Uncommon Leadership — Lasting Impact and Paul O'Neill [eBook Excerpt #4]

Value Capture is pleased to share another excerpt, our fourth, from the free eBook, Lasting Impact: Leaders Share Lessons from Paul H. O'Neill, Sr. Today, we focus on the uncommon leadership traits of Paul O'Neill that we'd like to see more of in this world.

The leadership lessons that he taught are timeless. And our latest book, written by George Taninecz, is a collection of stories and reflections from leaders who learned from Mr. Paul H. O'Neill, Sr. The book shows how these leadership practices and mindsets live on and will continue to be taught and passed on to others.

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Excerpt:

Uncommon Leadership Characteristics

Thousands of leaders in all walks of life are recognized by a title, office, or some other description that indicates their importance. O’Neill’s importance had nothing to do with a designation, nameplate, or corner office, and everything to do with the characteristics of how he led — in many ways foreign to that frequently exhibited by too many leaders today. According to those who knew and worked with him, O’Neill’s leadership habits were astonishingly consistent day to day and deeply ingrained. Imagine more of today’s business and government leaders acting in ways that for O’Neill were as natural as breathing.

Integrity

People make mistakes, and some who knew O’Neill cited mistakes that he had made. But they never questioned the process by which he came to his decisions or the motives that led to his actions. His intent was to do the right thing.

Dr. [Richard] Shannon of Duke Health claims to not have the resolve of O’Neill, but he has held tightly to many principles he gathered from their time together:

“What I have learned from Paul O’Neill is that it’s worth spending all of your political capital on something important.”

Dr. Shannon has taken that approach at the University of Virginia (“220 years old, founded by Thomas Jefferson, etched in every tradition you can imagine, [and where anything] is an enormous undertaking and you spend a lot of political capital”), the University of Pennsylvania, and Duke Health. “You often times run out of that capital and, as a consequence, reach a natural ending to your tenure... You often times reach the limit of what the key executive is willing to do, and, at that point, you have to do something that Paul taught me — be principled. You leave... Paul was at Alcoa for a decade, a short period of time at International Paper before that, and, obviously, in the Treasury. You know, he spent every nickel of political capital and wasn’t afraid to do so, recognizing that at some point, it might mean that he fell out of favor.”

[Ken] Segel says that working alongside O’Neill confirmed a lesson he learned in his youth:

“You don’t have to compromise your values and your principles in order to exist in this world, hard as it is. And I don’t pretend that I lived up to that completely 100 percent when I intensely examine myself. But I know I don’t need to compromise. Paul was a big part of that, together with how my parents lived and a few others showing me that it really is true. I think that’s something really powerful.”

“I learned from Paul how important it is to do what is right, no matter the cost,” says [Kevin] McKnight. “Paul had a moral compass stronger than any leader I have ever known. I never saw him hesitate. Once he made a decision regarding what was the right thing to do, it was impossible to move him off his path.”

When in the Alcoa legal department, McKnight was involved in a delicate matter involving the U.S. EPA and reporting irregularities at a smelter facility in New York. Legal had developed various approaches to resolve the matter with the EPA, and spent time with O’Neill going over the facts and describing the various defenses that could be asserted to put an end to the situation.

“Paul concluded that we were guilty, and we needed to say so. I remember he personally flew to New York, met with the governor of New York and the head of U.S. EPA, and pled guilty despite the strong advice and counsel from the experts and the lawyers regarding the fact that there were many easier approaches to get Alcoa out of the problem... What he basically said was, ‘Listen, I hear what everyone is saying. If I assess the facts, I think we did something wrong. We shouldn’t have done that, and we need to say so. That is how we are going to handle this.’ It was so important to him that he did the right thing that it didn’t even occur to him that there might be other ways to do it.”

“If you look at the basics of Paul, he had integrity,” says [Bill] O’Rourke. “It made me want to have integrity. He treated everybody with dignity and respect, and you wanted to do the same. His inquisitive nature and fact-driving were just positive comments, but I think by emulating those particular characteristics it makes your organization better. You improve the climate in the entire organization.”

[Geoff] Webster of Value Capture recalls a time when he wrote an opinion piece for a Pittsburgh newspaper about a local hospital that had done something not in the best interest of healthcare in the region. O’Neill previously had been embroiled with the hospital.

Rather than attribute the article to Webster alone as was intended, it referenced Value Capture and O’Neill as well.

