I read an interesting and insightful  article online called “Hired! Turning a Demotion into a Promotion”  which is accessible at http://money.cnn.com/2009/07/10/news/economy/_demotion/index.htm?postversion=200907.

The main point of the article is that individuals need to rethink their strategies for securing new employment, and, in many instances, need to accept a lower-paid position in a different kind of organization with a different career path, compared with the firm that laid them off.  I can relate to this to some extent.  When I was not selected as a partner in the law firm for which I worked in 1978, I was essentially told that I needed to look for another job.  While I was not immediately laid off, my position was eliminated, and I eventually moved into a status in which I was no longer in full-time employment, but was paid only by the hour for the work I did.

I started my search by trying to get another law firm position, but realized that I would not find a suitable situation.  In fact, I received an offer that was withdrawn.  It forced me to change career paths, and I began the search for a corporate legal department position.  Although my salary offer from Pitney Bowes was nominally higher, I effectively took a pay cut to move to a much higher cost area at a time when salaries were increasing rapidly because of double-digit inflation.  In effect, I followed the path recommended in the article when I was 30 years old.

I successfully convinced Pitney Bowes that I was genuinely interested in a complete career change, and that I was not simply waiting for a better private law firm opportunity to emerge. It was obviously a great long-term decision for me, even though the gap between my pay and the pay of those who stayed in private practice widened significantly over the next 10 years.  I threw myself into my new career enthusiastically and never looked back.

The lesson I would impart is that the strategy described in the article can work in any economic environment if individuals genuinely accept the fact that what they lost is not something to which they should continue to try to regain.  Looking back and regretting the income once earned from a past job is not productive.  Figuring out how to maximize the opportunities in a new situation is the best way to go.

I believe that even when the economy recovers to normal GDP growth, the job market will look very different from what it did two years ago.  People will need to be more resourceful, more intellectually engaged, more flexible, and more able to manage their emotions.  Falling back on credentials will be less important.  Relying on past accomplishments will be less useful.  Above all, being comfortable with the fact that each individual will need to reinvent himself or herself frequently to adapt to a faster-changing and more complex environment will be an essential skill.

Like many people today, I believed that it was going to be a very long time before I got reemployed.  However, once I got more flexible and enthusiastic, I found myself much more employable. 

I do not mean to minimize the difficulty individuals have today in getting resituated.  We have a serious, long-term structural unemployment problem that will not get corrected without a lot of pain. I do believe that many individuals can minimize their pain by following the path described in the article.

One of my experiences was a lunch at a popular New York City restaurant on July 8.  When I looked at the menu, every item was labeled relative to the calorie content of the item.  I was ready to order the caesar salad as a low-calorie alternative, when I was shocked to find out that the salad contained 790 calories, and that the salad with chicken was 1,325 calories.  To my surprise, the 10-ounce filet mignon was only 390 calories, so I ordered it and also had a cup of soup.  Undoubtedly, absent the disclosure, I would have ordered the salad.

I also wear a pedometer every day and almost always am able to walk or run sufficiently to get to 10,000 steps per day.  On July 8, on my way to the restaurant, I was taking a subway from East 86^th Street in New York to Grand Central Terminal at East 42^nd Street.  While I was on the subway, I noticed that I had 20 minutes to spare when the train pulled into the 59^th Street station, and that I needed to log a number of steps.  As a result, I exited the train at 59^th Street and walked the rest of the way, because I saw that it would be difficult for me to get to my target.

At Pitney Bowes, we took one further action relative to marketing the benefits of walking.  At the bottom of our 3^rd floor stairway in our World Headquarters, we have a sign that informs someone that if they walk up and down these stairs every for a year instead of taking the elevator behind the stairs, they would lose 5 pounds.  I watch people make the discretionary decision to take the stairway rather than the elevator.

The Wall Street Journal article notes that the same behavior occurs relative to electricity usage when a home has a power monitor that informs the home owner minute by minute how much power has been consumed.  The author, Geoffrey Fowler, cites an Oxford University study in 2006 that found that “people getting direct feedback on their power consumption reduced use 5% to 15%.

There are two implications to these data points:

•       If we want to reduce overeating or to increase exercise, measuring, monitoring, and disclosing the quantitative aspects of a behavior will change the behavior.
•       Conversely, if we want to change an unconscious behavior by altering the environment that produces it, that will be successful as well. Eating, exercising, and other behaviors, good and bad, have a heavy unconscious, automatic aspect to them.

Reflecting on my behavior in the restaurant and on the subway, I am more convinced than ever that mandatory nutritional labeling works if it is quantitative.  Warnings like the Surgeon General’s warning on cigarette packages are much less effective because they are not quantitative.  Similarly, disclosures on prescription drug packages relative to side effects are also relatively ineffective because they are not quantitative.

