Editor’s note: In the second part of WRAL TechWire’s exclusive interview, LabCorp CEO and Chairman David King talks about his rise to the top of the life science giant’s executive suite, striving to keep his ego under control, challenges of the job, the unfinished business of the company, and the commitment to its hometown. Oh, there’s also the debate about how to pronounce the company’s name. King will appear at WRAL TechWire’s Biotech Live event in Durham this evening for a “fireside chat” and also will participate in a panel discussion about North Carolina’s growing life science industry. The first part of the interview is available online.

BURLINGTON – While working as a partner at Hogan & Hartson (now Hogan Lovells), a law firm in Baltimore, David King became outside legal counsel for LabCorp in 1995. At the time, LabCorp was under investigation by the federal government for its billing practices, and King spent two or three days a week helping resolve the issues.

LabCorp

That work led him to join the company in 2001 as senior vice president, general counsel and chief compliance officer.

“I brought, in my mind, some discipline to the function, to the legal department,” King recalls. “We have definitely spent a lot of time focusing on a culture of compliance and ethics. I think you would hear from customers and others that it’s a very strong part of our values.”

He was soon tapped for other roles. He headed the company’s U.S. Labs/Esoterix division, a specialty testing and cancer diagnostic laboratory. He led LabCorp’s corporate development and strategic planning function before being named executive vice president and chief operating officer in 2005.

His success in those roles fast-tracked him into the CEO’s chair in 2007, only five and a half years after joining LabCorp.

“What I’ve been most impressed by is his strategic perspective,” says Garheng Kong, noting that LabCorp’s core business, diagnostic services, is an inherently difficult industry to understand due to its logistical, regulatory and reimbursement complexities. “To lay on top of it where you’re going, I think it’s something he’s brought to the company.”

For example, LabCorp’s diagnostic testing partnerships with more than 1,800 hospitals and 200 healthcare systems have proved to be “a win-win,” Kong says. “It’s more volume and more opportunity for LabCorp, and it saves those institutions a lot of money. That was quite strategic within the given business.”

King agrees that pragmatic, strategic thinking has been vital to LabCorp’s growth and performance.

“What I was not strong on when I came to LabCorp was thinking about things from a financial perspective,” he says. “But what I was strong on was thinking about them from a practical and a strategic perspective. I think that we have tried very hard to balance long-term thinking about where our business is going with the near-term imperative of execution.”

‘HIGH PERFORMANCE WITH NO ARROGANCE’

King is paid handsomely for his role as chairman and CEO. His total compensation in 2016 was $10.85 million, according to the company’s last annual proxy statement. That made him the ninth highest-paid CEO of a Standard & Poor’s 500 company in North Carolina, according to an analysis by the AFL-CIO.

But if you met King in an informal setting, you would never know he was the head of a global giant with a market capitalization of $18 billion, says Kong.

“He’s really quite understated,” Kong says. “He doesn’t exude some of the stereotypes that we’ve come to know about CEOs in a negative way. I find that to be very refreshing, to have this combination of high performance with no arrogance. He comes from a very humble perspective. He’s sort of a different breed.”

King admits he has an ego “like everybody” but tries to minimize its appearance.

“I’ve tried to be a good CEO by not acting like a lot of CEOs act,” he says. “I’m not particularly into the trappings of being a CEO.”

King often visits the company’s sites for “town hall” meetings with employees and to speak with front-line employees such as the phlebotomists who collect blood samples from patients.

“Those are things I enjoy,” he says. “I don’t feel like I’m quote, unquote, ‘too good’ for those things.”

King, who goes by Dave, has a “warm interface” and an approachable nature that have helped him attract top talent to LabCorp, Kong says. Recruiting has become a point of pride for him.

“When I came, we were very much a North Carolina-based employer,” King says. Since then the company has extended its geographic reach to recruit more nationally and internationally.

“We’ve attracted very dynamic people,” he says. “The nice thing about improving your talent is that talent attracts talent. So as you get better talent, that makes more talented people want to come work for you. I think just across the board we’ve upgraded the caliber of our team, and that’s something that really will have significant long-term benefits for us.”

PROS AND CONS OF THE JOB

Asked what the hardest thing about leading an S&P 500 company is, King ticks off a few challenges.

First, he says, “You can’t do everything you want to do.”

Second, “You have less control over the organization than people think you do.”

And third, “It’s hard to learn to stay focused. There are so many things that I could choose to be involved in, and I could probably contribute positively to most of them,” he explains. “But I can’t do them all, so you have to pick what you’re going to work on and recognize that some other things will either not turn out as well or languish because I choose not to be engaged with them.”

As for what he enjoys most about LabCorp, King reverts to the company’s mission of guiding patients’ healthcare.

“In our job here, what we do every day is we come to work to improve people’s health and improve their lives, and it’s a very gratifying thing to do,” he says. “I think that’s an inspiring mission. That’s what makes it great to get up and come to work.”

UNFINISHED BUSINESS

Though fit and trim and a youthful-looking 61, King admits he has thought about retirement. “I do ask myself what I would do,” he says, before shifting attention to LabCorp’s future.

