The Question Every Executive Should Ask

Every CEO has many stakeholder groups whose interests he or she must balance: customers, employees, the board, shareholders, regulators, partners, nongovernmental organizations, and communities the business may impact. But even by CEO standards, Bernard J. Tyson’s stakeholder management responsibilities are extensive. The chairman and CEO of managed care giant Kaiser Permanente Health Care must attend to the interests of nearly 12 million people who count on his company to keep them alive and healthy; thousands of physicians, nurses, medical technicians, administrators, and managers; unions; government agencies; industry watchdogs; pharmaceutical suppliers; emergency-service providers; and, oh yes, the president and Congress of the United States.

Such is the challenge of leading one of America’s largest health care organizations in the year 2017. The remarkably upbeat and optimistic Tyson met with MIT SMR editor in chief Paul Michelman to discuss Tyson’s role as a leader at this unique time and place in history.

An in-person conversation at Kaiser Permanente’s headquarters in Oakland, California, was followed by an exchange over email. What follows is an edited and condensed version of the conversation.

MIT Sloan Management Review: As the CEO of a large health care provider, you are facing a potentially dizzying array of systemic challenges — even before you get to the day-to-day needs of the organization. You’re dealing in life or death. You’re dealing with a broad range of different stakeholders, some of which are notoriously challenging to manage. And you’re leading an organization in an industry impacted by a highly unpredictable set of economic, policy, and technology factors.

I can imagine it’s easy to get lost in these many issues. How do you stay grounded and focused on the needs of the organization?

TYSON: (Laughing) If I took what you said literally, I wouldn’t show up for work.

One of the best of the many pieces of advice I’ve gotten over the years is, “Keep the main thing the main thing.”

So, what’s the main thing for us? We are here to provide care when people need it and to help them maintain their health. Everything we do is through the lens of that mission. The rest is subplot. Yes, there’s going to be a lot of turbulence. The broader conditions change continuously. We don’t control that. But one thing we do control is staying focused on the main thing.

What does that look like in the organization? It’s easy to assume that through every layer of management that gets closer to day-to-day process, it becomes harder and harder not to get lost in the details. So, what do you do to reinforce the focus on mission throughout the organization?

TYSON: Well, actually, I would reverse that. I know, from walking through our medical centers a lot and from experiencing a near-death experience myself a decade ago, it is at the front lines where people really understand our mission, because they live it every day. I don’t need to remind a nurse or doctor that we are here to improve health and save lives.

The challenge is everything after that. Does our work throughout the organization support the interactions that happen at these delicate moments in people’s lives? That starts with recruitment. Wherever in the organization we are hiring, we need to ask if the employee’s personal mission in life aligns with the mission of the organization. My job is to maintain an environment conducive to attracting people who fit our culture. Making sure we are all clear on the mission is core to that.

One of the benefits of our model is that physicians are managed in separate organizations called the Permanente Medical Groups. These are self-governing groups that contract exclusively with Kaiser Foundation Health Plan Inc. This is unique to our model, and it’s a tremendous asset. Physicians operate within their own organizations and manage and oversee all aspects of patient care. There is no health plan interference in medical decisions.

Given the challenging context in which you lead, when are your values tested the most?

TYSON: They are tested when external forces raise questions that the organization needs to address. We dealt with an example of that in January with the [U.S.] president’s executive order about immigration [restricting entrants to the U.S. from seven Muslim-majority countries]. It raised a lot of angst in our organization, just like it did in society at large. It prompted me to send a message across the organization making sure everyone was clear that we will continue to stand for equal access and care for everyone, and that no one will feel that they’re being scrutinized if they need care from Kaiser Permanente.

Now I know, even without my message, we wouldn’t have had a single problem with someone being questioned for care, or denied care, or anything like that. But it was an opportunity to reaffirm what we stand for, to reinforce what people throughout the organization already know about our values, and to remind them that they are a part of it. And there is real satisfaction that comes from the thousands of responses to the message, saying, “Thank you for just saying that.”

