By his own admission, Ron Williams was an unlikely CEO. He grew up in a Chicago working-class family, with college and corporate America distant realities, and graduated high school unsure of what to do next. But thanks to his steely work ethic and relentless desire to learn and grow, he soon found himself rising through the ranks of the insurance industry, ultimately leading one of its most significant and successful turnarounds.
Williams joined Aetna as president in 2001, becoming CEO and chairman five years later. Over the course of his decade-long tenure, Aetna—acquired in 2018 by CVS Health—swung from a $292 million loss to a $2 billion profit. During the national debate leading up to healthcare reform legislation, Williams also became a key representative of the insurance industry and later worked directly with President Obama.
Now a board member for American Express, The Boeing Co. and Johnson & Johnson as well as an operating advisor for private equity firm Clayton, Dubilier & Rice, Williams recently published a new book, Learning to Lead: The Journey to Leading Yourself, Leading Others and Leading an Organization (Greenleaf Book Group Press, 2019). He spoke with Russell Reynolds Associates’ Center for Leadership Insight writer Alix Stuart about some of the key takeaways for current and aspiring CEOs.
In your book, you have a list of things only a CEO can do for a company. What’s on that list and why?
One of the most important things the CEO has to do is to protect innovation, to ensure that the company is creating the solutions, products, services of tomorrow. I have an expression that “Large organizations are built to do yesterday’s work.” Virtually everything that they are structured to do reflects a requirement of their history—but they are often poorly equipped to do tomorrow’s work.
A top way to protect innovation is for the CEO to be very thoughtful about the culture of the organization. The CEO has to make a conscious choice: What do they believe is the best way to produce results? You can produce great results from any number of cultures, including fear, monetary rewards, duress and a host of other things. My choice is a values-based, high-performance culture.
Let’s talk about the values side of that for a moment. You created the Aetna Way, which was a set of four foundational values: integrity, quality service and value, excellence and accountability, and engaged employees. How did you make them a reality at Aetna?
To start with, the CEO has to talk about the values regularly—literally every day. I did an analysis once where I counted how many times I talked about our values in one year. I had given over 200 talks to employees. Some were small, some were large: town halls, quarterly management meetings, some individual recognition events. But every conversation I ever gave started with the values of the company.
From there, it’s about enforcing the norms that make those values real to employees, such as aligning the incentives in the organization with the values and the behaviors you want to see. We built recognition programs that rewarded individuals who exemplified the values in the Aetna Way through their behavior. One thing we learned about that recognition strategy was that you had to be nominated by one of your co-workers. People often are good at managing up, but the people who work next to you know whether you’re doing a good job or not.
What happens is, that culture becomes the curbs. The more the CEO talks about it, the bigger the curbs get. So that when someone’s in a meeting and it’s a tough business issue, and you’ve got a decision to behave consistently with the values or shave corners, that decision is “Be consistent with the values.” Because they know someone will say, “That’s not who we are. We don’t do that,” if they choose otherwise.
Turning to the performance side of the culture, how did you instill the commitment to improvement that led to Aetna’s turnaround and success?
A big part of it is being highly disciplined about performance, achievement and expectations. Meaning if the goal was 100 percent, 99 is not 100. You don’t let 99 be presented as 100. Because when 99 becomes 100, pretty soon 98 is 100, and 97 is 100 and 95 percent is 100.
But when you have a problem and you’re trying to understand the problem, it’s critical not to make the people involved in it seem like they’re the problem. How many times have you been in sessions where someone asked, “Well, why didn’t you hit the goal?” My experience is that “why” only works well when you’re in a Sigma or Lean setting, where people understand the real question. When you’re outside of that setting, the minute you ask someone why they didn’t hit their goal, they instantly become six years old. They start answering, but it’s often a reflexive answer and not really a thoughtful exploration of the issue.
