Healthy returns Featured

7:00pm EDT February 24, 2008

Opportunity pounded on Michael Blackwood’s door back inearly 2005. The only problem was he couldn’t answer it by himself

On his doorstep was an opportunity to grow his company’s revenue and diversify its business through a new Medicare product.But, for Blackwood, the president and CEO of Gateway HealthPlan L.P., the project wasn’t simply filling out some paperworkand then watching the money accumulate.

He needed the help of all his employees and his managementteam to get the product in place by January 2006.

The only way to do it was to get buy-in from all companyemployees on why they should go through the process to makethe new product a reality.

“We had to create the sense of urgency and create the capacitysimultaneously,” he says.

Here’s how Blackwood sold his staff on the initiative and heldthem accountable for results.

Communicate to get buy-in

Blackwood needed complete buy-in from the organization in orderto take on such a monumental task in a short period.

He started by discussing the change with his senior managementteam, and then brought the rest of the managers into the discussion inearly 2005.

He explained why the product was so attractive, filled them in onhow much work it would take as well as the systems that the company had to create to make the change a success. He knew no otheractivity the company could undertake would lead to growing the company’s revenue line like the new Medicare product would.

“You had to make a case to the organization for why you needed todo this as an organization and do it so rapidly,” Blackwood says.

To get the point across, he showed them the projected $300 millionrevenue increase that the new product would provide.

“We also have a philosophy around here: You are either growing oryou are dying,” Blackwood says. “So, they knew that this was going tocreate major growth for the company as very few things could have.Nothing motivates a company, in my opinion, more than growth.When they see growth is possible, and particularly of this magnitude,it’s sort of self-motivating.”

Blackwood also pointed out the number of members they would beable to retain, which has a lot to do with retaining positions andresponsibilities in the $1.21 billion company.

“So, we made the business case for why we should do it and add thisnew line of business in a rapid period of time because it was in thedirect interest of the company as well as in the direct interest of ouremployees and certainly in the direct interest of our owners,”Blackwood says. “So, it was not that hard of a case to make, frankly.”

After he made his case to all levels of management, Blackwoodallowed the senior management team to be the communicators of thechange because there was no way he could do it all himself.

“Make sure you communicate throughout the company the samethings you communicate to your senior management team,” he says.“Sometimes you do it directly as a CEO; sometimes you rely on yoursenior staff to be ambassadors and proponents of the change so thatthey can help sell it through the company.”

He met with the team more frequently during the process in orderto stay in the loop and to monitor the communication of the message.

“It took an intense amount of oversight,” Blackwood says. “Then,those people in the organization brought it to individual departments,the individual workers, through company meetings, through department meetings, even through sectional meetings, and made sure thatwe tested our efforts. ... Then we created a plan in each department toroll it out, which we sequentially followed. So it was a very complexundertaking.”

Blackwood says you should state the business case upfront in orderto get the buy-in from the beginning.

“People will no longer just do it because someone tells them to doit,” Blackwood says. “I don’t believe that is the way things work in thismarketplace anymore. You have to make the business case as to whyit is critical, why it makes financial sense, why it makes business sensefor the company, and that is half the battle right there.”

Though it was fairly easy to make the business case for the change,employees still had questions because they had other strategic effortsgoing on, and they were concerned about the allocation of resources.Employees also questioned whether the company could pull off thechange successfully in the timeline suggested and if Blackwoodwould support budgetary changes to allow them to add new peopleor to modify the systems.

“We didn’t know this opportunity was going to exist until it wasalmost upon us,” he says. “Our managers and the global managementteam had to believe that we weren’t going to ask them to do it with thesame number of people or with the same resources.

“As soon as they understood that we were going to put the moneyand resources and the systems behind them to build the capability —once they knew we were going to give them all the tools that theywould need to have in order to do it — that created enormous buyin.”

Measure your progress

Blackwood compares implementing the new product to swallowingan elephant — you have to do it one small piece at a time. He says youneed some type of management tool you can use to track the progressof all the efforts you are making to bring the product to the market,and what worked best for him was a Gantt chart.

