Employees who do not have high levels of education and technical skill will be continually insecure and will be displaced if they are not continually keeping ahead of the marketplace.  The most painful point the reporter makes is that anyone who starts his or her work career with major family or other responsibilities will have difficulty keeping current with the skills needed.  Maddie Parlier is 22 years old, has completed high school, but has not gone beyond it, is a single mother, and has no spare time or money to take courses and upgrade her skills.  She will be vulnerable to a future replacement by technology.

The problem with the increasing inequality of outcomes in our society in a time of global competition, continuous price pressure, and technology advancement is that continuous education and skill development are more important than ever.  However, achieving this goal is particularly difficult for those individuals who enter the workforce with the handicap of obligations that make continuous learning extremely difficult.

The story about Maddie Parlier begs two questions:

• Why did a woman who is obviously smart and a hard worker not continue her education beyond high school?
• How does someone like Parlier, with time-consuming family responsibilities, find the time to continue to upgrade her knowledge and skills outside of work hours?

When we consider these questions, we are inevitably led to a different way of defining the problem than is customarily used in analyses like these.

Why individuals like Maddie Parlier do not continue in school

My dad, who died in 2001, was a very intelligent person, with great wisdom and insight, and a continuous learner as an adult, but he dropped out of school after the 9^th grade.  My mom, also a person of great intelligence who was a continuous reader and learner all her adult life, dropped out of school after the 11^th grade during the early part of the Depression.  Why?

For them, going to school was an unpleasant and unproductive experience.  The classrooms experience did not engage either of my parents sufficiently to keep them in school, so they dropped out at the earliest possible opportunity.  While it is easy to say that we need better teachers and schools, the bigger problem is that schools do not teach people how to learn.  The educational paradigm is fundamentally flawed. Educators make the judgment that individuals have varying learning abilities, and assume that some people will learn, and others will fail to learn.

I can relate to my parents’ experience by what happened with subjects in which I did not do exceptionally well, like biology, chemistry and physics.

These subjects were taught in a standardized way.  I did not master them, but got good, although not exceptional, grades by sheer hard work and will power.  However, as an adult, I saw their value, and became genuinely excited to learn about the underlying principles of each subject. My daughter even gave me a brief chemistry tutorial on equation balancing recently.

Every one of us gets interested in a subject for different reasons, and we learn in different ways.  I think metaphorically and structurally, and recall information most effectively when I can engage multiple senses in learning the subject.

People have told me I have a photographic memory.  That is not true. I have a photographic memory on certain selective categories of information, but have a below-average memory on others.  My wife can remember the location of a house by a visual map of the color and style of the house and the houses around it.  She remembers foods she ate at a restaurant decades ago, and can even discern differences in the taste of an item from what she ate years ago. I cannot remember what I ate last Saturday night at the local tapas restaurant.

Why do I learn and retain information?

• The subject matter has to be important enough to want to retain it.  I tune out on information that will not matter to me, or that does not strike me as interesting.
• I take copious notes.  Contrary to popular belief, I do not file the notes, but review them once and discard them.
• When I take notes, my handwriting is highly legible, so that I can re-read what I have written.
• If a particular note is important, I underline it.  If it is exceptionally important, I place an asterisk next to it.
• After taking the notes, I re-read them, and I recite what I have written, so that I can hear from what I have written, in addition to seeing it.
• If the notetaking on a subject reveals a particular way of organizing and structuring the information, I create a visual structuring on the page of the notebook, either in the form of a graph, a flow diagram, or a chart.

The more of these tasks I perform, the more likely it is that I will remember what I have written.

My mother used to joke that the reason she dropped out of school was because she was required to do a paper on Sir Walter Scott’s Ivanhoe in her final semester as a junior in high school. I am sure that no one engaged with my mother in a way that helped her find meaning in the assignment.

Rather than trying to shoehorn every student into a one-size-fits-all educational system, let’s try to figure out the different ways in which to engage increasingly diverse populations in the art and the technique of learning.  The goal is “learning,” not “education.”

How do people with overwhelmingly complex lives carve out time for continuous learning, particularly of highly technical subjects?

How does someone like Maddie Parlier possibly carve out time to upgrade her skills?

• We have to create learning processes that provide more flexible self-learning opportunities.  It would be unfair to expect Parlier to attend a classroom course outside work hours, given her single-parent responsibilities, but she can learn online or in other ways.  If there are fees for such courses, she should be reimbursed under a company’s educational assistance program, just as she would if she were attending a class.  We need to make continuous learning as convenient and cost-free as possible.
• We have to teach people how to use small blocks of time as effectively as possible. A single mother holding down a job does not have big blocks of time for learning.  She might get a series of 5-minute blocks of spare time. We need to figure out how she can use them for learning exercises.
• We have to teach people how to multi-task more.

Alternative learning methodologies

Learning can happen anywhere, any time.  I love the text-to-speech feature of my Kindle, especially when I am in my car and can have the experience of listening to an audio book, even if it is in a computer-generated voice. I learn from online demonstrations of subjects.  I also have found that certain TV programs have presented subjects with far more impact than I have ever learned them in a classroom. My friends showed me about the many free tutorials on YouTube. I have even learned from a casual face-to-face encounter, such as a cooking demonstration at a supermarket or a restaurant.  We should test individuals to determine how they learn best, and should draw from their insights and experience, even at an early age, to figure out what is most likely to excite them. Courses should be created in ways that enable them to be delivered remotely and in a multiple ways.

What always amazes me about learning is what we discover about how people of all ages engage with the world.  Some people learn through video games and master complex subjects.  Others gain a great deal of insights from friends, work colleagues, peers, and even online communities.  Even today, I find that my best learning about potential applications for my I-Phone comes from other users.  One of my nephews told me about a new application called Soundhound, which enables my phone to pick up music sounds in a public place and identify the song and the artist.

In essence, everyone can learn, and we should figure out how to make that learning process happen.

How does learning fit into a busy schedule?

It is easy to criticize people who do not take time to improve their skills.  However, in the real world, people have multiple jobs, are juggling time-consuming family responsibilities, and often have challenging commutes to and from work.  Moreover, many jobs are physically and mentally draining. For many people, the ability to take time to learn simply does not appear to be there.  How can we help people carve out the time to learn?

• We need to show people how to simplify their lives, reduce the wear-and-tear of daily activity, and create learning time.  Too many people drive to work alone every day.  Even when public transportation is unavailable, there are many underutilized carpooling, vanpooling, and ride-matching services available to people.  I gained an extra 90 minutes a day of reading time when I commuted by train between New York and Connecticut. When shuttle services between the train station and the office were unavailable, many people gave me rides to and from the train, and I learned a great deal from them.
• Buying hot, healthy pre-prepared food virtually eliminates cooking time, and frees up time for other activities.
• If I were a young parent today, I would be looking for tools to order groceries, clothing, supplies, hardware and other items online for home delivery to save on shopping time.

If large blocks of time cannot be created, then we have to coach people how to use smaller time blocks more effectively.  I always felt that one of my advantages over other people was the use of 1-5 minute time blocks.  When I watch live television, I put the set on mute during commercials, set an alarm for 3 minutes, and do something productive. More and more, I record programs to reduce the watching time from the original running time by fast-forwarding through commercials. I recapture that time for other purposes.

