CEO perspective: Jack Larsen, UnitedHealthcare Medicare and retirement
For many companies, a corporate awakening comes with a crisis. At UnitedHealth Group, a stock options scandal prompted some senior management soul searching. “It was painful,” recalls Jack Larsen, chief executive of UnitedHealthcare Medicare and retirement. “But we can’t lose sight of the fact that we are a very social business, carrying out social policy.”
The stock options scandal, which erupted in 2006, forced the resignation of the group’s chief executive, along with other senior executives.
However, says Larsen, it helped the group – one of the US’s largest healthcare companies – focus on its social footprint and rethink its approach to community investments.
“It was an abrupt wake up but we’re fast learners,” he says. “And that maturing we’ve done as a corporation meant we had to change the way our employees saw themselves.”
This did not mean abandoning philanthropic programmes but it did involve dramatically increasing the level of staff involvement.
“We do our fair share of philanthropy,” he explains. “But almost 80 per cent of employees engage in some form of community service or volunteerism.”
As a new generation of employees enters the workforce, providing volunteering opportunities goes beyond altruism. “It’s about finding the right people,” says Larsen. “We’ve had a generational change. People coming into the workforce are wanting something different, and that is a global phenomenon.”
This something the company is keen to track. To assess the level motivation among employees and their engagement in their work, UnitedHealth Group does an annual review of what it appropriately calls its “vital signs”.
Moreover, compensation structures are used to support community investment. ‘In all our businesses, the annual incentives are tied to how our engagement scores fare year-to-year,” explains Larsen. “And part of that is how much volunteering you’re doing.”
Meanwhile, the company can use its scale to make an impact. With its government programmes reaching up to 20m people and the commercial business reaching 45m, the company can, as Larsen puts it, “drop a pebble in the pond and see the ripples go out”.
For example, in 2012, the company worked with Comcast, the cable operator, to produce a reality TV show designed to help people reduce their risk of developing Type 2 diabetes. The 16-episode show was part of the group’s efforts to combat the spread of diabetes. “We can move that out to a large number of people,” says Larsen.
Another partnership – this time with Sesame Street – provided a way for UnitedHealthcare to help improve nutrition in children from low-income families.
“It was a simple collaboration but extraordinarily successful in terms of reaching kids and getting the message out on nutrition,” says Larsen. “So we use our scope and scale in creative ways.”
However, he acknowledges that with scale comes responsibility. “We are the largest operator of Medicare and Medicaid plans and the largest operators of managed care,” he says. “We can’t be in our business and not be fully aware of our societal position.”
THE GOOD STUFF
Here, I invite my interviewees to name a favourite charity and – in the spirit of Mixing It Up – a favourite cocktail.
Charity: Second Harvest
Cocktail: Bombay Sapphire gin and tonic with extra lime
How we met: I spoke to Jack Larsen before the opening of the CECP’s 2014 Board of Boards CEO Roundtable.
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