My good friend Dr. Elliott Fisher of Dartmouth’s Health Policy Institute introduced me to a different form of disclosure relative to prescription drugs, a one-page chart that lists every side effect, but that specifically supplements the disclosure by listing in quantitative fashion the results of the clinical trials conducted for that drug.  Thus, for example, the chart does not simply say that Drug X has been shown to cause headaches in some people.  It specifically discloses that of the 2,500 people who took the drug, 17 of them, or .68%, experienced headaches.  There are some indications that individuals confronted with quantitative information react differently.  Some pay attention to the disclosure and decide they do not want to take the risk; others are reassured by a low-percentage risk disclosure and decide they will take the risk.  In both cases, the quantitative disclosure altered behaviors.

Because of all these experiences and observations, I have become a strong believer in more detailed labeling and disclosure, as well as much more quantitative disclosure, whenever such disclosure is not false or misleading.

Both Gladwell and Colvin understand that great talent, by itself, is insufficient.  Both extol the value of sustained practice and discipline, with Colvin describing that sustained effort as “deliberative practice.”  Gladwell goes a step further and identifies environmental and marketplace conditions that enable some individuals and organizations to succeed when others of comparable talent and discipline fail.

The article adds one other dimension: the element of random distribution of environmental factors and circumstances that either lengthen the period of success or end it.  I believe that the combination of the two books and the article are exceptionally insightful in analyzing what enables sustained success.

At the same time, I want to discuss their implications:

•       While it is true that following the approach put together by these three authors is likely to succeed to sustained success, we must be far less confident that the formula always works.  The environmental conditions change in subtle ways over time to make continuation of success unlikely.  For example, almost inevitably, a successful business gains dominant market share and huge profits, which makes it a target for those who either resent the success, want to take what they believe to be their fair share, or want to tax or redistribute the profits. These forces include employees, executives, the government, community organizations, and large customers.  Walmart is a classic example of this. In effect, success contains the seeds of future failure.
•       While there is some degree of randomness to when successful businesses start to fail, there is an inevitability to the fact that, absent an external, artificial force that maintains a monopoly, the concentration of profits invites someone to develop a disruptive business model that captures the potential profit pool.  Thus, for example, Microsoft’s phenomenal success inevitably led to the Linux operation system and its progeny, Google as a web-based knowledge repository, and web-based applications service providers like Salesforce.com.  Therefore, an exceptionally successful has to be consistently vigilant for disruptive forces.
•        A public company that achieves long-term success will inevitably see its stock price reflect an unrealistic expectation of how long that success can last.  Cisco is a great company that has achieved phenomenal success over the last two decades.  However, its stock was bid up to unrealistic levels in the 1990.  While it continues to perform exceptionally well, it clearly will not reach the unrealistically high levels it reached in the late 1990’s for a very long time.  Those who bought shares at $80 are unlikely to recover what they paid, even if the stock market and the economy recover.
•       As business leaders, we must be humble and must never take success for granted.  We must also recognize that, as conditions change, we may find that others are better able to react to the new and randomly-distributed environmental conditions than we are.
•       Finally, nothing good or bad lasts forever, unless organizations or individuals choose to give up and stop fighting and learning.  While talent and deliberative practice and assessing what the environment gives us as opportunity and risk does not guarantee permanent unbroken success, it also gives us the ability to bounce back from failure, if we should choose to keep pursuing a dream.  Understanding that success and failure will both come, and both need to be managed with a realization that they will pass, are critical insights for success and happiness.

On Friday, June 19, our younger son graduated from high school.  As I listened to the various speakers and the roll call, I thought back to my own high school graduation in 1966 from a Catholic high school in Rochester, New York.  Many thoughts came to me during our son’s two-hour ceremony.

I was angry and disappointed that I was not selected as valedictorian.  The school had consistently manipulated and changed grading rules to give the advantage to my rival, who actually was a lifelong friend of mine.  They did so because he had gone well beyond any other student, including me, in supporting the school and his classmates, and deserved the award as the award criteria should have been designed. However,  the school had locked itself into a set of rules in which the valedictorian was the person with the highest grades.

Had the school administrators come to me and said that, although I earned the highest grades, they wanted to give the valedictorian award to my friend, I would have been disappointed, but would have understood and accepted the result as fair in the ultimate sense.  Instead, they clumsily manipulated their rules to get the right result, and acted belligerently toward me when I questioned the decision.

Why do I reflect on this?  Governments and other firms often makes the same mistake.  Government officials get caught up in writing detailed rules into laws and regulations, and then find that they do not work as intended.  They also clumsily manipulate these rules, or try to fix the problem with even more detailed rules to deal with unintended consequences.  The better approach for my high school, for government or for any other organization creating award criteria or bases for any decision and leave it to experts to craft decisions that accomplish these goals, rather than micromanaging those experts.