How do I use 5-minute drives to and from the coffee shop? I turn my Kindle into an audio book and listen to a few pages while driving.  The Kindle also can be read outside while I am walking and even while I am waiting in line at the grocery store or some other retail outlet.  I have done a lot of reading in the security lines at airports, while I watch other people stare into space.  I also remember doing work during the many times I waited with my children at the pediatrician’s offices as they were growing up.  I took my own materials, rather than relying on what the doctor’s office had available.

Everyone has spare time. The only question is how to take advantage of it.

We need to teach people how to multi-task more.

When my children were young, I used to take them to the local doughnut shop, get a cup of coffee, browse the newspaper, and talk with them.  It was a great bonding experience for us, and I typically read to them and talked about whatever I was doing.  I also used to take them to museums on Saturdays and Sundays and learn as they were learning.

Today, the shoe is on the other foot.  When I am with my adult children, I ask them about what they are learning, what books they are reading, what movies or videos they have seen, and what places they would like to visit, and why.  My daughter is great in the sciences, so she continually directs me to good resources.

Also, as I noted above, we have a lot of waiting time in our lives that can be usefully deployed. Today, many people use their cell phones to talk or do text messages while they are waiting for someone, but it is easy to convert some of that time to learning time.

We have to change the paradigm from schooling to learning.  We have to change the paradigm from learning as a highly standardized activity to a highly customized one. We have to change the paradigm from learning as a process that takes place within specific certified courses to one that can occur anywhere.  I have no problem with testing people to see what they have learned, and rewarding them for having achieved a certain level of competence, but we need to make it as easy for them as possible.

This skill and knowledge gap is solvable. We can help the Maddie Parliers of the world compete in the global economy and support their families.

These theories are certainly part of the explanation, but I would offer another explanation: that we are in the midst of a long-term redefinition of the skills and capabilities our economy needs, as well as the way we govern ourselves as a society, and that, as a result, there is a serious mismatch between the skills our economy needs and the skills and capabilities available within our country.

Our economy, our labor-management relations, our government tax collection systems, our communities, and our social relationships are build upon an economy based on regular full-time jobs with well-defined and relatively stable definitions of job responsibilities.  However, the world we are entering makes our ways of organizing work, labor-management relations, tax collections, communities, and social relationships obsolete.

When young people ask me about how they can have successful careers, I tell them that there are three ways of defining their career objectives: around a job or a profession, around working for a particular organization or industry, or around a mission or cause.

Career objectives organized around jobs or professions

In the past several decades, we have heavily emphasized training people for specific job categories and causing them to define themselves around a particular job category.  People get jobs as teachers, lawyers, accountants, consultants, general managers, IT professionals, auditors, engineers, or HR managers or professionals.

In fact, I think we have gone overboard in rigidly defining jobs and professions by creating state and local licensing requirements that have significantly raised entry barriers and lowered employment in many professions.  For example, to get a license to cut hair at a barbershop in Connecticut requires a one-year course of study that costs a person $20,000.  While there are good reasons to require education, training, and certification for hair cutters, since they handle sensitive and potentially toxic chemicals, I find it hard to believe that the certification process should cost an applicant $20,000.

Colleges, universities and training schools, as well as governments, like the idea of slotting people into job categories.  It is easier to organize curricula around job categories, and, as noted above, it can be highly profitable to train people for specific, licensed job categories.  It is easier for government regulation and reporting to attach people to specific jobs.  Unions can more easily organize around particular crafts and job categories.

The problem with this form of career organization is that, from time to time, particular types of jobs or professions become very attractive and end up creating surpluses of people with job-specific skills.  This happened with aerospace engineers in the 1960’s after the space program was phased out, with journalists after the Internet obsoleted traditional print journalism, with IT professionals after the hiring surge caused by Y2K ended, and with lawyers after companies found ways to automate what lawyers used to do.

Over a much longer period of time, productivity improvements will obsolete any particular narrow job description that pays a high salary or that, even at a low salary, employs a lot of people.  Agriculture has employed progressively fewer people, as has manufacturing, and we are seeing a similar reduction in call center workers as we move more toward self-service.  In the next decade, I predict that retail cashiers in large stores will decline as technology moves us more toward self-checkout systems.

Today, we have many people trapped in jobs or professions for which the supply far exceeds the demand.  Creating more specific jobs in specific categories is not a good way of managing and sustaining an economic recovery.

Organizing careers around companies or industries

This was a popular way of building a career after World War II and into the 1980’s and still remains as a way of thinking about career planning.  In the 1940’s through the 1970’s, people entered the automobile industry because it seemed large and stable.  Today, the U.S. automobile industry has probably shrunk permanently because we have declined from purchasing 17 million new passenger cars a year to about 11-12 million, as cars become more reliable and their replacement cycles lengthen.

Large companies relentlessly shrink their workforces over time, even in good economic environments, especially as they seek more productive and lower cost work environments, so the notion of attaching oneself to particular companies is obsolete.  When I was growing up in Rochester, New York, cousins and friends urged me to seek safer employment in companies like Eastman Kodak and Xerox Corporation, companies that have a fraction of the jobs they had 40 years ago.

Government and health care jobs have increased significantly in the last decade, but government jobs are already shrinking, and I predict that health care jobs will as well.  We will find ways to get more health care tasks done offshore or through technological means.  For example, the task of drawing blood will move from being a high-skilled task in a laboratory to a self-administered task for many applications.  We will still need nurses trained in drawing blood intravenously, but the occasions when intravenous blood draws will be needed will decline over time.

Careers organized around missions, causes, or problem areas

To me, the most sustainable careers are those organized around a mission or a cause that will take decades to address.  We are blessed or cursed, depending on one’s perspective, with societal issues that are going to take years, if not decades, to address.  Those who can identify recurring work responsibilities needed in the addressing of those missions, causes, or problems can secure long term employment.

For example, America will have a long-term need to rebuild its crumbling infrastructure. It will be several decades, if ever, before we complete this process. Those with skills deployable on the process of rebuilding America will be employable for a long time.

We have a shortage of civil engineers and systems engineers to do the work on the major capital projects required for this rebuilding process Relative to other professionals, such as attorneys, those who can help manage environmental, land-use, and financing issues will be employed for a very long time.

Funding may ebb and flow, but we do not have the luxury of stopping work on these projects.  Moreover, even if a specific type of professional work declines, there will be adjacent spaces in which work will be needed.

We have big, long-term societal problems, such as the rebuilding of our crumbling infrastructure, the sustainability of our environment, the need for energy conservation and efficiency, and the reskilling of our workforces.  We also need to deliver services to turn our least productive citizens into more productive members of our society.  Those who focus on societal needs and then work backward to what tasks are required to meet those needs are most likely to figure out what skills are needed and then to develop those skills.

We have to get away from rigidly defining jobs and certifying people into those jobs, and to move toward defining broad societal needs and deploying people toward meeting those needs.  Government can facilitate these processes by organizing stakeholders to address them, but it is a hopelessly inefficient and slow stakeholder in creating jobs and filling them with people that can meet complex and often fast-changing needs.  Government also has to get out of the business of creating large and inflexible entry barriers for jobs and professions.  To the degree that licensing requirements exist today, government needs to have a process of revisiting those requirements every few years to insure that they still make sense.

It is a tragedy that we have so many potentially productive Americans on the sidelines, either collecting unemployment benefits, or, in some instances, having exhausted their benefits when there are so many compelling societal needs that remain unaddressed.

Whether he made a values-based judgment that he had simply received a windfall and did not deserve to profit simply from being in the right place at the right time, or whether he believed that he would receive more long-term economic benefit from giving up the ball does not matter: he did an admirable thing.

