for change, and enlisting broad market acceptance for his vision, has served Primary very well so far.
In the short term, Primary at least has an executive team that knows what it is doing and is stable.
The only possible criticism you might level at Gregg is that there isn’t an obvious successor. But after less than two years at the helm of the group, we can forgive him that.
It’s the mid term that Primary doctors might need to worry about.
Getting a new CEO to take over mid stream, with what was a relatively new but well set management team is tricky. It’s probably too early to do internal succession, and when you don’t use internal succession you have instant issues.
The likely candidate is going to come from outside. The new chief is going to inherit a team that was presumably, because of its success, tightly knit. There will be the odd internal candidate who feels they could had made the leap, so no matter, there will be some internal rumblings.
And the group is still in the middle of major change which requires strong ongoing direction and leadership. The board can’t take a long time either. At present it is seeking to retain Gregg as CEO while the case against him is run and they find a replacment.
That is a strategy that has a short and dangerous life span. The board needs to find someone in his mould, and very quickly.
