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Powell ’60: Founder of LabCorp

Jim Powell '60

James B. Powell ’60, M.D., founder of LabCorp.—Photo courtesy Powell.

James B. Powell ’60, M.D., an entrepreneur who founded the company that eventually became Laboratory Corporation of America, the largest medical testing business in the United States, admits that when it came to deciding which college to attend, he was heavily influenced by his father. “My mother died when I was 5 years old. So, my brothers and I grew up in a very paternalistic environment.”

Thomas E. Powell Jr. grew up in rural North Carolina. As the only son, the burden of working the family’s farm fell increasingly on his shoulders. “He knew where this would end up,” recounted Powell, “and he wanted something different.” At age 15, therefore, he left the farm and enrolled at Elon College.

In 1917, the United States entered World War I. The tales of the Civil War from his grandfathers and other veterans inspired him to join the officer training unit at Elon, one of the hundreds established at colleges and universities to meet the rapidly growing Army’s need for officers. Commissioned in 1918, after an intensive three-month course, Powell was assigned to Plattsburg, New York. During this service, he encountered several VMI alumni, who, according to his son, “he held in high regard.”

Returning to Elon in 1919, Powell’s father completed his undergraduate studies and became an instructor in geology and botany at the college in 1920 and later a full professor.

In the classroom, the elder Powell encountered shortages of necessary biological specimens and materials and became aware that other schools faced the same challenge. In 1927, therefore, he and a friend founded Carolina Biological Supply Company to meet this need. As the company struggled through the Great Depression, he left Elon to focus on it. It survived and would thrive during World War II and into the 1950s, as it does today.

His father’s example—and his exposure to biological science as he worked at Carolina Biological—inspired Powell to think seriously about his career at a young age. “I wanted a career in science, preferably related to biology. In our family, however, the expectation was that, after college, you’d either come back and work for dad or do your own thing.” Medicine seemed to offer him the path to the latter.

The question then became where to start. Powell’s father pointed out that he had started his education at Elon and then went to graduate school at the University of North Carolina–Chapel Hill and then Duke University. “If I did my undergraduate work at a small college, he explained, I would get to know my professors better—and they would get to know me.”

His father had important connections to two colleges: Davidson College and VMI. “He knew the head of the biology departments at both schools and so knew their departments were top-notch.” The fact that the family’s eldest son, Thomas E. “Ed” Powell III ’57, was at VMI deepened the latter relationship.

Powell initially chose Davidson. But two weeks away from matriculation, he decided to accompany his twin brother, John, to VMI. It was the Institute’s military character that won the day. “My father had served as an officer and always spoke warmly of the experience. I also had an interest in military history, which I have to this day. Furthermore, I saw the value in military training as a preparation for life.”

Life as a rat in the late 1950s was, Powell recalls, “tough and grinding.” The Rat Line lasted almost all year, and a few times a year, the rats would be subjected to “resurrections,” two- to three-day periods during which “upperclassmen had their way with the rats.”

Fortunately, James and his brother found a home in the biology department, which was headed by the legendary Robert P. “Doc” Carroll. Many alumni cite Carroll as a major influence on their lives, crediting him with getting them started in medicine, dentistry, and science. Such is their esteem that, collectively, these men refer to themselves as “Doc’s Boys.” Powell remembers, “Doc Carroll was a father figure. You couldn’t help but love him, and he loved his boys. If you had a problem with the commandant or someone else on post, he’d go to bat for you.”

Powell remembers Carroll kept a chart outside his office on which he tracked biology majors’ progress. “He would brag about our accomplishments to just about anyone who would listen.” He also was something of “a psychiatrist.” He would tell cadets, especially the rats, “Don’t worry. Just take it day by day.”

Carroll was just one of many professors whom Powell remembers fondly. “VMI had so many good, solid professors. Louis Huntley was in the biology department. Physics was a thoroughly great department. I love history, and John Barrett was a superb history professor. One of my favorites was George Pickral of the chemistry department.”

Taken together, according to Powell, these men “provided a very well-rounded education that instilled a strong work ethic.” Powell enjoyed his academic work. “I loved the chemistry labs George Pickral would organize; they were very well run. And, if you enjoy what you are doing, it’s not really work.” Even Saturday morning classes didn’t faze Powell. “My father’s company worked on Saturday mornings,” he said. “I was used to it.”

“[VMI] instills a strong work ethic, and you need that to be successful.”

James B. Powell ’60, M.D.

After graduation, Powell followed his elder brother to Duke Medical School. It was during medical school that, like his father, he perceived a need and began thinking about how to meet it. Blood samples had to be sent by mail in special glassware to a laboratory in California for analysis. The entire process of sending samples and receiving results took two weeks or more.

During his last year at Duke, he learned a life-changing fact: North Carolina required medical testing laboratories to be headed by board-certified pathologists. “I had long considered a career that blended business and medicine, and there it was: Creating a clinical laboratory.” So inspired, he embarked on a five-year residency in pathology.

During his training, Powell met Ernie Knesel, a medical technologist. They discussed what would be necessary to create a top-notch clinical laboratory. Powell and Knesel—as well as Powell’s two brothers, Ed and John, who joined the effort—decided to base the laboratory in the town next door to Elon: Burlington, North Carolina.

In spring 1969, immediately before he began his Army service, Powell started ordering equipment. He and his brothers then secured a lease on the former Alamance General Hospital, then owned by Carolina Biological. Things moved fast, and in October 1969, Biomedical Laboratories tested its first sample.

Over the next three years, Powell served as an Army officer at the Walter Reed Army Institute of Research in Washington, D.C. “It was fascinating work, and I loved the Army,” Powell recalls. But the newly established business was never far from his mind.

