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The Strength To Lead

Humana's Bonnie Hathcock, the 2007 HR Executive of the Year, has a straightforward philosophy: "HR takes a back seat to no one."

Tuesday, October 16, 2007
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Sometimes, you just have to trust your instincts.

Bonnie C. Hathcock was a year into her first job in HR -- she was vice president of human resources at a division of Siemens -- and things didn't feel right.

A top company executive had brought her over from marketing and sales, saying, "You don't think like an HR person, you think like a business person." But Hathcock quickly saw that the HR department she led was not operating from a business perspective.

She wasn't quite sure what to think. And so that first year at Siemens Rolm Communications, in the Silicon Valley, she began to doubt her own inclinations. Was she wrong to think that HR should play a key role in an organization's business strategies?

"For a year, I was repressing my instincts to do things differently," she recalls.

About that time -- this was the early 1990s -- Hathcock happened to attend a seminar given by HR guru and University of Michigan business professor David Ulrich.

She listened raptly as Ulrich put into words all that she had been thinking about.

"He said that, as an HR executive and leader, you have to have business competencies -- it's not enough to be good with people," she recalls. "He said, 'Be bold. Speak the language of business. HR people must be business people.' "

For Hathcock, it was an epiphany.

She said to herself, "I am not thinking incorrectly. I am right on target."

When she returned to the office, she says, "I unleashed all that pent-up energy."

Hathcock's energy -- and her instincts -- helped transform the role of HR first at Siemens Rolm, later at US Airways and most recently at Humana, the Louisville, Ky.-based health-insurance company where she is senior vice president and chief HR officer.

Perhaps it's not surprising, then, that Hathcock has been selected as Human Resource Executive®'s HR Executive of the Year for 2007. The award recognizes HR leaders who have made outstanding contributions to their organizations, and who exemplify the increasingly strategic nature of the profession.

Those who, in other words, might be seen as ambassadors for a new, more influential HR. And since that life-changing seminar years ago, Hathcock, 58, has never been shy about taking on such a role.

"HR takes a back seat to no one -- that's my assumption going in," says Hathcock. "I look for HR people who are not afraid to get in a room and slug it out professionally for what they believe in. We need to have some boldness about us, and some courage."

Into the Fire

Both qualities were certainly needed when she arrived at Humana eight years ago and took over as human resource leader. The public and political backlash against HMOs had thrown the company into turmoil, and the HR department itself was in shambles.

Hathcock led an effort to overhaul employee health benefits, designing a new, consumer-based program that the company later introduced to its customers. She also placed top "business-oriented" HR people in various departments, such as finance and sales, to help provide business leadership. And, she collapsed 1,500 job descriptions into 400 "roles" to encourage talent development.

Those and the other initiatives she pushed required just that -- push -- to overcome the natural resistance to change. But, according to those who work with her at Humana, Hathcock has done it with more of a pulling motion, with persuasion rather than blunt force. She has a deep understanding of people, they say, and knows what it takes to win others over to her way of thinking.

"She's very bold in her ability to take on the tough issues and do it with finesse, and yet strength," says Ray Vigil, an HR vice president and chief learning officer at Humana. "That's a rare combination."

Colleagues say much of Hathcock's success as an HR leader comes from what seems to be an innate business sense. As Carleen Haas, vice president of diversity and talent acquisition, says, "Bonnie plays at the business level because that's the way she thinks."

Like many HR leaders these days, Hathcock is a key member of her company's executive committee. CEO Mike McCallister says she participates in every aspect of strategy "from soup-to-nuts."

"She is a major participant in everything the company does," he adds.

What makes Hathcock perhaps unusual, though, is that her focus on business and strategy has not led to a diminution of what is at the core of HR -- the human element. While it may be difficult for some HR executives to balance the overall needs of the company and the individual needs of the employees, Hathcock seems to do it naturally.

She lives and breathes bottom line. And she is at heart a people person.

"She has the ability to genuinely connect on a person-to-person level, and make you feel you're the most important person in the world," says Vigil. "I have never had an HR leader that had the capacity to be a really powerful, compelling business leader, but also operate in such an emotionally intelligent way. She's got tremendous instincts with people."

Strengths and Hardships

Hathcock's clear-eyed view of the world has its origins in her rocky childhood in small-town Shippensburg, Pa. Her father, who suffered psychological trauma in World War II, abandoned the family when she was 3 and her brother was 6 months old.

"It forced us into a fairly desperate situation," recalls Hathcock. All their belongings were repossessed -- "down to the toys."

Hathcock, her brother and mother moved in with an aunt and uncle and their three children, but things weren't much better. Everybody was crowded into a one-bedroom apartment that "almost sat on the railroad tracks," and all the children were left in the care of Hathcock's uncle while the women went off to work.