A second observation was my short and long-term reaction to what happened.  My dad was unsympathetic and said to me: “It’s your fault this happened.  If you were several points ahead of your rival, no manipulation would have been possible.  You would have won, in spite of what the school administration might have wanted to do.  You did not work hard enough and you left too much to chance.  This is unimportant in the overall scheme of things.  However, when something matters to you in the future, leave nothing to chance.”  From that moment on, I approached important challenges, including college courses, very differently.  I relied less on my natural talent, and was far more disciplined.  I also did not take my teachers’ reactions for granted, but worked harder to understand what needed to be done.

My dad gave me phenomenal advice, which was consistent with our relationship throughout his life.  He died almost eight years ago, but I have exceptionally fond memories of him and my mother, who died in 1994.  They were both unbelievably supportive and insightful parents, and I have tried to emulate how they raised me in the way we have raised our children.

The longer-term reaction to what happened was that I really tried to figure out what I cared about most.  My rival and friend had a lifelong quality of selecting an institution to join, and giving it his undivided focus.  He went on to Notre Dame, and eventually was employed by Princeton University, and was beloved by people at both places. 

I was different.  I did not find an organization to which I could commit myself until I joined Pitney Bowes in 1979.  Over the years, I felt a tremendous emotional commitment to the Company.  I felt the same about the National Urban League, Catalyst, Eaton Corporation, and the other boards I joined.  I was late to the party as far as finding institutions and causes to which I could make deep emotional commitments, but, when I did, the rewards were tremendous in many ways.

I was blessed to marry a woman, my wife Joyce, whose family and who, on her own, exemplified the same deep emotional and spiritual commitment to institutions and causes, and who inbred those qualities in our children.  My father-in-law William McNagny was a fourth-generation attorney in a Ft. Wayne, Indiana, firm his great-great grandfather formed, and he and my mother-in-law Joan McNagny were both deep supporters of a bank at which her father Charles Buesching had been a President for many years.  They also exemplified the old-time values of loyalty and commitment that I have tried to emulate.

As Father’s Day comes to a close, I hope all of us remember the critical help our fathers gave us at important points in our lives. 

I am highly confident of the long-term success of all of our children, but I also expect that, out of his graduating class, will come some wonderful surprise success stories.  I also expect that, beyond those stories, we would see very supportive fathers.

In the Saturday-Sunday Wall Street Journal,  for June 20, there is a lengthy article entitled “The Myth of Prevention,” by Dr. Abraham Verghese of Stanford University.  It is a very thoughtful article with many good insights, but one comment captured in two separate sentences is worth a great deal more commentary:

“…a dollar spent on medical care is a dollar of income for someone. ..It may be the single most important fact about health care in America that you or I need to know.”

I experienced this when I was advocating postal reform.  Everyone understands that we need to reduce the number of retail post offices, postal processing centers, and, probably, the number of postal employees doing what they are doing today.  However, no elected official wants to sit idly by and let a postal facility close in his or her district, state, city, or county, because people will lose jobs or income.

Similarly, hospitals are almost impossible to close, even if they are losing money, delivering sub-standard care, and are unnecessary, because people will lose jobs and communities will lose income.  When I told the people at Dartmouth’s Health Policy Center about the Pitney Bowes health program last December, their comment was that, unless we reduced the supply of certain kinds of physicians and medical technologies, those physicians losing business from our employees would find a way to stimulate increased demand from their other patients.

So what do we do?  The answers are simple, but unsatisfying for those who want a quick fix.  First, we need to reduce the growth in demand caused by unhealthy living.  To use the analogy of postal reform, it is a lot easier to reduce capacity when mail volumes are flat or declining, which they are today, than it is to do so when volumes are increasing. The fundamental problem is that we spend too much of our wealth and income on products and services that make us unhealthy, like junk food, and products and services that treat the medical conditions that those unhealthy actions cause. Investments in healthy living are critical.  By the way, when Dr. Verghese refers to the “myth of prevention,” he is largely referring to screenings administered broadly to the population, which actually add costs, rather than reduce them.  We need to focus on reducing obesity, smoking, alcohol and drug abuse, injuries from violence, infectious diseases, and illnesses and diseases resulting from environmental hazards.

Second, we need to let attrition through retirements of health care professionals work, and simply not replace every specialist physician that retires.  We actually need more primary care physicians in many communities, but increasing the supply of primary care physicians without having a plan to reach underserved populations is not a solution to the primary care shortage.  Having more physicians will simply clutter the wealthier communities and drive supply-driven demand.  To enable primary care resources to work effectively, we need payment models that encourage self care, remote care through telemedicine, and more care delivered by nurse-practitioners, physicians’ assistants, and nurses, in place of doctors.

Third, there are many businesses that have sprung up to manage inefficiency, such as firms that provide software to help physicians and insurance companies work better with one another.  We need to reduce the complexity of billing and claims interactions, and to reduce the need for customer care support.  These jobs can also decline as people retire, and some businesses will simply disappear.  These are not caregiver jobs, but jobs for administrative and technical people who can be repurposed into more productive activities outside the health insurance sector.

