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SPECIAL REPRINT BLUE CROSS AND BLUE SHIELD OF NORTH CAROLINA COMPANY SNAPSHOT

THE JOURNEY TO DIVERSITY MATURITY How CEO Brad Wilson is Driving Diversity at Blue Cross and Blue Shield of North Carolina REPRINTED WITH PERMISSION

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COMPANY SNAPSHOT

New office at Blue Cross and Blue Shield of North Carolina demonstrates “going green.”

COMPANY: Blue Cross and Blue Shield of North Carolina HEADQUARTERS: Chapel Hill, North Carolina PRIMARY BUSINESS: Health insurance 2010 REVENUES: $5.2 billion CUSTOMERS: 3.7 million EMPLOYEES: 4,200 COMPANY WEBSITE: www.bcbsnc.com

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iversity and inclusion are much more than stand-alone efforts at Blue Cross and Blue Shield of North Carolina. They are key elements in company-wide cultural change. “We’re living in a revolutionary time in health care. Our challenge is to take a 78-year-old organization and refocus our culture to be more nimble and more innovative so that we can respond to the changes brought on by health care reform and to the changing demographics of North Carolina,” said CEO Brad Wilson. “Diversity has always been an important part of my moral fabric, and I also believe that diversity PROFILES IN DIVERSITY JOURNAL

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is an important business principle,” he said. By focusing on employee networks, new models of diversity, and clarifying the definition of “diversity” BCBSNC has improved their diversity program tremendously. In the future, they hope to strengthen their supplier diversity program and continue to expand the message of diversity and inclusion.

Tapping the strength of a diverse workforce

One way BCBSNC is creating cultural change is through its employee networks. The company has seven employee networks with more than 1,000 members. The networks help sharpen the company’s competitive advantage by increasing employee cultural awareness to better serve its customers, both internal and external. While these networks do focus on shared interests, backgrounds or perspectives, membership is open to all employees. Wilson has challenged his senior leaders to join the networks, especially those with whom they least identify. Employee networks support the corporate culture at BCBSNC by providing an environment that is caring, collaborative, creative and REPRINTED WITH PERMISSION


BCBSNC’s Cultural Transformation:

Leading the Improvement of North Carolina’s Health Care System

committed. These qualities are the hallmarks of the company’s change initiative called “The Way Forward,” which describes the desired culture and strategic direction of the company. Wilson tapped the employee networks to help identify the company’s desired culture. Wilson asked the networks questions like ‘How would you like our company to be viewed? What kind of culture would you like to have?’ The employee networks, in turn, spoke with employees across the company and responded with a 26-page report. Among the themes of that report were: caring, collaborative, creative and committed. “These themes were identified by our employee networks, and they serve as a common ground for our increasingly diverse employee population,” said Wilson. “When you have a diverse population, you’re going to have opportunities for healthy differences of opinion. It’s good for business to have those discussions, and it’s also good to have a common set of values to help guide those discussions to resolution.”

The definition of diversity

BCBSNC Culture: Caring, Collaborative, Committed, and Creative As a BCBSNC employee, I am: CARING. I distinguish myself through superior customer focus. I am passionate about the work and service I provide. I focus on the larger good of our organization through enterprise thinking. COLLABORATIVE. I trust my colleagues. I know we do our best and most important work through teamwork. I know that my personal growth and openness to new ideas will help me shape the future of North Carolina's healthcare system. COMMITTED. I show dedication to doing my best work. I take personal accountability by having the courage to identify problems, and the vision to create solutions. I demonstrate a spirit to win by working in a responsible, professional, and ethical manner. CREATIVE. I know that, more than ever, embracing change is critical to our success. I focus on innovation and problem solving. I share my ideas and seek opportunities for simplification and continuous improvements every day. Most impertinently, I have a sense of urgency about transforming our company as we lead the improvement of North Carolina's healthcare system.

BCBSNC’s definition of diversity includes much more than visible attributes. “What we’re looking to do is build teams that include a diverse set of skills, diverse thought processes and diverse backgrounds,” said Kim Drumgo, Chief Diversity Official for BCBSNC. “Because we believe that with all three of those differentiators, we can build teams of strength, innovation and creativity. “If you look at the diversity wheel [developed

by Marilyn Loden], you get a sense of the full scope of diversity. And while those primary dimensions are important, the secondary dimensions help us build teams with varied experiences. It’s the accumulation of these experiences that make us who we are. And bringing that unique person to work every day is important to the business. It’s only by creating an environment where it’s safe for every employee to bring their full range of experiences to the table that the company can fully benefit. “For example, our senior vice president of

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COMPANY SNAPSHOT

The Diversity Wheel

marketing recently visited our GLBT employee network, called Spectrum, and asked them how the company could reach more members of this community. They came up with the idea to identify GLBT-friendly insurance brokers. It’s a great idea that we’re starting to implement.”

