Archive for the ‘Strategy’ Category

The new normal has begun – and the first scraps of new ideas in delivering health insurance are emerging.

I spotted an interesting story from the Carolinas.   You can read it here.  They are setting up state-wide cooperatives to offer group buying of health insurance.  Exchanges, anyone?  Where many states are filing lawsuits to challenge the constitutionality of the new law, others are moving forward and getting new structures in place. 

This is a time where the early adopter has an advantage.  The first states to figure out the recipe for affordable health insurance will have a real competitive advantage.  Time to act!


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It had to happen.  As the “wellness” bandwagon is getting rolling, lots of people are jumping on.  I have had three sales calls from vitamin sales people who started the call with a wellness pitch, and chiropractors are becoming “wellness” consultants.  Now, it looks like the workout/fitness world will be rebranding itself.

Read this article for a look inside a recent industry trade show about the subject.  Looks like a marketing blitz is about to start, just in time for new year’s weight loss program…

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I promised to keep you posted on the frontlines of the challenges to health insurance reform.  Yesterday, the first lawsuit that I know of was ruled on by a judge – and the basic constitutionality of the law was upheld.  It happened in a federal courtroom in Detroit – you can read the full story here.  As you may know, the State of Indiana has filed it’s own lawsuit challenging the law, so this first ruling is of special interest to our Attorney General…

I’ll keep you posted.

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In today’s trifecta of Webinars on Health Insurance Reform, the overall theme is handicapping the political scene in general, and the mix of the Republicans vs the Democrats in congress when the smoke clears in early November.

It really doesn’t matter, as the outcome will certainly not be a complete repudiation of everything Democratic.  There will still be gridlock.

What really does matter this week is California taking the first steps on setting up the first state Insurance Exchange, with legislation signed by a moderate Republican governor to get the basics in place.  Many other states are watching this carefully.  Others are taking another, more confrontational approach – suing the constitutionality of the whole affair. 

What REALLY matters in all of this is that the early leanings in California exclude the use of Brokers and Licensed Agents from participation in the exchanges.  I’m here to tell you that the idea of non-licensed advisors involved in something as complex as health insurance is a bad idea.  Kind of like a non-licensed financial advisor running your 401k.  Bad (or unethical) things might happen.

A good blog post on the overall subject can be read here.  I’ll be following this issue in coming months and reporting back…

Webinar survival kit - soda, smartphone, speakerphone, and a notepad. If only there was a better answer than "Yes and No"...

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A modern wedding cake...

I have spent the last week at several SHRM Conferences (Nebraska and Kentucky) and have started getting depressed about wellness. 

As I present about Strategic HR stuff, I have intentionally included an inflammatory statement about wellness.  I have included the sentence “And wellness plans don’t appear to be working.”  When I say that, I watch the audience carefully.  It’s kind of a litmus test.  The response has been that everyone sagely nods their heads and quietly agrees, then some put their hands up and offer some examples of their own wellness program.

They report that there is usually a flurry of initial success and energy, and within a year the air is out of the balloon and the health care cost trend line is still pointed to the moon.  It seems that we don’t have the motivators right.

Carrots and sticks are both needed.  Let’s get working on that part – the carrot part is in place and not working long term in changing the health behaviors of the public.  Perhaps it’s time to move to the stick side….

What “sticks” can you think of that might work?

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Remember the  39% Wellpoint proposed premium increase that helped get health insurance reform back in play?  The company said they made some errors in calculating their projected losses and pulled the proposed increase.  We never heard about it again, until now.

I’m out here in CA for the conference, and saw the follow up story in the paper.  Not sure if this got much play anywhere else.  Read the article here.  Interesting that they admit they got the premium calculations wrong…

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Admit it – we try to avoid panel discussions.   The chances of disaster are high, either coming from a bad moderator or one of the panelists going off on a rant that has no end or whatever.

This was a good one.  The advertised topic was “HR Strategy is Business Strategy.”  Moderated by Angelia Herrin, the panelists were articulate heavyweights that made good points.  I wrote down some favorites and here they are:

Conrad Venter, Global Head of HR, Deutsche Bank (these quotes should be read in a crisp German accent) –

“If HR stays the same as it is now – transactionally based – we will be out of business in 5 years.  Where is the value in being transactional?  The organization can (and will) outsource that.

Be a business person with a specialty in HR.

With revenue linked to reward and aggressive talent management, we must now bring the training to people.  A breakthrough this past year, we are developing people across silos, moving people around.  We are now identifying future leaders better.

Shannon Deegan, Director of People Operations, Google –

Our president gives the same speech to our people that he gives to our board of directors.  Everybody gets the same message.  

It is difficult to have HR strategy and Company strategy that are different.  It’s all people strategy.  They’re the same.

Most organizations are not comfortable outsourcing HR.  Good.

Hire really good people that are good at many things.  Only one third of our HR people have HR backgrounds.

PEOPLE strategy, not HR strategy.

We occasionally give the President’s award to a failure.  Our people must know that failures are an important part of the creative process, and we honor that.

Paul Records, SVP and Chief HRO, Kaiser Foundation Health Plan

We embrace Facebook externally, with separate data resources for internal use.  Most of my colleagues see Facebook at work as a waste of time.  They think people should only work at work.  They’re wrong.  People are smart and they can figure ways around most internet blocks.  Just set up internal social networking tools and get ahead of it.  Our biggest issue with all of this is data security, as we are medical.

