Sometimes the strategic planning of growth can be as simple as adding a zero.
That’s what happened at AultCare, a health insurance provider for individuals and companies.
In the mid-’90s, health care was in the news again, and AultCare’s leaders were looking to the horizon. President and CEO Rick L. Haines says they were just sitting around a table and someone said, “Hey, let’s add a zero.”
Sounds too simple, right? Well, at the time, AultCare was insuring 50,000 members, so the company set up a strategic plan and put the parameters in place for the company to grow to 500,000 nationwide members within 10 years.
AultCare began in 1985 as a not-for-profit joint venture between Aultman Hospital and its medical staff. Although the hospital was striving to keep costs low, the savings weren’t directly benefiting those individuals and companies who used the hospital — the savings were benefiting the insurance companies.
“We found as we started talking strategically about AultCare, if we could provide the insurance vehicle — just to be the conduit and try to operate that insurance component at literally a break-even — that we would be able to provide that conduit of Aultman’s low cost onto the local community,” Haines says.
He says while it sounds like a simple idea, it was novel at the time, and it still is. The company’s break-even pricing method measures its growth by new members, not revenue. Since its inception in 1985, AultCare has grown from one client — Aultman Hospital — to more than 500,000 members.
“We started as an idea back in the mid-’80s,” Haines says. “Today, we have close to a billion dollars running through the organization.”
With that kind of growth, Haines has had to overcome more than a few obstacles to keep everything running smoothly. Here’s how he led AultCare through 22 years of constant growth.
Know what you need
One of the most basic challenges associated with growth is this: As your operations grow, you’re eventually going to run out of space and resources. Haines says the two biggest keys to overcoming this challenge are planning and communication.
“When you get into growth stage, it may sound silly, but you have to learn how to handle success,” he says. “You build on continuity by developing infrastructure and focusing on communication. Those are things that you have to focus on more as a bigger company than we did as a smaller company. The one thing that makes it easier to handle all that growth or change is you all are working on the same objective.”
When you are planning for growth, you can’t just rely on yourself to know what infrastructure needs the company has. You have to go the source. For AultCare, it was employers, employees, doctors and hospitals.
Haines says you need to talk to all the different entities that have needs and find out what those needs are. Then you must design and develop an infrastructure that supports those needs.
“Looking down the road, you project what you’re going to need as an organization and what you have to provide for the future,” he says. “You have to develop an infrastructure to maintain an ongoing organization.”
That is where other growth-related challenges occur, like delegation and employee retention.
“We’re in this for the long haul, and you start talking about things like strategic planning and retention and continuity,” Haines says. “There wasn’t a specific time the light bulb came on, but it’s almost self-evident as you project ahead and start looking at annual plans and two- to three-year plans.”
Look to the future
Delegation was something that Haines didn’t have to do much of in the beginning, but now with more than 500 employees, it has become an imperative part of his management style. He has taken a more long-term, strategic view of leadership rather than the hands-on focus with which he started AultCare.
“As you start to grow, what makes it easier is if you as the CEO have the right people in the right places,” he says. “More importantly, if you have confidence that they have the character and the competence to follow the vision, then delegation can be a wonderful thing.”
Haines defines character as being honest or having personal integrity, and he defines competence as being able to perform to meet the company’s goals.
He says AultCare has always prided itself on planning, and you can’t do a good job of that without delegation.
“If you’re thinking ahead and looking forward with delegation, you see it coming,” he says. “And on the short-term side, if you see things that aren’t getting done or aren’t getting done consistent to the plan, then delegation may or may not be part of the answer.”
It’s difficult for a CEO to be able to devote the time and energy to planning for the company’s future growth if you don’t have people helping you take care of today.
“You have to really be dependent upon your team,” he says. “You really have to look for a good management team, executive team, and learn to depend upon them. That’s why you have to learn to delegate.”
Cross-training
Another reason that Haines can stick to the strategic side of management is his company’s 95 percent employee-retention rate.
There are a few secrets to AultCare’s ability to keep employees: One of them is spending more time on the front end of hiring.
AultCare uses a program to help match up the personalities of its employees with the right job, which helps management make a determination on whether someone’s skills might be better used elsewhere.
Employees are also cross-trained in different areas to allow for maximum flexibility.
“As we grow, sometimes you can’t predict specifically where your resources are going to be needed,” Haines says. “We may have one product line that will take off unexpectedly. We may have to move some people into that product line, so if those people are cross-trained they can move into that service component or that technical component or claims component.
“Also, as an organization, it provides us with the breadth and the depth to move into some new areas and be comfortable and have the confidence that we have the resources to provide the services that would come up.”
Many AultCare employees have moved throughout the organization to go into areas they are interested in or to go into areas that would be a better use of the talents they bring to table.
“That’s one of the nice things about being in a growing company,” Haines says. “You can provide those opportunities to employees. It’s good for the employee, and it’s good for the organization, as well. It’s a win-win for both sides.”
He hasn’t kept track of No. 4 through No. 500, but the first three employees he hired in 1985 are still with AultCare today. Of course, they’ve grown along with the company and are in different areas now, but he’s still proud of AultCare’s ability to retain employees.
“Those employees — and employees like those employees — provide a cement throughout the organization,” he says.
Keep people informed
When you’re running such a large organization, it can be difficult to keep everyone in the loop. So, it’s important to have plenty of formal and informal communications set up to keep everyone from your management team to the employee you hired last week informed and up to date.
At the same time, you need to know what’s going on in the organization from an employee standpoint.
Haines has a way to take care of both kinds of communication at once at AultCare — the AultShare luncheon.
It’s an idea he got from the insurance company’s partner, Aultman Hospital. The luncheon is an open format, and any employees can sign up to attend.
“We give the employees a chance to ask questions they may have,” he says. “I also ask them, ‘If you had my job for a day, what would be the first thing (you) would do?’ We’ve had some interesting responses there, and we’ve actually implemented a couple of those. We’re looking for the pulse of the organization, and that’s one way we stick with it.”
One of the ideas implemented from those luncheons was the “Six-Minute Scoop.” The scoop is a way to provide some basic items to give the departmental managers to communicate to their employees.
Haines and his staff had been trying to find a way to provide AultCare’s employees with consistent communications. There were different management meetings being held throughout the organization. Although that’s a good thing, those meetings all tended to be specific to what’s happening in their particular department.
“Now we have six items, twice a month, that we provide in written format to our management team,” he says. “We can go through them very quickly, like a minute each.”
Another way Haines stays in touch with his employees is the “Walk and Choose” program, which is also done at Aultman Hospital. Haines will periodically attend a departmental meeting, and after the meeting is finished, he helps that department with its work. The Walk and Choose idea also serves a dual purpose: While he’s helping out, he’s talking to the workers and checking for inconsistencies in information.
“I go right to the front line with a few of those individual employees and spend the morning with them, whether it’s answering phones or providing an internal cost report or whatever their specific job may be,” he says.
“I get a pretty good pulse for the organization, and if I pick up any inconsistency with what my management team is telling me and what I’m hearing from individual employees, it’s pretty easy to pick up.”
Haines says the most important thing a leader needs to do is instill trust and courage in the organization. If the parts of an organization trust each other, they will stick together through change, growth or anything else.
Haines says you build trust by simply being honest. Employees are smart. They know if you’re not shooting straight with them. That’s why they need consistent communications, whether the news is good or bad.
“It’s that consistent communication so our employees and our management team know that we stand for a good thing — keeping costs as low as possible for this community,”he says. “That’s a good mission to have and those are good values to have.”
How to reach: AultCare, www.aultcare.com or (330) 363-6360