Mike Critelli

Mike Critelli,
Executive
Chairman,
Pitney Bowes

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Archive for June, 2007

It’s About Health

Friday, June 29th, 2007

In recent weeks, I attended and spoke at the Mackinac Policy Conference in Michigan, and visited Congressional staff experts on health care, as well as some of our elected representatives. I have seen two points of view expressed by different stakeholders. 

At Mackinac and in other forums where companies are faced with overwhelmingly large retiree medical obligations or onerous active employee medical programs that resulted from collective bargaining frameworks agreed upon decades ago, many company and union representatives expressed the view that the government should take over or  redistribute the burden of health care costs away from the employer.

On the other hand, in discussions with others who do not face this legacy burden, there is more recognition that an employer-based health program has a vital role to play in any future health care system.

We have been at a point at which our health care costs were overwhelming, since, up to the late 1980’s, we were paying close to 100% of both our employee and retiree health care costs, and, even today, we have a legacy population of close to 2,000 retirees who still have the pre-1990 100% plan. 

But we changed direction in 1990 when I took over responsibility for Human Resources.  We have been a laboratory of sorts in trying new approaches, and I feel we have a great story to tell.  At the same time, I am frustrated because the media, and, too often, elected officials focus too narrowly on the underlying issues.

The purpose of a health care program should be that the people covered by it are as healthy and productive as they can be. Obviously, health care system access, coverage, and cost are critical to making sure that the health care system plays its role in maximizing health and productivity.  But these components are not enough.  While many who propose solutions to the health care crisis will discuss health improvement, it is an after-thought or a component of one of these structural solutions.

Discussing health care without discussing the root causes of deteriorating health is as incomplete as confronting a widespread failure of a mass-market product like brakes on an automobile by focusing on abundant, affordable brake repair shops, and, failing that, making sure that the government steps in to negotiate with all the brake repair shops.  Imagine if those discussing the massive brake failure problem generally failed to ask why the brakes failed in the first place.

We need to ask why Americans are not as healthy as they can be before we confront the issue of how we treat the diseases and injuries that indicate that health deterioration.  In other words, it’s about health, not health care.

What’s making us less healthy?

Let’s start with obesity caused by bad eating habits and inadequate exercise and fitness.  Obesity drives diabetes, cardio-vascular diseases, and orthopedic problems, as well as contributing to injuries.  In fact, the Robert Wood Johnson Foundation and other authorities clearly point out that chronic and complex diseases arising from lifestyle-related conditions like diabetes are the most significant contributors to our spiraling health care costs.

Beyond obesity, lifestyle-related health conditions, such as those brought on by smoking, alcohol and drug abuse, including performance-enhancing drugs drive up our costs.

We tolerate unhealthy communities with environmentally-induced conditions, like the significant increase in asthma in high air-pollution areas.

We are one of the most violent societies in any developed country in which a war is not being fought.

All of these conditions are preventable, and, if we were to improve our health to a level comparable to other developed countries, our health care costs would be far lower, and most of the problems of coverage and access would melt away.

With respect to obesity, I read a great book recently called Mindless Eating: Why We Eat More Than We Think by Brian Wansink.  Wansink has a great quote in the book:  “The best diet is the one we do not know we are on.”  He makes a number of points strongly supported by scientific study and common sense:

  • We gain weight not because of short-term eating binges on unhealthy foods, but because we consistently ingest slightly more daily calories than we burn off.  Likewise, we can lose weight if we burn off slightly more calories than we consume.  For example, if our calorie intake to maintain our existing weight is 3500 calories per day, a 100-calorie swing up or down makes a difference of 10 pounds more or less over a year.
  • The most sustainable weight-reducing diet is one in which we consume between 100 and 300 calories less than we burn off.  Diets based on depriving ourselves of kinds of foods that we enjoy or significant calorie reductions below maintenance level are not sustainable, or unbalanced diets in which we do not eat certain food types like carbohydrates are not healthy or sustainable. I know, because I have lost weight on many different diets in which I have deprived myself of foods I liked, but ultimately could not sustain them.
  • Many techniques can reduce the marginal intake of the food that makes a difference between weight gain and loss, and many are as simple as not putting ourselves in situations in which eating is the easiest thing to do.  Some techniques are as simple as buying, or keeping, or measuring smaller quantities of food.
  • Some highly-appearing foods are highly likely to result in overeating if easy to access, such as desserts and other sugary foods, simple carbohydrate foods like pizzas and pasta, and snacks.  The best approach to those foods is to reduce ease of access.

