It wasn’t arrogance that left Delta Dental of Missouri so unprepared for the sudden influx of competition it was facing. It was the fact that up to the beginning of 2010, there really had not been anyone to challenge the company’s status as the leader in providing dental benefits.
“For a number of years, there were limited choices in terms of dental benefit plans,” says David Haynes, the 113-employee company’s president and CEO. “Delta was the premier choice. As the economy worsened, large health payers have started seeing dwindling bottom lines because of increasing medical claims costs. They started looking for other revenue streams, and as they looked, a natural one to look at was dental. So we started seeing a lot of increased competition.”
Haynes was brought in to lead the business in January 2010. He was given the challenge of preparing this untested company, which had generated $437.4 million in 2009 consolidated revenue, and getting it ready to face this new threat.
“Because of the lack of change that had occurred for a number of years, as a business, we weren’t organized strategically as a team and we didn’t operate as a team because it wasn’t necessary,” Haynes says. “We operated more in silos. Each discipline represented things they needed to take care of and business was good. As you’re starting to move into a rockier climate and you know your business model needs to change, one of the first things I said we needed to address was how we structured the organization and how we operate and how we make decisions. We had to start making decisions much more quickly.”
This would be easier said than done as everyone had grown pretty comfortable with the way things worked at the company.
“My challenge is really getting my team and the employees rallied around some common efforts and common goals in terms of the changes that we need to make as the marketplace is changing around us,” Haynes says.
He didn’t have a lot of time as the competition was going to get more intense. But he had faced tough challenges before. This was a guy who as a high school student singlehandedly managed a lunchroom of 600 factory workers one summer and left an indelible mark in doing so.
“My supervisor at that time, he said, ‘You know, you’re one of the greatest guys I ever had working for me,’” Haynes says. “’But I’m going to be glad when you leave. You got all my people to quit smoking and they are going back to school and they think they can change the world.’ And I said, ‘You know what, Danny? They can.’”
Haynes faced a daunting task. But confidence would not be an issue in his effort to overcome it.
Build a team
The silo problem was first up for Haynes as he sought to put Delta Dental in a better position to respond to its new competition. It was a problem Haynes knew quite well having served as chief financial officer at the company for eight years prior to becoming CEO.
“As CFO, I dealt only with financial issues,” Haynes says. “As a chief operating officer, you dealt only with the day-to-day operating issues. Human resources and marketing, you dealt with your respective disciplines, as well.”
Haynes needed to demonstrate that these departments would benefit from knowing what the other was doing. Operations needed to know what IT was doing and IT needed to be familiar with what sales and marketing was doing and sales and marketing needed to be aligned with finance and so on and so on.
In order to accomplish that, Haynes had to get them to work together. He had to create a safe environment where they could get through their unfamiliarity and uncertainty about working more closely together.
“They have to feel comfortable to ask questions,” Haynes says of his leaders. “When you’re coming from a siloed environment to a multidisciplined approach to management, you have to make sure people don’t feel compromised at the table. Finance may not be their expertise, so all questions are fair questions.”
When you’re trying to bring leaders together who haven’t had a lot of interaction, the sharing of departmental knowledge is only part of the puzzle. You’re trying to build a team.
“It’s really important as a team to establish and clarify what is your mission and vision for the company,” Haynes says. “I find even with our team at times, all of the disciplines have a different take on the marketplace and what we should be doing. If your team isn’t on the same page in terms of vision, where you’re going, and mission, why you do what you do, it’s counterproductive. It’s wasted energy.
“At a senior team level, if you have that kind of wasted energy, it’s going to multiply out to all of your staff, as well. They are getting a mixed message. What is our vision? My boss said it was this, but I’m hearing this from somewhere else. That really is very difficult for an organization. Make sure you clarify your mission and your vision.”
If you find that people don’t understand your mission and vision and aren’t clear about where you’re trying to take the business, don’t automatically blame your people for failing to grasp your explanation. Take the initiative to solve the uncertainty before it spreads to the rest of your staff and creates even more confusion.
“That is something leaders struggle with because you really like it when people love your ideas, but you have to understand that any time you make a decision, there’s probably folks who don’t understand the decision or aren’t in favor of the decision,” Haynes says. It’s one thing to tell people, ‘Hey, we’re seeing more competition. We have to work more closely together.’ You’ve got to explain what that means and how your plan will solve the problem you’re facing.
“I’ve always looked at those opportunities and said, ‘Well, that means we didn’t communicate it well. We didn’t think through the objectives well enough. We didn’t communicate the objectives well enough. We need to do a better job.’ That’s why I welcome the discussion.”
Deal with resistance
There are times, of course, when it’s not a lack of understanding that makes it hard for people to buy in to your plan. Sometimes, they just don’t like what you’re proposing.
“We had an employee that when I sent this out, I got a bunch of e-mails back on it, and I got one that was a little disgruntled by it,” Haynes says. “He said, ‘I’m really disappointed by this, and I feel really kind of bad that we made this decision.’ I know this employee very well. We corresponded and chatted about it. I said, ‘Here’s the reasons behind why we did this.’ I think it’s important to take that time and effort to deal with employees and deal with them one on one, if at all possible.”
