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.

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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.

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•       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.”

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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.

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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.

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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.

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In an Op-Ed piece in the Tuesday, May 12, issue of The Wall Street Journal,   entitled “Schumer’s Shareholder Bill Misses the Mark,” attorneys Martin Lipton, Jay Lorsch, and Theodore Mirvis accurately and insightfully point out the fundamental flaws in the shareholder rights legislation proposed by Senator Chuck Schumer.

Senator Schumer ’s bill is designed to override state corporation laws that vest the primary power for leading any state-chartered corporation to its board of directors.  In a number of ways, including banning staggered boards of directors and reducing barriers to shareholders nominating their own candidates for directors, Schumer’s proposed legislation would significantly transfer power from directors to shareholders.  The simple, but flawed, rationale is that, since shareholders own the company, they should have more power to manage it.

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I have been blessed to have been a part of three families in my life, the one into which I was born, the one into which I married 30 years ago, and the one my wife Joyce and I formed when our first son was born in 1986.

 I have gotten to know my mother-in-law Joan McNagny very well over the last 30+ years and have a great admiration for what she has done with her three children and their lives. She has been exceptionally supportive of not only her children, but of the spouses of her three children, as well as her nine grandchildren.

I also have gotten the opportunity to observe my sister Trina who became a mother of four, and a grandmother with 11 grandchildren, and who has been exceptional in both roles.

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In the Spring 2009, issue of the Harvard Public Health Review entitled “Stealth Tobacco”, there was an article about the response of the tobacco industry to the increasingly heavy regulation and prohibition of cigarettes.  The industry has been very resourceful in marketing tobacco in forms and packages that are designed to reduce the public opposition to the sale and use of tobacco products.

Tobacco marketers have figured out that the public is more ready to prohibit tobacco ingested through smoking processes because of the second-hand smoke issue.  As a result, they have aggressively marketed smokeless tobaccos that are chewed, either in traditional chewing tobacco products or in more innovative products that package nicotine in lozenges, mints, and other orally-ingested forms.

Although these tobacco products do not pose the public health risks to those in the vicinity of the tobacco user that cigarettes, cigars, or pipes pose, they have all of the same negative consequences for the user, including the same addictive properties we associate with smoked cigarettes.

As I have said many times, I do not oppose a mature adult’s freedom to smoke or otherwise ingest tobacco, but I believe more strongly that these alternative forms of tobacco ingestion should be heavily taxed, that sales to children under 21 should be prohibited, and that health insurance plans should not only be permitted to charge tobacco users more for their health coverage, but should be required to do so.

The federal government, which has talked a lot about the need for health care reform to address prevention and wellness issues, has a golden opportunity to take a strong stand on this issue, and adjust Medicare, Medicaid, VA, and DOD participant co-payments or premiums to discourage tobacco consumption, and to direct states receiving federal funds for Medicaid and SCHIP programs to do the same. 

The federal government has recently increased the excise tax on cigarettes from $.39 to $1.01 a pack.  It needs to make sure that it heavily taxes all forms of tobacco ingestion, and that states bring tobacco taxes up to a minimum level.  By way of comparison, New Jersey has the highest tax on cigarettes, $2.58 a pack, while South Carolina is at $.07 per pack.

I am sympathetic to the argument that an excise tax on tobacco is highly regressive, as is any other sales tax.  I also recognize that we are dealing with addictive behaviors.  Therefore, I would require both the federal government and the states to use all the increased revenues from these taxes for smoking cessation programs, not to reduce budget deficits.  Over time, the lower-income population would find that its discretionary income would rise because it would not be spending scarce funds on tobacco products, and would see a broader improvement in health and quality of life.

I would adjust Medicare and Medicaid payments to reward physicians and other providers that are actively promoting smoking cessation as part of their primary care interactions with patients, and to reward broad integrated care organizations that are attacking this issue aggressively.  Tobacco cessation counseling is a high-level skill and requires a highly-customized and individualized approach to each person who is being counseled.  We need to make sure that the financial benefits of undertaking this activity are given to those who do it.

Finally, I favor the regulation of the marketing and sale of tobacco products by the FDA, because, over time, that regulation will be able to curtail the sale of tobacco products to minors.  Pitney Bowes was in the cigarette tax collection business until the early 1980’s, and I learned from those in that business that the technology to track individual tobacco product sales is available and affordable.

I applaud companies like Wegmans, the Rochester New York-based retail grocery chain, which has decided to stop selling cigarettes and other tobacco products in its stores.  I would like to see the major pharmacy retailers do the same, even though tobacco products are among their most profitable retail products.