Do you think that the necessary skill set for leaders is changing?

TYSON: Absolutely. There are so many forces coming at the same time. It used to be you could portion things off and deal with them one issue at a time. Now the challenges are multidimensional. Leaders are required to distill the complexities of all the forces, some of which are beyond their control, and then to guide the organization in making sense out of them and delivering on the value proposition, which requires executing on strategies within all this complexity.

An example is our continued work to increase access to care and services and improve quality of care while also making health care more affordable. That is the promise we have made to our members and customers. Every day we are working through extraordinary complexities to deliver on this goal.

The days of a hierarchical leader being the know-all, the understand-all, and the be-all individual makes no sense in today’s environment. You have an organization made up of people with skills, talent, and intelligence. The challenge is no longer how to instruct people in what to do. It is to set the direction and performance expectations, and then to inspire and motivate people.

I would argue that, in simplistic terms, the old model was [that] those in management were the thinkers, and the rest of the workers were the doers. Now we live in a day and age where everybody gets to think and do. I want the frontline nurse, who has access to the same information I do, to act on the information pertaining to his or her profession and, with that access and freedom, come up with new ideas and new ways of getting work done.

For example, our Nurse Knowledge Exchange reinvented the way nurses share essential patient information during shift changes. This new process was developed on the front lines. Nurses moved their meetings from the nurses’ station to patients’ rooms and made patients part of the process. The “ghost town” atmosphere during shift changes that patients sometimes mentioned was essentially eliminated.

In the past, power was centralized in the hands of the few people who had access to information and who used that access to direct the narrative for the company. So we were benefiting from the intellect of just a handful of people. Now that information is available everywhere, the leader’s critical question is, “How do I charge up the organization so that we’re maximizing the intellect of all of our people?”

When you take that approach to its extreme, you potentially have anarchy. How do you guard against that?

TYSON: I reject that term. I think of it as very organized chaos, if anything. In a complex organization like Kaiser Permanente, you manage the organized chaos with clarity about the mission, the value proposition, and the end game — the main thing. All the incentives and resources need to be aligned to that.

As I’m talking to you right now, a medical team is likely attending to someone with a near-death experience in one of our emergency departments. My job is not to call to see what they’re going to do next. It’s to make sure they have the tools, the equipment, the know-how, and the decision power to make the right judgment when called upon, in the interest of the person whom they are serving. We are perfectly organized for this to happen.

In an organization like Kaiser Permanente, where knowledge, technology, and skills are in the hands of thousands of capable individuals who are making millions of microdecisions, a CEO would be foolish to think he or she controls those decisions.

Let’s talk about the middle of the organization, where people are not dealing directly with patients. Is it more challenging for middle managers to adhere to the same mission-driven standards?

TYSON: Yes, I think middle managers are in one of the most difficult positions. They are right in the line of the visionary statements that come from people like me, who ask them to create the right environment to do all the stuff we believe in. And then this same person gets a budget, and a set of objectives, and they’re getting pressure from both ends. They’re feeling the push of the frontline caregiver saying, “I need more resources to do the things I need to do for our members.” And the people above them are saying, “Are you within your budget? Have you justified what you need?”

Managers in the middle of the organization are dealing with both dynamics simultaneously. I’ve been there. I know what it’s like to try to sort through the demands of both worlds. It’s not always clear but, guided by our mission, we’ll always do the right thing. We make sure we have the right resources to deliver on our mission.

Then there’s the fact that many managers got to where they are because they did the technical stuff right. People who had strong skills and leveraged those skills well were rewarded with more responsibility.

When the primary job of a manager was to make sure the workforce had what it needed and did what it needed, these technical skills usually transferred pretty well. Now management is evolving away from directing and toward coaching, facilitating, and creating the right environment for people to excel in their space. Middle managers are again caught between two forces. We are asking them to move away from exercising hierarchical authority and still expecting them to deliver results. We have great managers at Kaiser Permanente doing this every day.

