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Jay Gellert is President and CEO of Health Net, one of the largest managed health care companies in the U.S. He started his career with a small management consulting firm specializing in health care before working at a series of managed-care companies from 1985-1996. Gellert holds a BA from Stanford University and serves on several boards, including the American Association of Health Plans, Mivita, and Ventas.
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PH: I'm doing research for a book on early-career management of people who've been well-accomplished in a variety of fields. Talking to a spread of people - Nobel Prize winners, Fortune 500 CEOs, politicians at various levels, non-profit leaders, and so forth.
JG: Uh-huh.
PH: So in that vein, I'm interested in the work you'd done at HealthNet and prior to that, earlier in your career. If all that works for you, I'm ready to just dive right into my questionnaire.
JG: That'd be perfect.
PH: Okay. So the framing mechanism for the survey, the area where I start my questions, is on the first job after college. From my reading, it looked like you were a very interesting CEO in that you had not gone to business school - Is that right?
JG: Correct.
PH: Okay, so we can start right there. What was the first job you held after college.
JG: I worked for a small management consulting firm named Hughes Tyson Associates, that did public-sector local and state government consulting.
PH: What were your goals in taking the job? Did you have a specific thought process in taking that one over other options?
JG: I'd done a little work with them during the time I was in college. In most of my career, I've not really had a clear plan. It just seemed like a pretty natural thing to do.
PH: Did you have an idea when you first took that job how long you might stay in it?
JG: Um, no.
PH: Okay - What about other alternatives to it? It sounded like you had a pretty good relationship with that firm -
JG: I don't think I really spent very much time thinking about alternatives.
PH: Okay - What about your career path after you took that job?
JG: Well, I ended up going from there to a job as the budget director in San Mateo County, in California. They were one of our clients, and so it was an opportunity to move from consulting to actually doing it within an organization. It occurred at the time that Prop 13 was being considered in California, so it was an exciting opportunity to re-create things.
PH: So how quickly did that move occur? How long were you at the firm before you jumped into that job?
JG: Two years.
PH: From the time you were at the initial firm, do any particular successes or failure stand out in your mind?
JG: You know, I think that (Pauses) the successes were that I had a feeling that the stuff we were doing was affecting the clients and was being positively received. The failures were bad work habits and procrastination, which led me to think about being in a more disciplined environment.
PH: So those were things that you saw that you wanted to get out of -
JG: Yeah.
PH: - and not let yourself fall into those habits?
JG: Yeah, I tried a different experience. And also, I think I felt that the consulting experience didn't have the continuity where you could make real change - you were only advising.
PH: That's interesting. This was a situation where you were pretty comfortable going in, right? Because you had the relationships set up going in, from when you were in school?
JG: Yeah
PH: But you still had the perspective after a couple of years to say, "Hey, from a long-term perspective, this might not be the kind of thing that would -
JG: Or more just that the other opportunity was more enticing.
PH: Okay. What about mentors? Did you have specific people that you worked with in that first job that were particularly helpful to you, either in the immediate moment, or -
JG: I think the two principals in the firm were very helpful in kind of supporting and educating and training me, in terms of understanding the business.
PH: So it was a pretty small firm, where you had good exposure?
JG: Yeah. I was lucky because I was in that situation.
PH: Have you stayed in touch with those people?
JG: Yes.
PH: One of the things I've been curious about, one of the themes to explore, the degree to which people take on situational mentors at different stages of their careers, versus having a lot of continuity with a couple of individuals.
JG: Yeah. In my case I think it was more situational.
PH: What about other things? One thing that immediately jumps out from your narrative is the perspective that you had in the first job - you were still relatively young, and it didn't sound like you thought about a lot of the alternatives initially -
JG: Right
PH: - But you definitely had your head up and were thinking about the long-term sustainability of consulting, the effect that you had as a consultant, versus other roles. Were there other things that you felt that you displayed in that first job that differentiated you, or made you act differently, than other people in the same position?
JG: I think that it was probably the fact that - one, I probably built deeper and closer personal relationships with clients, and secondly, I think I was much more outcome- rather than analytically oriented.
PH: So you focused more on the bottom line, than process, per se?
JG: Getting something done? Yeah - exactly.
PH: About the relationships - Being a relatively junior consultant, was it just the quality of your interpersonal skills, or the quality of your work, that got you that exposure?
JG: Well, I think that in reality, that if you take interest in people, and the process, that it happens fairly naturally. I think that the issue you've raised, is when you overthink the potential relationships, in terms of junior/senior, effect on the job, all those kinds of things, it ends up making them stilted, and generally, they don't happen.
