strategy+business is published by PwC Strategy& LLC.
or, sign in with:
strategy and business
 / Winter 2004 / Issue 37(originally published by Booz & Company)


Kenneth W. Freeman: The Thought Leader Interview

FREEMAN: The first strategy was to survive, because we were broke. But right on its heels came driving to leadership. There were three big competitors in the industry, all roughly the same size, and thousands of smaller local competitors; all of us were beating our heads against the wall with the same customers.

S+B: But your earliest moves weren’t really about the market. They were about the people.

FREEMAN: You have to establish your credibility. One thing I faced going in the door was people in the company saying, “Who is this ‘glass guy’ from Corning, coming to us with no lab experience? He has no health-care experience to speak of. He’s not a ‘laboratorian.’” At the time, we had 14,000 employees. I reached to the bottom to reach up, to establish my credibility first with the rank and file of the company.

I started visiting our laboratories. One of the first was in Pittsburgh. And I said to the general manager and his staff, “Look, I’d like to take a walk around the lab.” They were puzzled. “We can show you the equipment,” they said. I said, “I don’t want to see the equipment. I want to meet your people.”

What I learned was that the general managers didn’t know their employees by name — who they were, why they came to work. So the CEO had to model the behavior we needed going forward, or change would not happen. I wanted to take a company that was hostile and hierarchical, and not particularly values oriented, and create a values-oriented, honest company where the people respected each other and were responsible for their actions. I had to model the behavior at the grass-roots level. And if I hadn’t done it, no one would have. Creating change in a troubled company must start at the top. The CEO sets the tone.

S+B: To whom specifically did you reach out?

FREEMAN: There were many groups of people who really touched our customers. Couriers, customer service reps, phlebotomists.

S+B: What are phlebotomists?

FREEMAN: They’re the people who draw the specimen. The blood. About 60 percent of the blood drawn for our tests is done in hospitals or doctors’ offices. The rest is drawn by our phlebotomists. In our industry, that’s one of those places where the rubber meets the road, because they have that direct contact with the patient.

S+B: Was the reaching out done primarily through those walking tours?

FREEMAN: It was a concerted effort across a whole bunch of areas. The company was a bunch of fiefdoms all running their own shows. There was no way to get information to or from the field. There were no metrics. We couldn’t tell our daily cash balance. We didn’t know how many employees we had. We didn’t have a voice-mail system.

So I put in a comprehensive communication approach. I created a leadership forum, made up of the top 60 people of the company at the time, that met monthly to teach and drive the changes needed. I put in an employee hotline with direct access to me. You could send me an e-mail anytime, day or night, and I would respond within 24 to 48 hours. The entire company had the opportunity to participate in setting the values and the vision for Quest Diagnostics when we were spun off.

S+B: Is there a distinction between values and vision?

FREEMAN: Vision and identity, in a way, are what you do, and the values and culture are who you are and how you work. You need both. But if you can’t create a view of what your identity is for employees, it’s hard for them to kind of figure out how their behaviors are going to fit in. By our engaging the employees, it became crystal clear the kinds of things we all had to establish. Integrity. Quality. Accountability.

Follow Us 
Facebook Twitter LinkedIn Google Plus YouTube RSS strategy+business Digital and Mobile products App Store


Sign up to receive s+b newsletters and get a FREE Strategy eBook

You will initially receive up to two newsletters/week. You can unsubscribe from any newsletter by using the link found in each newsletter.