Webster says he felt badly that he had pulled O’Neill back into the fray, and apologized. “He just looked back at me and said, ‘Geoff, it’s the truth.’ And that’s all he needed to say. As long as you’re telling the truth, you’re never doing something wrong. You’re actually doing something very right. You know, that’s just the kind of person he was. I’m sure it was annoying, and I’m sure it caused him to have to have a whole bunch of other conversations. But as long as you’re doing the right thing and as long as you’re telling the truth, you never needed to even think about whether Paul thought it was the right thing.”

Humble and Kind

The words “humble” and “kind” are not necessarily what comes to mind when considering great leaders throughout history, many who have prided themselves on being the exact opposite. Leaders are supposed to be the tough guys who make things happen — or else. Yet this is where O’Neill once again differs from so many of his peers. He was able to capture people’s attention with quiet — albeit determined — actions that are in stark contrast to today’s standard of civility (or lack thereof).

Kathryn Correia is President and CEO of Legacy Health, a nonprofit health system in Oregon and Washington with six hospitals. She was immediately impressed with O’Neill, whom she met while serving on the Catalysis board of directors. “He was silver-haired, very neatly attired, and an understatement of his presence. But when he spoke, everybody that was on the board stopped to listen. He led with his humbleness, but he also had a very dignified confidence.”

She says there was always a sense of genuine interest when speaking with O’Neill.

“Paul talked with you. He didn’t look over you. I’m pretty attuned to that. I’m 5’1”. I’m female. I’m tiny. I get a lot of men that look over me; Paul never did that.”

She says his physical presence and how he carried himself — reserved and humble — spoke directly to the respect he had for everyone he met.

O’Neill was gracious and humble even in his final year while dealing with illness, willing to share his time, which had become his most valuable resource, says Dr. [Steven] Muething. “He saw leadership as I serve others, I serve the organization, but I have a specific role and a specific way I need to do that. 'Servant' didn’t always mean doing everything somebody else wanted you to do. Servant meant because I have this role, I can do things that other people can’t, but I always have to remember it’s in service of others.”

One memory for McKnight reveals the kindness of O’Neill: Soon after O’Neill joined Alcoa, McKnight had met his wife and two young children for lunch on his birthday at the William Penn Hotel in Pittsburgh near company headquarters. O’Neill entered the restaurant with some significant Alcoa customers, walked past, saw the McKnight family, and then politely excused himself from his business guests.

“Paul proceeded to spend about five minutes at our table, introducing himself to my wife and to both my kids, and telling my wife what a valuable employee I was. It was so graceful. He was not in a hurry. He was so genuine, and, to me, that was a moment that really captured Paul’s character and personality perfectly for me.” After O’Neill left, McKnight’s wife was surprised: “She was like, ‘That’s your CEO? You’ve got to be kidding.’ That was not her reaction to most of the CEOs that I worked with.”

Courageous

O’Neill’s willingness to immediately go before investors and analysts as Alcoa’s incoming CEO and proclaim employee safety as the company’s top objective clearly struck some at the time as crazy. Today it’s the stuff of business folklore and, in hindsight, one of many examples of his courage as a leader.

“I believe one of the key leadership attributes over these past decades, but particularly now into the future among many, is managerial courage,” says Dr. [Gary] Kaplan. “Paul was a touchstone for me. When I have needed to kind of reflect and rely or draw on my own fortitude, so to speak, Paul often comes to mind in courage and willingness to really buck the status quo.” He says that in today’s world amid COVID-19, there is a need for leaders to have “courage to sort of center yourself, be able to tolerate the ups and downs, be able to stay strong when people are watching you.”

“Having had the great, great privilege of a lifetime of working with him for over two decades closely, I realized that part of his great courage and great strength was being willing to lead in ways that pushed uncomfortable questions and drew uncomfortable challenges of folks that didn’t necessarily want to be pushed,” says Segel.

Over time, leaders who are trying to make meaningful changes will hit some walls and run into challenging personalities, and, even for O’Neill, those moments must have been hard and taken a toll, adds Segel. Yet even in his last years at Value Capture, when O’Neill could have found a comfortable way to exist, “he was still willing to do hard and uncomfortable things, not just for others but for himself. And that was another dimension of learning about true leadership and the depth of his character.”

On an episode of The Bottom Line podcast[1], Wartzman spoke with O’Neill about a range of topics.