I think the key thing is kind of a natural curiosity and interest in people, which I think exposes itself and has an effect.
PH: Interesting. Getting back to your decision to move onto the client company, what was the process you went through in making that decision? Were there specific principles or things that you did that guided your decision, or was it more opportunistic?
JG: I would say it was opportunistic.
PH: So you sort of felt like -
JG: "Sounds like a good idea. I'll do it."
PH: How long did you think about it?
JG: Hmmm - probably a very short period of time.
PH: So it was pretty decisive action on your part.
JG: Yes.
PH: Going on from that second position, and the first one the industry side, how long were you in that position before you moved on?
JG: It was a local government agency, and I was there for eight years.
PH: Okay, so there you entrenched for awhile.
JG: Yeah, and I had two basic positions - well, three. I was the budget director, the assistant county manager, and then I ran the health-services department there.
PH: Was it the same kind of thing, where you were fairly opportunistic and each thing as it came?
JG: Yeah, I think it was less of a plan. I never really believed I'd end up in health care. In fact, most of the work I'd done before going into health care was in financial, and development, and those kinds of things - in the county. So the transformation was just the result of a malfunctioning, large operational entity that needed to be changed - and [I was] taking the advantage of getting the experience of running something directly.
PH: So it was your best, first opportunity?
JG: Yes.
PH: Were there any other forks in the road, either in the first job or later, in the subsequent 8 years, where you were tortured about something, or faced a difficult decision? Or did you feel like you approached everything pretty straightforwardly, and there was generally a common-sense imperative?
JG: I don't think there were tortures in the position - It was a very hospitable, upbeat kind of situation. Still, virtually everyone who was there when I was there, I remain in contact with. But there were instances where you had consideration to go to a more urban, as opposed to a suburban place, so you could deal with deeper, more substantive problems. There were a couple of opportunities, one to come down here, to LA County, but I just - they just never coalesced, primarily because everything was going well and I had relationships that kept me there.
PH: Switching gears a little bit, one of the things that has been interesting in talking to some of the other people has been work-life balance - the juggling of other priorities. Have you ever found that to be, or did you find it to be a concern as you were setting up your early career?
JG: No. There's really not been a situation like that. I've always kind of been in a situation - I haven't gotten married, I don't have kids, and I've kind of integrated work and social and everything. So I've never had a conflict.
PH: So you never compartmentalized one from the other?
JG: Yeah. It's one continuous thing, yeah. I don't see that there's a balance.
PH: Do you consider yourself a particularly hard-driving, hard-working person, or was it, is it something that just comes naturally to you?
JG: Naturally. I think basically my situation is that I enjoy everything I do, so I don't really - I don't view life as very much of a struggle.
PH: That's very interesting.
JG: Yeah, I view this just as - I truly believe that I'm among the luckiest people alive. What'd Michael Jordan say? "This is so much fun, and they pay me, also?" That's been my - I've had work issues, but you just go through them, but in terms of existential dilemmas, I have not.
PH: Where do you find your motivation, then? You mentioned Michael Jordan - is it a competitive thing?
JG: I think it's more the joy of the game, the joy of being challenged, personal curiosity, some desire to succeed. But among people in this position, I'm at the far extreme of viewing it as intellectual and personal challenging growth experience, rather than a competitive, outcome-oriented process.
PH: Okay. What about general philosophies? Looking back on this period of early-career development, were there particular axioms or sayings or principles that you adhered to?
JG: Two things - I don't know if they're axioms, but two things that I think I've learned are: One is, if you treat people well, they treat you well in return. And two is, as long as you stay standing, you generally can succeed.
PH: When you say "stay standing", you mean?
JG: As long as you stay in the game - as long as you don't capitulate. As long as you persevere. It's rare to get yourself in big trouble.
I guess the final thing which is relevant now, you can't take it so seriously that you commit acts that are unacceptable - as we've seen recently. [alluding to Enron, Worldcom, and other corporate scandals]
PH: In terms of ethics?
JG: Yeah. It's a combination of not work-life balance, but seriousness balance, with persistence, and being in a situation where people actually want you to succeed. That adds a lot to your likelihood of success, [as does] the joy with which you experience work.
PH: So in terms of working with other people, have you found that it's a relationship that tends to be founded on some interpersonal harmony? Let me rephrase: One of the things I've found in talking to a lot of the other executives is that they talk about their friendships, almost, with their co-workers and direct reports. Thinking about people as whole people outside of the office, as opposed to just workers. Do you find that's the case as well?
