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The Honolulu Advertiser
Posted on: Monday, November 14, 2005

Leadership corner

Full interview with Richard Okazaki

Interviewed by Alan Yonan Jr.
Advertiser Staff Writer

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RICHARD OKAZAKI

Age: 57

Organization: Diagnostic Laboratory Services Inc.

Title: president and chief executive officer

Born: Honolulu

High School: Iolani School

College: University of Hawai'i

Breakthrough job: being hired out of college by a major CPA firm even though my academic record was less than stellar. This provided a foundation to build on. I've been used as an example that it's never too late to start.

Mentor: I've learned something from every one of my previous bosses as well as many employees that I've worked with. I've been especially fortunate at DLS, where previous leaders have organized the company in a way that allowed for personal growth.

Major challenge: recruiting and retaining the type of quality employees it will take to build on our success to date

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Book recently read: "Kite Runner" by Khaled Hosseini

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Q. Many people may be aware that Diagnostic Laboratory Services is a leader in drug testing in Hawai'i. What other kinds of services does DLS provide?

A. Actually, drug testing probably represents less than 10 percent of our overall business, although over the last two or three years it's probably grown faster than any other segment of our business. Most of our business is servicing physician offices. For example, if you went to your doctor and he wanted you to have some lab tests done, he'd send you to a laboratory to have your blood drawn or provide a urine sample, and that's the bulk of our business — around 80 percent. The remainder comes from servicing institutions, like The Queen's Medical Center, where we run the laboratory.

Q. How comprehensive is the range of testing that DLS is able to do?

A. We do hundreds of different tests here in-house. But like every other lab in the world, no one does every single test. So we send out some of our tests. We send out less than 2 percent of the tests being ordered — very low-volume, highly esoteric-type testing. Most of those we send to the Mainland.

Q. How much has DLS grown since it was founded in 1985?

A. When we started in the first year, we probably had about 120 employees. Most of those worked at The Queen's Medical Center, which was one of the original owners along with the Honolulu Medical Group. The other owners were a group of laboratory professionals that sold the concept to the first two. Slowly over time, we significantly increased the physician office market work that we get. We now have almost 600 employees.

Q. What is the competitive landscape for medical lab services in Honolulu?

A. In terms of market share for the physician office market, we have one significant competitor, and I would guess we do more than they do. Very few physicians send tests to the Mainland.

Q. How does DLS stay up to speed with technological advancements in the medical-testing industry?

A. We are constantly sending staff to seminars. And vendors will come by and they'll do presentations. We have excellent medical directors that also keep in touch with what is going on in the industry, so we're very current. I would say Diagnostic Labs is as up to date as virtually any lab in the nation.

Q. Given the geographical restrictions of Hawai'i, how do you expand your market?

A. We believe that besides the ability to provide testing services, that the company over 20 years has developed expertise in many different areas, such has how to run an outpatient reference lab. We've also developed expertise in things like information technology in billing for laboratory services, safety, compliance issues and logistics. So we believe we have things that we can even market in terms of providing services to other laboratories on the Mainland. We have a very good reputation on the Mainland.

Q. Has Hawai'i's tight job market had an impact on recruiting at DLS?

A. We have both specialized and nonspecialized types of positions, and we're having a problem in both. Industrywide, across the nation, there is a growing shortage of skilled medical-laboratory professionals. There are not enough graduating in the field to be able to fill the positions that are being vacated through retirement. That unemployment rate is definitely having an impact on us. On top of that, we are choosy. We pick people we think will fit into our organization, as well as perform at the level we expect they should.

Q. Where do you recruit job applicants?

A. We work very closely with not only the University of Hawai'i-Manoa, but also Kapi'olani Community College. We also recruit at job fairs here and on the Mainland. That's our biggest challenge going into the future — recruiting and retaining qualified staff.

Q. Was it difficult making the transition from accounting and finance to head of a medical laboratory?

A. Not at all. When you get to a certain level, it becomes all about people. We have so many smart people that can deal with the technology. My primary job is managing people.

Q. Were management skills something you picked up along the way, or did you have formal training?

A. Picked up along the way, especially when I came to DLS. I've been here almost 18 years. I've had two people who I would have deemed my boss. Both of them were excellent with people and inspired others to perform at a higher level. That's what actually kept me here. In the first 14 years after I graduated from the University of Hawai'i, I had seven jobs. So I know a little about good employers and not-so-good employers. Almost immediately after joining this company, I realized that the way it was being run at the time was totally different.

Q. What were some of the management techniques that you use?

A. Encouraging people to take risks and encouraging them when they succeed, but don't discourage them when they fail. We allow people to fail. We allow people to take risks, and if you do that, you have to recognize that not everything works. We've created a very positive work environment. We pay fair compensation and we provide training and education. The vast majority of people won't stay with a company unless they feel they have an opportunity to advance themselves.