In some cases, middle managers need to unlearn old things to learn new things, and part of our evolution is addressing how we continue to reeducate our people. We have more work to do with our middle managers, who are critical to the success of any organization but especially at an organization like Kaiser Permanente, where we work in a partnership model with our unions, employees, and Permanente physician groups, all collaborating together.

Given those observations, has Kaiser Permanente thought about changing the criteria for identifying managers in the organization?

TYSON: Not necessarily, but it has prompted us to rethink our whole training and education program and how we support managers to be successful.

We also look for skill sets that match the management requirements of the 21st century when hiring. We are looking for ways to find and develop talent — both inside and outside of our organization — that align with what we’re trying to accomplish.

As an example, genKP is a millennial employee group I sponsor. Almost 20% of our employees now are millennials. This group meets on a regular basis with me and presents to my senior leadership team. Last year, I made a special effort to meet with millennial employees during my visits to each of our regions. Across the country, these employees shared why they want to work at Kaiser Permanente — and also what makes it challenging.

From those discussions, they created something called Stretch@KP, which offers millennial employees opportunities to take on projects outside their core areas of responsibility. They learn new skills and expand their relationships in areas that interest them, while bringing fresh perspective into other areas of the organization.

It’s a two-way street. We’re learning how millennials think, how they behave, what they expect in the work environment, just as they’re learning from us.

We had this wonderful interaction in a recent meeting. They were being very clear about what’s important to them: “I don’t want to be stuck in one job. I’m looking for meaning. I’m looking for purpose. I’m looking for a life.” We listened, and one of my senior executives said, “While you are taking care of all that, let me offer some advice about how to get stuff done in the organization.” It’s a give-and-take relationship.

We’re focused on working with our millennials as the future leadership of the organization. We’re building the pipeline.

In our conversation, you’ve emphasized a focus on mission and on understanding what’s important to both individuals and the organization. How does the Kaiser Permanente culture work in support of those cornerstones?

TYSON: One of the cultural elements I’m focused on is the freedom to speak.

First, I believe strongly that we live in a great country and that freedom of speech is, in part, what makes it great. We’re seeing it acted out every day right now in our country, and it’s a beautiful thing. The last thing I want is for individuals who exercise freedom of speech throughout the rest of their lives to feel any different about the freedom to speak inside the organization.

We are working on creating an environment where everybody feels they have the right and the obligation to speak their truth: “This is what I witnessed. This is how I’m feeling. This is what I can offer toward the solution.” I want the best thinking brought forward. I want all the different views to be on the table. I want debate and people discussing options. When people believe they will be respected for their views, they are more willing to contribute.

In senior management meetings, when one of my executives feels strongly about an issue and they want to take me on, sometimes they’ll ask, “Freedom of speech?” And I’ll say, “Yes.” And they’ll repeat, “Freedom of speech?” And I’ll say, “Absolutely.” And then they’ll come with it: “I think you’re dead wrong.” They don’t have to sugarcoat it. They just simply put the code out there: “Freedom of speech?”

Now our management needs to continue to get comfortable that freedom of speech exists everywhere in the organization. Everyone has the freedom and the right to share their views and even disagree with others.

I’m struck by the language you use. It’s not unusual to hear organizational leaders talk about the need for frank conversation, but “freedom of speech” is not a term that you often hear in business. I’m interested to know if you’re actively using that phrase throughout the whole organization.

TYSON: Yes, we are using that phrase. I think the organization, just like this country, is not owned by any individual. We’re all stakeholders. You’re spending eight to 10 to 12 hours of your living day in this environment. And I believe you have the freedoms in this organization that you have in general society.

Freedom of speech does have consequences at times. You take a hard position on something, which you have the right to do. Well, there may be some people who feel just as passionately that that’s not the right position. You need to be prepared for that. But this freedom is intended to bring out the best in individuals. And when it’s working, it feels nonjudgmental.