An enlightened model of diversity

When BCBSNC launched its diversity efforts, it not only defined a business case for diversity, it also implemented a model to measure its progress. The diversity maturity model was developed by Drumgo. She says the company is currently in the “Enlightened” phase and beginning to move into the “Integrated” phases. “We’re beginning to see that diversity and inclusion are being integrated into our current work processes and not viewed as a standalone program. For example, as we begin to think about new brand campaigns, we’re looking at creating brand campaigns that speak to all of our members and are bilingual rather than creating separate campaigns for our Hispanic population,” said Drumgo. While the company understands that different populations are moved by different marketing, company leaders also know that a strong brand should transcend many different cultures. PROFILES IN DIVERSITY JOURNAL

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“This year we began implementing ’Divisional Inclusion Teams’ within each division in our organization,” she adds. “The purpose of the divisional inclusion teams is to ensure each division establishes and strives to attain diversity and inclusion goals specific to their business function and their business needs. Enterprise-wide goals have been and continue to be effective. However, when divisions develop their own business case for diversity, they begin to see their own growth opportunities and then begin to develop their own goals for improvement. “For example, our Healthcare division is taking a serious look at developing programs specific to the changing demographics of our state.

“ What we’re looking to do

is build teams that include a diverse set of skills, diverse thought processes and diverse backgrounds...” — Kim Drumgo Chief Diversity Official

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Brad Wilson with students from Winterfield Elementary School kicking off a community garden initiative in Charlotte.

Our Federal Programs group is taking a closer the thirty-second percentile to the fortieth. look at how we ensure we are meeting the needs Scores on almost every cultural measure imof varying generations of customers we service. proved in the 2011 survey. In the areas most reAnd across the organization, we’re finding ways lated to diversity and inclusion, measures of emto maximize the energy of Generation Y and powerment and team orientation both increased the wisdom of the Baby Boomers, which are the by more than ten points, as did a measure of two largest generations among our employee creating cultural change. population.” Following the 2010 survey, BCBSNC leaders Another key measure of cultural change decided to focus on improving three aspects of comes from the company’s Employee the company’s culture: decision-making, creating Engagement and Culture Survey. BCBSNC and embracing change, and collaboration across began working with Denison Consulting in the company. Scores in each of these areas im2010 to conduct this survey, and the progress in proved in this year’s survey. one year’s time is significant. Survey participation BCBSNC Diversity Maturity Model rose from 80 percent in 2010 to 93 percent in 2011—one of the highest response rates that Denison has seen among the firm’s thousands of clients worldwide. Using Denison’s scoring method for employee engagement, (a measurement of how positively employees view their organization) BCBSNC jumped from REPRINTED WITH PERMISSION

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Brad Wilson with members of BCBSNC’s Spectrum employee network.

Diversity next steps

In 2012, BCBSNC plans to continue strengthening its supplier diversity program by looking at engaging diverse suppliers and utilizing their services in many different areas throughout the company. “We are one of the largest North Carolina-based employers, and we think it’s extremely important that we give back to the economic sustainability of our state in a multitude of ways,” Drumgo said. Keeping the conversation going is critical to achieving maturity in the topic of diversity and inclusion, she says. Every new employee is required to go through diversity and inclusion training within 30 days of joining the company. Throughout the year, the Diversity Office offers trainings to the entire organization on a variety of topics. “However, to continue to increase our diversity and inclusion maturity, we ask our managers to have at least two diversity-related conversations a year with their teams. We use a tool called Diversity Xpress, by Prism International, which provides discussion prompts for our leaders to have 20- to 30-minute discussions with their teams on multiple topics. For example, one discussion prompt is titled ‘Working Across Language Barriers.’ We’ve seen that when converPROFILES IN DIVERSITY JOURNAL

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BCBSNC Employee Networks

BCBSNC employee network leaders with CEO Wilson. • AABEN – African American/Black Employee Network – 230 members • GBEN – Golden Blues Employee Network (targeted to Boomer generation) – 270 members • HABLA – Hispanic and Bilingual Learning Alliance – 70 members • SEA Net – Support for Exceptional Abilities Network –75 members • Spectrum – Lesbian, Gay, Bisexual, Transgender employees and their allies –120 members • WEN – Women’s Employee Network – 350 members • YoPro – Young Professional Network – 200 members

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Senior Leadership Team holding a Town Hall meeting with employees.

