Bright Horizons CEO David Lissy '87
CEO David Lissy ’87 has a lot to do with why Bright Horizons is friendly to families, clients, investors, and employees. by Tamar Morad
When talking about the hundreds of child care centers he runs in the United States and abroad, Dave Lissy is as enthusiastic as one of his clients’ tots who has just been set loose in a candy store. He has good reason: The chief executive of Bright Horizons Family Solutions, headquartered in Watertown, Massachusetts, has been unusually successful in a field typified by low profit margins, high barriers to entry, and high labor costs—a field most entrepreneurs won’t touch with a 10-foot pogo stick.
But since Dave became its CEO in 2001, Bright Horizons’ sales have doubled to $700 million, centers have increased to 650 from 390, and the number of clients has more than doubled to 700. The company employs 18,000 people across 43 states, Puerto Rico, Canada, and Europe, and lists 95 Fortune 500 companies, including Allstate, Bank of America, DuPont, and IBM, among its clients.
That success reflects both Dave’s entrepreneurial abilities and the company’s unique business model, formulated by founders Roger Brown and Linda Mason in 1986: employer-sponsored child care. Bright Horizons’ corporate and nonprofit clients build space for a center at or near their own offices. Thus, Bright Horizons never pays for real estate, allowing it to keep tuition affordable, plow more money into teacher salaries—which Dave claims are 10 to 20 percent higher than regional competitors—and offer benefits like health care and 401k plans that most child care operations don’t. Most clients also subsidize tuition for their employees’ children.
The formula works: Employees get access to affordable child care near their places of work, while employers boost productivity by reducing the high costs of employee absenteeism and turnover. And Bright Horizons turns a profit.
Dave attributes the company’s success to its ability to capitalize on two developing nationwide trends. First is the fact that a growing number of organizations are acknowledging that reliable, affordable day care translates into more work days for employees. Simultaneously, many university and college administrators are responding to studies showing that child care challenges are among the causal factors behind the continuing inequity between men and women in tenure-track positions. That’s the case, says Dave, at Johns Hopkins University, the Massachusetts Institute of Technology, and Georgia Tech, which all have Bright Horizons centers (MIT has three).
Second is the growing desire of highly educated parents to prepare their children for kindergarten, which has become more rigorous than in earlier generations, and beyond. “Gone are the days when a parent thinks of day care as just a babysitting service,” says Dave. “Today it’s all about ‘school readiness.’ Parents have a checklist of skills they want their preschoolers to get, and if you can’t provide those, parents are smart enough to take their children elsewhere.”
Dave’s business sense was sharpened at IC, where he helped pay his tuition and living expenses by working as a waiter. A management major and economics minor whose leadership skills were already evident—he was president of his senior class—Dave met his wife, then Suzanne Schulman ’88, on campus. The friends he made at Ithaca, he says, “became my defining friends for life.” After one of his closest friends, John Sweeney ’87, died just a few years after graduation, Dave helped establish a scholarship in his name—the first of many ongoing connections to Ithaca College (see story).
After graduating, Dave moved to New Jersey and took an entry-level job selling health care plans to businesses for U.S. Health Care, which was later acquired by Aetna. He was promoted up the ladder, eventually running Aetna’s New England operations. In 1997 Bright Horizons recruited him as chief development officer.
“Bright Horizons’ founders were in the business of doing something meaningful and good for people—they were out to make a difference—and at the same time the company had the underpinnings of a solid business,” says Dave. “I am very enthusiastic about balancing social responsibility and doing good business, so I like to say that Bright Horizons has the soul of a nonprofit organization and the muscle of a profit-making firm. If one finds a way to combine those two things, the business will have great power to sustain itself and blossom.”
Bright Horizons’ Foundation for Children, the nonprofit arm, provides an extra dose of soul: company employees help build and run the foundation’s smaller child centers, called “Bright Spaces,” now in 125 homeless shelters across the country.
While its competitors are mostly nonprofit entities, Bright Horizons went public in 1998. As CEO, Dave finds new corporate sponsors and identifies acquisition opportunities, mostly small local networks of employer-sponsored day care centers. He works with clients to formulate their ideal combination of services. For instance, the two centers at Toyota’s manufacturing plants in Kentucky and Indiana operate 24 hours a day, since Toyota employees often work shifts. And at the headquarters of retail giant Land’s End in Dodgeville, Wisconsin, the center is open extra hours between Thanksgiving and early January to accommodate parent-employees working extended days during the biggest shopping season of the year. Many centers offer emergency back-up care for school-age children, so parents don’t have to lose work days during school holidays and during gaps between the end of school and the start of summer programs. Some centers are open to the surrounding community, or offer full-day kindergarten and after-school programs.
In the last year, Bright Horizons took two ambitious steps outside the day-care center arena: it began an emergency home-care service for sick children and elderly parents of employees, and acquired a company that provides employer-sponsored college admissions support services. “When we talked with our sponsors about what other areas of family life create stress for their employees, elder care and finding the right college for their kids were next on the list after child care,” Dave says. Both ventures fit with the company’s mission of offering solutions to work-family issues.
As do Dave’s plans to expand the number of private elementary schools, some of which are subsidized by client companies, operated by Bright Horizons. Now numbering seven in four states, they are strategically located where there is a dearth of top-notch schools. The school in Bellevue, Washington, for instance, serves the huge influx of highly educated employees of Microsoft and Starbucks. Such private schools are attractive when school districts are tightening purse strings and the cost of private education is rising.
Bright Horizons has been named eight times by Fortune magazine to its prestigious list of “100 best companies to work for.” Dave has also been named as one of “top 10 men in work/life” by Work Life Matters magazine. “One of his strengths,” says Bright Horizons CFO Elizabeth Boland, who has worked with Dave for a decade, “is that he genuinely sees those awards, and all the accomplishments of Bright Horizons, as the result of the work of all its employees—not simply a reflection upon himself. The employees feel that appreciation, which is incredibly important in making the business thrive.” Boland is as effusive in her praise of Dave as a manager: “His effectiveness as a leader comes from his breadth of knowledge about all the various components of the business and their interdependence. He then expresses his overall vision and strategy, and breaks that down into specific tasks that his employees can grasp and carry out.”
Now, with 20 years of experience in business under his belt, Dave is devoting more time to Ithaca, where he sits on the fund-raising task force for the Campaign for Ithaca College [see pages 4–9], is on the School of Business Advisory Council, and in April was the keynote speaker at an awards ceremony for graduating business school students.
“Dave is a wonderful role model for our students,” says Susan W. Engelkemeyer, dean of the School of Business, “because he has achieved success in business by doing something very meaningful—making family and work life easier for employees and therefore enhancing productivity for employers.”
And that balance, in the end, is what it all comes down to. While Dave is undoubtedly a forceful spokesperson for Bright Horizons, perhaps the biggest indicator of his belief in the company is this: He and Suzanne sent their twin daughters, Sarah and Julia, now six, to the company’s center in Watertown.