Everyone’s behaviors are on a continuum from being totally generous of spirit to others to being totally mercenary and interested only in helping oneself.  To be generous of spirit does not mean that one withdraws from the capitalist system, lives like Mother Teresa or Paul John Paul II, and deny or give away everything material.  A person whom I consider an example of practicing behaviors that are generous of spirit, and whom I have always admired, and got to meet by serving briefly on a board of directors with him, is Neil Armstrong, the astronaut who was the first person to walk on the moon.

His behavior that I would consider exceptionally generous of spirit is his refusal to engage in any behavior in which he personally profited from his status as the first person to walk on the moon.  He could have made millions of dollars in commercial endorsements from his lasting fame and celebrity, but he steadfastly declined every opportunity to do so. He has lived a successful life and is a wealthy person, but he recognized that many people contributed to his accomplishment as an astronaut and that he should not draw a disproportionate benefit from it.

I have aspired to be more like Neil Armstrong in not trying to extract maximum economic benefit everywhere I could.  I have given free advice to many people for which they would have paid thousands, or even tens of thousands, of dollars, or arranged introductions that have resulted in financial success for others without receiving any short-term economic benefit, even when I was not financially secure earlier in my life.  I did well financially, although I could have done better.  I never once negotiated my own compensation package, even when others around me negotiated theirs.

I have met many people who have given generously of their time, their insight, and even their services and not asked for anything in return in the short run.  I have also worked with people whom I know could have driven harder bargains with their employers.  I admire athletes like Hall-of-Fame baseball player Tony Gwynn, who stayed in San Diego and made far less money than he could have made with many other teams.  I also admire teachers who have stayed in seniority-based public education compensation systems and foregone great opportunities to make far more money in corporate training and education positions.

At the same time, I have experienced extreme distaste and stress by encountering people who think of the world as a place in which they have to extract compensation for every deed with economic value and have to extract as much as the market will allow them to extract.  People who expected to be compensated for everything they did were very common in New York.  Many jobs only made economic sense if the jobholder could get tipped consistently.  However, there was a broader philosophy that no one ever did anything for others without getting paid for it, and closely related to the fact that everything could and should be compensated was a philosophy that everything was for sale.

I remember the scene in the 1991 film Goodfellas, in which the protagonist Henry Hill takes his future wife on a date to the Copacabana.  From his car to his front-row table, he passes many hotel and restaurant workers and hands out money to every one of them.  The front-row table clearly would not have been available to anyone else.  It was moved into place and set up especially for Hill and his date.  That scene was director Martin Scorsese’s depiction of a culture in which everything was for sale and that such a culture was so ingrained that it was a regular part of everyone’s daily routine.

In 1980, the 12-year-old son of one of our neighbors regularly cut our lawn.  He was receiving what we thought was a fair price for his services.  He tried to double his price, and when we asked why, he said that his parents told him to see how much he could get from us.  He was told that if we objected, he could negotiate downward, but that he should try to maximize his short-term return.  We never employed him again, and I sent him a note telling him why.

What the Christian Lopez story reminded my wife and me about ourselves was that we are people who believe strongly that our capitalist system works best when people give value without expecting to be paid top dollar immediately for everything they do.  George Gilder, an American writer, philosopher, and Republican activist, wrote a powerful book in 1981 entitled Wealth and Poverty, in which, among other things, he described capitalism by saying that it “begins with giving.”  What Gilder meant was that capitalism, by its nature, requires one or more individuals to expend capital at a point in time and to provide goods and services for which he or she will get rewarded at a later point in time.  Capitalism requires an act of faith that investment will yield later reward.

To the degree that everything someone does requires immediate reward, the capitalist system collapses.  Such a system usually does not enable the granting of credit, except in a very close circle of family and friends.  Credit given to people one does not know is essential to the optimal growth of an economy.

Unfortunately, America has moved progressively toward a country in which there is more and more distrust, and more of an expectation of immediate gratification and maximum economic reward.  Some of this is a result of an increasingly mercenary society.  Some of it is the result of people being influenced by others to become more mercenary than they would be on their own.  Sadly, some people have become more mercenary as they have become more financially desperate.

I was saddened by the experience with the 12-year-old boy. He seemed liked an enterprising young person who could have been generous of spirit, but whose mind had been poisoned by his parents, with whom we ultimately had a dispute on unrelated matters.  I do not know what effect, if any, our refusal to continue to do business with him had on his values, but I suspect that his parents probably found a way to deflect the blame for that situation on to us.

It is reassuring that there are people like Christian Lopez in the world.  He did the right thing.  He may, or may not, ever receive economic benefit comparable to what he gave up. However, if he lives the rest of his life with values consistent with those that led him to make the quick decision to return the ball to the guy who truly created the potential for its economic value, Derek Jeter, he will live a far more satisfying life, and he might even be more financially successful than he otherwise would have been.

Here’s to you, Christian Lopez!!!

These gaps matter because leaders cannot make good decisions when they do not understand that categories within which they think about the world are out-of-date or even just plain wrong.  Aside from the increasing complexity and interconnectedness in the world, there are three reasons for this:

• Senior leaders continue to be isolated from the day-to-day environment around them, even though isolation is having progressively riskier consequences;
• Everyone is operating in more fragmented media environments in which it is harder to get a holistic view of what is happening; and
• Even if we understand a particular issue, geography, country, market, or culture, it changes so fast that our knowledge become obsolete more quickly.

Senior leaders, particularly older white males, are isolated from what is happening in their organizations, as well as the societies of which they are apart.  In particular, they broadly underestimate diversity and complexity in our society, as well as other societies.

The “Isolation” Problem

When we are at lower organizational levels, we tend to mingle more with ordinary people.  As we move up in organizations and get wealthier, we tend to have assistants who guard access to us. We get higher up in an organization, and are expected to delegate decision-making authority to others, which is considered a good leadership practice.

However, these practices often cause us to get progressively more isolated from the people we lead, as well as other people who live more ordinary lives.  We live in more exclusive neighborhoods, join exclusive clubs for recreation, have people drive us from place to place, and have others perform tasks that touch ordinary people.  When we visit remote operations of whatever organizations we lead, those we visit shield us from the ugly underside of whatever location we are visiting. The end result of this progression up an organization is that we lose a sense of the increasing diversity and complexity in our society.

America and other developed countries have become more globally, racially, religiously, and racially diverse than ever.  People of color live in communities that we used to think of as being very non-diverse.  There are more immigrants from more countries than ever before.

As I have presented our film From the Rough to many potential investors and partners, I have been struck by how limited their knowledge of broader societal trends has been.  In the film, one of the story lines is a dating relationship between a white British student and a black female American student.  Some people have commented that interracial dating of that kind cannot be common.  They are shocked when I tell them that between 8-10% of all marriages licenses are being issued to interracial couples.

The film has international characters, one of whose members is a South Korean student passionate about hip-hop and gangster rap music and culture. Many viewers have questioned how true to reality a character like this can be, only to be surprised when I tell them there are several hundred thousand Korean-Americans each in the New York and Washington DC, and over a million in the Los Angeles metropolitan areas.  They are even more surprised when I tell them that a sizable percentage of young hip-hop dancers and singers are South Korean.

