Founded in 1853, Aetna, Inc. is an American diversified health insurance company, providing a range of traditional and consumerdirected health care insurance products and related services, including medical, pharmaceutical, dental, behavioral health, group life, longterm care, and disability plans, and medical management capabilities. With revenues of $30.950 billion (2008) and a workforce totaling 35,258 (2008), Aetna is a member of the Fortune 100. Aetna advanced up the Fortune 500 list in 2009. The companys strong 2008 revenue gains were largely the result of Aetnas integration and segmentation strategies, which led to strong membership gains. The Aetna Mission: Aetna is dedicated to helping people achieve health and financial security by providing easy access to safe, costeffective, highquality health care and protecting their finances against healthrelated risks. Building on our 156year heritage, Aetna will be a leader cooperating with doctors and hospitals, employers, patients, public officials and others to build a stronger, more effective health care system. Vision: To earn the distinction, financially and by reputation, of being the preferred benefits company in all aspects of our business. We strive to be the industry leader by including the best ideas and perspectives available. This in turn enables Aetna to develop the most relevant solutions for each of our markets. Strategy: Aetna will be the industry leader in the diverse marketplace. We will deliver bestin class service to our customers because we want them to be comfortable when doing business with us. To achieve this mission, we will: Create innovative 2 and tailored product and service solutions that will meet the unique needs of our customers. Develop a diverse supplier base, reflecting our multicultural environment, that supports innovative ways to deliver bestinclass services to them. Build a workforce that fully understands the diverse communities where we do business. Foster a culture of inclusion that grows a diverse talent pool and recognizes and rewards the contributions of every employee whilst allowing employees to do their best work. Williams case study begins in 2001, when he arrived to find a corporation (Aetna) in need of change having lost $280 million in the past year. He diagnosed key areas of failure and opportunity in Aetnas vast enterprise: orchestrating medical, dental and other health and insurance benefits in a network of 843 thousand health care professionals with 37 million members. Williams shaped a path to recovery, focusing on a better understanding of Aetnas current customers, from small employers to the largest corporations, and concentrated on the best way of expanding into new markets such as retailers, banks and law firms. To do this, Aetna needed to build products and services suited for those groups, and Williams strategy involved developing integrated information systems for both employers and consumers, to ensure costeffective and high-quality health care delivery. Williams repeatedly made the case for this new strategy directly with Aetnas staff. He pressed the issue of values: integrity, employee engagement, excellent service and highquality healthcare, and implemented employee surveys and biannual performance reviews. Employees were invited to answer whether they believed their supervisors held true to Aetnas values and whether they were proud to be working with the company. Williams has noted a marked improvement in responses over just a few years. External benchmarks reflect positive growth as well: Aetna has reached the number one spot as Fortune Magazines most admired health care company, after occupying the bottom position. Williams invested a great deal in technology he believes will shape the future of health care. He describes a Care Engine, containing an individual members personal health record and uptotheminute journal information and health guidelines that are converted into computer algorithms. This system can detect and fill gaps in care for patients conditions that go undetected, tests that should be administered, medicine that should not be prescribed. Williams has also given consumers the ability to find and compare the costs of tests and doctor visits. He believes we can check the trillions of dollars in health care spending through smart technology. For him, health care reform means we get and keep everyone 3 covered; maintain the employerbased system reorient the system toward prevention, value, and quality of care; and use market incentives to improve coverage, drive down costs and make the system more consumeroriented. Below you can see selected parts from a 56 min film clip, which will help you to understand the scenario: 00:00 00:04:30|INTRODUCTIONS|Positions the lecture a corporate turnaround: the company was failing in 2000/1, through change new leadership and a strategy focusing on customers, employees, company values and culture, information technology and management, the company was turned around. From almost the bottom in the rankings to the top by 2008. 