“H.I.S.-tory” by Vince Ciotti

© 2015 H.I.S. Professionals, LLC, all rights reserved

R.I.P.

Jim

Macaleer,

SMS’ Co-

Founder &

CEO

The Greatest HIS-tory Hero• Sad news last week: Jim Macaleer, the co-founder and CEO of

Shared Medical System (SMS) died. Jim was easily one of the most successful business entrepreneurs in our industry, having co-founded SMS back in 1969, and led it to becoming the number one HIS vendor for decades before its sale to Siemens. Much more importantly, he was a father-figure to thousands of employees like myself, who owe their careers to this great man.

• It is difficult to write a tribute to a man who so many know much better than I, but Mr. HIStalk is so kind to air these slide shows that I hope I can get some of Jim’s story across to the many people who join me in grieving for his loss. Our sincerest condolences to his family who at least got to spend so much time with “Big Jim” over his many happy years...

Daring HIS Pioneers• Like so many early HIS-tory heros, Jim got his start at IBM back in

the 1960s, when their Series/360 mainframes were sweeping the DP industry. Jim worked in IBM’s Philadelphia office along with two other HIS-tory heroes whose names should ring many bells:

• Harvey Wilson – of later Eclipsys fame, was a super-salesman back then with IBM, selling Series 360 mainframes to every large hospital that could afford them in the Delaware Valley, and some that couldn’t... ( - don’t get mad, Harv, just kidding!).

• Clyde Hyde – a brilliant scientific researcher in the then-modern field of Electrocardiograms. Clyde could speak geek with the best of them, both in the data processing and medical worlds, and was a leading expert in EKGs when few heard of them.

A Daring Idea• Jim, Harvey and Clyde weren’t the only ones at IBM selling 360s to

literally every large hospital that could afford them - IBM reps around the country were soon running out of prospects since the thousands of small hospitals could never afford the multi-million dollar mainframe hardware, let alone the costly DP staff to write COBOL programs and operate the complicated JCL and VSAM files.

• Realizing they were running out of large hospital prospects, IBM started writing a “Shared Hospital Accounting System” (SHAS) in their Armonk HQ that would enable a number of small hospitals share a costly Series/360 among themselves, making both the capital and operating costs far more affordable.

Shared Start-Up• SHAS gave Jim, Harvey & Clyde a bright idea – form a company that

ran the 360 mainframe and sell this new system to hospitals!

• They approached Wall St. mavens with their bold idea and sold them as well as they had sold so many hospitals on Series/360s, raising $5M in capital to get their new company off the ground.

• Big Jim became the Chairman and CEO, Harvey the Sr. VP of Sales & Marketing, and Clyde the VP of R & D. They rented office space at a shopping center in Bridgeport, PA (near King of Prussia) and named their new firm appropriately enough: Shared Medical Systems.

Here’s the ad they ran

at Temple University

in Philly that got me

my first job at the Ross

& & Royal Roads’ office.

Big Challenges!• SMS faced a number of challenges: a small unknown start-up is a

tough sell in a world dominated by hardware giants like IBM, and competing shared systems run by giants like GE and McAuto, let alone almost every state’s Blue Cross systems that also got their hands on SHAS and started selling it to their local, small hospitals.

• Harvey did incredible miracle work in sales, recruiting the best & brightest salesmen from IBM, and leading them in closing sales all around the country.

• Jim had an even tougher job: managing the company’s finances as the $5M shrunk faster than revenue came in. He led by example, driving a used Dodge Dart so old that salesmen asked me to pick up prospects at the airport in my 66 ‘vette!

Strong & Caring Leader• Jim led SMS through some very tough times back in those days:

– June 30th 1970 - SMS re-wrote the SHAS code to allow for more than a single character for the hospital code, to handle more than 36 clients. The system went down for days, and Jim called employees at home to come in on the weekend and help keypunch cards to re-balance the screwed-up files…

- Jim was extremely generous with SMS’ stock as well, giving manyemployees either initial “penny-a-share” stock, or, after the IPO in 1975, stock options that locked in the price at current value, which increased as the company’s market value soared, sharing these profits with the SMS team.

