Aetna Case Summary

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Aetna: Improving Culture Equals Improving Profit
Aetna is one of the US’s largest health insurance providers. However, in 2000, the company found itself in financial duress – their reputation with customers and doctors was corroding, they were inundated with lawsuits, and they were losing approximately $1 million dollars every day due to outdated processes and high overhead costs (Katzenbach, Steffen, & Kronley, 2012).
Aetna’s culture attributed to the majority of the problems it faced. The company had a 150-year cultural history that it valued and avoided changing. It even had a nickname – “Mother Aetna” – and it encouraged employees to maintain the status quo, avoid risk, and be suspicious (Katzenbach et al., 2012).
Dr. John Rowe joined
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When Dr. Rowe joined Aetna, he didn’t immediately make changes. He endeavored first to understand the individuals and how change would impact them.
Make the right hiring/firing decisions. Letting employees go is not easy, and large scale terminations should not be done simply to reduce costs. Selection of those employees who will leave the company must be tactical, leaving no gap in critical knowledge. Aetna used a planned approach to those who were let go so that important company knowledge would not be lost.
Set short term goals. Aetna focused on small shifts in culture change, which led to greater employee satisfaction. Companies need to select only a few areas to change at a time so that goals are achieved and stakeholders (both internal and external) have an opportunity to adjust.
Give employees a chance to be heard. Corporate leaders need to have dialogs similar to those Dr. Rowe had with Aetna employees so they can understand perspectives, gain ideas, and identify current strengths.
Follow through with promises. Aetna chose positive reinforcement to reinforce cultural changes. The First Claim Resolution program provided incentives to reward employees who exhibited the behavior the cultural change sought to create.

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