When Powell returned to Biomedical Laboratories full-time in 1972, the company had a reputation for accuracy, speed, reliability, and innovation. Over the next 27 years, the company never lost sight of those goals, and under Powell’s leadership, it went from strength to strength. By 1982, BRL was operating in 22 states and had 1,700 employees who processed almost 5 million specimens a year for more than 15,000 customers.

This growth in business spurred growth in the company’s physical plant. For example, in Burlington, the company built a new facility that opened in 1978 and soon acquired properties in the city’s downtown that had become available as the local textile and hosiery industry began to decline.

Financially, too, the company matured quickly. It went public as Biomedical Reference Laboratories in 1979. In March 1982, Powell announced that BRL would become part of the Swiss-based pharmaceutical and diagnostics company Hoffman-Roche, as Roche Biomedical Laboratories. Powell stayed on as president and CEO, helping to integrate the companies’ operations and, more importantly, cultures.

During the 1980s, RBL adhered to the path that had led to its success and kept growing, branching out, for example, into drug and DNA testing. It kept up with technology, acquired smaller labs throughout the country, expanded facilities in Burlington, and opened new ones in the nearby North Carolina Research Triangle Park, which had become a national center for biomedical research. By the early ‘90s, it was the second-largest medical testing company in the United States, with more than 8,000 employees and more than $600 million in revenues.

In the early 1990s, RBL encountered some challenges related to the growth of managed care companies and federal government actions. However, it adapted to the new environment and kept moving into new fields, such as HIV testing.

In late 1994, the process began for RBL to merge with National Health Laboratories. The merger was concluded in May 1995, creating the Laboratory Corporation of America, more commonly known as LabCorp. Powell would be LabCorp’s president and CEO until 1997, and Burlington would remain the new company’s headquarters.

When Powell left LabCorp, he returned to his entrepreneurial roots, working with his old friend and colleague, Ernie Knesel. Together, they took a medical-testing business Knesel was nurturing and created what became Tripath Imaging. As before, they saw a need and used technology to meet it. As Powell describes it, “We applied computer analysis and essentially changed the way the Pap smear had been analyzed for 50 years.” It is hardly surprising, therefore, that the company went public in nine months and was purchased outright in 2001.

As he looks back over a long and exceptionally successful business career, Powell credits his VMI education with providing him with a good foundation. “No matter what you study at VMI,” he said, “it is a great business school. As I said earlier, it instills a strong work ethic, and you need that to be successful. Just as important, however, is that you come to understand organization. You learn to organize yourself first, then small organizations, and then larger ones.”

Although he could point to many highlights of his time at the helm of LabCorp, he singled out the company’s consistent willingness to examine itself and adapt. Being adaptable, Powell asserts, is the key to success as a business leader. “You have to be willing to change your approach, take advantage of unexpected opportunities, and adapt to new information.”

“You have to be willing to change your approach, take advantage of unexpected opportunities, and adapt to new information.”

James B. Powell ’60, M.D.

For a long time, Powell says, his business was “very centralized. We made all the decisions in Burlington. As we expanded throughout the country and pursued new opportunities, it dawned on us that it was better to keep decisions as close to the action as possible. So, we established six divisions for the routine testing in addition to niche businesses, each focused on some aspect of lab testing.” It got to the point where the compensation of each division and niche leader was based on their respective division’s performance.

As someone who started and grew two companies, Powell has some advice for aspiring entrepreneurs: “Again, be adaptable! You might start with a perfectly good business plan but soon discover it does not work. Don’t be stubborn, thinking circumstances will change to meet your plan. Junk it and develop a new approach. Being an entrepreneur also is an all-encompassing task. It will take over your life. So, be prepared to be intensely focused on the task at hand.”

In whatever form it has taken, LabCorp remains firmly rooted in the Burlington area. There are several practical reasons for this, according to Powell. “We are centrally located between North Carolina’s Triad—High Point, Winston-Salem, and Greensboro—and its Triangle—Raleigh, Durham, and Chapel Hill. Two interstate highways run through here, and the area boasts several high-quality community colleges, as well as Elon University, all of which have close ties to us.”

But there are intangible reasons. Powell cites local ties. “The people from the area have been our employees and very loyal ones, too. Careers at LabCorp lasting 30 to 40 years are not uncommon, and we have some people who have worked with us for 50 years or more. It seems only right to reciprocate that loyalty.”

Powell has somehow found the time to be active in his community. He has been a member of the boards of several organizations, such as the Alamance Regional Medical Center, the Alamance Foundation, and the Duke Comprehensive Cancer Center. The focus of his service, however, has been Elon University. He joined its board of trustees in 1979 and served as its chairman from 2005–07 before becoming a life trustee in 2008. He led successful fundraising efforts at the school, supported capital projects, and established various funds and scholarships, including two in honor of his parents. “If it weren’t for Elon, I wouldn’t be here,” he replied when asked why he had served the school for so long. “My father became an instructor when he was 21, and to do his work, he needed a lab assistant. So, he hired a local girl, Sophia Maude Sharp. Soon, people were saying my father had ‘a very sharp assistant.’ Well, she was, and they married. And, well, that was that.

“I grew up in Elon. We had the run of the town, and because of our parents, we knew so many people. The college just let us run around, too. The campus was our playground.”

Asked to look back on a career that has spanned a cadetship at VMI, medical training, service in the Army, a successful business career, and decades of service, Powell summed it up by saying, “I have been fortunate in that I have never been involved in anything I didn’t love.”

  • Scott Belliveau

    Scott Belliveau '83 Communications Officer - Executive Projects

    The communications officer supports the strategy for all communications, including web content, public relations messages and collateral pieces in order to articulate and promote the mission of the VMI Alumni Agencies and promote philanthropy among varied constituencies.