Organizational (D)evolution

The recent high-profile public resignations of Greg Smith (Goldman Sachs) and James Whittaker (Google) from their respective companies have created quite a stir and caused a recurrence of my own intense feelings of dislike for my former employer, OptumHealth (a subsidiary of UnitedHealth Group). Looking back, I wish I had taken the opportunity to leave in a similar “up yours” fashion. But hindsight is 20/20, so I guess crapping in the trashcan on my way out will have to suffice.

It’s hard to be excited (hell, not embarrassed) working for a company that is continually under fire for cheating the system and putting profits over customers. Examples include, but are not limited to:

• Stock option backdating scandal of former CEO William McGuire (2006)
• Current CEO Steve Hemsley’s option backdating scandal (1997, 2008)
• Leadership with ties to Arthur Andersen, Enron’s now defunct partner-in-crime
• Denying claims of thousands of policyholders
• Manipulating “reasonable & customary rates” (2008), costing customers millions
• UHG’s lobbying activities and political contributions during health care reform
• Pushing employees to contact congressman, attend town hall meetings, and help sway health care reform
• A list of lawsuits and settlements bigger than NYC’s phonebook
• Double-digit , above-inflation rate increases (sure, health care isn’t broken)
• Working to constrain benefits for people who are currently uninsured

I could keep going, but I’m getting writer’s cramp. I lived through the days of health care reform and it was entertaining to see how nervous management became over the idea of “a public option.” For a company so convinced that private is better, they sure tried hard to limit or block competition.

I wasted two long, painful years that I will never get back. But in spite of the soul-destroying work, the time at OptumHealth inspired my theory of organizational (d)evolution. I posit that like organisms, companies (d)evolve by means of natural selection – a gradual, nonrandom process by which specific traits become either more or less common in an employee population as a function of culture and promotion practices. The selection of individual traits affects the (d)evolution of the greater organization.

Day after day, I parked my 2007 Beagle at the shores of OptumHealth and observed life in cubeland. This routine allowed me to notice a few interesting characteristics that seemed to permeate the organization.

The wretched culture, tedious work, and lack of development opportunities caused abnormally high employee turnover. This toxic atmosphere caused the best and brightest employees to leave as fast as they could for greener pastures. It was so bad, that some employees even left in the midst of the financial crisis before they had another job lined up. We were chronically over-worked and understaffed. Management cared little since their budgets looked better - one less FTE (person) to pay. A few brave employees tried to stay around just long enough to reap the benefits of title inflation – rampant at UHG (I was CEO of my cubical region).

When it came time to fill holes, there were few quality employees to promote. So who becomes manager? The best of the worst. Management at Optum was incredibly inept. This promote-the-last-man-standing phenomenon only made a bad situation worse. Bad managers then hire people with traits similar to their own (more poor employees) and simply drove out good employees.

At UHG, the number of hours worked is continually selected as the single most valuable employee trait. It’s no wonder they demand and reward long hours from employees. When left with a company full of average to below average employees, UHG leadership must fully embrace the infinite monkey theorem – with a sufficient number of monkeys working on Excel spreadsheets long enough, they will eventually stumble upon the correct analysis. Or calculate exactly how much money UHG is stealing from its customers and the health care system.

So in the end, UHG sees their most capable, intelligent, “strongest” employees leave for better companies, leaving the less talented, less intelligent, morally bankrupt employees to promote into management positions. My theory suggests that if and when the devolved UHG is forced to play fair or face a real competitive environment, they will be the first health care company to go the way of the dodo.  You won’t be missed.