Direct line Featured

8:00pm EDT September 25, 2008

In one of the first meetings Howard A. Kahn sat in on after being named CEO in 2001, he noticed after every question he asked there was a long silence in the room.

“When I asked questions, nobody would say anything at all, and they all looked toward their manager to speak first,” Kahn says.

That moment of silence was symbolic of a problem rife within L.A. Care Health Plan.

“The management team meetings were totally noninteractive,” Kahn says. “The organizational culture was, ‘Don’t speak up to leadership in the presence of your own manager. Let those above you do the talking — it’s safer.’ ... That’s just a deadly way of thinking.”

The more Kahn tried to get information out of people, the more he realized that the culture of L.A. Care wasn’t conducive to clear communications. In fact, the community accountable health plan that serves nearly 800,000 Los Angeles residents had a history of problems because people didn’t speak up or they didn’t fully understand the often-clouded mission of the company.

“Before my arrival at L.A. Care, the staff was buffeted by a number of surprises by managers, leadership and the board,” he says. “A culture of secrecy was developing. It was a young organization, but felt old — old style and old attitudes.”

It didn’t take Kahn long to come to the realization that, without taking some bold moves, this was going to be the company culture that he had to live with.

“I said, ‘You know what, everything I hear here is going to be filtered unless I change that,’” he says. “So I started popping in around the different departments and said, ‘If I start having these smaller group informal communications, the word would get out.’”

And so Kahn started getting the word out about having employees speak up and speak more clearly. He wasn’t just trying to get chatter going, he knew he and his employees believed in the mission of the $1 billion plan, the largest public health plan in America, and he wanted the company to use that passion to get feedback from people.

So Kahn took some symbolic actions and did some daily things to change his company culture, setting a clear tone for more straightforward communications from his office and then encouraging his more than 350 employees to speak candidly in different forums.

Set the tone

In order to clear up communications and stop filtering things coming up the line, you need top management to quit sugarcoating truths and using jargon where the plain truth would do. At L.A. Care, Kahn decided he’d first take symbolic, companywide measures to show how the culture was going to be moving forward.

Kahn went to his employees and asked them to help cut down the company’s bulky 64-word mission statement and the packets given at board meetings because both were thick, antiquated representations of how heavy company communications had become.

“If it takes you 20 pages to explain it, you’re probably not giving the message directly,” he says of cutting the board books. “So there’s a directness of communication that I put in place. I said to the staff, ‘That’s how I want to communicate with you. That’s how I want you to communicate with the board.’”

And after that process was over, Kahn showed a little flair for the dramatic.

“At the end of my first year, I came to the board and I did something that was kind of a gimmick, but [it] sent a message,” he says. “I weighed the board book from the first meeting when I came here and weighed the board book a year later, and I congratulated the board on having lost over half a pound.”

Doing things in the public eye like that may seem, as Kahn puts it, gimmicky, but when you’re trying to build a company culture around something, you need to make a point of emphasis to begin rallying people.

Of course, you have to do the daily parts, too. At L.A. Care, Kahn began making it a point to communicate very directly with his people. He took that to his direct reports and had them do the same with their people. To get people putting out messages more clearly, he says start by cutting the euphemisms.

“I think it’s fair to say that the staff here feels like they have no confusion over what I mean,” he says. “I am — I hope — fairly kind but very direct, and when there is a problem, I believe in calling it a problem, not a challenge, because I don’t want people to have to interpret what we’re saying to each other.”

That’s doesn’t just mean using the thesaurus to find the most brutal word for your message, it means that you give people a chance to hear where they and the company stand, and you address that process very honestly. It’s no surprise that L.A. Care has biannual reviews, but Kahn says the focus is on letting employees know exactly where they stand and what help they can get to improve.

“If you have an employee that’s having a problem, they shouldn’t be surprised by their supervisor coming to them and saying, ‘You can’t do this job anymore; you’re being fired,’” he says. “They should have lots of warning and opportunity and support for improving their situation. We do annual and midyear reviews, and that way you avoid having any sort of confusion about levels of performance.”

