Leading by example to transform healthcare: The leadership journeys of Blue Shield’s CEO and CHRO

In this podcast, Heidrick & Struggles’ Samantha Carey speaks with Paul Markovich and Mary O’Hara, the CEO and CHRO, respectively, of Blue Shield of California, a $22 billion nonprofit health plan seeking to transform the healthcare system. They share their leadership journeys, emphasizing the importance of continuous learning and challenging and improving oneself in order to make a difference not only within the company but also in the healthcare industry. They discuss how effective leadership is a combination of integrity, authenticity, and humility, which are key to engaging people’s hearts as well as their minds and inspiring commitment throughout the organization, helping Blue Shield to fight “the world’s fight.”

Some questions answered in this episode include the following:

• (1:32) What have been the most pivotal experiences shaping your personal leadership journeys?
• (3:53) What drew you both to healthcare?
• (7:17) How does your personal mandate for transformation, not just of Blue Shield but of the industry, change your leadership style?
• (10:28) How do you transform your workforce into the next-generation workforce you need going forward?
• (15:55) What are the biggest challenges that you still face in transforming healthcare?

Below is a full transcript of the episode, which has been edited for clarity.

Welcome to the Heidrick & Struggles Leadership Podcast, the premier provider of leadership consulting, culture shaping, and senior-level executive search services. Every day, we’re privileged to talk with fascinating people who are shaping the future through their leadership and vision. In each episode, you’ll hear a different perspective from thought leaders and innovators. Thanks for listening to the Heidrick & Struggles Leadership Podcast.

Samantha Carey: Hello, I’m Samantha Carey, a partner with Heidrick & Struggles and a member of the Healthcare, CEO & Board, and Private Equity practices. Today I’m speaking with Paul Markovich and Mary O’Hara, the CEO and CHRO and head of internal communications, respectively, of Blue Shield of California, a $22 billion nonprofit health plan seeking to transform the healthcare industry. No small feat.

Paul Markovich is the president and CEO of Blue Shield and has been with the company for more than 20 years. He first joined the company in 1996 in a product management role, left in 2000 to cofound a start-up, rejoined the company in 2002, and took over as CEO in 2013.

Mary O’Hara is the CHRO and senior vice president of internal communications for Blue Shield and has led talent and development strategies for 28 years across 13 countries. She joined Blue Shield after a highly successful career outside of healthcare.

So starting out on what shaped you both. What have been the most pivotal experiences shaping your personal leadership journeys?

Paul Markovich: I was born and raised in North Dakota, and there’s just a set of values that gets instilled in you, with your parents there. Authenticity and humility are two of them. I think those have stuck with me.

But one other formative experience for me was when I was interviewing for a scholarship just after I graduated college, and the founder of this trust wanted to give the scholarship to people who would fight the world’s fight, and I was being asked by the panel what the world’s fight was to me. At the time I was 22 years old, and I do not remember what I answered. It clearly was a good enough answer because I ended up getting the scholarship, but it really stuck with me and it catalyzed something that had always been inside of me, which is that we all have an obligation to try to leave the world a better place than we found it. And then it made me keep asking that question until, at least from a professional standpoint, I answered it, because I feel like trying to create a healthcare system that’s worthy of our family and friends and sustainably affordable is the world’s fight for me.

Samantha Carey: And Mary?

Mary O’Hara: My personal leadership journey has really been through a course of certainly having tremendous parents who helped instill a set of values and a set of life experiences that shaped me. But it’s also marked by being a “hanger arounder,” for lack of a better way to describe it, in lots of instances in multiple sectors, where I had a privilege to just watch and observe and develop, from a leadership point of view, a learning posture by virtue of seeing how it’s done well and also seeing ways where it hasn’t been done so well. That helped solidify for me a point of view about what I stood for and a set of values in terms of what I wanted to be known for and how important that was in the execution of my responsibilities to try to influence the thinking and the action of others. So my personal leadership journey has been a combination of where I came from, but certainly my opportunities to be a “hanger arounder” as well.

Samantha Carey: Obviously, healthcare is the world’s fight. All of us will touch the system at some point. What drew you both to healthcare?