Fourth, we need to reduce government micromanagement of health care, which adds cost to the private sector, as well as to government.  There needs to be a much simpler, less politicized system for managing Medicare, Medicaid, and SCHIP costs downward.  Setting cost targets and giving the private sector flexibility on how to meet those targets and improve quality is far better than micromanaging at the transactional level.  Over time, these compliance-related jobs will disappear, and the people in them can be repurposed for more productive uses.

Fifth, we need strategies to close hospitals and repurpose their sites, just as we did with military bases, and will need to do with post offices.  Having a hospital in a community is usually considered to be positive in terms of the attractiveness of that community, but we need customized strategies for each community.  Stamford, Connecticut, where Pitney Bowes is headquartered, came up with a great solution ten years ago.  We had two hospitals less than a mile apart. One of them, St. Joseph’s, was old and was financially shaky.

The solution that evolved was a win-win for everyone.  The Stamford Health System acquired St. Joseph’s Hospital, closed it down, and built a state-of-the-art wellness center on the same site.  The center, called the Tully Health Center   has a state-of-the-art urgent care facility, fitness center outpatient diagnostic and surgical facility, rehabilitation and fitness facility, and community wellness outreach capability. The facility is modern, highly useful to the community, a better neighbor for area residents because it is quieter and less disruptive, and a more appropriate health care resource to be paired with the hospital less than a mile away. 

In some communities, there may not be a need for a substitute health care facility, but we have to treat hospital closures as political challenges, not just as health care delivery challenges.  We have to stop pretending that our runaway health care costs have mostly to do with greed, unsolvable health problems, better quality, greater efficiency, or better cost containment.  We spend more on health care because health care professionals make good livings in health care and are respected by their families, peers, neighbors, and communities, and because health care spending is a major economic and financial market growth engine. 

Unless we figure out alternative spending paths for our health care dollars, alternative careers for people in the health care industry, and alternative uses of excess health care facilities, this problem will not go away. 

In the Saturday-Sunday Wall Street Journal, there is a lengthy article entitled “The Myth of Prevention,” by Dr. Abraham Verghese of Stanford University.  It is a very thoughtful article with many good insights, but one comment captured in two separate sentences is worth a great deal more commentary:

“…a dollar spent on medical care is a dollar of income for someone. ..It may be the single most important fact about health care in America that you or I need to know.”

I experienced this when I was advocating postal reform.  Everyone understands that we need to reduce the number of retail post offices, postal processing centers, and, probably, the number of postal employees doing what they are doing today.  However, no elected official wants to sit idly by and let a postal facility close in his or her district, state, city, or county, because people will lose jobs or income.

Similarly, hospitals are almost impossible to close, even if they are losing money, delivering sub-standard care, and are unnecessary, because people will lose jobs and communities will lose income.  When I told the people at Dartmouth’s Health Policy Center about the Pitney Bowes health program last December, their comment was that, unless we reduced the supply of certain kinds of physicians and medical technologies, those physicians losing business from our employees would find a way to stimulate increased demand from their other patients.

So what do we do?  The answers are simple, but unsatisfying for those who want a quick fix.  First, we need to reduce the growth in demand caused by unhealthy living.  To use the analogy of postal reform, it is a lot easier to reduce capacity when mail volumes are flat or declining, which they are today, than it is to do so when volumes are increasing. The fundamental problem is that we spend too much of our wealth and income on products and services that make us unhealthy, like junk food, and products and services that treat the medical conditions that those unhealthy actions cause. Investments in healthy living are critical.  By the way, when Dr. Verghese refers to the “myth of prevention,” he is largely referring to screenings administered broadly to the population, which actually add costs, rather than reduce them.  We need to focus on reducing obesity, smoking, alcohol and drug abuse, injuries from violence, infectious diseases, and illnesses and diseases resulting from environmental hazards.

Second, we need to let attrition through retirements of health care professionals work, and simply not replace every specialist physician that retires.  We actually need more primary care physicians in many communities, but increasing the supply of primary care physicians without having a plan to reach underserved populations is not a solution to the primary care shortage.  Having more physicians will simply clutter the wealthier communities and drive supply-driven demand.  To enable primary care resources to work effectively, we need payment models that encourage self care, remote care through telemedicine, and more care delivered by nurse-practitioners, physicians’ assistants, and nurses, in place of doctors.

Third, there are many businesses that have sprung up to manage inefficiency, such as firms that provide software to help physicians and insurance companies work better with one another.  We need to reduce the complexity of billing and claims interactions, and to reduce the need for customer care support.  These jobs can also decline as people retire, and some businesses will simply disappear.  These are not caregiver jobs, but jobs for administrative and technical people who can be repurposed into more productive activities outside the health insurance sector.

