Humana, headquartered in Louisville, Kentucky, is one of the nation’s largest publicly traded health benefits companies, with over 11 million medical members and twenty-five thousand associates. Throughout its forty-seven-year history, Humana has seized opportunities to reinvent itself to meet changing customer needs. Humana was founded by two local entrepreneurs as a nursing home company. Later the company moved into hospitals and integrated health care before its decision to focus solely on health benefits. Humana pioneered the way for a consumer focus in health solutions. The company has experienced rapid growth, doubling in size and revenues over the past few years. Today the company retains the entrepreneurial spirit it has embodied since its beginnings.

When Michael B. McCallister became chief executive officer in 2000, Humana was facing major challenges. The industry was under pressure as health care costs were rising at a double-digit rate and the cost of insuring the corporation’s own associate population was forecast to rise dramatically. McCallister determined that we needed to find a different solution that would serve the company, its associates, and its customers. Humana therefore launched a strategy that would place the consumer at the forefront of health care for the first time. The strategy was designed to empower consumers with the information to make informed decisions about their health care in the same way they make other purchasing decisions.

The creation of the role of chief learning officer (CLO) in 2002 placed the focus on enterprisewide learning with a single senior leader for the first time. The first priority for the new CLO was to assess the current state of the learning organization: identify individuals performing learning functions across the company, ascertain the scope of ongoing learning activities, identify vendor relationships, and estimate the organization’s yearly spending on learning activities. At that time, learning activities were performed by disparate teams throughout the company, with learning leaders reporting to their business units and operating with little to no connectivity to other learning functions in the company.

The shared services model represents a portfolio of learning resources that can be leveraged enterprisewide. These include a common leadership development curriculum, common competency curriculum, and common online content. It also includes technology components such as e-learning tools and a learning management system. When these areas were selected as shared services, priority was given to having a common and consistent approach across the enterprise. Shared services are largely managed within the corporate learning functions reporting to the CLO, supported by key partnerships with information technology, finance, and human resources. These functions engage the broader learning consortium to identify and prioritize needs, explore opportunities, and drive shared solutions.

The goal of the business unit (BU) learning teams is to advance the strategies of their respective business units through learning. Business unit learning leaders identify performance gaps in their business units, determine how those needs will be met, and design and manage learning interventions. Often training being conducted within the business units is technical or unique to a particular area. When needs do cross areas, the Learning Consortium provides a vehicle through which activities can be coordinated. Where a shared service or tool does not exist to meet the needs, BU learning leaders initiate and manage the learning process from start to finish. In these situations, the BU leaders may tap into the Learning Consortium to identify a practice or resource that was successful in another area, solicit input to increase probability of success, and later share information with other consortium members. In selecting activities to be performed within the business units, priority is given to business relevance and speed of delivery.

FIGURE 15.1 LEARNING CONSORTIUM MODEL : THE NETWORKED ORGANIZATIONAL STRUCTURE

The role of governance for the Learning Consortium centers primarily on ensuring the continued effectiveness of the consortium. That includes the evaluation and enhancement of the shared services portfolio, alignment and coordination of efforts, and facilitation of information sharing across the consortium. Other active areas of governance are tracking and reporting of learning spending and management of centralized external vendor relationships. The governance function is largely managed within the corporate learning function and supported by partnerships with information technology, human resources (HR), and finance, as well as committees formed around communities of interest.

The idea of creating an alternative organizational approach for learning emanated from an analysis of decentralized and centralized organizational models. The benefits and drawbacks of centralization and decentralization were thoroughly considered. The consortium model was born out of the realization that while both of these approaches have significant advantages, they also have shortcomings. The goal became to take the best of both approaches and create a new networked operating model—one that would create a unifying framework for learning, leverage scale for efficiency, and keep learning close to the business by maintaining reporting relationships for BU learning teams into the business units.

Implementing the Learning Consortium began with a communications campaign initiated by the CLO with senior leaders. The goal of those conversations was to engage leaders in dialogue around the business value of the consortium approach and secure buy-in. Leadership support was critical to ensuring participation in the consortium, whose goal is to advance shared objectives through influence leadership and a shared sense of what is best for the enterprise.

The Learning Consortium model, which empowered BU learning teams to focus on their strengths and benefit from shared services, has delivered value in several ways. The model has allowed us to scale learning. Figure 15.2 indicates the extent of increased reach and frequency of learning activities while significantly reducing learning spending. Millions of dollars in cost avoidance have resulted from leveraging volume to negotiate favorable vendor discounts, eliminate duplicate efforts, and increase the use of technology and online learning.

An organizational model that relies on influence leadership and collaboration must seek executive endorsement and identify the benefits for consortium group members and their leaders:

Succession management and executive development quickly became the centralized services that complemented the Learning Consortium. The leadership development strategy was created based on early conversations between the CEO and CLO about the company’s consumerism strategy and the need for a fresh approach to executive development. Dialogue around the organizational and leadership capabilities required to execute the strategy facilitated the creation of a new set of strategic leadership competencies that included understanding and articulating the business strategy, development of an out-of-industry perspective, collaboration across functional boundaries, and emotional intelligence. The Humana Leadership Institute was created as a forum by which the company could advance the consumerism strategy and develop the competencies needed to take the company in a new direction.

The business simulator was the first major initiative launched through the Leadership Institute. It was an optimal choice for two reasons: first, it engaged business leadership in the process of learning in a way that appealed to their pragmatic nature and technical mind-set. Second, it addressed the strategic competencies of articulating the strategy and working cross-functionally that the CEO had identified as critical.