JG: Yeah. Not only with co-workers and direct reports, but also with competitors, with buyers, with the whole range of people. If you're in a situation with them where it's more than just transactional, it makes both the work better, plus in my view, it increases your likelihood of success. It doesn't always increase it in the short term, but over the longer term, it does.
PH: Because managed care in California, I imagine that's been a very dynamic, competitive industry over the last couple of -
JG: Tumultuous.
PH: Right - but you've found that those relationships are fairly resilient through those kinds of ups and downs.
JG: Yeah, it doesn't always mean that someone won't screw you, but at the end of the day, people have to do what they have to do, and there's no reason to take it personally.
PH: That's very interesting. It's very interesting to hear your perspectives in general - I don't know if it's the day I'm catching you or what, but it sounds like you're very relaxed, and - I don't know if balanced is the right word, but you have a different outlook than the average -
JG: Yeah, I think you're right. If you want, I'll send you my 360 reviews, and you can see it. That would be very helpful.
PH: That would be very helpful.
JG: Yeah - I don't know if this is the best way to get short-term results. I don't know if it's the best approach to get long-term results. But I think it's the best approach to make it so that you view your - most of the people I know, by a certain age, are just hanging on. They've lost the joy, they've lost a lot of stuff. I think that why do it if you're going to be miserable? You know that new Kennedy book [by Robert Dallek]? There's a quote early in there, which Bobby Kennedy used, "Youth isn't a time of life; it's a state of mind. It's courage over timidity, it's a yearning for adventure over a sense of ease." I think people lose their youth way too early in this business process.
PH: So was this completely natural? This has been a theme running through a lot of your comments - Is this something that came very naturally to you? Has it been conscious at all?
JG: I don't think it's been very conscious, but I think it's been affected by the fact that (Pauses) My early years, while I was doing all that stuff, I was somewhat aloof from life, so as a result -
PH: When you say "aloof", what does that mean?
JG: It means that I had all of these interactions, but I protected myself a lot from disappointment and success. So at this point in life, when I'm at a point where - You know, when you get to this point, if you look at life really objectively, you have life made.
PH: Right
JG: You could just call it a day and do something entirely different and you're fine. At this point, therefore, I don't have any of the - I don't feel like I've felt any of the arrows, and at the same time, I have limitless opportunities, so it's hard not to have this philosophy now. Earlier on, there were a lot more times when I had to defend myself against frustration, and defend myself against disappointment, and I did it by disengaging instead of taking it on. That left me in a more tangible place now.
PH: At what point do you think that mindset transitioned?
JG: Probably, at most, about 6-8 years ago.
PH: So relatively recently?
JG: So part of it relates to - I can tell you, but you don't want to use it.
PH: Sure
JG: Part of it relates to the fact that I've got terminal ADD, and it got diagnosed, and as it got diagnosed, it really has changed my attitude on life. That process left me more distant until it got worked out, and now, I don't have any of the negative experiences of life. It may also be that I'm kind of slightly delusional that way, also, but that's probably a healthy thing.
Not to say that this philosophy of life isn't the reason I made decisions or [the reason for] the course of my success. I think it's that combined with intellectual curiosity and perseverance. You have those three, and you can deal with this in a different way. If you're intellectually defensive, if you're competitive, and if you're kind of frayed coming into the process - and I think many people who get to this position get to it with the latter characteristics rather than the former -
Part of it also is that I've just stumbled into this job. I never intended to be a CEO, I never worked through any kind of process to get here. I think that's another factor - if you've worked for it all the time, you have a different sense than if you landed at third base.
PH: Well, I think you've got to give yourself more credit -
JG: Oh, no no no no. I'm not trying to diminish my competence, but I'm dealing with the issue of intent and whether this is what I've strived for all my life. It really isn't, and I can think of 4-5 things that I'd do as happily as this. So I have a different attitude. It's not right or wrong.
I think as you look to the future, there are two different tracks you can follow. President Kennedy always poo-poo'd the amount of intellect necessary to be in commerce, and he was more right than wrong. As we've learned over the last 15 years, commerce is more about ambition and drive and focus than it is about deep thinking. The question you get to is in the future, with the complexity of the world and the fact that basic information is going to be readily available, it may get to refocus this where people will have to have a more curious, less intense state of mind to successfully lead organizations in the future, than they have in the past. Will the past model be the right model? I would argue that I'm more suited for the [future] model, and most people have been constructed for the [past] model.
My life is about flipping from one thing to another, so my attitude's a product of my experience, which has been different than the experience of many others.
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