When you get 99 percent, for example, the conversation is “We missed by 1 percent. It doesn’t make us bad human beings. But what should we have done better or differently in order to get that extra 1 percent?” It becomes a conversation about solutions and about the team working collaboratively to improve performance, not what someone’s individual shortcomings are.
When you joined Aetna, it was losing morale as well as money. What were some key steps you took to win the trust and engagement of your employees?
I believe that the broader the context people have about the business, the better they can engage and support its objectives. We had employees who thought that at the end of the year, the executives took the money home and divided it up. Nor did they understand why a shareholder expected to see the stock go up.
So we created knowledge maps, or graphic illustrations, that were designed to increase the level of business literacy across all of the employees, by answering the question of “Where does the money we earn come from, and where does it go?”
We literally would assemble cross-sectional groups of 10 employees from different parts of the company. You would come together as a group, and you would go through each of these maps, which would have discussion questions and answers. When we finished, 50,000 people understood where the money came from, where it went.
It was a really important part of increasing employee engagement and saying to everyone, “You’re all smart enough to understand this. We just need to make it accessible in a way that everybody can easily get."
You devote a good portion of your book to the importance of diversity, both from your own experience coming from an unconventional background and from seeing the value of it as a leader. At a tactical level, how did you approach diversity as a CEO, and what do you advise others to do?
I would start with the fact that I chaired the diversity committee of the company. Just like culture, if the CEO flies in, gives a five-minute talk and then leaves the room, how important do you think that issue is? It starts with demonstrating your personal commitment and leadership in that regard.
The other thing is becoming a bit of a student in the area. As the CEO, I would talk to other CEOs and diversity officers across the industry to understand what were the best practices. What were we not doing, for example.
One of the simple things we did was, when we did searches, we required that there be a diverse slate of candidates. When search firms brought back people who weren’t, we would say, “It looks like we’ve got some good, well-qualified candidates. But you haven’t finished your job.” When we looked at our vendor relationships, it was usually about printing, advertising, supply services. We then began looking at investment bankers, law firms, consulting firms, and asking, “What’s the composition of the team that’s servicing us?” Because you don’t get to be the lead investment banker if you’re not the junior investment banker.
We also held up individuals who had done a good job of creating talent. We had mentoring programs. One of the things I did was create a chief of staff position, where I consciously selected a high-performing executive to come into my office and work for a couple of years, learning how you run a major company. I have five people who worked for me who became CEOs. Three of them are women.
These are all things that you can do to help create an environment in which diversity is very real.
You have a great quote where you say, “Ordinary people can achieve great things if they learn how to recognize the barriers that limit them and start learning how to overcome them.” What do you think are the top barriers that keep CEOs from achieving great things?
I would start with the early stages, even before you become a CEO. Accepting stereotypes and external perceptions of limitations is one of the biggest barriers that people face to transforming themselves at the early to mid-levels in their career. In the book I talk about reframing, which is simply letting those melt away and saying, “I can learn whatever I need to learn in order to do what I’d like to do.” I might not be the world’s greatest at it, on a scale of one to 100. But I think I can get to easily 50, 60, 70 percent if I’m diligent at it, and it’s something I want to do.
Shifting up to the CEO level, I think the biggest challenge CEOs face is underinvesting in people. Having the right human capital to execute your strategy is extremely important. You have to make certain that the next generation is getting the experiences they need to fill in their gaps. It does require a focused program and set of initiatives that create a common language around performance. I’ve found it extremely helpful from a developmental point of view to crystallize the two things which that executive needs to learn or demonstrate in a coming assignment. For example, you might have an executive who is very skilled in launching new products or ideas but has never had experience at turning around a business, which requires very difficult cost-reduction decisions. That person needs to have that experience in order to run a major part of the company, because you can’t run it only on one vector.
Finally, one of the other limitations CEOs face is ceasing to continue to invest in their own 15 percent growth each and every year, to make them better and better CEOs and better stewards of the organization and its resources. There’s an expression that says, “What got you here won’t get you there. You are no more finished with development and growth the day you become CEO than you were when you started your career.