Methodology. Partnering with BTS, a world leader in customized business simulations, Humana developed its first simulation in 2003 to address the complexities of its business. The simulation was created with information gleaned from interviews with senior executives and reflected the decisions and dilemmas similar to those that the highest executives wrestle with routinely. Since that time, Humana has developed three additional simulations for the United States with the goal of furthering leaders’ knowledge and skills in implementing the company strategy.

Successes. Although the primary goal has been to build the business acumen of senior leaders, the purposeful assignment of teams with leaders with different functions, departments, and markets has provided some of the greatest insights. Participants learn the importance of aligning their decisions with a long-term strategy and gain a better understanding of the many factors that affect business decisions. With a more systemic view of the organization, leaders are able to see their place in the end-to-end process and understand the implications of decisions within the company and externally with consumers.

Real World Work is an action learning methodology that brings together a cross-functional cohort of high-potential leaders to examine a business challenge facing Humana. The idea for the program came from the CEO, who acts as sponsor and selects the topics for each group.

Methodology. Each Real World Work cohort comprises eight to ten leaders from across business disciplines. The program begins with a dialogue between the group and the CEO, who provides specific questions for them to explore and answer. Subsequently the group is introduced to an external thought leader who shares subject matter expertise and provides guidance to the group throughout the process. To augment learning, leaders are involved in teaching: each participant is paired with an executive committee member who serves as a mentor during the process.

Successes. This action learning process has achieved success by facilitating resolution of organizational challenges, enabling participants to learn from participating in the process, and disseminating those insights across the organization.

The development of women leaders is a critical imperative to sustaining the growth of all organizations. As in other corporations, women in Humana represent an underused and underdeveloped resource for leadership talent. One factor driving the creation of the company’s recent Women in Leadership Program is the desire to increase the internal leadership talent pool significantly to meet the company’s future executive leadership needs. By increasing leadership diversity, the company also believes it can bring about greater innovation and better fulfill its core business strategy of consumerism. Expected outcomes for the Women in Leadership program include improved readiness for succession, enhanced performance and impact, and the capability to encourage an overall coaching culture within the organization, which is critical to creating a learning organization.

Source: A. Miller & Associates LLC and Humana.

Methodology. The Women in Leadership program as outlined in Figure 15.4 targeted the top 150 high-potential women. It has three elements: group and individual coaching sessions with professional executive coaches; peer coaching; and Thought Leadership Symposia, a series of high-impact forums with premier thought leaders. Structured networking opportunities with past and future Women in Leadership program participants augment the experience. The program cycle spans approximately four to five months for each of three groups of twelve to sixteen participants per quarter.

Success Factors. The program is delivering impact in significant ways. First, the combination of having executive coaches on premises and creating peer coaching teams has allowed an expanded segment of the leadership population to benefit from executive coaching in a cost-effective manner. Second, the personal transformations that have occurred with individual leaders are creating a ripple effect within the organization: as the participants gain skill in giving and receiving feedback and trust in their individual approaches to leadership, they are creating the culture around them and replacing the myths about what leadership approaches lead to success. The net result is more open and honest dialogue between the participants and their managers, which leads to authentic feedback and coaching. Third, the networks built inside the program have shown sustainability outside the program, with program alumni organizing formal and informal meetings to support one another. Finally, it is believed that the Women in Leadership program will be a tool by which the company’s talented women leaders can better understand and develop their strengths and achieve their career goals. Promotions and role changes that have come about as a result of the program have demonstrated early success in this area.

Several key factors have contributed to the success of learning and leadership development at Humana. The most important success factor has been to take an approach that respects and works within the company’s unique culture. Some organization models and interventions work in some companies where others will not. Finding the approach that best fits a company’s unique culture is critical to building and sustaining momentum. What is more important than having a textbook-perfect approach is facilitating the conversations that engage senior leaders and inspire them to take ownership of learning. Executive buy-in and involvement are critical for substantive change to occur. In order to get buy-in, learning leaders must be able to demonstrate an understanding of the business strategy and design a learning strategy that complements the business strategy.

Over the next couple of years, the intention of the corporate learning function is to build on the successes of the programs and models outlined in this chapter. Further adaptations of the business simulator are taking place to facilitate community dialogue with external stakeholders in the health care system. In addition to creating learning for Humana leaders around the company strategy, the simulator also demonstrates to external stakeholders a new approach to problem solving. A second area of focus is to augment the leadership skill sets that will enable them to build on the networked operating model across the organization. The intent is to increase the use of technology and the Internet to build collaboration and virtual leadership skills in those groups and other teams. Finally, the role of learning will increasingly focus on developing the decision process skills and knowledge of leaders across the enterprise so that they are able to help teams and groups to be more effective.

Raymond L. Vigil is vice president and chief learning officer at Humana. He is responsible for the Humana Leadership Institute, succession management, organization development, and the Learning Consortium, a networked operating model for learning. Prior to joining Humana, he held senior-level leadership and human resource positions with Lucent Technologies, Jones Intercable, US West, and IBM.

Elizabeth H. George is the director of human capital integration at Humana. She is responsible for defining and communicating the company’s employment brand. Prior to joining Humana, she was an organizational consultant and headed the learning function for a division of Merrill Lynch Europe.

Robin K. Hinkle is a learning consultant at Humana. Her focus is on researching and evaluating the impact of organizational development initiatives on human capital performance. Prior to joining Humana, she held a fellowship at the Army Research Institute at Fort Knox, Kentucky.