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8:00pm EDT April 25, 2009

When Jesse Thomas first mentioned the T word, he knew it would raise some eyebrows.

That’s T as in “turnaround.”

Like a lot of companies in Michigan, Molina Healthcare of Michigan has recently felt the effects of a sagging economy, which had led to concerns among the health insurance company’s leaders over revenue and membership growth.

But when Thomas became president and CEO of the subsidiary of California-based Molina Healthcare Inc. early last year, he wanted to take things a step further.

“Every market has some of its own challenges that are unique,” says Thomas, who arrived in Michigan after a stint with Molina’s Ohio subsidiary. “In this market, I felt we had opportunities for improvement in profitability, membership and revenue growth. To address that, I repositioned the company as a turnaround. Sometimes that is difficult on the psyche of the individuals involved, but nobody disagreed with me that we had missed some of our targets and had the opportunity for improvement.”

Molina’s situation wasn’t as desperate as some turnaround stories. The existence of the company wasn’t at stake. But the long-term financial health of the company was potentially poised for a steady decline without Thomas’ intervention.

As with many turnarounds, Thomas had to identify the problem areas and ways the problems could be addressed, organize a go-forward plan with his leadership team, and then achieve buy-in from as many people in the organization as possible.

It’s a multistep process that took vision and big-picture thinking from many people. But it also took a great deal of persistent communication from Thomas as he rallied 250 associates around the common cause of improving Molina’s outlook in Michigan.

Build the bandwagon

Thomas saw three areas of concern on which Molina needed to focus its resources: improving profitability, improving membership numbers and improving the overall quality of the services Molina offered to its Michigan plan members.

But in order to move forward, he needed to make sure his leadership team was on the same page with him.

“I needed to see if our associates and leadership team were drawing the same conclusions that I was,” Thomas says. “So, at the outset, it required me spending a significant amount of time with the team, getting the team in agreement that these are the priorities.”

Thomas does meet periodically with all of Molina’s associates in Michigan, but on a more frequent basis, he and his management team rely on cascading communication. During the early stages of the turnaround plan, it was cascading communication that helped get everyone focused on the tasks at hand. Thomas’ communication strategy started with high accountability at the top levels of the company.

From the outset, Thomas wanted to ensure that his leadership team was meeting and reviewing the strategy and that the strategy was communicated throughout the company at frequent intervals.

“As the president and CEO of the Michigan plan, I have leadership that includes a C-level chief medical officer, my chief operating officer and chief financial officer, and other directors and officers who report to me,” Thomas says. “We can’t just get together willy-nilly. We needed to have a standing agreement to return and report to each other regularly, to get together, measure and gauge the progress we’re making on the important priorities of the company.

“Each of my direct reports, in turn, meets with and counsels with their direct reports. So it starts with the leadership team, cascades down to the next level and down through the levels of the company so that every associate in the company is aware of our priorities. We also post them in the building and put them on our computer desktops so that everyone can see the progress we’re making with regard to those priorities.”

Thomas says good communication starts at the top. If you want to focus your employees on a set of goals, you must communicate actively, not passively. Just because the message is out there doesn’t mean people are absorbing it.

“The effectiveness of communication is in the outcome you get,” he says. “Simply put, the burden for effective communication is on the communicator, rather than the person hearing the message. If you can’t tell it, you can’t sell it.

“I follow a principle I call GABE, which is an acronym. G is ‘Get in front of the issue.’ A is ‘It’s always about the money.’ B is ‘Be proactive.’ E is ‘Early and often.’ I believe that I have to keep in mind that the greater burden is on me to communicate and that I need to make sure I’ve communicated effectively to get the outcome I want. I can’t assume someone is going to hear what I want them to hear. So I have to test and retest what I said, asking people what they heard me say, what is the outcome, what are they taking away from my communication.”

In refocusing Molina, Thomas found that what employees take away from your messages can have a lot to do with the words and descriptions you use. Thomas divides people into three general categories: those who learn by sight, those who learn by hearing and those who learn by feel. The stage you set in your communication plays a large role in how you reach each of those groups.