People also underestimate the degree of diversity in formerly homogeneous non-coastal American cities, towns, and suburban areas.  We have more immigrants in unlikely places, like the Vietnamese and Cambodians who work at Pitney Bowes’ Bucks County, Pennsylvania, facility, or the Africans who work at the company’s Cincinnati and Columbus, Ohio, facilities, or the Tongas from the South Pacific who work at the UPS complex in Louisville, Kentucky.

Throughout the country, we have refugee populations, which have built communities in unexpected places.  Many senior leaders are oblivious to these communities because they not only do not come in direct connect with them, but those interacting with the leaders never have occasion to tell them.

They also do not understand how diverse other countries have become.  Many people formed an image of Australia from watching Paul Hogan in Crocodile Dundee in the 1980’s.  However, almost 25% of Australians are first-generation immigrants.  Many people of Japanese origin live in Peru, a vestige of a time when the Japanese invested heavily in Peru.  Many entrepeneurs of Middle Eastern origin live throughout Latin America.  Toronto, Canada, is a great center of medical genetics research because over 100 ethnic groups live within its boundaries.

My wife, daughter, and I traveled to Italy already this summer.  For many years, I have seen Albanians and sub-Saharan Africans in Rome and other cities because of the more open EU immigration policies.

However, in the last few years, visiting Rome on business, I was surprised to be served by Indian desk clerks or Filipino hospitality workers at hotels in Rome.  More recently, I have been surprised to learn about the fact that about 90,000 Peruvians live in Italy, and that there is a fast-growing Chinese population.  In Northern Europe, before the financial crisis hit, the biggest issue Ireland faced was the influx of Polish domestic workers into the country.  Of course, the growth of Muslims from North Africa and the Middle East is not only noticeable in France and Germany, but in Norway, Sweden, and Denmark as well.

Today’s isolation is magnified by fragmented media channels and technologies.

In the 1960’s, we grew up in a mass media generation.  We had one TV set in a home, three national networks, and a very limited selection of films, AM radio stations, and other forms of entertainment.  Time Warner estimated that in 1968 it was possible to reach 80% of the core adult audience with three prime time TV media advertising purchases.

We received our news from one of three national nightly news broadcasts. Walter Cronkite of CBS News would end his broadcast every night with the same sign-off: “That’s the way it is.” Today, we would consider this laughingly arrogant, since no 30-minute news broadcast could summarize the world as “it is.”

Today, we are in very personalized and customized worlds.  The way we learn about the broader world is through highly fragmented media.  We do not watch the same TV shows, if we even watch them on a digital TV set.  We see a wide range of films in a variety of media.  We are exposed to global content as it happens.  We communicate by receiving broadcasts, and by broadcasting to a select group of friends through Facebook or LinkedIn.  To reach the core audience that three media purchases could touch in 1968, we would need to buy more than 115 ads.  A recent book called The Filter Bubble by Eli Pariser argues that the personalization of content by Google, Facebook, and other popular web sites fragments us even more. I see it with my own children. The world my 25-year-old son experiences is far different from the world my 18-year-old daughter experiences, even if they are in the same place at the same time.

What this means is that, as a parent, an organizational leader, or an advocate for a cause, a product, a service, or an organization, we are far less able to grasp the world in which we are acting in any holistic fashion than was the case before.  Understanding the world our individual children inhabit is more bewildering than ever

What we think we understand changes more rapidly than ever.  Our knowledge becomes obsolete more quickly.

Technologies and markets change faster than ever, and, with them, our mental maps of how the world works get obsolete.  There are countless examples of this.  In medical diagnoses, we no longer think of “cancer” as a single disease, as we did when President declared a “war on cancer” 40 years ago.  There are over 100 varieties of breast cancer, and we are learning that “cancer” is a generic label for a medical condition in which certain cells either multiply more quickly or die more slowly than normal cells.  “Curing” cancer is not a meaningful term in many cases because, while we can eliminate all detectable cancer cells in the body at one time, we may not be able to eliminate what has caused cells to mutate and create new cancer cells.

The concept of a “genetic” link to a medical condition has changed.  “Genes” are not hard-wired as a cause of diseases, except in a small number of cases, but only come into play when ”expressed.”

Beyond medicine, the same need to redefine old categories comes into play every day.  Today, telephones operate as computers, and computers are used for telephone calls.  The Internet has converted analog voice into digital data streams.  The nature of workplaces has changed radically.  We may work where we are and we have connectivity to servers enabling us to perform tasks, rather than going to a particular location.

Geographic areas we visited ten years ago do not even look the same or have the same demographics.  Anyone who visits China today will see cities that bear no resemblance to the same places they visited 5-10 years ago.  Even in America, many cities or towns look different, especially if they have experienced an economic boom of any kind.

Overall implications

Leaders today have to be humble, flexible in their views of how the world works, and in a continuous learning mode.  Adults of my generation or earlier who climbed up an organizational ladder and believed that they had “mastered” a body of knowledge, a set of skills, or a group of people are the most dysfunctional people.

As an adult, I have developed humility and skepticism about my ability to lead others with the boldness and confidence that a predecessor generation justifiably may have had.  This world requires more testing and retesting of whether our fundamental assumptions about the word are valid and whether our messages mean what we intend to communicate, and whether they are getting through.

Many successful adults are in denial about this world. I hope we will find a way to reassert some common experiences, values, and insight as we try to address the increasingly complex problems all societies face.

Whole industries and marketplaces, and often political and social paradigms, depend on people willfully denying reality.  In health care, the stubborn myth is that more care is always better care.  This myth enables health care providers to make more money, not have to make tough end-of-life decisions, and appear to be giving the patient what he or she wants.

Excessive care often puts the patient in worse position than if no care were given.  Many drugs are ineffective and have negative side effects. In certain cases, aggressive cancer treatments shorten life. Surgeries not only do not correct the problem for which the surgery is done, but create other complications.  The Dartmouth Atlas Survey, which was created by Dr. John Wennberg, has demonstrated over several decades that there is no relationship between the intensity and cost of health care across regions and the health outcomes.  It often happens that we spend more and get less for our money.

We willfully deny this self-evident truth, because, if we acknowledged it, we would have a health care system with different winners and losers.  Many high-cost health care regions would lose revenues and jobs.  More painful end-of-life conversations would have to take place. Society as a whole would be far better off, but many individuals would have painful readjustments.

Similarly, in the film industry, there is a deeply imbedded view that commercial success for films is totally random.  It is best reflected in how many people have interpreted a famous quote by William Goldman, an author and Academy-Award winning screenplay writer: “In the end, nobody knows anything.” Goldman meant to point out that making commercially successful films is an art, rather than a science, and that there are no guarantees of success.

His thoughtful observation has been distorted into a view that commercial success is totally random.  This view of success as being random is insidious because it denigrates the value of intelligent planning and execution, as opposed to the seat-of-the-pants decision-making many people make.  It turns every filmmaking endeavor into the equivalent of playing the exceptionally low-odds Powerball lottery. It also justifies making no significant changes to what intelligent film industry executives know is an unsustainable business model.

The unpredictability myth enables some to resist any changes in business practices that would increase predictability and likelihood of success.  Companies like Epigogix, which offers predictive modeling on film screenplays, and Opera Solutions, for which I am an advisor, which provides data analytic solutions for increasing the yield on film recommendations to customers, prove that, while results can never be guaranteed, the odds of success can be significantly improved.  There are many film industry executives who have developed extremely workable and intelligent business models, but what has made them successful has not been universally understood or copied.