Fourth, we need to reduce government micromanagement of health care, which adds cost to the private sector, as well as to government.  There needs to be a much simpler, less politicized system for managing Medicare, Medicaid, and SCHIP costs downward.  Setting cost targets and giving the private sector flexibility on how to meet those targets and improve quality is far better than micromanaging at the transactional level.  Over time, these compliance-related jobs will disappear, and the people in them can be repurposed for more productive uses.

Fifth, we need strategies to close hospitals and repurpose their sites, just as we did with military bases, and will need to do with post offices.  Having a hospital in a community is usually considered to be positive in terms of the attractiveness of that community, but we need customized strategies for each community.  Stamford, Connecticut, where Pitney Bowes is headquartered, came up with a great solution ten years ago.  We had two hospitals less than a mile apart. One of them, St. Joseph’s, was old and was financially shaky.

The solution that evolved was a win-win for everyone.  The Stamford Health System acquired St. Joseph’s Hospital, closed it down, and built a state-of-the-art wellness center on the same site.  The center, called the Tully Center (in honor of its major donor, Dan Tully, a retired Merrill Lynch CEO), has an urgent care facility open seven days a week, an outpatient diagnostic and surgery center, a rehabilitation and fitness facility, and a major community outreach capability.  The facility is modern, highly useful to the community, a better neighbor for area residents because it is quieter and less disruptive, and a more appropriate health care resource to be paired with the hospital less than a mile away. 

In some communities, there may not be a need for a substitute health care facility, but we have to treat hospital closures as political challenges, not just as health care delivery challenges.  We have to stop pretending that our runaway health care costs have mostly to do with greed, unsolvable health problems, better quality, greater efficiency, or better cost containment.  We spend more on health care because health care professionals make good livings in health care and are respected by their families, peers, neighbors, and communities, and because health care spending is a major economic and financial market growth engine. 

Unless we figure out alternative spending paths for our health care dollars, alternative careers for people in the health care industry, and alternative uses of excess health care facilities, this problem will not go away.

At a time when businesses are trying to reduce costs to continue to be profitable when revenues are either declining or flat, it is tempting to reduce spending on government advocacy, especially if a business believes that it is adequately represented by trade associations or coalitions.  Nothing could be riskier.  Let me illustrate my point by discussing the evolution of health care legislation.

Contrary to what is sometimes reported in the popular media, large, self-insured employers want to continue to control and manage their own health plans for their employees, and are unenthusiastic about the “single payer” system, which would take control of health care costs away from them, and place it with a government-owned organization.  While some employers think a single payer plan will reduce their health care cost outlays, this is probably not the case, and, more likely than not, they will pay more, except that it will be in the form of one or more kinds of taxes.  In fact, when I hear the comment that Toyota has an advantage over GM because Toyota does not have to pay health care costs, I am astounded that any intelligent person accepts this argument uncritically.  Someone, whether it is Toyota or another category of Japanese taxpayer, pays for the health care costs of Toyota employees.  While a single payer system spreads the cost over a larger population, the real driver of health care costs is not who pays, but how much is paid, based on usage and cost-per-unit.

However, getting back to the point of this blog, President Obama has repeatedly said that if individuals like their health care plan and their current doctor, under his proposed reform framework, they will be able to retain what they have.  He has repeatedly commended companies like Pitney Bowes and, in his June 15 address to the AMA, Safeway and its great leader Steve Burd, for their great health care programs.  The implication for a business leader listening to the President is that any legislation emerging from Congress will be designed to leave such plans intact.

However, if one looks at the proposed health care reform legislation emerging from the Senate Health, Education, Labor, and Pension Committee called the American Health Choices Act, the fine print yields a very different conclusion, as does the perspective emerging from conversations many people have had with the staff of the House Ways and Means Committee.  In their view, anyone, including employees currently in a self-insured employer plan, should be free to participate in a government-sponsored plan, and the President has publicly stated that there should be competition among government plans, private insurance, and self-insured employer plans.  The details of that competition become critical, and they will determine whether the public plan merely attempts to cover people who do not have satisfactory, affordable coverage today, or whether it puts self-insured employer plans into a death spiral. 

Moreover, a similar bill pending in Connecticut and passed by both houses of the General Assembly called the SustiNet bill similarly opens up a public plan to those earning at or less than 4x the Federal Poverty Level, and SustiNet requires an employer of an individual who enrolls in the public plan to pay a penalty into that plan.

Why does this matter?  Every health plan is designed around the principle that healthy individuals who spend less on health care each year subsidize those with large health care bills.  If a healthy individual leaves a plan, the employer or insurance company or government payer loses a profitable member, and has to increase rates from other members.  Over time, the rates go up, more healthy people leave the plan, and the plan becomes unsustainable.

I was a member of the HealthFirst Authority, a public-private task force very capably co-chaired by two dedicated and thoughtful individuals Tom Swan and Margaret Flinter.  The HealthFirst recommendations to the General Assembly struck the appropriate balance between covering the uninsured and protecting existing plans.  Unfortunately, as the legislation made its way through the system, it got much more threatening to large self-insured plans. 

