New Sterling chairman sets coursefor company in post-Du Pont era

July 3, 1996

Linderman's retirement sparks search for presidentThe new chairman of Sterling Diagnostic Imaging, Rodney Wolford,has hit the ground running, in part because he has to. In additionto the normal responsibilities of running a large medical

Linderman's retirement sparks search for president

The new chairman of Sterling Diagnostic Imaging, Rodney Wolford,has hit the ground running, in part because he has to. In additionto the normal responsibilities of running a large medical imagingvendor, Wolford must oversee the separation of Sterling's operationsfrom those of former parent Du Pont, which sold the medical imagingunit to investment firm Sterling Group and a management-led groupearlier this year (SCAN 4/10/96 and 1/31/96).

Wolford has also been hit with some unexpected tasks, such asa search for a new president for Sterling Diagnostic Imaging followingSuzanne Linderman's retirement from the medical imaging business.Linderman was named to the post only three months ago, but decidedto step down this month in order to devote more time to her familyand community, according to the company.

Wolford introduced himself and Sterling to the Asian market ata presentation at the International Congress of Radiology meetingin Beijing last month. Sterling, of Glasgow, DE, intends to expandits foothold in China by building on the 5% market share it nowholds. Sterling sees China as a more promising market than Japan;the company earlier this year closed its Tokyo office and saidit would no longer maintain direct operations there.

China is a different story, however. Du Pont had not focusedon the country until last year, but now has offices in Beijingand Shanghai and is in discussions regarding several joint ventureswith Chinese companies. It is also the sole-source provider forfilm and related products to Hospital 301, the largest hospitalin Beijing, according to Wolford.

"This is a market that we feel has a great deal of opportunity,"Wolford said. "We have some very large placements, some veryprestigious organizations, that are using our products and arequite satisfied with them."

Wolford comes to Sterling from the hospital systems managementfield, where he was CEO of several hospital systems over a 15-yearperiod, including California Healthcare System in San Francisco,Alliant Health System in Louisville, KY, and HealthLink (now LegacyHealth System) in Portland, OR. He started his own consultingbusiness three years ago, advising firms on mergers and acquisitions.It was in this capacity that he became familiar with the SterlingGroup, providing consulting services for the firm's acquisitionof the Du Pont Diagnostic Imaging business.

As the first chairman of Sterling Diagnostic Imaging, Wolfordis in a position to put an indelible stamp on the company's corporateculture. He sees Sterling as a firm that must carefully managethe evolution from film-based imaging to digital image management.

"We are at a point, as all of the other (film) manufacturersare, of trying to manage the transition from the old conventionalstyle of imaging to a new technology that we haven't defined thefull extent of at this point," Wolford said.

Fortunately for Sterling, the company's direct radiography technologyfor digitizing conventional x-rays should help it ride out theshift. Wolford said the company is still on schedule for a deliverydate of early 1998 (SCAN 12/13/96).

The DR program is a good example of Sterling's product developmentstrategy: Invest heavily in technologies that are unique to thecompany, and outsource the rest. For example, Sterling has chosento maintain several OEM relationships with PACS software firms,such as ISG Technologies and Cemax-Icon, rather than develop itsown image management software in-house.

In addition, Sterling has reached an agreement with Agfa-Gevaertin which that company will supply Sterling with all of its filmprocessors, which were formerly manufactured by Du Pont. The processorscompose a small percentage of Sterling's business, according tothe company.

"Our purpose is not to create and expend all of our energyon proprietary technology. Our effort is directed at trying tofind the best solutions for customers," Wolford said. "Wewill continue to make a very strong investment in R&D in certainselected areas, but we will choose those areas carefully."

As for Linderman's departure, Wolford said Sterling is lookingboth internally and externally for a replacement.

"Sue had a great deal of knowledge about the company, andso it is not easy to replace her," Wolford said. "Butwe have a great deal of respect for Sue's wishes to retire atthis time because she has done something that probably is braverthan most of us, in that she followed her heart."