Among politicians, a similar, deeply imbedded paradigm is that success is a result of luck.  Politicians, many of them far left Democrats, refer to taxes that redistribute wealth as “progressive” and as “ways to help the less fortunate.”  To them, the difference between success and failure is a function of how lucky breaks are distributed.

Success is a combination of smart decisionmaking and luck.  Malcolm Gladwell, in his book Outliers, argues that Bill Gates’ success was heavily influenced by computer access he had at his prep school.  He also gives many other examples of people who had similarly privileged access to resources needed for future success.  Bill Gates clearly had an opportunity not available to many Americans in the 1970’s.  However, Gates was not the only student at that school.  Others had the same access, but he was the only one who took full advantage of it.

In my life, becoming the CEO of Pitney Bowes involved a great deal of luck.  However, my work, and the assistance I received from family and friends over a lifetime, enabled me to benefit from the lucky breaks when they came.  I worked hard, deferred many gratifications, and experienced a lot of resentment from those who chose not to work as hard.

Other than lottery winners, there are no instant successes.  Many so-called “overnight successes” are really cases of people who have labored for years to be ready to take advantage of the one big break.  I wrote about this in a blog some time back about the difference between the way Bill Wyman accurately chronicled the Rolling Stones’ success, compared with how popular media described it.  Popular accounts of the Rolling Stones’ origins focus on the early partnership between Mick Jagger and Keith Richards and imply that there was instant chemistry and genius yielding early success.

Wyman, a founding band member, told a different story.  The individual band members toiled for years as solo performers and members of other bands.  They experimented with different musical styles, inspired by artists like Lonnie Donegan who led the way with musical pieces that combined multiple musical genres. The Rolling Stones did not achieve instant success, but built the foundation for what appeared to be instant success after the Beatles led the way in the U.S. in 1964.

Even those cases of performers “discovered” decades ago in various Los Angeles area soda shops, such as Lana Turner at Schwab’s drug store, often leave out the foundational processes that led to the “discovery” or that followed it.  Turner grew up under very difficult circumstances, being born in Idaho and moved to San Francisco as a child, and worked hard to be ready for her break.  She made a number of gutsy decisions, including a decision to leave one studio and join another as a teenager.

With the exception of lotteries and those smart enough to take their casino winnings and save them, there are relatively few cases of lucky, overnight sustainable successes.  When people get lucky and win lotteries, they often are unprepared to deal with the consequences of success and either lose their money over time or experience huge disruptions in their lives. A great TV show in the 1950’s The Millionaire, depicted people presented with a tax-free million dollar check (comparable to $10 million today) from an anonymous donor, who often struggled to live with their newly-found wealth.

Adherence to myth is unaffected by one’s level of education and wealth.  Many educators with advanced degrees adhere to the myth that, if only we gave teachers and schools more money, the quality of education would improve.  Clearly, good educators would benefit from having more resources.  However, giving a poor or mediocre teacher a higher salary and smaller classes with more equipment and supplies in a nicer facility will not turn that individual into a better teacher.  Moreover, someone ill-equipped to teach does not get better with experience.  Teachers’ unions and other advocates of more education funding would be much more credible if they acknowledged that many members of their profession do not belong in it.

What do we do about these persistent myths?  First, acknowledge them in a non-judgmental way. Second, recognize that, if there is economic dislocation from changing a paradigm, such as the amount of health care we deliver, the way we evaluate potential feature films, and the way we fund education, we need to anticipate and address that economic dislocation.  Unfortunately, people rely on the rules of a marketplace, a business, a government, or a system, and we need to transition them to some degree to a new system. In the transformation of electric utility service, we call these obsolete systems “stranded costs” and we develop plans to pay for phasing them out. All this obsolete health care, education, and government infrastructure is a “stranded cost.”

Most important, we need to recognize that every myth or paradigm is a temporary way of thinking about the world.  We must stop reinforcing the notion that there is a fixed way of thinking about the world that, once learned, will give someone a permanent advantage.  Experience is valuable, but the most important lesson that we need to recognize is that, sometimes, experience gets in the way of insight.  The art of being successful is knowing when experience is useful and when it must be discarded.

Life is inherently uncomfortable and insecure.  We should not teach our children to seek security and certainty, but to build resilience, continuous learning skills, and the capability to address the widest range of life’s challenges.

Wooden won the NCAA championship with a very small, fast team in 1964 and 1965, with two dominant centers, Kareem Abdul-Jabbar (then called Lew Alcindor) and Bill Walton, between 1967 and 1973, and with a team of physically strong forwards and guards in 1970 and 1975.  He made his team the center of attention rather than himself.

What were his secrets?  Every successful college coach has to be a great recruiter, a great team builder, a great teacher, and a great game coach.  However, what struck me most about Wooden was a quote about him in the June 14, 2010, issue of Sports Illustrated, in an article by Alexander Wolff entitled “Remembering the Wizard, ” as well as a quote on a sign he posted on his office wall.

The quote about him was “His great strength was a knack for knowing when and what to change, and when to leave things be. He let sands shift, but only over bedrock.”  The quote on his office wall was “It’s what you learn after you know it all that counts.”  The combination of these two statements is the essence of a great human being: someone who continuously learns and tests his or her ideas, and, through continuous learning, discovers what changes, as well as what is unchangeable.

The stakes for continuous learning have been raised by the scientific research summarized by David Shenk in his book The Genius in All of Us. The research to which Shenk refers us makes it increasingly clear that what we thought were genetically-determined traits in ourselves and our children and grandchildren may very well be changeable, based on our behaviors and attitudes. Shenk’s point is that, by our actions to learn, grow, and become healthier, we can alter the genetically-expressed traits in future generations, especially for future offspring or for children still under our environmental control.

In this stage of my life, I have transformed myself from a secure corporate executive to a person who is engaged in a number of entrepreneurial pursuits.  Although my life is at a more frantic pace than ever before, I feel more energized and healthier than ever.  I am making mistakes left and right in my new pursuits, which include investments in health care companies, charity service providers, a reality TV incubator, and even two full-length feature films, one of which is fully produced and is Fog Warning, and the other of which is at the pre-production stage through a newly-formed production company called Gyre Entertainment.

The words describing John Wooden ring true to me because virtually every transformational success that occurred in my life happened because I broke the rules and followed a path different from those who seemed to have mastered conventional paths to success that were no longer working predictably.  I am particularly finding that today in the film industry.  No one in their right mind would say that anyone in the film industry has a working formula for success.  Most films fail, andmost investors never get their money back.

The most successful film industry people with whom I have spoken are respected because they have a less poor record than others, and, perhaps, had a single blockbuster hit or a single Academy Award nomination that validates them.  There is an old (and, as expressed, politically incorrect) statement that “In the land of the blind, the one-eyed person is king.” However, I aspire to be consistently successful, not to get a hit 1 in 10 times, so I know that I need to use a radically different approach to making and distributing a movie.  Similarly, the person who is successful 10% of the time is a failure in my book.

The movie industry reminds me of the direct mail business, in which direct mailers celebrate a 1% response rate as an exceptional success in an industry in which the average response rate is .25%. To me, a 1% response rate is an abysmal failure. It means that 99% of the people threw the mail into the wastebasket without responding.

What do these two industries have in common and how is John Wooden’s wisdom relevant to both?  What they have in common are a lot of relatively successful and wealthy people who depart from Wooden’s maxim that it’s what you learn after you think you know it all that matters.  These industries are dominated by people who stop learning after they “know it all” because they achieve a certain level of success.

