Stericycle’s Alutto Talks Safe Medical Waste Disposal Solutions, Growth Opportunities

Managing medical waste disposal is no easy feat, but Lake Forest, Ill.-based Stericycle has made safe and proper disposal of medical, hazardous and pharmaceutical waste its mission.

For more than 25 years, the company has worked to develop strategies for disposing of medical waste, sensitive information and documents; compliance training; communications; brand protection; and other specialty products and services.

Under the leadership of Charles Alutto, CEO and president, who took the post in January 2013, Stericycle has expanded its business through both acquisitions and development of new product offerings. And with 2018 quickly approaching, Alutto and his staff are preparing for more growth opportunities in all firm's business lines.

Waste360 recently sat down with Alutto to discuss Stericycle’s new product offerings, the company’s biggest growth opportunities and how the company is handling the growing opioid epidemic in the U.S.

Waste360: Before joining Stericycle, you were employed with Environmental Control Company for nine years, where you worked your way up from sales representative to director of sales and marketing. Tell us about that experience and some of the best practices that you learned.

Charles Alutto: I have been in the waste and compliance industry my entire career. Ben Velocci of Avid Waste Systems Inc. has been a friend of my family’s for a long time, and he was actually the one who got me interested in the industry. When I was ready to go to grad school after earning my undergrad, he told me about the medical compliance industry and how it was growing. He informed me that it was an industry that I could work in during the day and still be able to attend grad school at night. That really peaked my interest, and I decided to give it a try.

In 1988, I joined Environmental Control Company, which was a startup medical waste company located in Long Island, N.Y., at the time. It was my first job out of college, and I was hired to be the company’s first sales representative. In that role, I basically sold medical waste contracts door-to-door to different types of medical facilities in the New York City metro area, which was the company’s service area.

While working for Environmental Control Company, I quickly learned that when you work for a small company, you pitch in and do a little bit of everything to ensure that customers get the best service possible. I worked really hard, just like anyone coming out of college, and I became an expert in a new industry that was just forming at the time, which was the medical compliance industry.

I was able to find success early on in my career because the medical compliance industry was a growing market. As the market grew, I was able to quickly become director of sales and marketing. In that role, I led the sales effort for the company for about nine years until we were acquired by Stericycle in 1997.

Waste360: Since Environmental Control Company was acquired by Stericycle in 1997, you have served in several leadership roles. Tell us a little bit about those roles and how they helped prepare you to become president and CEO of Stericycle.

Charles Alutto: I have been blessed to lead some very talented teams throughout my career at Stericycle, and I think the key to becoming successful is working your way up through management and surrounding yourself with smart, hardworking and talented team members.

The position that prepared me the most to become president and CEO was the role of vice president and managing director of Stericycle Europe because I was responsible for all aspects of our business, including sales, operations, human resources, environmental health and safety and more.

Today, as president and CEO, my day-to-day job entails a lot of different aspects. I am ultimately responsible for serving multiple stakeholders, board of directors and customers in the many different communities that we service and operate in. We service more than 1 million customers in 22 counties and have more than 24,000 team members.

In addition, I am responsible for the long-term, strategic direction of the company and ensuring that we deliver on our short-term commitments to our shareholders.

Waste360: In addition to serving on the Stericycle board of directors, you serve on the Foundation Board of Chicago’s Shirley Ryan AbilityLab and the Advisory Board of the Providence College Business School. Tell us about your responsibilities on those boards.

Charles Alutto: I am proud to hold advisory roles on those boards because they are both great institutions to be associated with. My wife and I are both alumni of Providence College, which is an important part of who we are today. 

In the case of Providence College, I am part of an advisory board that supports Sylvia Maxfield, the dean of Providence College School of Business, and her strategic goals. Ultimately, we try to advance the college’s liberal arts-based education offerings for both current and future students.

With Chicago’s Shirley Ryan AbilityLab, I am part of an advisory board that supports the institute’s mission of developing and growing translational research environments.

Waste360: You’re also the new director for Consolidated Infrastructure Group, a private company based in Omaha, Neb. Tell us about that role.

Charles Alutto: Consolidated Infrastructure Group (CIG) is a private equity-backed startup company that specializes in the utility locating business. The company employees go out and locate the utility lines that are underground so that you don’t damage those utility lines when you’re digging.