Great Sense of Humor• For a “Theory X” manager, Jim had a great sense of humor. Here’s

two of hundreds of stories about his wit and love of laughter:

– In the early 70s, the annual Xmas parties were a big deal, where our wives got to meet the weird people we worked with. Jim actually let us hold a “Roast” like Don Rickles did on TV, where we all mocked him in public, and he got us back with glee!

• That’s Jim’s younger brother Terry on the extreme right, who laid into Jim (3rd from the right) with gusto, only to get an even better mocking from his big brother about their youthful escapades.

Employee Memos• Hard to remember

the days when we communicated on paper, rather than email, but on the right is a typical “wise guy” memo Jim loved to write.

• He issued this one in 1985 when then-president Ronald Reagan was scheduled to visit – check out the last paragraph!

CSC Memo• Jim also had fun with

memos to clients too – “Customer Service Center” (CSC) memos sent to hospitals explaining improvements to the system. One went out in 1977 on Inventory that was rather obtuse, so Jim sent this follow-up apology a few weeks later – it wasn’t signed, but we all knew who wrote it!

Scary Slip• One winter day in the 1970s, the company really took a dive

when a snow storm blanketed our parking lot at 650 Park Avenue in King of Prussia (image in lower right). Jim was working one of his usual 12+ hour days, leaving the office around 8PM to walk across the slippery parking lot to his car (he had replaced the ancient Dodge with a new Chevy – not a Caddy or Rolls, but, a cheap Chevy!). Jim slipped on the ice, and fell so hard he hurt his back and had to stay home in bed-rest for several weeks…

• I remember very well how all we K. of P. employees were rather nervous about his absence, and eager for his recovery. We breathed a sigh of relief when he finally returned after a month, wearing sneakers to and from his car, then changing into the IBM-uniform “wingtip” shoes in his office!

How Successful Was SMS?• Jim’s success leading SMS is best summed up by #s:

– When I started in 1969, we had ≈10 hospitals, 30-odd (sic) employees, and annual revenue under a million dollars.

– When I left 10 years later in 1979, SMS had several hundredclients, over 400 employees, and annual revenue of ≈$100M.

– By 1990, SMS had grown to almost 1,000 clients on both shared and minicomputer system products (ACTIon, Allegra…), several thousand employees, and annual revenues of over $400M.

– In 2000, when bought by Siemens for about $2B, SMS had over 7,000 employees, and annual revenue of $1.2B

- Add up the 40 years of annual revenue and it’s

over $20 Billion Dollars!!!! Not bad for a

start-up next to a deli at Ross & Royal Roads…

– No wonder Jim & Harvey are smiling in this picture from our 2009 reunion:

Continued Success

• After selling SMS to Siemens, Jim retired and started enjoying life even more, taking up bird-watching with his wife Jean and working with numerous not-for-profits in Philly and even founding a charity near his home in West Chester county.

• On October 21st he was awarded this citation from Terence Farrell, the Chairman of the Chester County Commissioners:– “Today I was pleased to present a citation on behalf of the Board to R.

James ‘Jim’ Macaleer, recognizing many of the good and generous things he has done in his lifetime for the citizens of CC. Dr. Macaleer was co-founder of Shared Medical Systems (SMS) and a philanthropic institution in Chester County. Because he is ailing, I read and presented the citation at his bedside, letting him and his family know that the Board applauds him ‘for his tremendous dedication to his community’ and that we are proclaiming January 29th (his birthday) as R. James Macaleer Day in Chester County. Thanks, Jim, for all you have done, for so many.”

Requiescat In Pace

• Early this year, Jim came down with a serious illness which he fought just as hard as fought his many business opponents.

• Despite being ill, he showed up at an event for hundreds of former SMS employees Cerner was offering early retirement to – they were amazed he cared enough to show up and wishing them all well, congratulated them on their successful careers.

• After his illness worsened, I reached him on the phone in a nursing home recently, and was amazed he remembered me after all these years. We shared a few pleasantries about early the early SMS days, I offered my condolences over his illness, and he bravely commented: “Nobody lives forever.”

• He died last week surrounded physically by his family, and emotionally by the thousands of former SMS employees who were lucky enough to work for him - R.I.P.