“You develop, over time, techniques for identifying in your associates what their primary system is for absorbing information,” Thomas says. “I use the predicates and metaphors appropriate for that learning style. For someone who is a visual learner, concepts need to be graphically illustrated more often. I’ll ask them if they can imagine or picture an idea or concept. Someone who is an auditory learner, I’ll ask them to drive a point home or nail it down. If someone learns by feel, I want to make sure I’m using predicates and metaphors related to feeling. ‘How do you feel about this; do you get a sense that it would be better if we approached it this way?’

“You have to learn the primary system for how each of your associates processes information.”

When you are in a large group setting, cover all your communication bases.

“You can’t just assume that you have one-third, one-third and one-third of each type of learner within that group,” Thomas says. “You have to mix up the predicates and metaphors in a way that you are making sure that there is a greater chance of hitting all three types of learners within the audience. I’m approaching things in two or three different ways in every forum, meeting or conference in which I am communicating.”

Measure the progress

Molina of Michigan has what Thomas terms a “scorecard culture.” In order to measure the progress of improvement in the areas of profitability, membership and quality, Thomas and his leadership team keep track of the metrics linked to those areas, graphing them and looking for trends.

“It’s very much like football, basketball or baseball,” Thomas says. “You know the progress you’re making because you’re keeping track of the score. You’re keeping track of the boundaries and all the things you need to be doing to advance the ball. We make sure that we scorecard not only all of the activities we perform but also the results, the things we want to get accomplished.

“We put together graphs that regularly show the improvement that we have in one metric over another. We are constantly proving to ourselves that we are making the progress we need to make, that we are watching a trend ... moving in the direction we want it to move. You’re looking for trend lines moving in the right direction, and you are regularly communicating and giving feedback to all who touch that priority to make sure you are accomplishing what you want to accomplish.”

Measuring metrics is one of the ways in which Thomas has gained input on the progress of Molina. The statistics and analysis reported by his management team have helped him refine the direction of the company.

It plays into Thomas’ overall philosophy that good leaders are good followers who take as many viewpoints as possible into consideration before making a decision — as long as a decision is ultimately made.

“As a leader, you have to be very respectful of the guidance you receive,” he says. “You have to be collaborative to a certain extent, without being democratic. Democratic is where you wait until you have total consensus or majority rule. But sometimes you won’t get that majority rule, and you have insights as the president of the company that others don’t have.

“I try to take into consideration the views and perspectives of others, but the buck ultimately stops with the person in charge, the person who has accountability. I know where my go and no-go decision points are. I know what my deadlines are for achieving consensus and whether I have it or not [and I know when] I need to move on.

“If you’re staying relevant to policy, the budget and the guidance of the company charter, having a majority consensus is less relevant than staying true to those things. That’s why a good leader has to be a good follower.”

Keep the momentum going

More than a year into his tenure, Thomas’ plan to refocus Molina Healthcare of Michigan has had positive effects. Though the plan’s final 2008 membership was down slightly to 206,000 from 207,000 in 2007, revenue has inched upward, with a final 2008 total of $509 million, up from $487 million in 2007.

The company remains focused on improving the three key areas that Thomas outlined during his first weeks and months as president and CEO, and the company’s leaders remain focused on maintaining a culture of communication that starts at the top.

“When you sit down to review the strategy and where you want to go the following year, you don’t do that in a vacuum,” Thomas says. “The leaders of our company don’t sit in a suite or in an ivory tower and issue declarations. We have a chance to invite the input from most of the leadership team and management team very early in the process.

“We have standing meetings where we bring together our management team, our key leadership team and even all 250 associates within the company. We spend time together, reporting the progress month by month and quarter by quarter. We do that because people need to see the progress being made against the priorities, that we are a company with a purpose.

“It’s about building and maintaining a culture of mentoring, coaching and constant feedback, and my door is always open to the extent that I am able to leave it open.”

How to reach: Molina Healthcare of Michigan, (248) 925-1700 or www.molinahealthcare.com