Paul Markovich: I appreciated how it is important to everyone. At some point in our lives, we all need to use the system. It’s universal and it’s broken and it’s complex. So solving it wasn’t going to be just a snap of the fingers, and it really has multiple elements associated with it. There are the core business elements you would have in any business environment, but there are also social and political and emotional issues tied up in it. It’s an incredibly complex Gordian knot. So the ability to find it both worthwhile in terms of the outcome but also highly challenging of me and requiring me to continuously improve and build skills in order to help make a contribution to it—those were the things that drew me to healthcare: being able to do good and make a difference while improving myself.

Mary O’Hara: For me, I undoubtedly became really, really clear at a certain juncture in my career that what I was doing, insofar as the contributions that I can make, needed to have more tight alignment to a purpose and values. And when I thought about the opportunity to join Blue Shield, I had an extraordinary example of a leader in Paul, who stood for something that was more than just the bottom line, and an opportunity to do work of real meaning against a cause of great importance, one in which I have personal experience in my family and in my life, which equally affected me. And I could see the purpose and the opportunity to take my talents and contribute to something of great meaning with somebody who was a real role model.

Samantha Carey: Paul, when you think about who inspires you and who you benchmark against, who would that be and why?

Paul Markovich: Any time I see leaders demonstrating the qualities that I think are so important to effective leadership—integrity, authenticity, and humility—I find that inspiring. And there are plenty of examples of it all around. I wouldn’t say that I pattern myself on any one particular leader, but I do find it inspiring when I see leaders standing up and looking to do the right thing, having a strong moral compass, and trying to do what’s right for the organization as opposed to what might be right for them. And I have the exact opposite reaction when I see, far too often, the opposite, which is CEOs using the company assets as their own personal piggy bank or the employee base as their own personal dating pool, or not confronting wrongdoing but rather putting it under the rug in order to try and keep the results going. Those are the kinds of things we’ve seen all too often. And I think they breed a skepticism, even a cynicism, about our institutions and our leadership.

Samantha Carey: Trying to take on healthcare transformation is hugely heady and complex and risky. How does your personal mandate for transformation, not just of Blue Shield but of the industry, change your leadership style?

Mary O’Hara: I do you think you have to lead by example. Insofar as what great leaders do, I think you have to take a stance that you’re going to be a learner, and you’re going to be willing to lead the way with humility and to say, “I’m prepared to be a role model to others, including holding up a set of standards that I’m willing to be judged by myself.” And if you’re trying to transform healthcare, or anything, whatever that is, you’re going to make some mistakes along the way. You’re going to have to certainly be a learner and somebody that embraces “What is it that I can take from this experience that I can improve upon and go at this with a different perspective on the next try?” So there’s an extraordinary amount of resilience that that requires and a resourcefulness that goes along with that learning posture.

Paul Markovich: I quote Ralph Waldo Emerson all the time: “What you do speaks so loudly that I cannot hear what you say.” And when I translate that into more modern language, people follow the CEO’s feet, not the CEO’s mouth. And so you have to just do what you expect of others. You constantly need to be challenging yourself. And I take that seriously. I take it to heart. I have a coach, and I have him interview my direct reports twice a year and give feedback. And I have a development plan, and I share it with the board, and I share it with my team. They get a little tired of it, I think, me coming back and saying, “This is what I’m working on.” But when you then show up and ask them to do the same thing, it comes with a level of credibility.

Mary O’Hara: There’s something really powerful in that surrendering, to not leading from a position of power. Ironically, this notion that your leadership role is for this purpose, not in order to bestow power and control others.

Paul Markovich: Mary and I often talk about creating commitment rather than compliance. If people are doing things because we’re telling them to do things, we’re in trouble. Especially when you think about trying to transform the healthcare system. It’s not something anyone has done before, so you’re looking for people to do some things that are innovative and new. They need to be inspired. You need great people doing their best work. You’re not going to transform this system with mediocre talent any more than you’re going to fly to Mars on a lawnmower engine. People like that don’t want to be told what to do. They want to know that their life and their professional lives have some meaning, that they’re making some contribution that matters, and that they’re able to grow personally, professionally, and financially. They want to work for someone who they can learn from and they can see is inspiring as an example. And so you have to strive for that as a leader, or I don’t think you’ve got any hope to make this happen.