You also need to show that effort daily. Whenever Kahn was in front of his people he was willing to directly answer any question they put before him. If you want people to have clearer communications, you have to answer every question you get from employees with honesty and without any hostility.

“You can’t be afraid to answer the tough questions with honest answers,” he says. “If you’re in a defensive mode, you’ll sound harsh.

“When you’re not direct, people have the sense — whether you are or not — that you’re hiding something and if you want

everybody to buy in, they’ve got to be able to understand it and they’ve got to be able to repeat it, like the mission statement.”

So many businesses worry about protecting feelings, but they don’t realize that people get mixed up in a game of protect the intent, and they don’t actually understand that they need to change their work habits or go in a completely different direction with a project. Kahn believes L.A. Care’s mission is too important for things to slow down because people can’t fully judge what others mean.

“You have to tell people why that’s important,” he says. “They have to understand it’s important because it will take us less time to do the same thing; if it takes us less time to do the same thing, given that we have important things to do, it will give us more time to do the important things.”

Create expectations for feedback

While Kahn wanted to encourage direct communications, he didn’t want them all to come from him. In a company where bad surprises pop up because people are reluctant to speak, you need to encourage people from every level to speak up.

“One of the things that I had said to our staff when I got here is I don’t want to be surprised by something that happens inside this organization, and I don’t want our board to be surprised by something we’ve done that they should have known about,” Kahn says.

So again he did something symbolic: He asked everyone to call him Howard instead of the dreary Mr. Kahn name that was commonplace. It was just a small move to soften his persona, but Kahn says you need to make simple moves everyone can see to get employees comfortable with the idea of talking to leaders.

“I started asking everyone to call me Howard because I said, ‘When we’re working together, I want to call you by your first name,’” he says. “‘And you’re working here, so you deserve as much respect for the time and effort that you put in here as I do.’”

Kahn then began a program where he had breakfast with small groups of people from the company. There was no special mode to selecting the group — except that he insisted on having employees from different levels of the company present.

“We invited small groups of people to come up and have a breakfast and coffee and just sit for an hour,” he says. “And I would tend to make about five minutes worth of points at the beginning, and then we would just open it up and let folks just talk about what they’ve got going, and I purposely designed it to include all the staff so that people would communicate across levels within the organization.”

While he believes in being direct, Kahn was willing to let these informal conversations flow at will to help break the ice. “I figure you have to have a conversation before you get the information,” he says. “When I got here I felt that I had to bring discipline to the organization and focus and a strategic direction. So when you’re trying to do all of those things, it can be viewed as overly directive and heavy-handed if you don’t at the same time say to people, ‘But I want to hear how you think it’s going.’”

Of course, when you have more than 350 employees you can’t have coffee with all of them — and even if you could, some still wouldn’t voice their ideas and issues — so L.A. Care also began a process of using an outside company to survey all of its employees anonymously on issues like compensation, work environment, management support and so on. Once the results were in, they were reported with actionable responses to the entire company.

“We said we’re going to take that and set up programs and report back to you on how we’re going to improve,” Kahn says. “So one of the areas we heard about from the staff, because we’re a medium-sized organization of 350 people, the opportunities for advancement some of the people felt were limited. So we set up a training program to help people prepare for management positions and to help people look toward what their next position would be to describe their career ladder.”

When you’re trying to knock out a culture of people reluctant to speak their mind, enriching people’s careers by showing that you are actually listening to their concerns goes, according to Kahn, further than money.

“People do not work just for the money — people work for a sense of mission, a sense of enjoyment of the people they work with and a sense of empowerment,” he says. “And so a leader taking on the role of saying, ‘I recognize these things are important to you,’ is very effective and is essential.”

In taking the time to proactively and directly respond to those issues brought up by employees, Kahn has been able to build credibility at L.A. Care. As a result, the company is moving forward with a culture where people are communicating up and down the leadership ladder with clarity and focus. And what does Kahn think would have happened had they failed to implement those changes at L.A. Care?

“We would have a less informed and committed staff,” he says. “A staff that doesn’t understand why it’s moving in a certain direction cannot self-direct. They would have no context for making decisions on their own.”

HOW TO REACH: L.A. Care Health Plan, (888) 452-2273 or www.lacare.org