The Turnaround King

By focusing on employees and customers,Ronald A. Williams has designed a culture at Aetna where workers thrive and shareholders have been rewarded by a five-year stock increase of 600%

A friend convinced him that his talents would be wasted as a venture capitalist, especially since he was one of the few people in the nation with the skills to retool a lagging but complex organization like Aetna.

Williams admits he was drawn to the challenge. And Aetna found the prospect of signing the exec even more appealing. “There’s Ron Williams and then there’s everybody else,” a headhunter told then chairman and CEO Rowe.

“We needed a very senior operation executive who understood health insurance at the molecular level,” he explains, “somebody who could take apart the engine and put the 200 pieces on the garage floor, put it back together, turn the key, and it would start.”

Rowe, a renowned gerontologist who joined Aetna in 2000, was a physician who had previously run Mount Sinai NYU Health in New York. He had never managed a for-profit business.

SHARED VISION, DIFFERENT STYLES
Williams and Rowe did share the same vision for what an HMO could become: an organization that would influence the quality of healthcare. The two, however, had wildly different management styles and personalities.

In outlining their differences, the talkative, playful Rowe explains: “If we are going to visit a customer, all I need is a one-page summary of our relationship and the current major issues. Hand it to me in the back seat of the car on the way from the airport to see the customer. Ron wants a report that’s this thick, about everything, the customer’s company and the industry, etc.”

The chemistry worked. When Williams joined the firm in 2001 as the new chief of health operations, there were concerns about a hostile takeover, and the company suffered net losses of $279.6 million. “This was a company that looked like at one point it might even go bankrupt,” explains Joe France, a healthcare analyst at Banc of America Securities. “It was really the low ebb of the company’s 125-year history.”

Part of Williams’ turnaround strategy focused on targeting different customer segments and developing new products within various lines of business. He strengthened the dental company that had been losing market share for years. He also invested millions in the pharmacy business, opting to manage it internally rather than partner with a pharmaceutical company. Williams also stopped outsourcing behavioral health services — which includes wellness and mind/body treatments — and brought the unit back in house.

Mark T. Bertolini, executive vice president of Aetna regional businesses, helped Williams execute the bold strategy to resuscitate Aetna. “What we know is that customers who had more than three products with us had a much higher retention rate than customers who only had one product with us,” says Bertolini.

A technology buff, Williams has applied new systems to advance strategic initiatives, such as centralizing patient data using a patented set of computer algorithms. For example, the system can identify incompatible prescriptions for a patient who may be seeing several different doctors. And Aetna was one of the first to offer a combined preferred provider plan, Aetna HealthFund, which gives members the

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