Her uncle, Hathcock says simply, "was not in a position to give us a lot of care." There was little food in the house, and the children were often hungry.

One October day when she was about 4, she was playing in a sewage drain -- barefoot, wearing a dress with only one button buttoned. Another aunt spotted her, and Bonnie Hathcock's life changed its path.

The aunt "took me to her home and gave me a bath and washed and curled my hair and then took me uptown to buy dresses," says Hathcock. That night, her aunt read to her from a book Hathcock later discovered was the Bible.

"The pink lampshade cast this warm glow over the room," Hathcock recalls. "I remember vividly thinking to myself, 'This must be Hollywood. This must be what they're talking about.' "

Even working two and three jobs, Hathcock's mother couldn't afford to take care of her two children, who sometimes went to bed hungry. And so the aunt and uncle took in Hathcock, and later her brother, though their mother got an apartment nearby and saw the children often.

Hathcock's new home was a modest apartment over a state liquor store, "but it was clean as a whistle, and there were hot meals every day," she says. Her aunt and uncle took her to church, and helped instill a deep faith that guides her to this day.

"We grew up," she says, "with a lot of love, a good set of values and, above all else, a strong work ethic."

Still, Hathcock never expected to go to college. None of her cousins did. "I grew up thinking I probably wasn't smart because I wasn't someone the guidance counselors paid attention to," she says. College "wasn't in the cards, wasn't in the genes, wasn't in the budget."

Someone did notice her, though -- her high-school shorthand teacher, who saw in Hathcock's lightning-fast speed a native intelligence missed by others. The teacher gave her praise and encouragement, and Hathcock's grades began to rise.

"Frankly," she says, "I just needed someone to tell me I was smart." She graduated from high school with honors, and did go on to college.

Hathcock's experience fueled a lifelong drive to improve herself.

"Bonnie is so dedicated to her own self-improvement," says Vigil. "She's constantly taking notes, and integrating things that she learns -- concepts, sayings, quotes -- into how she operates. If you're having a conversation with her and give her insights, you'll find the next day she has incorporated those insights and is using them."

Says Steve Moya, senior vice president and chief marketing officer, "You know how, in meetings, something comes up and gets passed by? She'll slow the meeting to talk about it to see what can be learned."

Hathcock "wants to be perfect," says her husband, Lee. After giving a presentation, "she critiques herself, and she's hard on herself. She'll say, 'Why did I say that? Why didn't I say this?' She didn't think it was perfect, but anyone listening to it would never know it."

Improving the Function

Hathcock's belief that she can do better clearly parallels her conviction that HR can do better -- that it can be a driving force to improve a company and its employees.

When she joined Humana in 1999, she says, "HR was very badly broken. HR had a bad reputation -- or it was a void to people."

That sorry state was physically manifested in the file room, where Hathcock, to her amazement, found employee data stuffed in boxes, rather than put away in personnel files.

There were "very good people" in HR, but they were working under difficult circumstances. Hathcock reorganized the staff, and gave them a vision of what HR at Humana could become.

"I painted a picture of what the future would look like once we got the respect of the organization," she says. "I brought discipline and order to HR, from the file room to the way we pay people."

The HR staff, she says, began to blossom.

Hathcock has pushed through -- or, rather, pulled -- a number of initiatives at Humana.

She has, for example, established HR "business consultancies" in sales, IT, finance and other functions at Humana. Four senior HR executives -- "responsible for driving the human capital plans" -- provide guidance to the various functions' senior vice presidents and vice presidents.

The HR leaders help develop an organizational assessment that looks at an entire function.

"They'll ask, 'Who's going to be promoted this year? Who's going to be moving into a job expansion?" says Hathcock. The HR executives will also put a strategic diversity plan in place, dealing with such issues as hiring, education and awareness. And, says Hathcock, they'll look at the function's overall business strategy, helping determine things like how many people need to be added during the year.

Hathcock also instituted "calibration sessions" for performance reviews, in which managers have to justify -- to a group of their peers -- the salary increases they intend to give out.

"They have to come up with extremely concrete examples of behaviors in order to sustain the ratings they want to give," she says.

When Hathcock presents her HR initiatives to Humana's executive committee, she leaves nothing to chance. She and her top staff "rehearse for hours," she says.

She doesn't want anything to sound canned, "But I want people to have really thought about what they're going to say," she says. "How this fits into the strategy. The hurdles we'll have to overcome."

The preparation is intense. "We grill the team," she says. "Have we thought of everything? Have we researched it? Have we anticipated the objections?"

Fellow members of the executive committee say Hathcock's presentations can be very effective.

