title: Power and Organizational Transformation with Amir Rubin
author: Pfeffer on Power
publication: Pfeffer on Power
published: 2024-07-17T14:00:00
source_url: https://audio4.redcircle.com/episodes/72f1158a-270c-4d23-a1bb-a215319140e6/stream.mp3
word_count: 4402
I'm your host, Jeffrey Feffer, a professor at Stanford University's Graduate School of Business, an author of 16 books on a range of topics, including the topic of my oversubscribed MBA class and this podcast, Power. Every other week, I talk to someone about their path to power and provide you with practical guidance about how to accelerate your career. Today's guest is my good friend, Amir Rubin. I met Amir when he came to Stanford to run Stanford Healthcare, our hospital in clinics. Amir transforms Stanford Healthcare. In his five plus years on that job, he doubled revenues, increased operating income by 500% and transformed Stanford Healthcare. There are measures of patient satisfaction and their quality measures, and when he left Stanford Hospital was considered to be the number one hospital at least in California, and he did an amazing job. He then went to United Health, which we won't talk about, and after he left United Health, he became CEO of One Medical. He transformed One Medical. He grew it substantially, took it public, and then a couple years ago sold it to Amazon.com for close to $4 billion. And now Amir runs Healthcare Capital, a venture capital firm to invest in high-tech medical startups in order to transform medicine, something that he's been interested in throughout his career. Amir, throughout the time that I have known him, has been dedicated to one thing, primarily, which is, to transform for the better virtually every aspect of US Healthcare. He and I have become very good friends over the years, and he and I have had many interesting discussions about whether or not being a VC in healthcare is the best and the highest leverage place from which to transform healthcare rather than being a healthcare operating executive. But he has done a fabulous job wherever he has been, and is a pleasure to know him. Our theme for today is power and organizational transformation. Amir really improved in almost every dimension, the operation of Stanford Medicine. Amir improved in almost every dimension and grew it substantially, One Medical. So Amir has led organizational transformations, but he has often led those transformations from a position in which he had to build influence. So when he came to Stanford Healthcare, 80% of the revenue of Stanford Healthcare derived from doctors, Stanford doctors, who reported to the dean of medicine, not to Amir. In One Medical, he came in, and he coexisted for a while with the founder of One Medical, Tom Lee. And once again, he had to get on board the commitment of the staff, the doctors, in order to make One Medical even more successful. So Amir has had to lead important organizational transformations, and in many instances has had to build influence, even though he was a CEO, not necessarily controlling every aspect of it. So that's what I want to explore with Amir Rubin today, how you build influence to transform systems for the better. Welcome to the podcast, Amir Rubin. Jeff, thank you so much. What an honor and privilege it is to be with you. I'm so excited to chat with you. And if I can wake one plug, it's read every one of those 16 books that Professor Feffer wrote. It will serve you well. So Amir, when you came to Stanford Healthcare, the emergency department was not doing so well. Patient satisfaction scores were not doing so well. And you had to lead a transformation of Stanford Healthcare, which you did quite successfully. And you had to do this, getting the collaboration of the doctors who reported for the most part, to the dean of the medical school, not to you. How did you get people on board? And how did you get influence them to do what you needed them to do in order to make Stanford Healthcare more successful? Well, I think confusing. I think first of all, Jeff, we were aligned by a common mission and vision. And we even rearticulated that, which was to heal humanity through science and compassion, one patient at a time. So this was less about what I wanted to do. And frankly, more about what we all were here to do. And now how do we make that clear? How do we align on that common mission? And how do we start defining how we do that? No one was actually against a better experience. What do we need to do it? What's my role in it? How do we start making progress on that? So I also think another key thing was, frankly, as I was coming in, I was learning what the problem statements were from the eyes of multiple stakeholders. Yes, what was the consumer experiencing and employers that we served. But also, what were the challenges for our providers, for our faculty, for our staff? And I've often felt that we have to address the needs of those multiple stakeholders simultaneously, right? It's not a zero sum. And often when one makes these zero sum, you can alienate folks. But in healthcare, it needs to work for the consumer and we need to be able to support a good clinical process, good workflow. So how do we do both of those things? And then also starting to make traction in small ways, we made baby steps on some things. We showed that we can paint walls and fix processes and help faculty and get traction on tangible things that then gets you some benefit of the doubt or using some of your words, some reciprocity in the future. But people saying, okay, I think progress can be made here. Let me get on board here and facilitate and be supportive. And one of the things I saw you do was really to get the doctors on your side, really address issues that made their lives better. Offer them equipment, offer them research support, offer them, you know, you're famous for fixing the roof. There was a helicopter that landed on the roof of the old hospital and the roof was in bad shape. And so when it rained, literally there were waste baskets out collecting the water that was leaking through the ceiling. And even though that hospital was not going to be the hospital forever, because you were in the process of building a new hospital, you fixed