As with most private equity-owned companies, the board is comprised of a small amount of members. As an outside board member, I hold an advisory role, and I help management grow the business by making smart investment decisions.

The startup is off to a fast start, and it currently operates in four states. It has expansion opportunities nationwide, and I am excited to see where the future takes CIG. 

Waste360: Since joining Stericycle, what challenges have you faced and how did you overcome those challenges?

Charles Alutto: As with any large company, there’s never a shortage of challenges. The first big challenge that I faced was actually during my first day on the job as vice president and managing director of Stericycle Europe. I learned that the company had lost a large contract in the U.K., and it was definitely a concern for the group I was leading.

To overcome that challenge, I had to make sure that the management team didn’t lost focus. I also had to make sure that we focused on cost reduction and what we could pull out of the direct cost associated with that agreement. In order to increase our revenue in the U.K. after that loss, we added more services to our portfolio.

Today, as CEO, I deal with multiple challenges. Stericycle has had incredible growth since I joined in 1997, when we had about $20 million in sales and were primarily based in the U.S. Now, about 20 years later, we have more than $3.5 billion in sales, and we are present in about 22 countries. With that quick growth comes growing pains, which we are experiencing now.

Currently, we operate too many systems, and we have yet to fully integrate the more than 470 acquisitions that we have completed. To work through those challenges and to become more efficient, we are formulating a business transformation initiative that will help us address the systems issues and processes that we have.

Waste360: How does Stericycle help companies comply with increasingly strict regulatory guidelines and quality controls?

Charles Alutto: Virtually every one of our services is related to compliance, whether it’s medical waste services, helping our customers safely and legally dispose of medical waste or assisting a business in destroying confidential information.

That being said, we help companies comply with regulations in many ways. One example is through our pharmaceutical waste program, which provides hospitals with a complete review of all of the pharmaceuticals that they have either administered or used. And with that review, we assist them in segregating those pharmaceuticals into two types of classes: hazardous pharmaceutical and non-hazardous pharmaceutical. From there, we offer a turnkey program that includes containers, collection, transportation and safe and proper disposal of both hazardous and non-hazardous waste. This service provides customers with an environmentally safe way to handle very complex waste streams.

Waste360: What are some of the ways that Stericycle helps ensure that medical, pharmaceutical and hazardous waste is disposed of properly?

Charles Alutto: First and foremost, education is key to helping our customers understand the regulations associated with specific waste streams. And since all of the waste streams are regulated, proper tracking and documentation of destruction also play important roles in protecting businesses.

Our drivers are highly trained to transport the specific materials that they carry, and other employees are highly trained on the various ways to treat and document these materials. In order to keep the processes running safely and efficiently, our employees and our systems need to work together at all times.

Waste360: What are some of the challenges and dangers that come along with disposing of medical waste, and what steps is Stericycle taking to ensure that employees are safe on the job?

Charles Alutto: At Stericycle, we have various service lines, but 90 percent of our revenues are based on a business model requiring transportation. And because of this, safety is something that we take very seriously.

On any given day, we can have thousands of team members on routes all around the world, so we want to make sure that they have equipment that’s smart and well maintained to add an additional layer of safety.

Technologies like backup cameras and telematics report on speed, excessive stopping and idling, so we have been active in equipping our fleet with those technologies to keep our employees and customers safe.

In addition to being safe on the road, we have to think about being safe at our processing plants. We want to make sure that we’re utilizing processes and equipment to eliminate any potential contamination, potential exposure to our team members and potential accidents. By putting safety first, we are protecting the communities that we serve and the workers that we employ.

Waste360: Last year, Stericycle’s Parkersburg, W.Va., plant was recognized as the first medical waste treatment facility awarded the Occupational Safety and Health Administration's (OSHA) Voluntary Protection Program (VPP) Star Status for its achievement of excellence in worker safety and health. Tell us about some of the efforts that made that achievement possible.

Charles Alutto: We are proud of that accomplishment, and that plant’s strong and dedicated team really made that achievement possible. For about three years, the staff at that plant identified safety improvement opportunities from all different perspectives and created a safety mindset that became part of the staff’s daily work routine.