We tried many of these techniques at our Company facilities and they work.  For example, the healthy food is easy to find and the foods that we tend to overeat, like cookies, cupcakes, and potato chips, are harder to find.  We are very careful with portion control.  We follow traditional retail merchandising techniques by putting foods we want people to eat, like fresh fruits, right near the check-out counter.

Outside the cafeteria, we make bottled water readily available everywhere, but make sodas and snacks from vending machines hard to find.  We eliminated food service at breakfast meetings, and significantly reduced the quantities of the food we provided at luncheon meetings. 

Alcohol is served for a limited period of time at after-work parties, and is served in relatively small glasses or cups.  Cocktail periods at parties are relatively short, and we try to get as many functions held at our Company dining facilities and as few at outside facilities as possible, especially restaurants that make their profits on alcohol and desserts.

With respect to fitness, we give away pedometers and encourage people to participate in 10,000 steps-per-day programs, and we subsidize fitness facilities, including fitness centers in our Headquarters and our Technology Center. 

We prohibit smoking at Company facilities, and we actively promote smoking cessation programs.

People like our health programs, and we have many inspiring and emotionally-satisfying stories of employees whose lives have been turned around by our programs.

I do not believe in coercing good behaviors.  I am appalled by companies that threaten to fire smokers or refuse to hire them in the first place.  I am also appalled by what I have heard about companies that humiliate obese people by communicating their Body Mass Index to them, and by requiring them to go into fitness programs as a condition to a better job.  They are unhappy enough being obese.  Why pile on?  I believe in the carrot, rather than the stick.

I also find it ironic that I go to many health-related conferences and the same junky food we talk about stopping our children from having at school is served at coffee breaks and lunches at the conferences. 

What I have tried to do is to create a culture of health. Helping people with diet, fitness and exercise, and lifestyle issues like smoking and drug abuse are obvious.  Alcohol consumption is more challenging, because it is less clear whether the right answer is no alcohol consumption or modest alcohol consumption, particularly of red wine.

My approach to alcohol has been to try to establish a culture in which individuals can make the appropriate health decision whether to refrain or to consume modestly.  Many companies, including ours, had a culture from previous generations in which heavy alcohol consumption was associated with fun and being sociable.  What I’ve tried to do is to make the decision whether to refrain or to consume moderately a personal choice, and to make sure that people at our Company know that heavy alcohol consumption, especially when coupled with driving, is a serious problem.

We try to create a culture of health at home as well with our children in terms of what they eat and drink.  The foods we serve and buy, the peer groups with which they connect, and the welcoming environment we create are more successful than the silly rules I see at the schools these days.  Letting children have a celebration with sweets once in a while is not going to change the culture of health, especially if schools monitor the portions served.  At the same time, schools need to focus on physical fitness, smaller food portions, and a better mix of healthy, tasty foods than they have today.

We take long walks with our children and have nice conversations.  One of my favorite movies from the 1980’s was The Karate Kid because the hero was training without realizing it, as he was doing chores.  Fitness needs to be fun and to be accomplished as part of something else.

One of my colleagues on an outside board of directors told me about an analysis someone had done about adult lives 50 years ago and why adults were not as obese then.  They expended from 50-100 calories per day more energy on day-to-day living tasks because automated solutions were simply not available then.

Think about the days before TV remote controls, automatic garage door openers, automatic car windows, electric or gas-powered lawn mowers or snow removers.  Those extra 50-100 calories per day gave adults a 5-10 pound per year head start over us in terms of weight management.  I replicate that with the 10,000 steps program, and stay in motion as much as possible.

I would love to see politicians focus on creating a national culture of health, as opposed to trying to rearrange the deck chairs on the Titanic by coming up with a different way to distribute the pain of current health care costs. 