the roof and you helped fix the parking for the patients. And I remember interviewing one of the doctors, the head of the vascular surgery department who said, I don't want to be famous for being the roof and parking guy. But on the other hand, a mere fixed many of the small problems that irritated people and his willingness to do that really brought him a lot of goodwill. Well, you know, at some level, I think a great experience, whether it's for faculty, clinicians, staff, or for patients is thinking through all those small steps of the process. And I think when we're often finding yourselves irritated with an experience, it's often something like, I can't believe nobody's thought about this. Well, you know, that's often the case, either folks haven't thought about it or haven't put the energy or effort to think about those things. I think ultimately a great experience, whether it's for patients or customers or consumers or for physicians, faculty, staff is thinking about all those things. How do we stitch these things together? The details matter, the value stream processes matter. And I don't think you can have great experience and ignore those details, whether it's for faculty or staff or for the patients. I think they're kind of one in the same. Well, I like that idea that in fact, it's not in conflict that if you want a great patient's experience and great patient outcomes, you have to have your providers aligned. And certainly the idea of doing favors for people in order to get them to get on board with your ideas is the idea of exercising reciprocity, I think is important. You did that not only at Stanford, but you did that at One Medical because as we know, as I know, from my own personal experience, physician burnout is a huge problem. One medical is basically a chain of primary care clinics. Primary care doctors seem to be particularly burned out because primary care in the United States is not that well compensated compared to other specialties and they have all of this stuff to do. And once again, when you came into One Medical, you said to the doctors, we are going to try to make your experience better so that you're not going to have the same level of turnover that we have experienced in the past. Yeah, that's absolutely right. And I'd say, we are situated in, well, the kind of mechanism of reciprocity was yes and effect. I didn't come into things thinking about, hey, there will be a reciprocal, you know, favor here. My dad's a faculty member in engineering, he's been a professor. I'm working with these amazing clinicians who are giving so much of themselves of train so hard. It's almost out of common decency respect admiration for these folks like that's not how we should be treating our physicians and faculty. I mean, these are people we trust with life and death. We owe them in this at some level. And so it's, I really feel that way. I feel privileged to work with these amazing caregivers and certainly coming into One Medical, I felt the same thing. And you can see if you, you don't have to step back too far to see that we are really making it difficult on people. We are in US health care. We're paying a fee for a visit, but saying you have to do this great longitudinal care. We're not giving people a lot of time. We put a lot of burdens of desktop medicine on them. The thought of how do we make it a better experience for the consumer also connects to how do we make it a better experience for the primary care provider. And if one medical, we said, well, gee, instead of paying him a fee for every visit, let's put him on a fix salary. Let's give him more time. Let's build technology that takes some of those burdens of desktop medicine off of them. Let's use modern technology, initially natural language processing that read a lot of those emails and routed into other team members. Now putting generative AI in the loop there to help still with humans in the loop. Let's leverage these approaches to route work around to get quick responses. So by addressing the provider issues, we also then were addressing the consumer issues. Well, great. You can get a quick response to your question because it didn't have to go to your in-office provider. It could be routed to a different team member and you could get a response in minutes versus days. So absolutely thinking about how do we show respect to our fellow human beings and these highly trained, very caring professionals. And while doing that, how do we deliver it to our patients, our consumers, what they're looking for? So Amir, we were talking about your respect for the providers, which you demonstrated both at Stanford and at one medical, which seems in some sense like common sense. Why is common sense so uncommon? Why do so many healthcare leaders not have that level of respect and commitment for the patients and for the providers? Well, I think first of all, people do have the respect for the patients and providers and do care, but it's difficult to work through the tyranny of the many things that are happening, you know, the objectives of today and to cut through that sometime to work on some of these fundamental process changes. It's often hard to do that in the incumbent organizations where they're getting paid a fee for service. They have to do all this documentation. They have to do all these assessments. And it's often hard to step back from that and say, gee, how do we redesign the way we're doing things? How do we redesign the processes? I think in general, people very much care, but they're often in a tough spot to step away from that. I think that's where the startup ecosystem is a helpful ecosystem because you say, you know what? Let me try to do something that's orthogonal to the way it's done today. The problem statements are well known. Even the approaches were implementing are not unknown to people, but they're hard to do in the current state often. So I think often you need innovators trying different things in the case of venture back companies, having people willing to invest in that and say, okay, well, this is high risk, but we think there's a shot that this could work. Let's go for it. And that's often hard to do in big incumbent organizations with existing