One was the abject failure of America to invest in young people and their development and his vision for having government cost-effectively intervene when children are very young. O’Neill was about effectiveness and results, says Wartzman, and it didn’t have to fit into some ideological box. “If you would listen to him and the level of government intervention that he was calling for on the frontend as opposed to the backend — with people being incarcerated, needing all kinds of services, and lives falling apart as adults — it was smarter, it was more humane. But you’d have thought, ‘My God, who is this rabid socialist?’ I don’t look at that as a question of ideology as much of as a question of him always driving out, ‘What’s most effective, what’s the most humane?’ I think those were, from what I could see, his bedrock principles. He had the courage to stand by those things, even when it went against party or popular opinion.”

Citing an IHI keynote address by O’Neill in 2003, [Vickie] Pisowicz says that with respect to healthcare, O’Neill’s notion of the ideal was that every American have access to the health and medical care that they need, without regard to income or wealth.

“Not only did he mean it, but through careful and thorough analysis, he generally knew how to accomplish it. He nurtured, he motivated, he expected, he even demanded us all to have the courage to think big and, most importantly, to have the courage to lead and act in the pursuit of making the seemingly impossible possible. Paul would say, ‘What would you do if you knew you couldn’t fail?’ Paul challenged us to make the ‘right thing to do’ the necessary urgent thing to do without fear. He had a forceful way of being impatiently patient. This vision in terms of the ideal, or the theoretical limit, coupled with responsibility and courage to act, and act quickly, was a powerful combination, one that I think about every single day.”

From his interactions with O’Neill and his colleagues at Alcoa, one of many things [Steven] Spear took away was the pursuit of theoretical limits. He describes Alcoa as a chemistry- and physics-intensive organization where it was literally possible to calculate the bare minimum of energy and raw materials that went into a process to produce aluminum products, be they soda cans or door frames. Theoretical limits led to questions of, “What are the limits the universe puts on us?” and “Just how far are we from those limits?” Those questions become a huge diffuser of objections to improvement, says Spear, unlike arbitrary goals that seek to move from 1X to 2X, which likely will be viewed as impossible.

“But he said, ‘Look, the theoretical limit says actually we should be at 15X. So if we’re at 1X, it’s not because 2X is impossible, it’s just because we’re incompetent, ’” says Spear, paraphrasing O’Neill. “When faced with objections, the theoretical limit allows you to say, ‘Hold on. What does nature limit us to? The speed of light? Are we anywhere near the speed of light? No, no, no, we’re not. Then stop objecting. There’s room for more speed here.’”

Spear reflects on the compatibility of theoretical limits with O’Neill’s respect for people, and points to the phrase “all men are created equal” in the Declaration of Independence.

“That was their theoretical limit. It didn’t exist, but that was the extreme truth, that all were created equal. By doing that, they set a standard, which obviously we fail at too often, but I think very often we strive to actually operationalize that point that all are created equal. They created tension for us. If we hadn’t had a founding document like that, if we just had a founding document that says, ‘The king sucks, we’re leaving,’ the stuff that’s going on around us now in terms of social discord wouldn’t be occurring because no one could have a theoretical limit to point at and say, ‘The system is not working to its theoretical limit.’ But we have a theoretical limit, and consequently the system is working toward it.

Paul said there’s a theoretical limit to an organization. And in its theoretical limit, everyone has equal importance, and things can be much better for everybody... I think Paul threw out that challenge. I think that challenge, just like our Declaration of Independence, makes a lot of people uncomfortable.”

Brilliant and Curious

O’Neill’s resume is a huge hint at the expansiveness of his intellect. He had a masterful grasp of accounting while at the Office of Budget and Management and the U.S. Treasury, industrial concepts and business management at International Paper and Alcoa, and the complexities and challenges that exist in healthcare at PRHI and Value Capture. Mixed in were work and knowledge around climate change and clean water. Seemingly no subject was beyond the reach of his acuity.

Dr. Shannon got an initial glimpse of O’Neill’s brilliance around the time O’Neill was beginning his push to improve healthcare. As a cardiologist, Dr. Shannon’s CEO sent him to a meeting of civic and business leaders, which O’Neill chaired, to discuss cardiac outcomes in the region.

“He made aluminum, and I couldn’t think of anything more remote from cardiac surgery than aluminum. So I figured this was going to be a slam dunk. I’d be able to go over and use my medical jargon and talk my way out of this, and I was confident my other cardiac colleagues would do the same. I remember making my statements to Mr. O’Neill about how our patients were sicker, we were a struggling organization, and all the reasons why our results were average. I remember two distinct things he said that day. One, he said to me, ‘Dr. Shannon, I’m really not interested in the reasons why you can’t. I’m interested in what you’re going to do over the next year to improve these outcomes.’