It’s not about promoting arguments. It’s about creating a culture where a nurse can walk in and say, “I’ve been thinking about something. What if we did this process 1, 2, 4, 3 instead of 1, 2, 3, 4?” And the natural response from whomever she is addressing is, “Oh yeah? Let’s flesh that out and see where we want to go.” Maybe it’ll get adopted and maybe it won’t, but it will be considered. No one should think twice about sharing their opinion, because they know freedom of speech is embedded in our culture.

It’s the role of management to take all the various perspectives and ideas into consideration before making a final decision and ensure everyone knows they have been heard in that process. And none of this works without people speaking up.

Let’s shift gears and look outside the organization at the broader context of health care. The morning after the U.S. presidential election of 2016, you shared a message on LinkedIn in which you affirmed your organization’s commitment “to advocating for a U.S. health care system that is affordable and sustainable and that delivers high-quality care for all Americans.”

What does the agenda for keeping to that commitment look like as we sit here today?

TYSON: For me, it begins with this question: How do I make sure that I demonstrate the same commitment to the current [U.S.] administration that I did to the previous administration and the one before that? I do that by committing to our policy position, which has not changed one bit. Before there was the Affordable Care Act [ACA], for as long as I’ve been in this organization, which is over 30 years, and well before I joined this organization, Kaiser Permanente has advocated for the same position: Coverage and insurance should be made available to everyone, and everyone should have equal access to the front door of the American health care system.

And what I mean by the front door of the American health care system is that everyone should have the choice to seek care early before problems develop, rather than waiting until they are so sick and desperate for help that they have to go to an emergency department, which is the most expensive place to receive care.

The ACA may not be perfect, but it helped millions of people get access to coverage and care. We saw many examples firsthand where members were able to sign up and receive lifesaving care within weeks or months of being enrolled.

My objective is for us not to lose ground on the progress we’ve made over the last seven or eight years. Kaiser Permanente will work with the new administration and our government toward this goal.

As we think about the future of health care, technology is playing a huge role in the delivery of care on many different levels. But which is more likely: that technology will democratize access to quality care or that the benefits will flow disproportionately toward those who are already advantaged and who need the help the least?

TYSON: That’s a great question. I think it depends on what kind of collective environment we’re going to create. The beauty of technology is that it gives us an opportunity to democratize access to care in very different ways from past models. Technology already allows us to provide most of our primary-care encounters virtually. We have mobile vans that we take out into the community. They include a lab, mammography services, and an exam room. We provide care on-site, not just for Kaiser Permanente members but for anyone in the community, and beam the information up to one of our main facilities.

Consider the possibilities for what the further evolution of technology means for access. In rural areas, for example, where you don’t have a standing medical infrastructure, you have the capability of piping in care. Think about this technology being applied in both our own country and across the rural Third World, where the infrastructure often doesn’t exist at all. Through that lens, technology has a great promise to democratize health care.

On the other hand, you can see the opposite. You can see the economics where the new technology becomes more of an added benefit, an added privilege that is priced accordingly.

Technology cannot be taken in isolation. We need policy makers, tech leaders, influencers, and others to come together to think through the ethical and moral issues technology poses. There are still fundamental issues that need to be addressed in order for the health care industry to tap the power and potential of technology to deliver better health to everyone, regardless of race, economics, or geography. That includes reducing barriers to tele-health services, encouraging interoperability, and addressing cybersecurity threats in a balanced fashion.

The question of equity applies broadly in health care, beyond just technology and innovation.

How do we get people to see the big picture when thinking about health and questions of affordability and access to care? I would argue that a big-picture perspective to health is what has been missing from our current health care system, which was designed around the “fix me” model, where people came to a doctor’s office or a hospital only when they were sick.

Kaiser Permanente has always focused on prevention, and now we are thinking about how we can influence health and behaviors even earlier — and not just the health of our 11.7 million members but the 65 million people in the communities where we operate. We know that medical care is only a small, but critically important, percentage of what determines good health, so we are looking deep into our communities to develop partnerships with schools, local governments, and businesses to influence the things that create health in the first place — such as jobs, education, public safety, environmental health, etc. I think this is the evolution of health care. It’s exciting.