In 1999, a company called Total Renal Care, a kidney dialysis provider, was nearly bankrupt. In October of that year, Kent Thiry took over as CEO and started the long road back, taking a very different course than traditional turnarounds.
Instead of a classic top-down, heavy-handed strategy, Thiry and his leadership team set a seemingly crazy course to build a more democratic company where everyone helps to make the important decisions together. Instead of telling everyone where the company needs to go, the leadership invited everyone to lead, and to work together to figure out how to right the ship. They call it the DaVita Village, and people aren't employees, they are teammates or citizens. Sounds really squishy, but the results are dramatic.
Much of what they do flies in the face of classic MBA teaching, including how they changed their name. In 2000, thousands of teammates worked on it together and decided in a vote to become DaVita, which means "he/she gives life". It is one of a fast-growing number of companies discarding over 100 years of management theory to try something new--asking everyone to participate together in building a great company, not for the CEO, but with him, as co-leaders, not followers.
And it's working. DaVita's revenue has exploded from $1.5 billion in 2001 to $12.5 billion last year. By every other measure DaVita is the kind of huge success that proponents of old-fashioned management claim can't happen without strong, top-down command and control. Thiry and his team have rejected the classic approach, and instead created a wildly successful company by believing that the principle of shared decision-making involving everyone, will be better for the company, the customers and those who work there.
A radical new direction requires changes in core beliefs. David Hoerman, the chief wisdom officer at DaVita, says, "Our beliefs drive our behaviors, which drive our results. When we all share the same beliefs, the right behaviors follow that benefit our patients, our business and beyond. We call each other on our behaviors that don't align with those beliefs."
That is a key statement. DaVita has seven simple core values: Service Excellence, Integrity, Team, Continuous Improvement, Accountability, Fulfillment, and Fun. These values aren't uncommon. Management teams regularly develop such a list, but that is exactly why they don't have any impact, because management developed them. At DaVita, these seven values were developed by and voted into existence by the teammates. This is a simple, but dramatic departure from the norm, and explains why these values are held so deeply at every level. The simple principle DaVita employs is that those who are most affected by a decision should have a say in that decision. And when they do, they will own the outcome. In this case, everyone owns DaVita's values because they were voted on by the people.
To encourage ongoing participation and decision-making, DaVita has a Voice of the Village call for the whole company every six to eight weeks, to listen, get ideas and feedback, and give advice on things that affect everyone. They also have online vehicles for the same purpose.
Hoerman says leaders at DaVita focus on serving others and supporting their teammates in developing their own ability to make decisions. Again, leaders say this all the time, but it's usually lip service. Not at DaVita. "My job as a leader here is to create an environment where our teammates can step up as leaders and make good decisions." The art of leadership is to know how few decisions the leader needs to make.
Why is all this involvement of the people who work at DaVita so important? Because the simplest way to get everyone engaged is to promote ownership, and decision-making is the principal way a company can motivate people to own their work. Vince Hancock, another leader at DaVita summed it up well, "Ownership is really important here--nobody washes a rental car." As a result, Hancock calls DaVita "a shockingly egalitarian place."
Hoerman gives advice to other companies attempting to make such a radical cultural shift, "We say here at DaVita, people can smell your intentions from a mile away. People will know whether you are attempting to build a company culture to manipulate them or if you're on this earth to create something special. If this is a tactic, don't do it. If it's something you really want to create in an authentic way, go for it."
The results speak for themselves. DaVita regularly outperforms other major dialysis providers, and their stock returns from 2000 to 2014 are in the top 3% among all S&P 500 companies.
But they are prouder of their "people stats" because they believe that focus on people drives their performance in other areas. DaVita has over 20 programs to support teammates, patients and the communities in which they do business. In Colorado alone they've invested more than $6 million in the community in the past five years through their Social Responsibility Program. They also track the personal and professional development of all 65,000 teammates every month to make sure their people are growing.
DaVita's lesson is simple, but not easy. They call their culture The DaVita Way--and together, they're dedicated to building a healthy village and caring intensely about each other, their patients and their communities. At the core of this intense caring is encouraging everyone to bring the whole, messy creative person to work, own their decisions, and participate in building a great community. To make that happen, DaVita leadership allows and requires decisions to be made where they are carried out, and then they get out of the way.
While others are still relying on a few heroic activists to tell everyone else what to do, DaVita is inviting everyone to participate. Giving people their brains back is working for DaVita, and is a way of leading all companies could learn from.