"She's passionate and tough about her desire to move the company in a particular direction," says Jim Murray, Humana's chief operating officer. "She's pretty honest about what it's going to require, the buy-in. If someone is sponsoring a program, they might sugarcoat the costs and the difficulties. She doesn't do that."

Adds Murray, "She helps create a vision around an area, and gets us to buy into 'what could be.' She makes us feel that if we don't do this, we'll fall behind."

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Hathcock says the trust and support of CEO McCallister has been critical. In one instance, she proposed to the executive committee that HR conduct a "change intervention" -- a series of meetings with all Humana employees telling them "what the business strategy was for the enterprise, what their role was and what behaviors were expected of them."

McCallister's response, typical of their relationship, was, "Frankly, it sounds a little squishy. But I'm going to let you go with it. I'm going to trust you."

According to Haas, Hathcock serves as a kind of adviser to McCallister. "She's what I call 'true north,' " says Haas. "She strives to be balanced. Many times in corporations, people have a specific agenda about their power base or their point of view. While Bonnie does have a point of view -- she has a strong point of view -- it's not 'I want to be right;' it's 'I want the company to be in the right place.' "

Hathcock also wants HR to be in the right place.

During the summer, documentary filmmaker Michael Moore released Sicko, an attack on America's health-care system that mentioned a number of insurers and providers by name, including Humana.

HR and corporate communications sent an e-mail to Humana's 22,000 employees that, Hathcock says, "treated them like adults."

The e-mail let the employees know what to expect in the film, and said that the specific allegations against Humana had been proven false. But, says Hathcock, the company also acknowledged that one of the movie's overall themes was valid -- "That the health-care system in the United States is broken and needs to be fixed."

Hathcock personally reviewed the e-mail -- as she does with every word of every message that's sent to company employees.

"I want to make sure the words we're using are real and genuine words," she says. "We have to make sure that we stand up for what we believe, and that we do believe in what we're saying. Otherwise, your museum of contradictions gets very crowded."

Humana, says Hathcock, has a "culture of candor." Preserving that -- and the rest of the company's overall philosophy -- will be one of her most pressing challenges in the coming year.

Because of changes in Medicare and prescription-drug laws, Humana has been expanding rapidly, hiring as many as 5,000 to 7,000 employees a year. 

"When you grow that fast, things get lost if you don't keep your eye on the ball," Hathcock says.

She adds, "We've been building this culture with the employee population that we have.

"Now you get all these new people who enter, and they bring their own ideas. If we're not careful, it will start to erode the culture that we have established."

The Humana culture, she says, values not only candor but also innovation as well as respect for the company's "strategy of consumerism," says Hathcock. "We believe consumerism is the next revolution of the health-care system."

For new employees, the transmission of culture -- including an understanding of the company's principles and ethics -- begins right away, during the one-day orientation for new staff and the two-day onboarding of new managers.

The process is a continuing one. Each year, all Humana employees are expected to complete an online ethics course, which deals with everything from medical privacy laws to filing expense reports.

The company's values are also emphasized to top managers at Humana's "Leadership Institute," which Hathcock helped establish.

With the company expanding so quickly, says Hathcock, "our challenge is to ensure that our culture is sustained. Culture is not something you're ever done with."

Leader and Teacher

Those who work for Hathcock say she's not only a leader, but a teacher as well.

"She's a very different senior executive in that she is really able to focus on your strengths and maximize them," says Haas. "She's a developer of people. She does a lot of feedback in pushing you to do bigger things."

Says Vigil: "She connects people with ideas on how they can improve. You're talking to her, and she asks very penetrating questions. She asks, 'Why are things that way?' She can empathize with what happened to you in your life. She'll say, 'Something similar has happened to me; here's how I learned to think about it; does that make sense to you?' "

Hathcock has a strong desire to share what she's learned, and says that when she retires, she might teach business and social etiquette.

"I have this desire to help others, particularly younger people, to develop an edge for their personal or professional lives," she says. "How you present yourself. How you communicate. How you treat other people."

She adds, "It's very personal for me. I didn't know any of this. I had to learn it all the hard way. There were painful moments of blunders, of doing the wrong things, of saying inappropriate things."

Hathcock says she wants to help those new to the business world because she sees herself in them.

"I want to save them from what I learned the hard way," she says. "My heart connects with them."

A Few Things Few Know About Bonnie Hathcock

Also:

About the Competition

Don't Say That

The 2007 Honor Roll Inductees:

* Valerie Murzl of Station Casinos: Staying Ahead of the Game

* Matt Schuyler of Capitol One: Making a Difference

* Jill Smart of Accenture: Smart Moves at Accenture

* Sharon C. Taylor of Prudential: Grace Under Pressure

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