Samantha Carey: You both have had great track records of success bringing in talent from outside the space. How do you then connect that talent to the folks who grew up in this space and transform that workforce into the next-generation workforce you need going forward?

Paul Markovich: If I just may tee up Mary for this because it’s pretty amazing how systematic she is about thinking about leadership and growth and development plans and managing talent and thinking about succession and encouraging and managing growth in people, across the spectrum at every level. So there is a lot that I could talk about, but pretty much it’s Mary who’s done it all. And I’ve just said thank you. So I’ll let Mary talk.

Mary O’Hara: Well, I think I’m just going to ask for a raise. Thank you. I appreciate that. But I will tell you what I told our board—by the way, on the second day on the job. So when I first met Paul, when we decided we were going to do this thing, I came to work on my first day, and he said, “By the way, tomorrow’s our board meeting, and I’d really like you to present just a one-pager, tell them what it is that we’re going to do here around our people strategy.” And I thought, “Wow, that’s sort of not a small ask on your second day on the job.” But, undoubtedly, the first thing that I said to them is a phrase I’m sure you’ve heard before around having a tone at the top. And what I mean by that is that you cannot hope to inspire an organization to gel and align and act a certain way and believe things unless you know that you are emitting a signal at all times at the top of the organization. And that signal sets a tone for what is permissible behavior, and Paul—with his coach and his engagement with his team around that, his constant learning posture—has to be credible, has to be authentic. The team he surrounds himself with has to be seen that way. So the first thing that we did together was to really institutionalize that this is not something for the masses and not for the leadership team.

We spent a lot of time deeply thinking about annunciating what those attributes would be. Paul describes them in a shorthand really quickly: being a learner and continuously doing that and building high-performing teams and getting to results. But it took us a lot of time to think deeply about the things that would matter, to engage people at both the heart level as well as the head level, and how we might create a system that would energize the folks in this organization. It is true that he spends a lot of time on this, but so does his entire leadership team, and part of that starts with making sure that people who come here to work at Blue Shield all have a resonance with this mission. So we look for people that share that, and the good news is, by and large, everybody who was already here joined Blue Shield because they are mission driven to start with.

The other thing we do is adopt a posture of show-how before we measure the know-how. In other words, what we try to do is to demonstrate through our actions but also through the practices that we instill and programs that we instituted, like our lead to excellence and our manage to excellence programs, the tools and the practices for leaders both to understand philosophically what we’re talking about and to get aligned with the guiding principles associated with those things, and then to show them, with examples in a program, how to do it well. And we sustain that with communities of people all throughout the year.

Paul Markovich: If I just might add to that. It’s impressive how systematic this is. None of this is left to chance—it’s in the screening process when you’re getting interviewed and potentially hired; it’s in the assessment process; it’s in your performance and built into the performance review; it’s in the development plan that you might have, if you aspire to get promoted to another role; and it’s throughout the process while you’re here. It’s quite well thought through and integrated. So when we bring people in from the outside, we realize that wherever you come from, you’re a human being and there’s going to be some learning and growth that you need to do. What is it that we need to spend time with you on and how do we support you?

Mary O’Hara: Our goal isn’t to try to change people’s personalities. We are trying to tap into their hearts and their minds. And, by the way, common sense, although it isn’t common practice, does seem to resonate, And we’re not talking to people about things that are so complex in nature that folks say, “I don’t understand what you’re talking about when you describe personal leadership requiring trust or relational aspects and your ability to be a learner.” People say, “OK, that actually makes sense,” and it resonates, for the most part. We’ve gotten so much feedback over the years from people about how simple these concepts are but also how deeply they feel supported in helping to grow them. And, more importantly, that they resonate.

Samantha Carey: You’ve made a huge amount of progress. But the journey is far from over. What are the biggest challenges that you still face?

Paul Markovich: Well, we haven’t created a healthcare system that’s worthy of our family and friends and sustainably affordable. So I put that one at the top of the list. I do think, when it comes to the people side of things, there are a few things on my list. One is that I would like our leadership team to more clearly mirror the ethnic makeup of the population that we serve. And we need to make more progress on that. We’ve done a great job making sure that there is no pay gap between men and women, that there’s no pay gap between minorities and non-minorities for the same work, and making us, I think, a great place to work no matter what your background. And we’re well represented throughout our employees, in many respects. But at the leadership level, I think we need more ethnic diversity.