When you’re not able to do it one on one, do it in a broader forum. Try to understand what their concerns are so you can address them. It’s all part of making sure your employees feel respected and feel like they have a voice in what your company is doing. “One of the worst things for an organization at any level is fear,” Haynes says. “You have to get the fear out of an organization. If you can get fear out of an organization, you can move forward at warp speed.”
Few things cause more fear than the unknown. But Haynes need only look at his past experience in the business world to find leaders who were less than truthful with their employees.
“I always had a problem with that because employees are very smart,” Haynes says. “I said, ‘If you have trouble being truthful with an employee, then you’ve made the wrong decision.’ Once you’re comfortable with a decision, regardless of how hard or difficult that decision might be, you should be able to communicate that. You should be able to debate that issue and have people understand why you did that and why it was in the best interest of your organization. If a decision is in the best interest of your organization, regardless of how tough it is, I don’t mind presenting that to anybody. In fact, I welcome that challenge.”
Fortunately for Haynes, his efforts to be transparent about the moves to be made at Delta Dental paid off with at least one member of his team, who has seen the benefit of interaction and the way it can contribute to making faster and more informed decisions.
“I was talking to one of my officers and she made a comment to me,” Haynes says. “She said, ‘You know, when you said you wanted to start bringing senior staff together in that fashion, I wasn’t really sure. I thought, what’s the senior staff going to do? But after I’ve seen these meetings and I’ve participated in them, I’m getting it.’ She’s really excited. She does such a tremendous job of coming to the table and contributing to all the disciplines. The team now is seeing so much benefit in terms of the multidisciplinary approach. They are realizing that we mitigate a lot of business risk by involving experts in very different fields coming together to reach a good conclusion.”
Look at the big picture
Perhaps the most important piece of what Haynes wanted to accomplish was the instilling of core values that would be part of every decision made in the business. These values would be the glue that would guide the company in its new direction.
“Great companies are born out of values,” Haynes says. “If you’re living those values and they permeate your decision making, you can’t help but become a great company. It’s important in terms of how you enforce those values. It’s a daily issue. It’s a moment-to-moment issue. It’s done in the smallest encounters when you’re walking down the hallway to make a copy and a staff person stops and asks you a question about the latest policy change or what’s going on in the board room or whatever that question might be.”
Values often become a punch line at companies that do nothing more than posting a plaque on the wall. It takes years of parenting to instill proper values in your children and it takes an extended effort to convey proper values in the workplace, too.
“A lot of your line managers that are dealing with fires on a daily basis, they aren’t really thinking about, ‘Wow, how does this fit into our values?’” Haynes says. “‘How does this shape our organization?’ You’re trying to connect those dots and you’re trying to lead by example most of the time.”
So values aren’t really something that you specifically talk about. They are guiding principles that you use when making decisions about your business. And as Delta Dental altered its operations to respond to more competition, Haynes wanted to make sure everyone was on the same page with how to act.
“Employees are incredibly smart,” Haynes says. “I don’t care what level they are in the organization. Employees really understand management a lot better than people ever give them credit for. If you’re insincere about values or you’re inconsistent about them, they know it. And they absolutely are going to nail you on it.
“As a leader of the service industry, the one thing that I find is just critical for us is that our employees believe in the leadership of the organization and that they believe in the direction we are taking the organization. I find that loyalty level you’re looking for in a service industry really comes whenever you start walking the walk and talking the talk of values. People can gravitate toward them.”
By bringing people together and showing a deeper reason for it than just sharing department reports, Haynes helped Delta Dental to increase 2010 consolidated revenue to $489.9 million.
“I need to make sure we’re in sync so as I’m carrying that message to my senior leadership team and to our management team and our staff, they see crystal-clear alignment in terms of what we’re doing,” Haynes says. “Are we great at it? We’re not there yet. I’m not telling you we’re the example. But in five years, I hope to be the poster child for it.”
How to reach: Delta Dental of Missouri, (800) 392-1167 or www.deltadentalmo.com
The Haynes File
Born: Versailles, Mo.
Education: Bachelor’s degree in accounting, University of Missouri; MBA, William Woods University, Fulton, Mo.
Who has been the most influential person in your life?
I was a change-of-life kid. My parents were older when I was born, and my dad died when I was young. So my mother played a very instrumental role in the development of who I am and who I became as an adult. She was very instrumental in it. My maternal grandmother, I absolutely idolized and I hope to live and pattern my life after her. She was a friend to everyone she met and she had a true zest and love for life. She really dedicated her life to service. That’s a lot about who I am. My management style, if you want to put a label on it, and I didn’t know it for years, I’m a servant leader. In the roles I’ve been in, I believe in servant leadership. The person who taught me that naturally is my grandmother.
What is the best advice you ever received?
Be honest. I know that sounds so simple, but in business and as a leader, just be honest. Even difficult decisions are made easier when you’re honest.
Haynes on reinforcing values: As a CEO, you look for every opportunity you can to reinforce the values of the organization. I’m not the best at it. I know I’m not. I have to consciously focus on it every day. I tell my team, ‘Hey, if we miss an opportunity, call me out on it. Make sure we’re doing that everywhere that we can.’