Adam: Thanks again for taking the time to share your thoughts on leadership. First things first, though, I am sure readers would love to learn more about you. What is something about you that would surprise people?
Ron: I am a jazz enthusiast. I developed a passion for jazz in college, and then and now it helps me relax and unwind. I’m a member of Jazz at Lincoln Center and my wife and I frequent jazz clubs. I’m a believer in the theory that Ursula Burns discusses in my book that work/life balance is true over a career but not necessarily all the time. So when I need to relax and refocus, jazz has the benefit of being highly portable; I can enjoy it at home, or take it on my device on planes, trains and in cars while traveling and benefit from it, even when I don’t have time to go and read a book by a pool somewhere.
Adam: How did you get here? What failures, setbacks or challenges have been most instrumental to your growth as a leader?
Ron: I view success as the progressive elimination of failure. My road to success was not a straight line. I worked in government, sales, tech, in a startup, and the health industry. For me, finding what I was good at meant realizing I had two really strong areas of expertise. One was a passion for organizational dynamics – the science of why some organizations succeed while others fail. The other resulted from the first one; my expertise in business growth, and in particular fixing businesses that others haven’t been able to fix.
Adam: In your experience, what are the defining qualities of an effective leader?
Ron: Leaders need a clear and eIevating vision for their organization. Shareholders might get excited about 15% EPS growth. But people in the organization are often more interested in feeling like they are changing the world. This requires the ability to communicate at all levels of the organization.
Leaders also need the ability to develop and lead teams. They need to select, recruit and hire the right people to create a high performing team.
My personal view has always been that leaders need to be able to have their head in the clouds, their feet firmly on the ground, and the intuitive ability to know when they need to be strategic and when they need to be in the weeds, helping the team dive into a difficult problem.
Adam: Who are the greatest leaders you have been around and what did you learn from them?
Ron: I have personally worked for good leaders and bad leaders, and I have been able to learn from all of them. No boss or mentor drove my success although they did open doors for me. I describe a number of great leaders in my book. Great leaders I’ve worked with at the board level also include Alex Gorsky of Johnson & Johnson and Jim McNerney of The Boeing Company.
For me, a compelling definition of leadership is from Napoleon: to define reality and create hope. My friend Ken Chenault uses it. While simple, the concept is powerful. Aetna’s employees, when I arrived, didn’t have a lot of hope; the company was losing $1 million every day. My predecessor, Dr. Jack Rowe and I needed the full engagement of our employees in order for the company to succeed. To engage them, we needed to define a vision of where we were leading the company, and give people hope that we would get there. In our case, it worked.
The best leaders create the cultures where their employees both want to work and be successful and that positively contribute towards a high-performing organization.
Adam: How can leaders and aspiring leaders take their leadership skills to the next level?
Ron: A favorite theory of mine: strive to be 15% better every year. It’s a big enough number to force you to create meaningful improvement for yourself. I set out guidelines for improvement every year. One example is continual learning: where can I continue to gain new knowledge?
You can open yourself to experiences outside of your company or industry and then think of how you can apply that to yours. Find a business (any size) that is different than yours and spend time learning how they do things. If you’re a leader, make it a priority to help plan these events for your team. Discuss what you learned. Did you notice any activities or practices that were relevant to the work we do? Are they serving customer needs that we’ve never thought about but that our customers might also share? Are they creating forms of value that we could create as well?
Also, exceed your job description, and pick jobs where, all things being equal, the risk is higher. You will likely face greater challenges and learn the most.
I also have a theory of “managing 2-up, 2-down,” which requires meeting with your boss’s boss, and as well with people two down from you. Gaining perspectives up and down the organization will do a lot to broaden your understanding of what’s important, what’s working, and what isn’t.
Adam: What are your best tips on leading a business turnaround?
Ron: When all else fails, get the facts. In tough circumstances, many times decision making for a leadership team can be difficult. Sometimes you need to call a time out and ask for the facts. It’s the way to get the emotion to a more reasonable level and allow people to concentrate on what’s wrong.
When I joined Aetna, we didn’t know what all of our problems were, because we didn’t have the data or systems to show us. One of my very first acts was to create an infrastructure that let us get at the data, on a granular level, to see where our problems were.
So get the facts. Listen to your customers, and deeply understand what they want and what they need. Build a strategy focused on that, build a team for your strategy and a culture to support all of these elements. Once again, your culture will be important. At all times but perhaps most importantly during a turnaround, you will need to unlock discretionary energy. A positive, high-performing culture can help you do that.