Deal with complexity.  I use the C-SAFE model.  Clarify.  Simplify.  Align.  Focus.  Execute.  Do not stay in an HR silo.

Michelle Toth, VP of HR, Northrop Grumman –

With less $$$ available, we had to take a hard look at our business processes.  We set up an internal Strategic Talent Initiative, where we selected the high potential future leaders and invest more heavily in them.  Careers are no longer linear, and we have to reflect that in our internal setup.

We love HR pros who love business and love people.  They need to understand business, finance, engineering, and they know who our competition is.  Oh, and they know people.

Wide shot of the panel discussion from the back. The room was half full, which was too bad because the content was the best general session so far...

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I was suspicious of Al Gore as a keynote for an HR conference.  Ex-politicians generally do what Steve Forbes did yesterday – give a standard “stump speech” with 5 gratuitous references to HR scattered throughout. 

Al didn’t do that.  He gave a thoughtful presentation on several HR topics, and only had a standard stump speech in the last third, combined with a proven rousing ending.  In the middle he even told a joke.  Worked for me.

Al on the big screen

His overall theme was “sustainability”, which he defined as not robbing the future to live now.

HR topics were:

Diversity – using all of the differing viewpoints to strengthen the organization.

Education – raising the bar for all employees

Dealing with the internet revolution – there are now 1 Billion transistors for each person on the planet. 

Organizational development – When he worked on re-inventing government, he would start by talking with the janitors and service workers in a department, then work up the pyramid.  They always knew what to fix.  Developing core competencies requires input from all levels.

Compensation & benefits – People work well because they identify with the values of the organization.  Don’t focus on the financial side of compensation completely.  Non-monetary benefits are better at building engagement.

Overall, he said that capitalism is the best method for resolving our recession, and HR is the key to developing society and markets.  The sustainability issue is not just environmental, it means not robbing the future but building value over the long term.  To do this, an organization must communicate from the entire supply chain.

Then, Al went into “Global warming” mode – talking about pollution, the BP response, and melting ice caps.  I could sense that the crowd didn’t necessarily appreciate him bringing his personal crusade into the conference.  However, he won them back by noting that this is the biggest opportunity business has confronted,

He also said that in the future the best young talent will judge where they should work based on how green the organization is.  He said that the challenge is to become more efficient, consume fewer resources, and be more productive.  Organizations that integrate sustainability find that profitability is up.

The very act of taking on a great challenge can transition an organization.  President Kennedy challenged the nation to go to the moon, and 8 years later we were there.  We are feeling another challenge now. 

A saying – If you want to go quickly, go alone.  If you want to go far, go together.  We have to go far, quickly.

Be bold.  This is like no other time in human history. 

He closed by asking the question of how we will be judged in the future.  He said that HR needs to have the moral courage to rise up and solve a crisis.  “We have everything we need to succeed except the will to act…but the will to act is a renewable resource.”

The crowd was back with him at that point – standing ovation.

Al on stage

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 One of the first full sessions was on doing “Health Insurance Check Ups” by Michael Aitken, SHRM’s director of Government affairs.  He did a basic summary of the legislation as it is known, with projections on how things will be implemented.  If you would like a similar summary for your own use, I have on that Bob Miller worked up here at Gregory and Appel.  Send me an email at kahlrichs@gregoryappel.com and I’ll make sure you get one.

One of his more forceful points was to stay up on the issue now, and do an ongoing checkup that will drive your decisions later.  The example he used was making the decision to offer health care or to pay a fine, which he said will be influenced by decisions made now and next year, not just in 2014.  “Don’t think of those decisions as a single rifle shot.  It’s not just the decisions in 2014, you’ve got to start looking at the implications now.”

He also noted both employees and senior management don’t know what is in this bill – and that we in HR need to play a big role in communicating what is known and what is not.  “People don’t know what is in this bill…we’re still finding things.  Your employees are just as curious about this as you are.”

Bruce Smith from Bloomington gives it a one thumb rating...

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The first surprise – the Keynote walks out in one of those neck braces that you wear after a whiplash accident.  Says he has just had back surgery.  He looks and acts and talks like Steve Forbes, just with less head mobility.

He didn't move around much...


What we got was a standard stump speech with the term HR inserted as appropriate.  That said, it was a good stump speech.  Key points:

HR has a vital role in the economic recovery.

He is confident that the economy will recover.  2-4 Years.

Watch U.S. Monetary Policy as an indicator.  You cannot have a sustained recovery with a weak dollar.

A big part of the blame for the meltdown comes from the Fed holding interest rates low for too long, overheating the housing market.

This is not the end of the world.  “The end of the world will only happen once, and this is not it.”

Health care made his list – that there will be significant ongoing changes in the law.  “This thing is just getting started, and isn’t over by a long shot.”

The real problem with health care in the United States is that the consumer has lost control of health care services.  Everything is by third party.  By providing customers more controls, you will see costs decrease and access improve.

He believes that we will eventually get it right, but HR will have to push harder to get and stay involved to guide it.

Overall, the core of his presentation was on the theory of monetary policy, with good illustrations, and a short HR part tacked on the end.  If nothing else, he made us all recognize the importance of good fiscal restraint and oversight as a part of a long term recovery.  He also joked that if anyone is ever on a bad date that they want to end early, start quoting him and his fiscal theories.  “They won’t be asking you out again…”

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