00:04:30|RON WILLIAMS TAKES THE STAGE | Explains how the company had lost its way/ outlines the structure of the presentation 00:06:15|AETNA TODAY (2008)|37 million members over eight countries, 35 thousand employees 00:09:00|STRATEGIC PATH TO INDUSTRY LEADERSHIP| Williams describes three phases (one) 20014; (two) 20046 and (three) 20068; for each stage Williams evaluates the strategic, operational and financial performance: in phase one the company was losing money and went BACK TO BASICS, seeking to better understand its customers, their needs, THE COMPANY AND ITS VALUES; in phase two, the company witnessed average returns, refined segmentation and focused on perfection of the basics and in phase three, the company was in the top tier of the industrystrategically they focused on innovation, information and integration and SET OUT TO DIFFERENTIATE THEMSELVES WITH UNIQUE OPERATING CAPABILITIES the strategic path to industry leadership is explored in more detail in the remainder of the lecture 00:11:30 00:12:00|Change|Williams discusses the start of the path to industry leadership; he had to make the case for change which involves communication with employees. Williams argues, understanding how to manage change effectively is an extremely important tool and skill set that will serve you well 00:12:00|Strategy|Created a strategy called the three Is: information, innovation and integration; an executive management information system (dashboard) was created and made available to all, 4 presenting one version of the truth and improving the speed and quality of decisionmaking. Williams emphasizes the need for communication of both problems and solutions 00:13:15|CULTURE|CREATED THE AETNA WAY: customer focus, better articulated and demonstrated VALUES (integrity, quality and value, excellence and accountability, employee engagement) 00:14:10 |as a leader| Williams, whenever he addressed a group of employees within the company, would first talk about the values and demonstrated their importance. 00:15:00| EMPLOYEE ENGAGEMENT | Williams emphasized the importance of employee engagement, suggesting that an engaged workforce was satisfied and this led to increased motivation 00:16:15||Employee surveys were implemented: employee surveys participation shifted from <50% at the beginning of the decade to almost 100% towards the end (best in class) similar changes were observed in loyalty with more employees indicating they were proud to work for the company and more employees behaving in the Aetna way (a stronger culture) 00:19:45|Leadership|The Company focused on developing high performing leaders improvements were made in performance management, succession planning, leader development and leadership assessment 00:26:00|Milestones| 00:32:30|Environment|The environment is discussed: Health expenditure is growing, as are costs 00:34:40|Leadership strategy and the role of information technology| Aetna will lead the industry in providing high quality, costeffective and personalized health and related solutions that leverage information to meet the needs of our targeted customers. A fundamental part of the strategy requires investment in information systems; such systems have enabled capabilities that competitors cannot easily emulate because many of them operate multiple unintegrated systems. Williams moves on to discuss the care engine, patient data, a knowledge base, decision support technologies, finding and suggesting care options and the provision of information to careers 00:35:50|Lessons learned| 00:37:48| LEADING AND MANAGING |Important to know the difference between leading the managing 00:40:00|End lecture|| Question session| 5 00:43:47|CORE VALUES| WILLIAMS FURTHER EXPLAINS HOW THEY DERIVED CORE VALUES WHICH WERE ALREADY IN EXISTENCE BUT WERE IN NEED OF BETTER PROMOTION 00:48:50|Principles of leading, communication| Williams explains that people had no idea that the company was losing money i.e. the need for change; he recognized the need to inform employees about the situation on an ongoing basis. He set up regular meetings to cascade performance and what needed to be done 00:54:50|LEADERSHIP VERSUS MANAGEMENT| A member of the audience posed the question can someone who is not seen as a leader be an effective manager? Williams argues that they can but Case study questions: LEVELS OF ORGANISATIONAL CULTURE: Q1. Drawing upon information from the case and your wider experiences, discuss what is meant by organizational culture. In your discussion, you should identify the common aspects of the many definitions of organizational culture and comment upon levels of culture. Q2. Consider the role of culture in relation to organizational performance; explain what is meant by the Fit and the adaptation perspective and evaluate these concepts in relation to Aetna, Inc. Q3. Evaluate the leader's role (for example that of Ron Williams) in shaping and reinforcing culture.