The plant implemented systems that resulted in injury and illness rates below the National Bureau of Labor Statistics’ rates, and that’s just one of the reasons why the OSHA VPP Star Status program recognized the Parkersburg location for excellence in worker health and safety.

In addition to that recognition, we have five other facilities in the U.S. that have received special recognition from OSHA. As a company, we hope to leverage these examples to improve and expand our safety performance in more facilities.

Waste360: There is increasing concerns about disposal of unused pharmaceuticals. What is Stericycle doing to help with this issue?

Charles Alutto: The opioid issue is getting a tremendous amount of press, and we are doing a lot of things in regards to that. Improper pharmaceutical waste disposal has severe implications on customers, communities and the overall environment, and we are doing everything we can to minimize improper disposal of pharmaceuticals.

We believe that we are uniquely positioned to help dispose of unused pharmaceuticals from almost every point of generation. For many years, we have provided our large and small healthcare providers with a solution for handling both hazardous and non-hazardous pharmaceutical substances. And more recently, we have introduced several new products that address the proper disposal of controlled substances and the disposal of pharmaceuticals in communities.

One of those new products is a CsRx service that’s specifically designed for disposal of unused controlled substances, which has been an issue in hospitals for many years. And another new product is our TakeBack suite, which includes Seal&Send Medication MailBack Envelopes that provide a safe and convenient option for consumers to dispose of their unused or expired pharmaceuticals via mail or collection kiosks. Both of these products are compliant with the Drug Enforcement Administration standards.

We have seen much success with these products because they meet a critical need in our communities today. As we look to the future, we will continue to expand our product lines to meet the needs of our communities.

Waste360: Stericycle recently completed a performance-improvement project to improve its overall fleet performance. Tell us about that project and what you learned.

Charles Alutto: Our fleet improvement effort is more than just a project; it’s a continuous improvement initiative designed to drive efficiencies across our network of medical waste vehicles. This first project, which lasted multiple years, was a combination of initiatives that focused on cost reduction and improving customer service levels. After we fully implemented those initiatives across our fleet of about 1,200 medical waste vehicles, we significantly reduced miles and increased the amount of stops per hour and on-time pickups.

Now that that first project is complete, we are focusing on the implementation of the same performance improvement playbook for our fleet of about 1,800 Shred-It vehicles that we recently acquired.

As far as lessons learned, we realized that you have to bring people together from all levels of the organization to maximize success. It’s not just about the process; it’s about the culture as well. In order to succeed, you need the team that’s going to be the most impacted by the change to be engaged in the process early on.

The improvement initiative for the medical waste fleet took many years, but now that we have a good understanding of what needs to be done, I think it will only take about a year for us to implement the process to the Shred-It fleet.

Waste360: New technologies are entering the industry at a quick pace. How is Stericycle utilizing technology to better improve its operations?

Charles Alutto: Technology, with respect to our transportation, has really helped us, and we will continue to use technology to better improve our operations and transportation. We have been successful with the technologies that we use on the medical waste side, and we are looking to utilize more technologies on the secure information side and the hazardous operations side.

Looking forward into 2018, we are involved in investing in a global financial and operational system that we will be announcing later this year or early next year, which will help us improve how we analyze data so that we can make smarter business decisions.

Waste360: Can you share some highlights from Stericycle’s recent financial performance?

Charles Alutto: It has been a challenging 24 months. Our growth has slowed down, and we have been dealing with certain company and industry issues that have impacted our financial results. Overall, our business continues to be profitable, and we are still able to convert that profitability into great cash flow to invest back into the business.

Over the last three quarters, we have returned to a predictable financial performance, and our communication-related services have exceeded the market’s expectations, which is exciting for us.

Waste360: Stericycle was integral in handling Ebola waste a few years back, helping to develop procedures domestically and deal with the waste generated. What did you learn from that experience?

Charles Alutto: When the first patient infected with Ebola came to the U.S., there were no specific regulations to manage the associated medical waste, which was a huge issue. Understanding the need for safe disposal options, we quickly worked with various regulatory agencies to develop a plan for handling the waste.

In a very short period of time, we were able to develop a process for a special permit to transport Ebola waste. We were actually the first company to receive that permit, and the only company that handled the transportation of Ebola waste during that crisis.