I am pleased with some of what I see in Congress with the thinking of many U.S. Senators on both sides of the aisle.  Senators Wyden, Whitehouse, Coburn, and Smith are among those trying to find solutions that focus on health, as well as health care. I am also pleased that Senator Clinton spoke favorably about our health care program

The good news is that there is a lot of momentum to reform health care.  In our rush to enact a much needed health reform bill I hope we do not inadvertently knock out programs like ours that actually are working to reduce costs and achieve health improvement at the same time.  Let’s deal with the legacy issues that plague some of our older companies and, by the way, our government employee health plans, but let’s not let those legacy issues drive the broad health care reform agenda.

“Do Not Mail” Legislation and “Junk” Environmentalism

Wednesday, June 20th, 2007

It has become fashionable to trash direct marketing mail in the media. Not surprisingly, reporters and editors in the print media, which compete with advertising mail, coined the phrase “junk mail,” and so-called environmentalists have argued that paper-based letter mail is environmentally unfriendly because of the consumption of paper, ink, and energy. (As an aside, I find that these reporters and editors are militantly ignorant about the role direct mail plays in enabling them to have jobs, since the magazines go through the mail, direct mail is used to solicit subscribers, and first-class mail is the way bills and statements get to those subscribers.) In fact, one coalition has recruited an articulate and highly-respected actor, Matt Damon, who recently appeared on the Oprah Winfrey show and passionately argued for the banning of “junk mail.” I understand his frustration and the frustration of others with unwanted mail, but the remedy of banning all unsolicited marketing mail is misguided.

Don’t get me wrong. I think low-quality mass marketing mail diminishes the value of the mailstream. I do not like having to throw out 90+% of what I receive every day, especially duplicates of catalogs I have no desire to get in the first place.

I also recognize that people who try and fail to get off a mailing list have a right to be angry.

But let’s “see a different game” here:

  • Why don’t the environmentalists who want to preserve trees talk to the environmentalists who care about clean air? When people stop shopping by catalog and, instead, go to a retail store to buy the same item the air pollution their car creates is far worse for the environment than the increasingly recyclable paper that makes up their catalog. One of the problems with many environmentalists is that they congratulate themselves for having reduced a particular environmental hazard without asking whether their success has created an even bigger hazard. The reality is that if you took all the paper from mail out of all of the landfills in America, the volume of these landfills would be reduced by only 2.5%, but the additional traffic congestion caused by all those vehicle trips contributes to asthma and an increasing epidemic of serious respiratory conditions, especially for children. If you do not believe people who stop shopping by catalog will drive to retail stores, ask the state sales tax officials who complain that catalog and online shopping are replacing in-state retail shopping that generates sales tax revenues.
  • Some environmentalists will say that everything should be e-mailed. That’s great for the sender, but it stinks for the recipient, and it’s also much more likely than many people realize to have a bad environmental impact. Have you ever received a 50-page attachment to an e-mail? If you want to read it, you will print it, and when you do, you have likely accounted for far more greenhouse gas emissions than if it had been printed by a sender in a production mail shop. Printing e-mails is more common than most environmentalists imagine. Some experts estimate that 40-60% of all e-mails get printed by recipients. Xerox Corporation recently did a study that showed that the average office worker prints 1200 pages of e-mails every month that he or she reads and throws away after reading. Are we better off with locally-printed e-mails and a lower recycling rate on desktop print cartridges than we are with centrally-produced printed material and more sophisticated recycling systems? Someone needs to do objective research on this.
  • Besides, who ever got the idea that pure electronic messages create no greenhouse gasses. Have you ever been to a data center where all those spam e-mails are transmitted and received? The electricity to run the computers and the air-conditioners to cool the data centers and the water coolants use up huge amounts of energy, not to mention the huge amount of wastewater generated.
  • In fact, I would suggest that many processes that are face-to-face and involve a round-trip in an automobile should be converted to mail delivery-based processes. Why shouldn’t everyone vote by mail, as they do in Washington and Oregon? Why should anyone ever have to register a motor vehicle at a motor vehicle bureau to which they have to drive? Why should people wait at toll plazas and spew horrible gasses into the air when we could have completely automated toll systems? Why do we need policemen to catch some speeders with their engines idling while the policeman writes a ticket when photo systems can catch all traffic violators and send them a traffic ticket in the mail? Why should a frail elderly person or their caregiver have to pick up a prescription at a pharmacy when the pharmacy could have it delivered?