I am not wired that way.  I strive to succeed all of the time, although I know that is impossible, simply because I know that striving for continuous success means that I will approach a problem radically different from the mainstream people in an industry.  I also know that many of them will ridicule me, and tell me that what I am trying to do will not succeed.  Their deep skepticism often is grounded less in logic or facts, but in a deep-seated need to believe that their approach is unassailable, even if it fail 90% of the time (as it does in entertainment) or 99.75% (as it does in direct mail).

How do we distinguish between what must change and what is foundational, something John Wooden understood in the context of basketball coaching and educating?  First, anyone who tells me that they have a consistent playbook or formula for success that has worked for several decades is automatically suspect.  Similarly, anyone who tells me that all the rules that have governed the past no longer apply is also suspect.  The current and future environments will always be a mix of the new and the time-tested.

Second, I am immediately suspicious of someone who tells me that a product or service that depends for its success on the stupidity and irrationality of the public is also suspect.  As Abraham Lincoln once said: “You can fool some of the people some of the time, all of the people some of the time, and some of the people all of the time, but you can’t fool all of the people all of the time.”

Third, I get suspicious of anyone who tells me success is totally random or totally formulaic and predictable.  Fourth, I get suspicious of anyone unreceptive to my ideas because I am new to a field. Someone who judges me based on my track record rather than the strength of my ideas will undervalue what I am saying or proposing. Finally, I value entrepreneurs or thinkers who continually test out their thinking and adapt, based on what they learn. Transformative thinkers are highly secure people who are not scared to admit they might have been wrong.

John Wooden has left this earth, but, fortunately, his example and his teaching will stay with us and be available to inspire and teach us forever.

I have always believed that cigarette and alcohol consumption could be cut significantly by increasing the price of these items. For hard-core addicts, price increases are probably less effective, except for those already predisposed to quit. But high prices are clearly a deterrent to those who are considering starting to smoke or drink, and, over time, reducing the health and other costs of cigarette smoking and alcohol abuse will reap large dividends in reducing the incidence of chronic and acute health conditions.

At Pitney Bowes, we have attempted to put in modest wellness incentives in our health plans by having differential premiums between smokers and non-smokers. Unfortunately, the U.S. Departments of Health and Human Services, Labor, and Treasury jointly issued a regulation on December 13, 2006, which severely limited wellness incentives in self-insured health plans. (See Department of Treasury 26 CFR Part 54, Department of Labor 29 CFR Part 2590, and Department of Health and Human Services 45 CFR Part 146). This is a very misguided regulation, which apparently was issued in the context of preventing discrimination in health plans based on “medical conditions.”

Our incentive is not based on conditions, but behaviors, but the federal government has inexplicably concluded that if a premium differential based on behaviors is high enough, it would constitute illegal condition-based discrimination. From reading the regulation and the summary of the comments, I believe that there was no rigorous analysis of the benefits of different levels of incentives, and there appears to have been a unscientific conclusion that an incentive in excess of 20% for people engaging in wellness behaviors would be a coercive penalty for those who do not.

The fundamental question is why we should not be “coercive” to penalize individuals who can change behaviors that cost others significant amounts of money, but choose not to do so. Even with a 50% or 100% wellness “penalty” for those who do not take advantage of wellness incentives, these individuals usually incur chronic disease expenses far in excess of what the “penalty” would constitute. If their behavior were a recognized violation of other people’s rights and it was a result of gross negligence or even simple negligence, they would be liable for 100% of the cost they imposed on others.

The implication of this kind of limitation is that government officials essentially do not believe that destructive lifestyle behaviors are either negligent or controllable. They do not want the individuals engaging in these behaviors to be responsible for the full consequences of the behaviors. Ultimately, we need a more open and candid discussion of the rationale for this decision, and a challenge to the government officials who made it.

Nevertheless, to the degree that states or other taxing authorities can follow what New York City did, they will have performed a valuable public service in both discouraging destructive behaviors, and making those who continue to engage in them absorb more responsibility for the public and private insurance health costs they cause.

On a related note, I was pleased to see that Progressive Insurance is offering discounts for those drivers who agree to put GPS systems in their automobiles to track time, location, and manner of driving. Progressive announced this program a few weeks ago, and noted that probably 2/3 of its automobile policyholders who participate will see premium reductions. This is the right approach, because it will make those who drive recklessly pay more, rather than having broad categories of people, like young men between the ages of 16 and 24 pay more. Within that broad category, there are undoubtedly big differences in driver quality and those differences should be recognized.

I do not want anyone to think that I favor discrimination in insurance rates based on medical conditions, because that is unfair. However, changeable and risky behaviors should be discouraged through insurance plans and governmental fees and taxes, and those who engage in them should be responsible for more of the consequences of those behaviors.

Our mail stream businesses have always required a high degree of subject matter expertise and relationship-building with postal services and customers that take many years to learn and master. Therefore, for several decades, we had been a generous company in delivering benefits that rewarded and encouraged employee loyalty and commitment.

In 1990, this commitment to employee health and well-being was being challenged by our inability to continue offering health plans that essentially provided medical benefits without meaningful employee contributions in terms of premiums, co-pays and deductibles. Our costs were increasing at an alarmingly high 14% per year, and we were not delivering a high degree of employee satisfaction. When I became head of human resources in 1990, I had the unenviable task of committing us to a long-term course of action that required higher employee premiums, co-pays and deductibles, but I also recognized that we had to maintain and/or increase employee satisfaction with our benefit offerings, or we were going to lose one of our key talent retention tools.

From 1990 on, we changed our philosophy in subtle, but important, ways. First, we engaged our employees in the dialog. We gave them the information which helped them understand and embrace the reality that the existing health plan, while it appeared to be highly-beneficial, provided virtually free care, resulting in the siphoning off of money to outside providers, thus reducing reinvestment into our business, shareholder value through dividends, or even yearly compensation increases. In effect, totally free health care meant massive wealth transfer was taking place from Pitney Bowes shareholders, which includes our employees, to outside health care providers and administrators without obvious benefits or results. Accountability was missing from providers, administrators, employees, and insurance plans.

Second, we helped our employees understand that more care, even if it were free, was not necessarily better care. Based on data, we demonstrated that there were good, bad, avoidable, and marginal uses of the health care system, and that we would modify our plans to provide our employees with more effective and results based care and to discourage bad, avoidable or marginally-beneficial uses of the health care system.

Resulting from our employee engagement efforts, in 1991, we did increase premiums, co-pays, and deductibles, but we also introduced coverage for many valuable preventive screenings in our self-insured plan, including mammograms, colonoscopies, and blood tests to detect and effectively manage diabetes and cardio-vascular conditions. We also introduced free coverage for well-baby and well-child care, including immunizations.

In 1992, as planned, we again increased premiums, co-pays and deductibles, but we also opened our first free clinic in our World Headquarters, and we introduced premium incentives for non-smokers and those who regularly used seat belts and safety helmets.

In 1993, we launched our flexible benefits program, which gave employees far more flexibility to use their benefit dollars in ways that mattered to them, but we again increased premiums, deductibles, and co-pays.

We balanced the reality of increasing cost-sharing employee requirements with the provision of ‘value add’ free services, which the employees desired and appreciated.