I do think one of the CEO’s jobs is to make sure that he or she has a strong successor or potential successors in place if you really want to have not just a legacy but to create something that’s sustainable. I’m not planning on leaving anytime soon, but, at the same time, you have to be thinking about that.

Mary O’Hara: It isn’t free food in the cafeteria or bringing your dog to work that’s truly going to engage your heart and get you to bring your best self toward a cause of such meaning and to work as hard at it to solve these problems. It’s actually feeling like you have a great leader whom you can work with who actually cares about your growth and development and helps connect you to opportunities and makes you better every single day. It’s working with people and colleagues who create an employee experience that you think is better than anyplace else you could be because you’re on a high-performing team that is accountable, that’s continuously learning, that is challenged to do great work and to solve really important problems.

It’s a set of leaders who you look up to in an organization, steering a ship in a certain direction, who you feel like you can trust, who are authentic, and who are doing good, not just good work, but they’re doing good. And it’s also about a place that you feel like you have an opportunity to come out the back end where you’re better off personally, professionally, and financially. Those are the things that we’re trying to really instill in the minds of people who work here and to deliver against. And it’s hard when you’re competing for the scarcity of talent in a place that has the highest cost of living in the country, that has a lack of affordable housing and infrastructure issues, and all these sorts of challenges, and potentially organizations that they’re thinking about because the glitz and the glam of free food in the cafeteria and bringing your dog to work might be more appealing than coming here and doing great work, but really hard work and potentially growing to be the best leader you could ever be by virtue of the support that we put around it. And leaving with a sense of pride that you helped transform this dysfunctional healthcare system.

Samantha Carey: Listening to you both, you’re obviously both incredibly accomplished. You’ve come a long way, and you’ve set a tone at the top that’s really meaningful. As you think back to the younger version of yourself, what advice would you give yourself?

Paul Markovich: Relax a little bit would probably be the one for me. What I have been learning throughout my continuous learning journey is that any overused strength becomes a weakness. I bring a lot of passion and energy to my job. And I talked about growing up in North Dakota and having a sense of humility, this idea that if I can do it, then everybody can do it. And Mary occasionally points out that this is not quite true, that I am actually pretty good at some things that other people aren’t. And so I would find myself getting frustrated when things that I thought were pretty easy, others were struggling with, and this sense of if I can do it, they ought to be able to do it. And then having this intensity and energy of wanting to get things done quickly.

And so you show up and you’re showing frustration and annoyance, which is not at all inspiring. It’s not inspiring commitment. It may get people to move a lot faster in the 24 hours within which they have that experience with you, but it’s certainly not going to help them be better in the long run. So one of the things I have been growing in the most is this idea of having these be teaching moments and remembering how important it is for me to be making connections with people. At the end of the day, you’ve got to love other people if you want to help them through an improved healthcare system. I mean, that’s at the root of what is a driver and that needs to show up even in the moments when it’s frustrating and hard and difficult.

And that’s something I’ve been working on for a while and getting better at. But boy, it didn’t show up when I was younger, didn’t show up at all. In fact, my first time being a leader, I didn’t really have much of anyone reporting to me. Then they gave me this job where I went from having 4 direct reports to 40 direct reports, and I was running around like this whirling dervish and getting everything done and very proud of myself. And then I got my first round of feedback: my boss thought I was great, my peers gave me pretty good scores, and the people reporting to me scored me a 4 on team building, which would have been fine except the scale was 100. And so right there I had this moment of, “Uh oh. You know, they just don’t get me. They don’t understand me. Maybe I just need a different team.” And then when I stopped and reflected on it, I said, “No, I don’t have a followership problem; I have a leadership problem, and I probably need to fix it.” And what they were really telling me was that I just brought nothing but intensity and transactions and “get the work done.” And there wasn’t this sense of human connection. There wasn’t this feeling that I cared. And at the root of it, if you’re not expressing that to the people who are close to you, how can you expect them to express it to the people you’re serving, your members? So I have to remember that that’s what it’s about. That would be the advice I’d give my younger self; it’s the advice I still give myself.