Through that process, I personally gained a new appreciation for the importance of having thought-leading industry experts on our team. I think the experience and the expertise of our team members really enabled us to quickly get the various regulatory agencies together because there wasn’t even alignment in various regulatory agencies like the Department of Transportation and the Centers for Disease Control and Prevention. We were able to align them around the appropriate action plan, which was critical, and I believe we did an outstanding job running the front lines in a quick, safe and calm manner.

Waste360: What are the biggest misconceptions about medical waste? How do you deal with any community fears?

Charles Alutto: Honestly, very few people even think about medical waste disposal because it’s one of those essential services that most people take for granted, especially patients who are in a healthcare setting.

As far as misconceptions go, I continue to be surprised at how many people within the medical community think all medical waste is incinerated, especially since we have made great strides in reducing medical waste incineration over the last 20 years.

In the U.S. today, only about 10 percent of medical waste is incinerated. The remainder is actually treated by autoclave or steam sterilization. There are some groups that are concerned about medical waste being incinerated and educating these groups on the need for incineration for specific materials and the regulatory limits, environmental controls and emissions performances generally helps ease such concerns.

Waste360: It has been two years since Stericycle completed its acquisition of Shred-It International. How has the integration process gone and are there any remaining hurdles?

Charles Alutto: The acquisition has gone very well for the company. The integration process is on track; however, we continue to find additional opportunities. Last year, we combined Shred-It with our medical waste operations, and we are now learning about the opportunities that we have for the future, which will be a work in progress for many years to come.

Shred-It was a perfect adjacent market opportunity for us, in my opinion, and I think we will look back at this transaction years from now and view it as a transformational event.

Waste360: What are the biggest growth opportunities for the company?

Charles Alutto: We will continue to focus both on organic growth and organic growth through mergers and acquisitions for years to come. Over the next couple of years, I think we will do more small, tuck-in deals in the U.S., Europe and Asia.

From an organic perspective, we are seeing a lot of opportunities to grow our secure information destruction services, hazardous waste services, communication-related services and parts of our medical waste business. We are looking at the best ways to grow those areas in both the short term and the long term.

Waste360: Who are your biggest mentors and how have they helped shape you to become the person you are today?

Charles Alutto: From both a business and personal perspective, my three biggest mentors are my dad, Ben Velocci and Mark Miller.

My dad taught me the value of hard work, and I honestly don’t ever remember him taking a sick day throughout his career. His work ethic was second to none and that certainly rubbed off on me. He was very focused on making a better life for his kids, who all went onto college and received opportunities that never existed for him. He made a lot of sacrifices for us, and I am forever grateful for that.

Ben was my first boss at Environmental Control Company, and he was the entrepreneur who started that business. He’s now the owner of Avid Waste Systems in New York. To me, Ben was a boss, a father figure, a brother and a friend all wrapped into one. To this day, I continue to admire his entrepreneurial mindset, incredible focus and commitment to quality.

Mark Miller, chairman of Stericycle and former CEO, has an ability to create a compelling vision and to think strategically on how to achieve that vision. I first met Mark when Stericycle was considering the acquisition of Environmental Control Company. At the time, Stericycle was a small, profitable waste company, but he walked me through how the company would evolve into a large and successful business-to-business medical waste company. He was right about what the company would become, and I am lucky to have learned many skills from him.

Waste360: What advice do you have for someone looking to join the waste and recycling industry?

Charles Alutto: You have to have a passion for what you do, and you wake up every morning excited about the company that you work for or the industry that you serve in.

My advice would be to focus on learning all that you can about the company you work for and the services that it offers. You should be an expert in the field you work in, not just an expert in the position you hold.

This industry is an industry where you can grow and provide a valuable service at the same time, which is rare. It’s a great industry to be in, and it’s an industry where you can be proud of the work that you do because you are making a difference in health, safety and the environment.

Waste360: If you weren’t in the waste and recycling industry, what do you think you would be doing career wise?

Charles Alutto: I certainly wouldn’t be a professional athlete because my athletic ability doesn’t exist. I hold two degrees in finance and have a passion for numbers and financial calculations so I would likely be doing something in the banking or investment industries. I think it would be really interesting to be on the other side of the table when having a discussion with a public company.