“It’s really important in the life of a company for leadership to progress and change to occur,” he says, “and there’s no better way to drive change than changing the CEO.”

For now, he says he is committed to staying at LabCorp to focus on finishing the integration of the Covance acquisition.

“My commitment, when we made the decision to spend $6 billion, was, it’s my responsibility to stay and deliver the value,” he says. “We’re getting pretty close to delivering the value on the acquisition, so I feel comfortably that it’s not a 10-year run from here . . . by any stretch. It’s important to me to get the value out of Covance and an orderly transition here to the right successor.”

LabCorp’s proprietary robotic system, Propel, which is used in several of the company’s primary labs.

LabCorp began an initiative in mid-2017, called LaunchPad, to “right-size” the Covance business, re-engineer its drug-development solutions, integrate new tools and technology, and improve employee and customer experiences.

In addition to integrating Covance, Chiltern and other acquired companies, LabCorp’s priorities in 2018 are to drive profitable growth and optimize enterprise margins, King said at the J.P. Morgan Healthcare Conference. Longer-term, over the next three to five years, he said LabCorp would address three industry trends that affect the company:

  • The transition to value-based care. “We need to improve the efficiency in care delivery,” King said. “We need to reduce the overall cost of care, and at the same time (gain) better outcomes across the population. And that is heavily dependent on tools and analytics to deliver better outcomes through population health and precision medicine.”
  • The need to enhance the drug-development process. “Tools, technology and processes will be vitally important to improve the efficiency” of clinical trials, which have become increasingly complex and competitive for enrolling patients, King said.  One encouraging development: an improving regulatory environment. “Clearly the FDA has given the message that innovation is going to be encouraged and that backlogs are going to be reduced at the agency,” he said.
  • The growing role of consumer choice in healthcare. Consumers are more involved in their healthcare decisions, and technology advances are driving expectations of convenience and satisfaction.  “It’s becoming much more important to meet the consumer where they want to be met, rather than come see us,” King said. LabCorp is offering more home-based tests and services for consumers and has partnered with Walgreens to set up in-store patient service centers for specimen collection at select locations.

COMMITTED TO BURLINGTON

LabCorp employs about 7,300 people in North Carolina. More than 3,100 of them work in or around Burlington, making LabCorp the largest private employer in Alamance County.

LabCorp’s dominant presence and big economic impact in the area make business and government leaders in the city and county perpetually watchful of LabCorp’s future plans.

Check-in for LabCorp tests – a familiar sight.

“There have been plenty of opportunities to think about moving to other places,” King admits. But he says that as long as he’s CEO, LabCorp will keep its headquarters in Burlington.

“There’s a lot people who depend on us for their livelihood,” he says. “So it’s not only our responsibility to help patients and do the right thing by them, but it’s also our responsibility to help and do the right thing by our people. To me, that very much includes the headquarters here. I think it’s really fundamental to who we are, that identity with the place where we were founded.”

Next year, he notes, will be LabCorp’s 50th anniversary.

“That’s a significant thing to think about,” he says. “A company that was started basically by a pathologist at Duke Medical School that has not only turned into a global life sciences leader but has stuck pretty close to its roots.”

DOWN TIME WITH FAMILY

In addition to his “day job” at LabCorp, King serves on several boards including those of Cardinal Health, a Fortune 20 healthcare company; PATH, a nonprofit global health organization; the American Clinical Laboratory Association; the Seattle Science Foundation; and Elon University. In 2017 he was appointed to the advisory board for Duke University’s Robert J. Margolis, M.D., Center for Health Policy.

Despite the 24/7 demands of his LabCorp role and board commitments, King manages to carve out precious time, mostly on the weekends, for his wife and two daughters at their home in Chapel Hill.

“The support of my family is very important,” he says. “I could not have been successful at all without my wife and my children being not only understanding but supportive of some long trips, some stress, some long days at work and long nights. So I think that’s a very important component of success.”

On typical days, King walks his two dogs, a rescued springer spaniel named Coby and a Maltipoo named Simba, “ever since I read an article in the newspaper that dogs don’t get enough exercise, and felt guilty,” he says wryly.

In his down time, he enjoys reading, attending his daughters’ sports events, watching college basketball (he’s a Duke Blue Devils fan but also roots for the North Carolina Tar Heels), and growing flowers.

“I’m not a vegetable guy,” he confesses. “The bunny rabbits overwhelm me. I don’t have the patience to deal with them.”

YOU SAY TOMATO, I SAY TOMAHTO

Before ending his interview with WRAL TechWire, King explains an issue that perplexes and divides many people, including LabCorp’s own employees: how to pronounce the company’s name.

“That is one of the great controversies of all time,” he says with a laugh.

Technically, the “p” in LabCorp should be pronounced, because “Corp” is an abbreviation of “Corporation,” he concedes.

However, King and many others pronounce the name with a silent “p,” as in “LabCore.”

It appears to be a rare technicality that King’s compliance-focused legal mind is willing to let slide.