I have talked with many CEOs and government affairs representatives of self-insured employers.  None of them picked up on this obscure provision of the SustiNet legislation.  The Connecticut Business and Industry Association understood it, but the CEOs and other senior executives of large Connecticut companies outside the health care industry really did not understand or focus on this legislation, even though it threatens a basic employee benefit they offer.

It is great that President Obama receives CEOs at the White House and listens to them.  It is also great that Democratic and Republican Senators and Congressmen listen to CEOs and others who advocate on health care.  However, the real battles are on obscure provisions in the legislation, as well as complex, irrational, and non-transparent budget scoring rules that CEOs and their government affairs teams never touch or understand.  There is an old saying that “the devil is in the details,” and that is clearly true here.  Unfortunately, businesses are not engaged at the level of detail that enables them to pick up these issues and address them.

At a time when government is more activist than ever, it is not enough that businesses and other stakeholders have meetings with senior government officials or their key staffers, and present generic concerns.  They need to understand at the level of specific legislative language and budget scoring rules what is happening, and how to modify existing proposals and rules.

CEOs and board of directors have often told me that it is not their job to get into the detail relative to governmental actions because they have “experts” whom they hold responsible for this, but my response is that it is absolutely their job to get into the detail that makes a life-and-death difference to their business.  Government affairs professionals, lawyers, lobbyists, and trade association representatives can only understand and influence issues to a limited degree.  CEO brainpower and influence is needed on the most important issues, and mastery of the details is essential.

•       Successfully combating obesity is simply a matter of controlling calorie consumption relative to the calories burned off through exercise and other daily activities.
•       In addition to controlling overeating, good eating includes having a diet that includes the correct balance of proteins, complex carbohydrates, fat, and minerals and vitamins.
•       Overeating is partially a result of a combination of the great success food companies have had in finding the “sweet spot” in the palette of eaters in which they are attracted to an optimal combination of sugar, fat, and salt.  Over time, food producers, restaurants, and grocers have gotten better and better at marketing the pleasurable aspects of food.  Historically, people stopped eating when they were full, and were constrained from overeating by the combination of the high cost of food, the unattractiveness of much of what they were eating, and the fact that their body signaled that they were full.  Today, unhealthy food is lower cost than healthy food, unhealthy food often tastes better than more attractive options because of brilliant product development efforts, and because there is a delay between when someone has eaten too much and when they feel full.
•       Combined with the brilliant product and marketing efforts of food producers and marketers is the environment in which unhealthy eating is almost inevitable.  Dr. Wansink’s book, in particular, identifies opportunity and disparate availability of good and bad foods as the reason why many people unconsciously overeat unhealthy foods. Many lower-income neighborhoods are “food deserts,” which means that they lack healthy food that is affordable, available, abundant and attractive.  Many public health officials have zeroed in on this problem.  For example, in a great report entitled Life and Death from Unnatural Causes: Health and Social Inequity in Alameda County,  the Alameda County Public Health Department states on page 97, “A lack of healthy food outlets and overabundance of liquor stores are part of the legacy left behind by several decades of systematic disinvestment in low-income neighborhoods.”

Several solutions emerge from these books, as well as other expert sources:

•       Better calorie and nutritional labeling will help consumers make better-informed choices.  Dr. David Katz of the Yale School of Public Health Preventive Medicine Research Center has spearheaded the creation of a single integrated rating system for all foods entitled NuVal, a nutritional scoring system, which is described in detail at nuval.com.  If all those who produce, market, and serve food were required to use this evaluation system, which was approved by the Food and Drug Administration, then we would have a simple way of comparing very different foods relative to calorie consumption and total nutritional value.  While there are legitimate questions about whether this is the right way to evaluate the nutritional value of food, Dr. Katz has clearly taken this debate to another level.  If NuVal is not the right solution, then someone needs to improve on what we have today in a different way.  We have insufficient and confusing food labeling.

•       Mr. Cardello recommends that governments not try to micromanage individual ingredients, as New York City has done with transfats, but that government give food producers, marketers, and retailers calorie reduction targets, (and he might also have suggested a nutritional scoring target had he been familiar with Dr. Katz’s system), and let the food industry use its innovative capability to figure out how to make more money and deliver more nutrition with reduced calorie consumption at the same time.

•       The implications of Dr. Wansink’s work, as well as the work of many public health officials, such as Dr. Tony Iton and the Alameda County Public Health Department, is that we must create environments more conducive to healthy eating.

•       Finally, Dr. Kessler takes the position that overeating is an addictive behavior, and we need to approach it as such.  As an addiction, it is not like smoking or consumption of controlled substances, which are bad at any level.  It is more like alcohol addiction, since eating is good up to a point, but bad when it is excessive.  Health insurance plans need to pay for proven programs that help individuals manage their addiction to overeating.  At Pitney Bowes, we pay for a variety of weight-loss programs, including WeightWatchers and a residential program called Structure House for morbidly obese health plan participants.

