CEO Williams’ case study

CEO Williams’ case study begins in 2001, when he arrived to find a corporation (Aetna) in need of change ‐ having lost $280 million in the past year. He diagnosed key areas of failure and opportunity in Aetna’s vast enterprise. Williams shaped a path to recovery focusing on a better understanding of Aetna’s current customers, from small employers to the largest corporations, and concentrating on the best way of expanding into new markets such as retailers, banks and law firms. To do this, Aetna needed to build products and services suited for those groups, and Williams’ strategy involved developing integrated information systems for both employers and consumers, to ensure cost‐effective and high quality health care delivery. Through effective communication channels, Williams repeatedly made the case for this new strategy directly with Aetna’s staff. He pressed the issue of values: integrity, employee engagement, excellent service and high quality healthcare, and implemented employee surveys and biannual performance reviews. Employees were invited to answer whether they believed their supervisors held true to Aetna’s values and whether they were proud to be working with the company. Williams has noted a marked improvement in responses over just a few years. External benchmarks reflect positive growth as well: Aetna has reached the number one spot as Fortune Magazine’s most admired health care company, after occupying the bottom position. In support of verbal communication within the organization and with its customers, Williams invested a great deal in technology he believes will “shape the future of health care.” He describes a Care Engine, containing an individual member’s personal health record and up‐to–the‐minute journal information and health guidelines that are “converted into computer algorithms.” This system can detect and fill gaps in care for patients ‐ conditions that go undetected, tests that should be administered, medicine that should not be prescribed. Williams has also given consumers the ability to find and compare the costs of tests and doctor visits. He believes we can check the trillions of dollars in healthcare spending through smart technology. For him, health care reform means we “get and keep everyone covered; maintain the employer‐based system… reorient the system toward prevention, value, and quality of care; and use market incentives to improve coverage, drive down costs and make the system more consumer‐oriented.” The case covers a wide range of issues and shows how the CEO, as a leader, effectively uses organization‐wide communication to bring about change and improve performance.

Tutors and students may watch (1) the whole film clip of 56 min, (2) the core lecture from 4.30 to 40:00 i.e. 36min or selected parts ‐ see below: 00:00 – 00:04:30|INTRODUCTIONS|Positions the lecture ‐ a corporate turnaround: the company was failing in 2000/1, through change‐ new leadership and a strategy focusing on customers, employees, company values and culture, information technology and management the company was turned around.  From almost the bottom in the rankings to the top by 2008 00:04:30|RON WILLIAMS TAKES THE STAGE | Explains how the company had lost its way/

outlines the structure of the presentation 00:06:15|AETNA TODAY (2008)|37 million members over eight countries, 35 thousand employees… 00:09:00|STRATEGIC PATH TO INDUSTRY LEADERSHIP| Williams describes three phases (one) 2001‐4; (two) 2004‐6 and (three) 2006‐8; for each stage Williams evaluates the strategic, operational and financial performance: in phase one the company was losing money and went BACK TO BASICS, seeking to better understand its customers, their needs, THE COMPANY AND ITS VALUES; in phase two, the company witnessed average returns, refined segmentation and focussed on perfection of the basics and in phase three, the company was in the top tier of the industry‐strategically they focussed on innovation, information and integration and SET OUT TO DIFFERENTIATE THEMSELVES WITH UNIQUE OPERATING CAPABILITIES ‐ the strategic path to industry leadership is explored in more detail in the remainder of the lecture 00:11:30 ‐ 00:12:00|Change|Williams discusses the start of the path to industry leadership; he had to make the case for change which involves COMMUNICATION with employees. Williams argues, “ understanding how to manage change effectively is an extremely important tool and skill set that will serve you well” 00:12:00|Strategy|Created a strategy called the three I’s: information, innovation and integration; an executive management information system (dashboard) was created and made available to all, presenting one version of the truth and improving the speed and quality of decision‐making. Williams emphasises the need for COMMUNICATION of both problems and solutions 00:13:15|CULTURE|CREATED THE AETNA WAY: customer focus, better articulated (COMMUNICATION) and demonstrated VALUES (integrity, quality and value, excellence and accountability, employee engagement) 00:14:10 |as a leader| Williams, whenever he addressed a group of employees within the company, would first talk about the values and demonstrate their importance 00:15:00| EMPLOYEE ENGAGEMENT | Williams emphasised the importance of employee engagement, suggesting that an engaged workforce was satisfied and this led to increased motivation 00:16:15||Employee surveys were implemented: employee surveys participation shifted from  inform employees about the situation on an ongoing basis.  He set up regular meetings to cascade performance and what needed to be done 00:54:50|LEADERSHIP VERSUS MANAGEMENT| A member of the audience posed the question ‐ can someone who is not seen as a leader be an effective manager?  Williams argues that they can but…