Jeff Hargroves – Founder & CEO, ProPharma Group

Jeff Hargroves founded ProPharma Group in 2001. His vision was to create a company that would serve clients long-term, creating a partnership to provide compliance-related solutions in an innovative manner.

Over his career, Jeff has held positions in operations, quality assurance, and engineering for manufacturing and consulting companies in the pharmaceutical industry. He used this breadth of experience as a backdrop for the creation for a company that provides a set of compliance-connected services to respond to the industry needs for a reliable partner with a wide array of solutions. This vision has produced a business with over 700 people that provides services to clients around the world.

Jeff earned both his BS in Computer Engineering and BS in Electrical Engineering from the University of Missouri.

Tell me about your early career.
I emerged from college with degrees in computer engineering and electrical engineering. My first jobs was as a project engineer, managing design and construction projects, first at a hospital complex and then at a drug company. This is how I entered the drug industry, which I now realize was one of many great things that happened to me without even realizing it (the drug industry is generally regarded as one of the top 3 most robust and continuously changing/growing industries).

How did the concept for ProPharma Group come about?
I worked in various roles, for drug companies and consulting firms, serving the drug industry. I observed that most of the service companies I worked for or used seemed to be focused on short-term results, including financial results. I have a view that if I focus on the long-term relationship, with the client and with my employees, the short-term things (like financial performance) will take care of themselves. I saw plenty of work in the compliance space – helping drug companies satisfy FDA requirements – and decided to start a company that would focus on great results, with the long-term in mind.

How was the first year in business?
At the time I decided to start my own consulting business, I was working for a small drug company that manufactured animal health products. When I informed my employer that I was stepping away to start my own business, they asked me if I wanted to manage a large, upcoming expansion project that included relocating manufacturing equipment from Mexico. Along with assembling clients with whom I had provided services previously, I was quickly in need of more employees and the business was off to the races.

What was your marketing strategy?
I did not have a marketing strategy to start. I initially named the company JH Services because I thought I would also be doing real-estate work on the side. After the first year, I realized the consulting business was a real and substantial business, so I hired a marketing firm to help develop a brand and related materials to communicate our message. My strategy at this time was clarified to address the compliance needs of human and animal health manufacturing companies in the Midwest region.

How fast did the company grow during the first few years?
We grew over 100% annually for the first several years and have continued to grow at over 20% annually ever since.

How do you define success?
We redefine the specific metrics for success at a company, department, and individual level each year. They always center around increasing repeat business with our clients while minimizing turnover of our employees.

If we do this, then we will have financial success that we can then share with our employees, who are happier and therefore take even better care of our clients who reward us with more work, which keeps the cycle going (picture a wheel, where happy colleagues -> happy clients -> more repeat business / financial rewards -> happy colleagues -> happy clients -> …………. )

What is the key to success?
Keeping a long-term perspective has been the primary key to success. Also, keeping a long-term perspective often leads to different decisions than a short-term focus. For example, if I run into a problem with a client – let’s say we spend more hours than budgeted on a project, I can take one of two paths:

A) I can belligerently demand that they compensate for each of the extra hours so that I maximize my short term profits.

B) I can look at the long-term relationship and probably not demand that I get paid for all the extra hours and increase the amount of trust that I develop with the client, which will usually result in more work being awarded in the future.

Further, I can share the profits of this project with the employees that helped create them – reducing my personal short-term profit, but enhancing my long-term relationship with my employee, who will stay longer, be happy, and create even more happy clients.

What is the greatest lesson you’ve ever learned?
A business with recurring revenue is a wonderful thing.

What are some quotes that you live by?
“Follow the Golden Rule.”
“Don’t sweat the small stuff – and it’s all small stuff.”

What are some of your favorite books?
General books that have provided a continuous and positive influence are:
1) The 7 Habits of Highly Effective People by Stephen R. Covey
2) Blueprint to a Billion by David G. Thomson
3) The Ultimate Sales Machine by Chet Holmes

Biographies I learned a great deal from are:
1) The Real Deal, about Sandy Weill, by Sandy Weill
2) Titan, about John D. Rockefeller, by Ron Chernow
3) The Snowball, about Warren Buffett, by Alice Schroeder

Tell me about one of the toughest days you’ve had as an entrepreneur.
Some of the toughest are when I have had to be away from my kids for an extended period of time. I tell myself it is an investment in their future, so it is worth it. I have had to manage this, though. There are some opportunities that I have passed on because they would have cost too much in terms of time away, and time with children at a young age is important.

I have also recently decided to step out of my role as president for just this reason. I’ve built a great business over the past fifteen years. I now have just a few years of middle/high school left with my kids under my roof. I have decided to spend as much time with them as possible while we’re still living in the same house. This was a particularly difficult decision, because I am having some of the best times of my career as I spend more time pursuing acquisitions to expand the services we offer and the regions we provide them in.

When faced with adversity, what pushes you to keep moving forward?
As long as I know I am making the best decision possible for all the constituents in a situation (client, employee, shareholders) with the information I have available at the time, I sleep well. When it was a financial adversity (i.e. cash crunch), I persevere because I had to, for my family.

What advice would you give to young entrepreneurs?
Develop a group of entrepreneurial friends. There are just certain things that you run into as an entrepreneurial business owner that are difficult to discuss with people who don’t have their house mortgaged (twice) in order to make payroll.

Who else should we interview? Nominate someone!

Interviews are conducted for research purposes by author Jason Navallo for his upcoming book, Underdog.

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