This will not be an easy problem to solve, but we must begin by recognizing its root causes, and by scaling up the solutions that are working best.  The most important conclusion from these books and from talking to experts like Dr. Katz and Dr. Iton is that the obesity crisis is not going to be solved primarily through clinical interventions.  It will require a major shift in community values and practices.

At a recent workshop hosted by the Institute of Medicine, Dr. Elliott Fisher of the Dartmouth Institute of Health Policy and Clinical Practice demonstrated that a sizable percentage of decisions made by health care professionals are discretionary and are within the range of what is popularly called “evidence-based medicine.”  His fundamental argument is that we cannot contain health care costs significantly by making health care practices conform to “evidence-based medicine.”  Instead, we will need to create systems in which the health care community selects less-costly, but equally-effective, approaches, over more-costly approaches. 

The Dartmouth Atlas survey, which I strongly recommend that everyone interested in health care transformation read, proves that there are wide variations in health care cost among American communities with not only no better outcomes, but, in some instances, slightly worse outcomes in the higher-cost communities.  A recent posting of an article entitled “The Cost Conundrum” in The New Yorker profiles McAllen County, Texas, one of the two highest-cost areas, the other being Miami.   In it, the report Atul Gawande, demonstrates the local health care provider community is oblivious to how out of line its practices and costs are, but the reporter also notes that nothing the practitioners do would ever be prevented by an evidence-based medicine system.

I can relate to his argument based on my own personal experience.  Several years ago, I had an angioplasty to address a relatively limited arterial blockage in one of my arteries.  My condition was not life threatening, and the blockage was discovered in a routine stress test during a routine physical.  Nevertheless, having this entry on my medical record sometimes triggers unintended consequences when I have a health care system encounter.

During Memorial Day weekend, I had a little discomfort on the right side of my chest.  When I called my internist and my cardiologist, both offices had other physicians on call and both were not reachable at the office because of the holiday.  Both on-call physicians suggested I go to the Emergency Department of the Stamford Hospital to get some precautionary tests.  I arrived at 11 am Sunday and got a blood test, an EKG, and a 64-slice CAT scan, as well as having my heart monitored for about two hours.  The test results were normal, and indicated that the likelihood that I had heart problem was very low.

Nevertheless, the cardiologist on call suggested that I stay and have 2-3 more blood tests spaced 6-8 hours apart to insure that I did not have an enzyme that indicated heart damage.  I accepted her recommendation, and the 3 additional blood tests, as well as 2 additional EKGs, confirmed that the chest discomfort, which, by the way, disappeared by Sunday noon, was not heart-related.  I was discharged Monday morning at 9 am.

My cardiologist and internist called me right after the holiday when each returned to their office, and both suggested that it was unfortunate that this event happened on the holiday weekend.  Both indicated that they  would have been less likely to have admitted me to the hospital because, being familiar with my history and medical condition, they might have made a judgment that my problem was not heart-related.  At the same time, they said that when a colleague deals with someone who is not their patient, with my history and my description of symptoms, the tendency is to be more cautious and that hospital admission is more likely.  When I related my story to a physician familiar with national health care practices, he told me that if I were in certain parts of the United States, doctors would have ordered me to go in for an angiogram, in addition to the other tests, and to be hospitalized a day or two longer, and that the event would have been far costlier. 

I tell this story because it is a good example of how different health care practitioners in different communities, or even the same community, might deal with the same situation very differently.  None would be wrong, according to the dictates of evidence-based medicine, but the costs would be radically different, ranging from zero for an encounter with my personal physicians who might have had a “watch-and-wait” approach, to the most aggressive and proactive approach, which would have generated huge health care expenses, probably in the tens of thousands of dollars.

This problem illustrates why I favor a health care payment system recommended by Dr. Fisher, rewarding the creation of “accountable care organizations” that self-manage their care costs downward, while improving or maintaining acceptable levels of health care quality.  Dr. Fisher’s approach is described in a number of well-researched and well-argued scholarly articles.

The June, 2009, issue of The Atlantic Monthly had a provocative article entitled “Do CEOs Matter?” by reporter Harris Collingwood. What prompted it was the recent story about the leave of absence taken by Steve Jobs of Apple Computer and the stock market reaction to stories by Jobs’ health problems.

As a former CEO, and as a student of leadership in business and other sectors of our country, I believe that individual leaders matters at all times, but in varying degrees at different times and under different circumstances.  Certainly, at particular points in an organization’s history, there are crises that demand unique leadership capabilities.  For example, I cannot imagine that IBM or Xerox would have survived the threats to their survival in the 1990’s without the inspired leadership of Lou Gerstner and, in Xerox’s case, the inspired leadership of my good friend Ann Mulcahy.