But there’s another big issue at stake here. Direct mail is a low-cost medium that enables many job-creating businesses of all sizes to survive. The mass saturation mail we do not like in our mailbox gets enough responses from others that marketers keep generating it. Even web-based businesses need to connect with prospects through the mail to get them to the web site. What happens to the Americans who lose their jobs when a direct mail or catalog operation goes out of business? I can tell you that many of the people who work in our industry are working-class Americans who would drop down into a much more challenged socio-economic environment if they did not have these jobs. I also believe that the small businesses which grow by using the mail would employ fewer people as well if they could not use the mail to reach a broader customer base.

I’m not an apologist for the Postal Service or for the low-quality mail that has led to these initiatives. It bothers me that the Postal Service does not penalize those marketing mailers who make no effort to eliminate badly addressed mail or duplicate mailings that come into the same household. It also bothers me that some credit card solicitors send multiple mailings to the same person. I am particularly offended when I hear stories about marketers who keep sending mail to people they have been informed have died. There are solutions to these problems. The people who truly mail “junk” should pay far more for postage than the mailers who invest in higher quality, better-addressed, better-targeted mail.

However, think of screening mail like having a remote control device for a TV set. We all want the ability to change channels, and, if we have young children, to be able to block specific channels, while continuing to access others. Imagine if there were a few consistently bad channels, and some zealots advocated that everyone should get a remote control with only an on/off switch that, once used to turn off the TV, could not turn it back on without great difficulty. We have TiVo and VCRs because we know that some of what is on TV is content we want to receive. Likewise, some of the marketing mail every one of us gets is something we would want.

What we most need is a workable registry that mailers would be required to check every time they want to do a mailing. You should be able to record your preferences in such a way that you could choose not to continue to receive certain items, to receive them less or more frequently, or to receive similar items. The preference service could even be a vehicle for recipients to say that they like receiving the notification about a particular product or service, but do not like the tone or style of the message. For example, I would like to tell any of the political groups which send me direct mail not to try to fool me into believing that it is an official communication, when it is a marketing solicitation.

Why mass marketers cannot figure out how to execute on a business case to eliminate the 99% of the direct mail that every recipient does not want when they get it is beyond me. Moreover, those mailers who fail to access the registry or to abide by recipient preferences should pay more to mail than those who access the registry and adhere to the preferences of the recipients.

In fact, why can’t a registry prompt people with a particular interest to look for catalogs or vendors they might want, as well as what they do not want, or ask about their preferences relative to how they want communication to reach them in the future? Amazon.com does this very well with the suggestions on other books. A preference service would be far more palatable to marketers if it gave them a roadmap as to what recipients want, as well as what they do not want.

But my biggest problem, having been an environmental advocate who has actually taken concrete actions to improve air, water, and landfills, is the sloppiness of the conventional thinking that passes for environmentalism.

For example, I have visited many coffee shops, and I have observed a lot of well-meaning, so-called “environmentally-friendly” approaches to the container for the coffee. Some shops serve coffee only in ceramic cups because they do not want to add paper or plastic to landfills. However, they have no conception of the greenhouse gasses emitted by the electricity generated to heat the dishwasher that washes the cup, or the hazardous emissions from the cleaning solvents used in the dish-washing process, or the destruction of living things in the waterways where the heated wastewater goes.

Some shops serve coffee in paper cups because they think plastic is bad for the environment, but, as we discussed above, paper consumption increases the cutting down of trees, and consumes energy. Plastics that are not recycled stay in landfills forever.

My point is that, as long as we consume resources, we will have some degree of environmental hazards unless we invest significantly more in reducing resource consumption, re-using and recycling. As a society, we need the political will to put the tough choices on the table.

Most importantly, let’s have the appropriate degree of intellectual rigor on these very difficult subjects.