Mary O’Hara: And so much of that resonates for me, too. I would also say I had an incredible mentor, who I worked with for years, who I admired so very much, a senior leader who was a woman, which you don’t often see in the C-suite, at least not as I was growing up in my career, role models who are as achieving as some of the men I’ve had the privilege to work with. And I admired her style so much, and there was just always this very elegant but very effective approach to getting things done amongst a lot of males. And I used to seek out advice from her a lot, and she used to say to me quite often, “Mary, just be you, just be the best version of you.” You can’t be inauthentic and be something that you’re not. And in some places, you may not fit and you also may be less of you. That’s not an excuse to not moderate and approach situations with the right skill and the right posture and the right learning. And that’s really important to increase your repertoire of influence skills. And you also shouldn’t try to contort to be a pear if they’re looking for a banana. Particularly as a woman, that was a really important and genuine, authentic lesson for me: just be you.

Samantha Carey: It’s a great jumping off point for one final question, which is, if you had one piece of non-obvious advice for the upcoming leader, what would it be?

Mary O’Hara: Wear sunscreen. That would be one.

Paul Markovich: You know that famous saying that culture eats strategy for breakfast? Well, I like to say, at least with Mary, that leadership eats culture for lunch because so many people run around talking about culture and what are we going to do about our culture or the culture’s this or how do you change culture? And it’s like talking about the weather or the air. It’s this passive thing that you can’t control, when all it boils down to is behavior and leadership. And so what I’d say is, if you’re trying to create the “right kind of culture”—and we haven’t talked about culture up until this point because it’s really about what gets you hired, fired, and promoted—these are the behaviors that we’re looking for, these are the things that we reinforce, and these are the things that we don’t want to see. And if you keep reinforcing those things, you make them clear that this is what we expect of you as leaders, and you hold leaders accountable to that model, lo and behold, that becomes your “culture.” I see leaders getting caught up in these complex questions about culture and how to move culture, and they’re frustrated about the culture. And it really boils down to, “Well, how are you leading effectively? If you’re all worried about this culture being siloed, go call Jane up, take her out to lunch, talk to her about what you’re going to do. Invite her to one of your staff meetings. Create a bridge. Go lead. Go be the world you want to see.” And so what I would say to everybody is don’t worry about culture; just worry about being an effective leader.

Mary O’Hara: I also got this piece of advice when I was writing my thesis, and I was looking for counsel from my advisor, who said, “You’re kind of overthinking this, Mary. Just make it matter.” Make it matter. And I genuinely believe that is true, too, from a career point of view. I wish I’d understood that much earlier in my career. Thankfully, Paul had that sense when he was going in for his scholarship interview to fight the world’s fight. For me, I guess it took me a while to realize just how much energy it gives you and how extraordinary your talents can become when you feel like your purpose and your values align to the work and the environment that you’re in and the people who you’re with who are emblematic of those things. If you’re going to bring your energy, and God knows how much time we have on this planet, to 50 hours a week, or whatever hours a week it is that you’re working, gosh, make it matter. It’s an extraordinary gift to you as much as it is to everybody else whom you’re working with.

Paul Markovich: At the risk of trampling on a fantastic ending, I’m going to go one over my quota on the advice side of things. This is probably obvious but uncommon and that is to take care of yourself. I see so many people who are just like train wrecks in their lives. They’re thinking they need to work 80 to 100 hours a week and not get much sleep and travel all over the place. And at the end of the day, the quality of your leadership comes down to the quality of your interactions with other people. And you can’t be your best self if you are chronically sleep deprived and not eating right and not managing your stress. And so you’ve got to take care of yourself. And I think effective leadership starts with that.

Samantha Carey: Paul and Mary, thank you so much for speaking with us today, and thanks for listening to the Heidrick & Struggles Leadership Podcast.

Paul Markovich: Thank you so much.

Mary O’Hara: Thank you.

Thanks for listening to the Heidrick & Struggles Leadership Podcast. To make sure you don’t miss more future-shaping ideas and conversations, please subscribe to our channel on the podcast app. And if you’re listening via LinkedIn, Twitter, or YouTube, why not share this with your connections? Until next time.