How Don Hairston keeps Molina Healthcare of Texas flexible Featured

10:39am EDT July 16, 2010

Don Hairston doesn’t claim to know what the future holds. But he plans for the possibilities.

“Contingency planning is very important for people to realize that if there is a major change in the environment or in the regulatory atmosphere or whatever, they are prepared to change direction a little bit … and to still accomplish the overall goal,” says Hairston, the president of Molina Healthcare of Texas Inc.

As the first president of Molina Healthcare of Florida, Hairston grew the state-managed care plan to 43,000 members in a little more than a year. The organization, which provides health care to individuals through government-sponsored programs, tapped his start-up savvy and brought him to Texas in May 2009 to lead 158 employees through several expansion projects.

Since then, the Texas plan has grown from providing services in seven counties to more than 180. At the end of 2009, it reported about 40,000 members and premium revenue of $134.9 million.

Smart Business spoke to Hairston about building a flexible company around contingency planning.

Hire for flexibility. The most important thing to keep in mind during the early days of a start-up company relates to your early hiring decisions. It’s critically important to hire people that have the ability to grow with the company.

Asking questions about what they would do in certain situations gives you a good indication of how they would react. The questions that you would ask would have to do with certain contingencies because flexibility is very important. You ask a question, ‘If you were planning to do this and this happened, how would you react?’ so that you see their ability to react under pressure and to be flexible in what they do.

Plan for what-ifs. [Another] critical thing about start-ups is to do a lot of contingency planning. If everything goes like you expect, then your job is a lot easier — but that doesn’t very often happen. So the ability to anticipate what might go wrong and preplan for a way to resolve the issue can often make the difference between success and failure.

Part of that is a planning project management process where we put together in detail how something is going to be rolled out: This is what we want to accomplish. This is how we want to accomplish, and we have milestones as we go along. We have time frames and we monitor and manage the dates that things need to be done. Not only, in the project plan, do we have the deliverable dates, we have the person who’s responsible so we know exactly what various people are doing.

When we put something like that together, we spend a lot of time saying, ‘OK, here, we’re assuming that this is going to happen at this particular point. If it doesn’t, what if this happens? Then how would you work around the process?’ so that we get a lot of discussion about the future as we go along. When you have group discussions, people are very creative and they can think of a lot more possibilities than any single person could think of. So it’s a matter of discussing and not just one time, but discussing as you go along.

Instill contingent thinking. You demonstrate that if someone comes up with a plan, that it may not be the greatest idea but you certainly appreciate them coming up with it and you give them credit for that. Don’t be critical if the idea’s not one that you use, but be appreciative for the fact that they’re trying and they came up with an idea in the first place. What they came up with might not be the right answer, but it may spur an idea from someone else that does turn out to be the right answer.

You start not only coming up with some good ideas, but you get people used to thinking about, ‘Well, if it doesn’t work, what do I do then?’ so you increase the ability for people to be flexible.

By doing this contingency planning and showing how planning works and how to be flexible and ‘if this doesn’t happen, then you try that,’ you try to create a culture of flexibility and having the people thinking in an opportunistic way. Anytime there is a downturn in the economy, anytime there’s change, anytime there’s chaos, there’s typically an opportunity that’s built into that if you can find it. So we spend a lot of thinking about, ‘OK, things are not good. So how can we actually use that to our advantage?’

I think it actually increases optimism, to give them the confidence that even if something goes wrong, that they have a way of solving it. If somebody is going along assuming everything is going to go in a certain way and it doesn’t, then sometimes there’s some panic. But if you’ve talked about it and you’ve said, ‘We can get where we want to go a lot of different ways and so don’t feel like we have to go in exactly the direction that we’re going,’ I think that builds confidence as opposed to tearing it down.

Stay on watch. As you put a plan together, one of the things that you have to do at the beginning, and then at the end, too, is have an environmental assessment where you look at your business, your competitors, your potential market share, your products as well as economic and regulatory or legal issues. From that, you’re able to identify opportunities for growth.

Something that I would expect to see on a regular basis is what our market share is compared to the competitors, what our plans are and how we intend to improve that market share. So monthly reports — where you look at not only what your business is doing but what all the business in that area is doing — give you a sense of how well we’re doing compared to our competitors and our peers.

You do an assessment of what they’re doing that works. It’s a continuous process of trying things that have been successful, evaluating them and doing the things that are most successful and discontinuing things that haven’t worked as well.

How to reach: Molina Healthcare of Texas Inc., (210) 366-6500 or