processes, existing promotion processes, existing compensation approaches. In both Stanford healthcare and in one medical, your transformation required not only the support, obviously, of the providers, but also the support of your board of directors. In both instances, you had a board, it's in one medical, first as a venture back company, then as a public company, and you had a board at Stanford as well, a board of trustees. And in both cases, you had to get support from the board to back you up as you led this transformation. What did you do to ensure support from the board? Yeah, I think back to the point about knowing all your stakeholders, certainly understanding that the board is a critical stakeholder. Certainly as the CEO, that's your boss, those are your bosses. And say, I think a few things, I think first on coming into an organization, understanding what is the organization looking for? And specifically what's the board looking for? And specifically maybe with the board chair, with you for it, why are you hiring me? What are you trying to achieve with this recruitment? And does that match up with my skills or any executive skills? And what I'm interested in doing, and frankly with how at least I would assess the problem statement and where we have to improve, and so having those areas lined up is important because it might be the case that not every executive is the right answer for every organization at every point in time. So I think that is very key. And then spending time, spending time with the board members, getting to know them individually, getting to know them as a group, keeping them up to speed on what's happening in the organization, getting their input. And then these were incredibly talented people with great experience in their own right. And then leveraging their talents and say, great, how can I take advantage of their knowledge, their network, their expertise? So basically with both the doctors and the staff and the board members, what you fundamentally did was spend time with them and get to know them and keep them informed and get them to buy into your vision. My sense is that you had the board as well as your senior staff try to expose them to what was actually going on in the medical center that you had. Certainly the senior staff you had to make rounds. Did you also get the board to go into the hospital? We did get the board exposed to things and later on we started moving our board meetings to different locations in a clinical enterprise and we would tour them through the organization we meet with individuals. We used a lot of lean and design thinking approach. So we would go to the field, go to the Gamba, the factory floor, the place where the work is done. So we spent a lot of time we brought in speakers. We had patients come and speak. We did that also with management meetings. We had certainly clinicians and other team members. So to get a favor for what the reality was on the ground, if you will. So I think that was certainly important. And that was really our management or organizational operating system. It really across the organizations I've worked in is we have to strategically align with each other. We call it strategic alignment and deployment. What are we trying to achieve and how does that cascade throughout the whole organization? Second key issue is how do we improve and innovate? And hopefully we're doing on the aligned goals that we had. And the third area we called active daily management. What do we do each and every day always to continuously improve to share where hiring, onboarding, training, measuring, coaching, being in the field and had these kind of common precepts. And we spent a lot of time talking not just with our leadership team and our clinicians and our staff about this, but also with the board. Like here's how we're going about doing things. You will hear the same approaches consistently from us because this is how we do things. This is our management approach. So at some level, it's also getting alignment exposure, buying on the way we want to go about doing things. And for some folks that wasn't a good alignment. Well, that's not how I like to do things. I don't like to go talk to customers or be in the field or look at processes or engage in multi-disciplinary teams. I delegate that or we have meetings to do that. And for us, you know, at least in the philosophies that I espouse, well, that's not going to work in our management system. It may be a fine approach, but we need to align on a common approach so that we're all working in the same way. And that gave us also a scalability in a different way to go to up to 31 markets at one medical and do expanded Stanford or UCLA or adopt them or other organizations. Because we had scalable ways to strategically align and deploy, to do improvement in innovation, to do our active daily management. One of the things that you did that was very unusual, particularly at Stanford, I don't know if you did this at one medical as well, but you had patients involved in almost all of your improvement efforts. And you paid for the time if you needed it, if you needed to pay it, but you had patients involved in all of the organizational improvement processes. Absolutely. And we absolutely did that at one medical in our healthcare organizations. And actually in a healthier capital now that we're investing in company, we're spending a lot of time in the field talking to users, patients, customers, clients, whether in those clinical settings, they were advisory councils, or as we made what we call our Sierra care rounds, our customer experience rounds. We go talk to patients, we'd ask for that feedback. Yes, as we had our lean kind of kaisan or rapid process improvement workshops, we'd include them in those workshops. And people were willing to share patients want to see better improvement. So we had great insights from patients and also just making those multidisciplinary. You know, we need the physician perspective, but we also need the person at the front desk and we need the technologists and we need how does this impact sales and we need to understand it from the patient's perspective or if we're serving a child, the parent's perspective. And the more of