Later in the 1990’s, based on our earlier challenges, successes and a commitment to trying to reduce the financial impact of burgeoning healthcare costs, we became even more convinced that we needed to develop a strategy which would influence our employees to adopt healthy behaviors. After much research we implemented a strategy of linking voluntary, healthy behavior adoption to financial incentives. We built a platform called “Health Care University,” which enabled participants to gain benefit credits for completing a health risk assessment or for participating in various kinds of wellness programs. This initiative exceeded our expectations in terms of employee satisfaction and improved the overall health of our employee base.

Leaping forward into this decade, we have made two further innovations. First, in our health plan designs, we began to understand that we could predict future costs by looking at population-level data for prior years. For example, we discovered that if we had employees who had been diagnosed with diabetes, but had not spent any money on maintenance drugs or were not taking them, these participants were highly likely to cause us to spend more than $10,000 in hospitalizations or emergency department care in a current or future year. The solution was clear. We knew that we needed to modify our plans to reduce the likelihood that this would happen in the future.

In fact, very much like the way Edward Deming and disciplines like Philip Crosby talked about upstream investment in quality that would pay for itself over time, we recognized that upstream investment in engaging plan participants to take maintenance medications would pay off over time in terms of employee health and productivity and improved shareholder investment return.

Thus, rather than increasing the cost of maintenance drugs for chronic illnesses, which was the more common approach across most health plans, we reduced the cost. For chronic disease medications conditions such as asthma, diabetes, cardiovascular disease, and behavior health, we reduced employee co-pays for brand name drugs by between 50% and 85%. We received a significantly positive payback, which I will share with you in a few moments.

More recently, we became acutely aware of the multiple benefits from creating a positive work environment for our employees. As we renovated our World Headquarters, we reduced the number of walled offices and shrunk average office sizes. We also virtually eliminated desktop printers, copiers, and fax machines, and replaced them with core area multi-functional devices.

By doing this, we created more exposure to natural sunlight for everyone; encourage our employees to walk around more during the work day, which was good for their health; and we created more meeting rooms for people to converse with one another, which improved morale and a sense of well-being.

We also significantly altered their experience in our cafeterias. The healthy food was more plentiful, lower cost and more easily accessible. The less-healthy food was made more expensive, less plentiful, and less accessible – we increased the distances people had to walk to find it. We also slowly, reduced portion sizes for all meals to reflect the recommended healthy portions of anything an employee choose to eat. For those who have chosen to participate fully in our benefit offerings, the wellness results have been tremendous.

Hence, I have come to realize that, while we must continue to emphasize personal responsibility for health among our employees, we, the employers, have an obligation to do what we can to create healthy work environments. Employees, like anyone else, will respond to the environment in which they find themselves. We, at Pitney Bowes have made doing the healthy thing an easy course of action to take and maintain.

At the risk of making our Pitney Bowes healthcare story sound easy, like any other large employer, we have challenges. We particularly are challenged by those employees who work remotely at customer sites in small numbers. Our Management Services Division has over 600 sites, with an average population of 20 employees per site, which makes that part of our business resemble a collection of small businesses. We also have several thousand sales and customer service professionals for whom their automobile is their workplace, as they travel from call to call during the day. We have come to realize that, for these populations, we need to communicate our health and wellness strategy more regularly at their remote sites and homes, and to engage their spouses or partners for added support.

We also recognized that, for populations in which we experience higher average turnover, like Sales, we needed to emphasize investment in health with shorter paybacks, such as our Flu Fighters program, which we launched in fall 2007. This program was very successful in getting employees from all over the country to get their seasonal flu shots, which significantly decreased our incidence of both influenza and other upper respiratory ailments last winter.

In spite of the challenging and highly financially competitive business environment in which many of our businesses operate, we have not experienced higher-than-anticipated employee turnover among longer-service employees, or among our executive population. Our only turnover challenge has been younger and relatively low-tenured professionals, who do not always tend to value health care benefits as highly.

I mention this last population because I believe that the longer-term solution is to educate them that managing their health is as important in their 20’s as they will perceive it to be when they are in their 40’s, 50’s and 60’s. We know that Type 2 diabetes is hitting our younger people earlier and earlier, and, sadly, the population that seems most resistant to the longer-term declining trend in smoking is younger, single women. At Pitney Bowes, we have begun an active, but empathetic outreach to these populations to get them more engaged in managing their health, and, although we have experienced some early successes, we are still at the beginning stages of understanding how to be effective in changing health behaviors in young people and how to use our commitment to their health and well-being as a retention tool.

In short, we at Pitney Bowes have achieved a lot, but humbly, there is still a lot of work to do and it is not necessarily easy. It will take creativity and innovation.

One innovation initiative that PB is vested in is the growing arena of tools for self-management of health. We are one of the founders of an initiative called Dossia, a non-profit, third-party organization with members such as Intel, BP, AT&T and Wal-Mart. Dossia’s goal is to fund the development of a web-based framework through which U.S. employees, dependents and retirees, and, eventually, others, can maintain private, personal and portable health records, as a way of empowering individuals to pursue health and to reduce provider medical costs. Dossia’s premise is that we can not overcome the health crisis in this country until most Americans manage their health metrics as closely as they manage their daily and weekly budgets

At Pitney Bowes, we believe that employees should be as conscious of their exact state of health as they are of everything else that matters to them. Health management is a collaborative opportunity to work with others to share knowledge and to reinforce best practices. To the degree that we create an environment where people eat healthy foods together, participate in healthy exercise programs together, and support each other in refraining from smoking and excess alcohol consumption, we have created an environment in which they will also team to create shareholder and customer value opportunities. Good health requires vigilance and personal responsibility.

What are the tangible results of Pitney Bowes decades of efforts?

For many years during this decade and before, we were able to keep per-employee health care costs for employees at our sites growing at low single-digit rates. For our total population, which included the half of our population which worked at our remote customer sites, we have experienced, per employee, consistently increasing cost savings vs. regional benchmarks.
Where by 2007, Pitney Bowes realized an estimated annual total cost offset or avoidance of $39.8 million on a cost base of around $150 million!

It has been hard work, but great reward!

Next, for the specific chronic conditions on which we concentrated this decade’s revised health plan, diabetes, cardio-vascular conditions, behavioral health, and asthma, our rates of increase in cost have been a fraction of those realized by benchmark companies.

We moved medication and services required for these chronic diseases from the more expensive 30-50% coinsurance tier, to the lower or 10% coinsurance tier.

The results were:

• A 50-80% reduction in employee cost on 30 day supply of medications without utilization of generic asthma controller medications and limited utilization of generic diabetes medications.
• Employee copays were kept to less than $20 for diabetes and asthma medications.
• Medication adherence increased.
• Compliance with disease management programs increased.

We were able to reduce the cost of treatment of employees with diabetes by 6% and treatment for asthma by 15%. We reduced annual pharmacy costs associated with diabetes by 7% and for asthma by 19% as well as we were able to keep behavioral health costs essentially flat. Also, because of our greater focus on adherence to treatment plans, we reduced emergency department use by asthma patients by 30%, hospitalizations by 38% and disability costs by 50%.

In short, we found that our on-site clinics produced a return of $2.30 for every dollar we spent, and those employees in the buildings which housed our clinics and who used clinical services had lower absenteeism, substantially higher adherence to chronic disease treatment plans, and significantly lower incidence of acute conditions.

We proved that the right design and delivery of health care can reduce the rate of increase in health care costs, can improve employee health, can improve workforce productivity, and can be a major factor in improving the quality of life for our employees.