However, the goal of a successful CEO is to create sufficient breadth and depth of leadership that he or she can exit without affecting the strength of the organization.  That was the whole  point of Jim Collins’ discussion of Level 5 leadership in his great book From Good to Great.  Collins argued that the best leaders create organizations so strong and resilient that the organizations can prosper without them.

When I think of my CEO tenure at Pitney Bowes, I think of three decisions that required my unique leadership capabilities, the decision to take a strong stand against the U.S. Postal Service leadership in place in the mid-1990’s, the leadership on postal reform legislative advocacy from 1995 through 2006, and the decision to persuade our board of director to exit our non-core financial services businesses.  All those decisions would not have happened as effectively without me.

On the other hand, I was blessed with inspired leadership from many levels of Pitney Bowes people, and, while I gave a unique twist to other decisions, I believe that there were others who could have crafted a successful direction to the company relative to those decisions.  By 2007, I was highly confident that the Company could be successful under Murray Martin’s leadership, and recommended that he succeed me.  Having seen his great leadership as CEO for two years, I feel that my recommended has been validated.

I am glad that Mr. Collingwood and The Atlantic Monthly have chosen to do this story because I feel that, as a society, we often succumb to the myth of the celebrity leader.  We overvalue certain high-profile leaders who appear to be dominant leaders, and we undervalue lower-key individuals who succeed by building broad organizational capabilities.  We overpay those so-called great leaders, and, then, get bitterly disappointed when they are less than superhuman.  The boards of directors that get caught up in this cult of the great leader are most to blame, but, clearly, shareholders have to look in the mirror and see if they contribute to the problem by over-reacting to a report on the health status of a single individual.  When boards see significant shareholder reaction to information about a leader, their potential ability to look for the quick-fix leadership solution is reinforced.

Great leaders make a huge difference, but, paradoxically, their biggest contribution to an organization is to create an environment in which they are not needed for the organization’s success.

Our country has spent hundreds of billions of dollars over many decades to reduce or eradicate poverty.  Governments at all levels have been part of the effort.  There are many explanations as to why these efforts have succeeded, if at all, only marginally.  As a member of the National Urban League board, and its former chairman, and as a person who has worked closely with many community-based non-profit social service organizations in Southwestern Connecticut, I have some thoughts on the subject.

The National Urban League, which will celebrate its 100^th anniversary in 2010, is a wonderful social services and civil rights advocacy organization, which has developed its programs through the benefit of rigorous research, experience from nearly 100 years of service delivery at its nearly 100+ affiliates, and incredible insight from leadership teams headed by great leaders like Whitney Young, Vernon Jordan, John Jacaob, Hugh Price, and the League’s current brilliant and accomplished leader Marc Morial.

I have become familiar with the Urban League’s affiliate programs, and visited one of its great affiliates recently.  The Urban League delivers services under many government-funded programs for such deep-seated problems as early childhood development, educational achievement gaps, health disparities, workforce skill gaps, foreclosures on homes, and the challenges of needy families.  Its advantages, as is the case with all high-performing non-profits, include the ability to react flexibly and in a deeply-personalized way to the problems in confronts in helping individuals and families.  It achieves phenomenal results in serving 1.3 million Americans a year in getting them ready to work, helping families avoid mortgage foreclosures and improve their financial literacy, providing vital child care and cash disbursement services to needy families, helping children with pre-school and after-school programs, and helping reduce health disparities.

However, when they, or other non-profits, provide human service programs through government grants, government creates a lot of inflexible, dysfunctional rules for program operation, and often mandates not only the software programs to be used, but the specific versions and process steps.  Usually, the software is outdated, is heavily driven by compliance, rather than program effectiveness, and requires a great deal of inputting by clerks and administrators. 

The other attribute of government programs is that there tend to be many of them and that they deal with pre-defined micro-segments of the communities they are serving.  Because of the inflexibility and complexity of the rules for program eligibility, an inordinate amount of effort is spent identifying the right program to help someone, and figuring out how to cobble together a holistic assistance package from multiple programs.  Governments do this because they do not trust anyone to spend government money without a lot of oversight, and because they are overly sensitive to small amounts of waste. 

On this last point, I think that career and politically-appointed government officials have always had acutely sensitive political antennae, but this sensitivity was accentuated by the 24×7 media environment, the blogosphere, and the excessively partisan political environment in which we operate today.  Governments are far more cautious in developing and implementing solutions that they were 40 years ago because the poisonous environment in which they operate.

Aside from the added cost and complexity of government, which we have less and less ability to afford, some individuals who need help cannot get it because they fall through the cracks between programs, or because the program rules have not anticipated their particular needs.  Organizations like the Urban League are effective precisely because they are close to the people they serve, seasoned and capable service providers, and highly flexible and cost-effective in the way they deliver services.

When governments micro-manage them, many of the advantages of using non-profit service providers are lost.  We need to hold service providers responsible for results when public money is used, not try to micro-manage how they do their jobs.  We need a complete rethinking on government delivers services, one which takes a lot of the micromanagement out of government.