“I thought of him, obviously, as the CEO of a Fortune 100 company, and for those reasons, I would have expected him to be direct and brash,” adds Shannon. “But what struck me in that meeting was how much he knew about cardiac surgery. I would venture to say he knew nearly as much as I did.

The enduring image I have of Paul O’Neill is this zeal for learning. He brought that same approach to anything that he encountered. And I will tell you, even as close as I was to him and as nurturing as he was of me, when I would know I was going to meet with him, I was always a little bit intimidated. I just knew that he would have such extraordinary command and such an innate ability to get to the heart of the issue; it was easy to feel inferior. But he always made it such that you provided the answer. He was the greatest questioner.

So the paradox of this was, while I was intimidated by what I knew was his knowledge, at the end of any interaction I ever had with him he drew the answer out of me. He didn’t come armed with the answer. He built it by a series of questions. He would make you feel like Paul O’Neill. But it was intimidating because he was just so incredibly smart and incredibly resourceful.”

After that initial meeting the two became friends, and Dr. Shannon took on larger role in PRHI. They, along with colleagues who are now at Value Capture, did the first regional study to prove that bloodstream infections could be reduced with real-time problem solving. O’Neill, Dr. Shannon, Spear, and others authored a report on their study and its outcomes: process-improvement techniques, such as those used by Toyota and Alcoa, were implemented for central line placement and maintenance at two intensive care units of Allegheny General Hospital, and within a year central-line-associated bloodstream infections decreased from 49 to 6 and mortalities decreased from 19 to 1, despite an increase in the use of central lines and number of line-days; results were sustained for a 34-month period.^[2]

“As I got to know him better, I came to appreciate the depth of his knowledge and the breadth of his perspective, but also his approach to leadership, his approach to lean and what we call the Virginia Mason Production System is all about, which is empowering the frontline workers,” says Dr. Kaplan. “His passion, fortitude, and perseverance were all things that I think were great leadership lessons.”

O’Neill was a good listener and always curious to know more, he adds. “As a long-time senior leader, I continue to believe there’s a ton that we all have to learn, and that one of those things is to be a better listener and [to have] another key leadership competency — curiosity. As well as we got to know each other and see each other on a regular basis, he was always listening, always curious, always mining for more information.”

When Bisognano and Berwick of IHI were gathering best practices from other industries, O’Neill discussed his “need to learn from outside Alcoa, and how he regularly encouraged leaders at all levels to step outside and to go visit other industries,” she says. “And so again, I felt this incredible resonance with his perspective. He was telling us that he encouraged leaders at all levels to go out and visit people, both within their industry and also outside, to bring back ideas. And that was exactly why we were there.”

Pisowicz believes that one characteristic of a great leader is an “insatiable curiosity,” and she learned that from O’Neill.

“He had this insatiable curiosity as a leader and as a person. He was curious about everything: ‘What is that? How does that work? What are the underlying principles? What is the science behind it?’ He was just this voracious learner who was curious about everything. And it didn’t matter if it was a national strategy, such as transforming healthcare or education, or how the nurse at the medical/surgical unit was being supplied sterile gauze.

I learned from Paul how to see the world and ask questions at a much deeper level. The other thing that strikes me with Paul was that he was truly one of the best systems thinkers that I have ever had the opportunity to work with. He was uniquely skilled at instantly getting to the heart of the matter, understanding what the need and the data was, how the process would work if it was done perfectly the first time without errors and waste, and how each of the pieces were interconnected, mentally traversing the silos and eliminating the barriers that plague our current system designs. It really was an important part of his leadership.”

Focused, Tenacious, and Impatient

It’s possible to get the impression that O’Neill was a saint among men — quiet, humble, kind, intelligent, courageous. In fact, some noted that they’d never seen him angry or heard him swear. So maybe there was something saintly to him. But don’t equate his style with timidity or weakness. In his quest for habitual excellence in all that he touched, O’Neill was a relentless force with which to be reckoned.

“The word that comes to mind is straight talk to leaders of institutions, in my case healthcare, but he did it with other industries as well, about making the right choices regardless of the consequences,” says [Cliff] Orme.

“He puts the leader in his place to say, ‘If this isn’t happening, shame on you. You’re excited about getting 60 percent hand-washing compliance? That’s awful. You got an award for that? Give me a break.’ That’s Paul. He says it like it is, and it took somebody like Paul to be able to say that because people don’t want to hear that. But it’s the right thing to do. [He would say], ‘Which patient do you want to infect? Is it your family member? Is it you? That’s not acceptable.’”