However, our experience is not simply a case study to support the need for the continued involvement of the employer in the delivery of employee health, although it certainly is persuasive in that regard. It provides a scalable example of how we can tackle the broader issues of health care in our country. We must:

• Invest in health first, and lower health care costs will follow.
• To invest in health, we must create a healthy environment that supports the consumption of healthy foods, fitness and exercise, and healthy lifestyles.
• Deliver high-quality health care at locations and times convenient to the people intended to be served.
• Design health plans to drive the right behaviors by both participants and providers, and to discourage the wrong behaviors.
• Make health insurance affordable and universal by reducing the overall cost burden of health care.
• Enable providers to invest in tools and technologies to improve the quality of health care delivery.
• Make sure that providers are both empathetic and competent.

These are the fundamentals which drive the Pitney Bowes healthcare story!

Finally, one question which I was also asked by our hosts today to answer was, “How can we can engage corporate leadership in this healthcare dialog?”

The most obvious answer is to highlight the financial results of healthcare optimization and behavior adoption, like those I shared today. However, the other two leadership engaging aspects are the human factor and leader’s strong desire to want to solve seemingly impossible problems – to be cutting edge.

First, yes, C-suite executives are human. They understand the basic challenges and concerns about healthcare. And, like every individual, we experience the positive and less desirable impacts of current healthcare in the United States. If we want their involvement in this dialog, we have to engage them on a personal level. At Pitney Bowes, while managing human resources, I was personally able to see first hand the impact of healthcare on all aspects of our employee’s lives. This is why I personally committed to improving the health of our employees. And, now as Executive Chairman, I continue this commitment with involvement in initiatives such as Health First Connecticut, a diverse, regional initiative to improve healthcare services for all Connecticut residents.

Second, if we want to engage executives in the healthcare dialogue, we have to capture their passion for mastering new frontiers. This means highlighting the perspective that healthcare is the next place of innovation, creativity and expansion. We have to get leaders to see that solving the nation’s health and healthcare crises as equivalent to man’s first trip to the moon. Organizations such as Partnership for Prevention, of which my panel partner, John Clymer is CEO, provides a forum for this cutting edge and collaborative dialogue. As a leader, it is one of the critical places I go to keep my own interest engaged, energized and informed about healthcare. Please consider my comments as an invitation to the conversation.

When I read this article, it occurred to me that the misuse of menthol and other sweeteners to attract people to cigarettes can be turned on its head to make healthy foods more attractive to eat. When our younger son, who is now 17 years old, was under 10 years old, we had a great deal of difficulty getting him to eat anything other than junk food. We had particular difficulty getting him to eat green vegetables.

My wife came up with the strategy of letting him put ranch dressing on his vegetables. It obviously increased his caloric intake in a less-than-optimal way, but it helped get him into the habit of eating vegetables. Over time, we started putting the ranch dressing on his vegetables, but we used less and less as time went on. Eventually, by the time he was 13 years old, he was still eating his vegetables, but had been weaned off ranch dressing.

My wife has understood that I have somewhat of a sweet tooth as well, so, over the years, she has incorporated bits of fruit in lettuce salads, fruit-like toppings on seafood, and interesting combinations of vegetables, like avocados, in salads. She has presented healthy food in a very attractive way, so we have eaten moderate portions of healthy food whenever we sit down at dinner tables. On my own, I have basted salmon with mustard before broiling it, squeezed lemon juice on swordfish, and added lemonade to green tea. As a result, our family has found eating healthy foods very attractive.

As we think about our obesity crisis, we need to recognize the reality that asking or forcing children to eat healthy foods when they have become addicted to junk food is going to be unsuccessful unless we can find ways to mimic the sweet flavors and tastes to which they have become accustomed. We also have to find ways of making the healthy food “cool” and a status symbol for young people, as cigarettes have become.

We also have to recognize that how food is presented and packaged matters greatly as well. To the degree that healthy food is made available in attractive packaging and with attractive flavoring at fast food retail outlets at which young people come together, it has a chance of being part of the diet, and, over time, to supplant less healthy food.

I recognize that weaning people from cigarettes is not as simple as making the substitutes flavorful, since the nicotine in the cigarettes is addictive and since there are many reasons people smoke. At the same time, the battle for the health of young people will be fought and won by making good food more fun to eat than bad food, and we can thank the cigarette companies for teaching us the techniques of how to make something people ingest more attractive to them.

The main example that comes to mind is the way we characterize how government positions are filled.

When I was growing up, like most American history students, I read about the 1881 assassination of President James Garfield, who was killed by a “disappointed office seeker.” I learned that this tragedy gave rise to “civil service reform”, which, if I remember the history books, characterized the change as being one which replaced an appointment system based on “patronage” or “spoils” with one based on “merit”. Like most Americans, I came to believe that the civil service system was an unqualified positive development for American government, and the old system was corrupt, to the point of being “un-American.” In fact, on the radio this past week, I also heard a radio commentator refer to “patronage” appointments in a very disparaging way.

As a person who has interacted extensively with elected officials, as well as their appointed government agency leaders, I have come to a much more balanced understanding of the relative advantages and disadvantages of the two systems for filling positions. While many civil service employees are dedicated, hard-working, imbued with a sense of mission, and able to provide expertise that political appointees can never hope to match, there are many government leaders who would argue that we have become unbalanced in creating career positions insulated from accountability for results versus accountable appointed positions in many government organizations.

What elected and appointed officials have told me is that the voters have put them into office to accomplish specific goals, and that they believe that, above a certain level in a government agency, officials should be “accountable” to the elected officials who are “held responsible by voters” to achieve certain public policy goals to which they have committed themselves. They look at career “civil service” officials as individuals who effectively have lifetime employment and, therefore, have “no incentive to be responsive to citizens.” They look at these officials as individuals who often deliberately frustrate the will of the people. They see appointed officials as having a clear mandate to do what citizens have expressed as their desires through the voting process.

They also say that career civil service officials are often unable to be removed from their position, even if they are incompetent performers, bad managers, or inappropriately resistant to change. They also comment that these officials block more talented people below them from getting promoted, and bring down the morale of an entire agency.

I agree with those who say that most states and the federal government have made it far too difficult for appointed agency heads to remove non-performers or under-performers. In many places, we are out of balance in protecting procedural due process for the employee, and insufficiently protective of the rights of citizens served by these under-performers, fellow employees, or those who are ultimately responsible for agency performance. We also do a disservice to the majority of civil service employees who really do consistent and excellent work year after year.

Relative to being responsive to voters, those who created the civil service system understood the need to balance the perspective of those voted into office to achieve particular objectives during their tenure as elected officials, and those who, because of civil service protection, are able to take the longer view, and build needed expertise. We should always maintain a set of checks and balances on government power, and a properly-constructed civil service system does just that.

Nevertheless, my fundamental point is that the choice of language drives us to very different ways of looking at the problem, and to conclusions about how to strike the balance. As a high-school student, I believed that we needed a civil service system for as many jobs as possible. As a person who sees many flaws in how our governments function, and as a citizen, I want elected officials and their appointees to have the maximum ability to accomplish what the voters have demanded that they do. We should never let our choice of labels and language obscure what are often difficult and delicate decisions on how to balance worthy, but competing, objectives.

My fondest wish is that the media use more balanced language in describing how government functions, and be attentive to the evaluative implications of what, on the surface, sounds like morally-neutral language. The choice of words has consequences, and tilts seemingly “objective” reporting in a very biased direction.