Why I Blog

Tuesday, June 12th, 2007

I will comment on the subjects I identified in my biography, as well as others. But I need to give you a little more of a sense of who I am:

I am a registered Independent, and have never registered to be in one or the other of the two major political parties. Why? I managed to live in places dominated by each of the two parties, Monroe County, New York by the Republicans, and Boston, Chicago, and New York by the Democrats. There is a depressing similarity between the two parties when they have had absolute power for a long time. Organizations with monopoly power become lazy, unresponsive, unwilling to innovate, and arrogant.

In terms of taking the road less traveled, I like causes that are far more important than they are visible. The mailing industry is a good example. If you asked 100 well-educated Americans about mail, most would say it is dead or dying, not a growing $900 billion industry. The economic impact of the mailing industry dwarfs the economic impact of the industry around Internet marketing. Alzheimer’s Disease affects far more people, but gets far less publicity, than HIV/AIDS. Politicians spend far more effort on the less important issue of health care access than on the more important issue of whether citizens are getting healthier in proportion to access and affordability. That’s why I focus on Alzheimer’s and prevention and less on the access and affordability issues, although we have improved access and affordability at Pitney Bowes.

I would be characterized as someone who, in the words of the tag line of The Sporting News, would “see a different game.” I look at situations differently from most other people around me. That’s partly why I made counterintuitive career decisions like going to a corporate legal department, taking on the HR job, or, more fundamentally, joining a company that seemed to be dependent on a dying communication medium. But, beyond that, I am often out-of-synch with conventional wisdom.

The road less traveled and “seeing a different game” applies to my day-to-day habits, as well as my longer-term career choices. I like to sleep, but I care more about going to shops and stores when they are the least crowded, so I am at the local doughnut shop at 6:00 on most mornings. When I visit customers or prospects in competitive situations, I like to go to the least glamorous locations at the least glamorous times. I can recall visiting major prospects in Minnesota in December and February. I visited a customer in Houston in July. I went to Arizona in August a couple years ago to secure a competitive bid. I also visited our employees in less glamorous locations, while others chose to visit offices in San Francisco or resort communities. When digital music media supplanted analog media, I collected vinyl record albums and 45’s from a specialty store in New York called Downstairs Records.

Consistent with taking the less traveled road and “seeing a different game,” I try to accomplish what I do as much as possible under the radar screen. I try not to be on covers of magazines or get front-page newspaper stories on issues because I believe the most successful change management requires a blend of highly-public activity and behind-the-scenes facilitation. Open meetings, “sunshine” laws, Freedom of Information Act requests, televised governmental proceedings, and beefed-up financial disclosures about elected and appointed officials all have their place in a free society. However, I think we need to figure out how to get more candor and less posturing into public debates on issues.

Also consistent with my personality, I have been a “stealth” change agent at every organization or function I have led. The only time visible change activity works is when an organization is in dire straits and everyone knows that radical change is required. When an organization appears to be successful, visible and radical change is resisted. At Pitney Bowes, I always told people we want to maintain the roof so it never leaks, rather than being heroes in repairing it as it is about to leak.

Time is an exceptionally precious asset for me, and always has been. I hate waiting in lines (or on lines). When I am waiting, I try to find a way to think about how the process could have been better, and how to avoid putting myself into a time-wasting situation in the future. I also believe in using small bits of time as effectively as I can. I am very likely to take a book with me when I am running errands or going out for a meal alone, because I know there will be a few minutes of dead time that I can fill with some reading.

I have a passion for intellectual honesty, and like to frame issues so that people have a better ability to solve them. For example, I am angry that, here in the U.S., governments at all levels are hiding the fact that they have given away billions of dollars in unfunded pension and retirement benefits to small numbers of public employees. Although the Government Accounting Standards Board has required disclosure of these obligations, governments at all levels are doing everything possible to hide what they have done. Let’s be honest, and acknowledge that public employees have bargained successfully for rich pay and benefit packages which we must honor, and let’s get on with the task of managing how we fund them, and meet the many other obligations people want governments to undertake.

In spite of my obvious passion for the mailstream and the industry I have been a part of, I will comment on a broad range of subjects, including some of those I have called out in my biography.


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Disclaimer

This is Mike Critelli's blog. The views and statements expressed herein are those of Mike Critelli and, in the case of a comment, those of the person who submits such comment, and not necessarily those of Pitney Bowes Inc.

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