Adam: What is the best advice you have on building, managing and leading teams?
Ron: I am a proponent of creating positive, high-performance cultures. I don’t mean “easy” cultures, but rather cultures based on a consistent set of values, such as respect for people, and clear expectations for accountability. I have been in negative high performing cultures. They can work, but generally not for long. I believe the CEO has the most important role in creating the right culture for their enterprise, including demonstrating the elements of that culture on a daily basis.
It’s important to build your leadership team with people with complementary skills and styles. Communicate constantly to help them connect your vision for the company and their personal goals and desires, so that they are willing to go along on the journey. And be clear on your expectations, always. I’ve talked already about unlocking discretionary energy and creating an elevating vision for the organization.
Adam: What are three things anyone can do to develop as a leader?
Ron: Reject stereotypical thinking – don’t allow others to determine who you are as a leader. Set your own style and realize that many different leadership styles can succeed and don’t accept stereotypical thinking or comments regarding others.
Take a risk – when two jobs are of equal interest but one has greater risk, take the one with greater risk. You will face bigger challenges and learn more.
Be patient but also the best you can be. So many times I see young people in particular frustrated with their pace of advancement. Being willing to succeed in your roles; in fact, knock the cover off your current job description.
Adam: What were your biggest takeaways from serving on President Obama’s President’s Management Advisory Board? What should business leaders understand about working with government that we may not?
Ron: My experiences working with government have been both rewarding and frustrating. I’ve met enormously talented people, eager and ready to meet the needs of the American people. But the more exposure I had, the more astounded I am that government works as well as it does. The tools are often not there – there is little forward visibility for planning purposes so multi-year planning projects are often difficult. And many functions are built to do yesterday’s work instead of tomorrow’s.
Adam: What have you learned from your experience serving on the boards of American Express, The Boeing Company and Johnson & Johnson? Any tips on how to land a board seat and then how to be the best board member possible?
Ron: I am often asked for advice on seeking a board seat. I suggest starting with a non-profit board in an area where you have a passion and can contribute to their mission. Once there, you can learn from other executives who are more senior about governance, how to conduct meetings, what the processes are. Become a student of governance, and consider joining an organization such as the National Association of Board Directors (NACD).
Beyond that, be diligent. Be a student of the business and industry where you want to be or are a board member; gain a good working knowledge. Be prepared to share your perspective with leaders and management. Take your obligation seriously.
Adam: As the former CEO of Aetna, I thought that you may have some thoughts on healthcare. What should we do?
Ron: I think the first thing we need to do is decide what we want to accomplish as a nation. All the indicators are there to suggest we have to transform health care delivery in order to reduce costs and increase quality and improve health in this country. In Washington, DC, the first thing we need to do is come back together and work toward solutions that will require compromise on both sides. I don’t believe that any solution that is entirely one-sided has much chance in the long run.
My personal view is that we need to get value back into the health care equation. We need to pay based on the value provided versus the number of services provided. Agilon health, where I’m chairman, is a company based in California working on physician centric models for value-based health care.
There are many options available; for example I helped develop the recommendations put forward by the Committee for Economic Development (CED) of The Conference Board. The report is available online and is Adjusting the Prescription: CED Recommendations for Health Care Reform.
Adam: What is one thing everyone should be doing to pay it forward?
Ron: Here are two ideas. In terms of philanthropy, give whatever you’re able to a cause important to you. But also give of yourself and your knowledge. In my book, I talk about a two-up, two-down management theory. In two-down, the intent is to meet with people two levels below you regularly to get their insights and opinions. Be prepared to give back; share your knowledge, experiences and recommendations. Be willing to coach and make yourself accessible. One of my expectations of leaders is to make what you know accessible to others to grow the next generation of talent. This is a second but very important way to pay it forward.
Adam: What are your hobbies and how have they shaped you?
Ron: I love technology. I’m always fooling around with a new device or technology. Smart deployment of technology and a focus on big data were instrumental elements of Aetna’s turnaround. I believe that all successful leaders should set personal growth goals, and recommend that a key deliverable be related to learning more about technology, no matter what your industry. Understanding how technology is affecting your industry and your company is crucial to long-term success.
When I went to MIT Sloan for my MBA, I was in the first class to have personal computers given to all students. This alone meant that I became much more facile in technology that others in my generation.
Adam: Is there anything else you would like to share?
Yes. One of my favorite quotes: The price of success is eternal vigilance.