those perspectives we had, the better picture we had of now I see what's going on here. If we could just stitch a few of these things together upstream, we'd make it better for the patient to consumer, but also we wouldn't create all this downstream work for the clinician and staff that could be avoidable. That was absolutely important. And it also thus infused our organization with the customer experience mindset. So getting that voice of the customer and everything we do. Well, this all seems completely common sense. Many organizations and many leaders of many organizations believe it is their job to buffer the organization rather than seeking out feedback and seeking out participation, they see their job is really protecting the organization from the customer. Yeah. Well, I think back to a point you were making about boards and leadership teams. I think here's where it's important to have that alignment and trust and empowerment from the board in the leadership, you know, until you lose that right, and that's why cultivating that right, maintaining those relationships, keeping people informed is very important because we were trying to do things with a certain philosophy, with a certain approach. And it's also why showing progress and making traction and having some early wins is also important because you want to keep building on that confidence. If you're like, man, no, it's coming in the future. You can lose some of the confidence of those stakeholders. So showing, you know, that foot in the door, hey, wait, hold on, we're making some progress here and showing the measurements and showing the traction and continuously improving is really important. And then bringing other people into this solution, bringing clinicians, bringing staff, bringing technologists, bringing the board, bringing the patients, let's all work on this. This is all of our mission. This is an aligned mission. And then trying to role model, right, as I say, it's healthier capital. We all plunge toilets and make peanut butter sandwiches. And then somebody said, well, maybe you should need so much peanut butter, but I digress here a little bit, but meaning we all get our hands dirty. We're all involved. We're making rounds. We're doing site visits. We're talking with people. That is our approach and philosophy. And then we're into making changes and continuous improvement and acting on things. Let's take actions and then let's take actions upon that. And if you find something that works, let's spread it everywhere. And if you find a better way, let's then spread that and let's build the mechanisms to spread it. The improvement in innovation, the active daily management. And the final comment I would make, which we can talk about very briefly, is that the theory of Stanford was you couldn't fire anybody. The theory in California is that we have very strong labor protections. And therefore, whoever you inherited, you were going to keep. But Jim Collins and Good to Great talks about getting the right people on the bus. And therefore, by implication, getting the wrong people off the bus. And in other words, you have to have people who are willing to align with each other and with the vision and actually work hard in order to engage in continuous improvement. And as you have told my class about two or three years into your tenure, 70% of the people, two and three levels down in the organization were new. That a lot of people left because they did not want to play the game at the level of intensity that you wanted them to. And so therefore, they self-selected out. Well, I think we had a great team and we have great staff. And to a point you teed up before, I don't think there's any reasons why you can't make the improvements. And I think for us, it was we were coming up with a approach in management philosophy. How we do this alignment in deployment? How we work on continuous improvement? How we're out in the field? And that wasn't the approach that all people were interested in doing. And so if that's not a good fit, that's okay. But we were going to have a common approach. This is how we were going to be able to continuously improve and do things at scale. And frankly, it's the only way I've ever managed across all my organizations. So there may be other ways, but this is the way that I've known or we've known. So yes, that is not always a fit with everybody. And that's okay. Now you don't have to be trained in all the techniques of agile software development or lean process improvement or design thinking. We could teach you those things, but you have to want to. And they have to align with the way you want to work. And if it doesn't, that's okay too. On the flip side, as I look at these organizations, many of our leaders subsequently, we did had a lot of internal hires. I look at when medical, a lot of folks who were growing up with these systems and were like, hey, there's great people externally, but here are people who know the system, know the philosophy, know the approach, know how to execute it at scale, same at Stanford or Optum or UCLA. And that also creates a great career ladder path for people. Get trained in these approaches. You can be extremely impactful internally. You've given us, I think, and you've given the listeners an enormous, wonderful lesson in how to accomplish transformational change, which is tough to do. Particularly as an outsider, as Rakesh Karana points out in his book, searching for corporate savior, many outside successions fail, organizational change is considered to be difficult. You seem to do it relatively easily and relatively consistently. And so congratulations, Amir, it's really a pleasure to know you, and thank you for being on the Fairfront Power podcast. A real pleasure. Thanks for having me, Jeff. This has been the Fairfront Power podcast. Every other week, we talk to an accomplished individual about their path to power and their practical lessons for you. If you enjoyed the episode, please subscribe to the podcast on any of your favorite sources, and buy my most recent book on power, Seven Rules of Power. Connect with me on LinkedIn, Twitter, and Jeffreyfeffer.com. Feffer on Power is a production of Stanford University and University FM.