Gantt charts are a type of bar chart used to measure a project’sprogress, keep track of how an employee was doing and break downthe work into components.

“It’s a way of visually seeing your progress of those elements of thetotal plan for which you are responsible — you being a departmentand you being an individual,” he says. “It’s a way of tracking progresstoward completion of a very large project, which was the elephant Iwas talking about.”

You also need to break the set of tasks into components so everyoneinvolved can take bite-size pieces of that elephant and digest it.

“We carve it up in a way that each person has a role, each person hasa reference team as well as a Gantt chart and a business completioneffort to get it done,” Blackwood says. “They can have milestones anddeadlines and accomplishments, which they can convey electronically throughout the company using all types of communication toolslike e-mail, fax and Gantt charts, and all of the tools at our disposal toget the word out to the people who need to know.”

Because just looking at the chart wasn’t enough proof the job wasprogressing, Blackwood met weekly with his management team forupdates.

“The weekly meetings took those Gantt charts and gave me verbalreports,” Blackwood says. “We gave them to each other as well as tome personally. That gave us the confidence level that we were progressing at the rate that we needed to in order to have this product online for the deadline, which was (Jan. 1, 2006). So, there was documentation. There was action being taken.”

As far as personnel goes, Blackwood says the people implementing the change need to be experts in the company who canexecute the plan.

When it came down to assigning people to Gateway’s project,Blackwood turned to the best of the best in the organization.

“People who we knew were stars, people who we knew could do it,people who knew the company, knew the resources, knew how tomake things happen in the company who could actually execute onthis plan,” Blackwood says. “They were given the authority and theresources to do it, and they knew they could come to me at any pointif they needed to ask for more resources or to modify the plan basedon their requirements. They had complete access to me throughoutthe process, and I was very visible and very much a part of the planning itself.”

Although Blackwood knew the people working on the project couldpull it off, he still needed to be kept in the loop. He tracked to makesure the execution of the plan was documented and could beexpressed to him verbally during the weekly meetings.

“They were empowered and had the authority and the organizationto make it happen,” he says. “So, I had high confidence they could, butI needed to hear — as well as the senior management team needed tohear — that the speed of progress was matching the deadlines thatwere approaching.”

Blackwood also referred to the Gantt chart to decide when heneeded to get involved if something was heading in the wrongdirection.

“That’s why we created a barriers section within that Gantt chart,”Blackwood says. “If I hear them run up against a barrier, I know I needto get involved. I have to define what that barrier is, or they do.Whenever I see a barrier, I know I have to personally get involved andhelp define the problem, and then perhaps engage other people tohelp knock those barriers down. I will not stop the process on thingsthat are working. I tend to insert myself selectively on problems thatemerge during the process.

“It could be based on reports that I get, feedback from individualpeople from members of my senior management team. I could bumpinto an employee, however, and they could give me a curbside consultation, which might be something from the ground level, whichraises a question in my mind, and I may elevate it to a much higher status. So, I try to listen to all our employees. We try to combine the intelligence of all our employees and treat them as a major resource andgive them a voice.”

After testing out the systems and fixing any glitches, the productwent live in January 2006 and resulted in a 25 percent increase in revenue between 2005 and 2007.

“It has been, I would say, a resounding success because we havebeen able to make it work both programmatically and financially,” hesays. “It has been a major diversification of the company in terms ofproduct line and in terms of revenue stream, and it’s helped contributeto the financial performance of the company. It is a central part of ourcompany.”

While the implementation wasn’t easy, not taking on the new product would have hurt the company’s potential.

“It would not have allowed us to diversify our revenue streams nearly as much as we were able to with this product,” Blackwood says.“And it created additional capabilities to serve our members. So, therewas a programmatic addition as well as a financial positive for thecompany. So, I think we would have really missed an opportunity thatmay not come along again in my lifetime.”

HOW TO REACH: Gateway Health Plan L.P., (412) 255-4640 or www.gatewayhealthplan.com