Dr. [John] Toussaint was able to convince O’Neill to be a founding board member of Catalysis (then known as the ThedaCare Center for Healthcare Value) and as a member he attended every meeting.

“He always was very clear about what we should be doing,” says Dr. Toussaint. “He served eight years on the board and was invaluable from the standpoint of his laser-like thinking. He would not stand for anything but leadership’s total commitment to habitual excellence. He would ask things like, ‘Do the organizations in the Healthcare Value Network have metrics around zero harm to employees or zero harm to patients? What are they doing to create that environment?’ We would work with a lot of different organizations in trying to apply lean thinking, but for him it was about are they really committed to zero. He kind of kept us on a straight and narrow path in terms of [being] focused on employee safety. He was always asking, ‘OK, so when we talk about True North, where does safety come in? Where does employee safety come into that? ’”

O’Rourke says that people loved working at Alcoa, but notes that it wasn’t easy:

“He wasn’t an easy leader. He was hard. He was challenging all the time, but he was fair in the process. He treated you right.”

Even when meetings became heated, he adds, O’Neill continued to show the kind of respect that he had for the process and for the people that were involved in it.

Anderson recalls a comment from an advisor at Value Capture who said that “Paul sits there and throws out thunderbolts. I think that captures what he does brilliantly. I do a fair amount of speech giving and occasionally try to startle people with a different way of thinking. But I had nowhere near the ability to throw out thunderbolts that Paul did. And it was always fun to hear.”

Dr. Kaplan describes O’Neill in many ways — respect, courage, curiosity, caring — and doesn’t want another perspective to come across unfairly:

“One of his attributes that I admired — but that for some people could become annoying — was his perseverance. He had tremendous perseverance around the things that were important to him.”

“Being on the [Catalysis] board with him was a fascinating leadership learning experience for me because his style is very different than mine,” says Bisognano. “He was very direct and sort of impatient, I guess is the word. He would listen quietly, and then he would say, ‘This is what has to happen.’ He was very forthright in saying, ‘This change needs to happen, and it needs to happen now and quickly.’”

Dr. Shannon recalls a meeting at NIH where there was a recommendation that the clinical center have a board and that the board would oversee safety and quality.

“So here we are at the NIH clinical center, surrounded by Francis Collins, who decoded the human genome, and Anthony Fauci, the now-famous public health face of our COVID crisis — I mean, extraordinary scientific luminaries.

And I watched Paul O’Neill systematically take each of them on around issues of quality in just a stunning display in his final year, taking on the notion that zero was the only number that mattered when it came to harm.

It was just as if I had met him yesterday, 20 years into our journey together, sitting once again in a conference room with a bunch of intellects, this time scientists, not business people, and Paul O’Neill holding court over the idea of,

‘Please raise your hand if you want to be the one person that gets hurt.’”

Dr. Shannon and O’Neill occasionally had their differences, and, he says, they were usually around how fast something could be achieved. “Paul would have had me go three times as fast as I moved, and I just couldn’t do it. I tried to explain to him that these medical institutions are nothing like what you’re used to. ‘Being the CEO of Alcoa, you control everything. You don’t have doctors that you have to manage — these highly educated, independent actors — and all these personalities.’

He would say, ‘Well, that’s all interesting, Rick. But come on, this is just a matter of continuing to daily engage in the ideas and practice them.’ So we would disagree on pace of change. Paul was a very impatient man, and I often had to remind him — and these were always funny conversations — that it took him six to eight years to get Alcoa into the position that it ended up. It didn’t start there, and it didn’t get there in the first year.”

At each organization with which Dr. Shannon was involved, he had “this daunting notion that the place had to be transformed in 12 months because that’s the way Paul would do it. But the reality was when he and I would sit down and truly lay out the timeline of what happened at Alcoa, it was a little longer than a year. But he was quick [to] condense that time at any chance he could to make the point of continuous improvement, continuous improvement.”

[1] Rick Wartzman, “The New Blue-Collar Blues with Robert Reich and Paul O’Neill,” The Bottom Line, June 22, 2017.

[2] Richard P. Shannon, M.D., Diane Frndak, Naida Grunden, Jon C. Lloyd, Cheryl Herbert, Bhavin Patel, Daniel Cummins, Alexander H. Shannon, Paul H. O’Neill, and Steven J. Spear, “Using Real-Time Problem Solving to Eliminate Central Line Infections,” The Joint Commission Journal on Quality and Patient Safety, September 2006.

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