It wasn’t an easy commute.
That’s what Roper Technologies Chairman, President and CEO Brian Jellison says.
In the mid-2000s, Roper, a company operating businesses that design and develop software and engineered products, decided to move its corporate headquarters away from Duluth, Ga.
“I used to bet people that I could wake up in the morning and fly to Sarasota, and it would take less time than to get from suburban Atlanta to Hartsfield airport,” Jellison says.
That’s one reason why Roper — ranked No. 7 on the Business Observer's Top 500 this year — relocated its corporate headquarters to Sarasota in 2007. “Sarasota has been an easy place for us to recruit the highly talented professional employees we have here,” he says.
The company’s senior leadership is based at an office in Lakewood Ranch in Sarasota County. Around 60 people work there out of 15,000 employees around the world.
Roper Technologies Inc., a multifaceted conglomerate that went public in 1992, has subsidiaries in everything from medical software to industrial technology.
Jellison has been Roper’s chairman since 2003. He’s been president and CEO since 2001, when he started at Roper. During Jellison’s leadership, Roper has focused on maintaining a decentralized, business-unit centric culture, making careful acquisitions and encouraging leadership to outperform previous periods.
Company revenues have grown from $2.05 billion in 2009 to $4.67 billion in 2017 — up 127.8%. Roper’s compound annual shareholder return from 2003 to 2017 was 19%, compared to 9% for the S&P 500 over that same time period, according to company documents.
But while Roper is a Wall Street star, it's been mostly quiet in its own backyard since relocating to Lakewood Ranch. Jellison, who rarely gives interviews to local media, says there’s a good reason for that. “We keep a low profile because there’s no reason to keep a high one," he says. "We’re not a consumer products company, so the brand is meaningless. We have a high global profile with investors but not with consumers.”
Billions of Possibilities
Roper Technologies is broken into four segments: RF (radio frequency) technology and software; medical and scientific imaging; industrial technology; and energy systems and controls.
“Every one of our segments performs better than any of our corresponding peers,” Jellison says. “We would expect all of them to perform well.”
“We’re unique in that we don’t have any budgets. People find that hard to believe, but budgets are a waste of time. Budgets create more conflict and confusion in business than any other factor.” — Brian Jellison, chairman, president and CEO, Roper Technologies
Roper’s businesses generate a lot of cash, he says, so it’s easy for the company to reinvest in its own growth through acquisitions. “We look at billions of dollars of possibilities every year, and we choose the one that makes the most sense for us.”
The company, in a recent report for investors, detailed its acquisition strategy. It says over the last seven years — 2011 to 2017 — the company has deployed $9 billion in acquisitions. It spent about half of that amount on application software in its RF segment and about 40% on software and services in its medical segment.
“Software companies are frequently paid in advance for the work that they do over the year because they have subscription models,” Jellison says. Generally, he says, the margins are better in software than in corresponding product companies.
Roper’s culture, based on individual business units instead of a centralized corporate culture, is another key to what makes it different — and successful, Jellison says. “It would work for anybody who would do it."
But usually, companies have it the other way around, he says. At those companies, executives think people in the corporate office are smarter than others in the company. “Universally, that’s why so many large companies are mediocre,” Jellison says.
Most people leading Roper’s businesses came from corporate-focused companies. “They know what’s good about scale, but they know what’s bad about centralization,” he says. “We hate centralized directives.”
That means business leaders are accountable for their own results. “Accountability is obvious here when you walk in the door,” Jellison says. “That’s an environment that really great performers thrive in and love it.”
Roper has somewhat of a different take on how to measure that accountability. “We’re unique in that we don’t have any budgets,” Jellison says. “People find that hard to believe, but budgets are a waste of time. Budgets create more conflict and confusion in business than any other factor.”
As an alternative, Roper measures leaders on variances from prior time periods. That means, for example, examining results from the first quarter of the current year and the first quarter of the prior year. Executives then ask questions about differences between the periods. “It’s a very Socratic place,” Jellison says, referring to the philosopher famous for discussions based on asking and answering questions.
The company’s expectations are high, Jellison says, and that plays into how bonuses are structured for business presidents: “If you don’t make more money in the next year than you made in the last year, you get zero.”
It’s not unusual, he says, for presidents to be in their job for 10 years or longer. “We have very, very little turnover,” Jellison says. “That’s a wonderful thing. They have to invest in the long term instead of investing through a business cycle. We don’t want those kinds of businesses. All of our people who run businesses are builders.”