BCBSNC extending diversity knowledge throughout the company In 2011, BCBSNC launched a series of employee “lunch-and-learn” sessions using the Diversity Xpress program from PRISM International Inc. The program consists of 20-minute prompted discussions that build a foundation for diversity competence and help teams have critical dialogue that fosters an open and honest environment. Each Diversity Xpress topic discussion sheet provides step-by-step instructions for a discussion session that incorporates the introduction of a topic, application of that topic in the work setting, and questions to encourage discussion. 2011 Diversity Xpress discussions at BCBSNC have centered on these topics: • Serving customers from other cultures • Working across language barriers

The Way Forward description of BCBSNC’s culture and direction.

• Maximizing generational distinctions • Getting comfortable with change

sations happen, both in person and on the blogs and discussion boards we have across our company, understanding happens.” “And we’ll continue to leverage the voice of our employees through our employee networks. Next year, each of our employee networks will be challenged with solving a business problem.

The benefits of this goal are significant. Not only will our leaders have the opportunity to deepen their relationships with the employees in the networks, but our employees will also be able to provide a voice and different perspective on solving important business challenges outside of their normal jobs.” PDJ

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PERSONAL PROFILE

Wilson finds Literary Motivation in Lincoln

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ilson is an avid reader. His reading list encompasses a wide spectrum of literary work that aids him in his personal and professional lives. “I usually have two or three books going at the same time,” he said. “I read a lot of biography and history. One book that I’ve continued to refer to over the past several years is Team of Rivals, by Doris Kearns Goodwin. It’s a story of Abraham Lincoln and how he picked people who ran against him for president to serve on his cabinet. Team of Rivals refers to this group that he gathered around him who were certainly varied in their points of view and how he leveraged that diversity of philosophy, experience, opinion and political views to build a team of strength that helped him navigate one of the most trying times in history. I think that strategy is very relevant today. “I’m also re-reading Daniel Pink’s book Drive right now in preparation for a company-wide meeting. I’ve talked a lot about Drive since becoming CEO and I quote Daniel Pink rather regularly—just ask anyone at Blue Cross. I think he has a lot to say that is highly relevant to our culture change journey. “Pink shows that it’s really satisfaction that drives people, often much more than money. People have a need to do good, to accomplish something meaningful, either individually or with a group of people. He captures the idea that what people really want is to have more autonomy to leverage their skills and abilities, and they want to have a purpose. So, if we understand that that’s what motivate people, and we build organizations that empower, liberate and incent people not just with money, but with these other positive cultural attributes, we’ll encourage higher productivity, more innovation and the creation of better products and services.” “That’s what we’re working to do at Blue Cross.”

Other recommendations from Wilson: • Bismarck: A Life, by Jonathan Steinberg. “There are great lessons here in diversity, the use of power and the power of personality,” said Wilson. “Bismarck was the architect of the unification of what become known as Germany and, in doing so, he brought together disparate groups under one flag.” • Woodrow Wilson: A Biography, by John Milton Cooper. “One of the better biographies I’ve read. Wilson was a great visionary. He was an intellectual who could theorize with the best. Yet, he had an ability to put theory into practice. This is a testament to the power of vision coupled with practicality.” • Great by Choice: Uncertainty, Chaos and Luck – Why Some Thrive Despite Them All, by Jim Collins. “Collins is always a mind stretcher. I heard him speak about this book recently and am very intrigued. It’s focused, like his others, on leadership. And I’m a firm believer that you can never learn too much about how to be an effective leader.” PDJ

Brad WIlson COMPANY: Blue Cross and Blue Shield of North Carolina TITLE: President and CEO EDUCATION: • J.D., Wake Forest University School of Law • M.A., Duke University • B.A., Appalachian State University CAREER: • Blue Cross and Blue Shield of North Carolina: CEO, 2010-Present; President and Chief Operating Officer, 2009-2010; leadership roles including executive vice president, general counsel and chief administrative officer, 1995-2009 • North Carolina Office of the Governor, 1993-1995: General counsel and chief legislative strategist to Gov. Jim Hunt; acting secretary, N.C. Department of Crime Control and Public Safety • Private law practice in Lenoir, N.C. INDUSTRY AND CIVIC APPOINTMENTS: • Chair, Blue Cross and Blue Shield of North Carolina Foundation • Member and past chair, University of North Carolina Board of Governors • Board member, North Carolina Institute of Medicine • Director, Blue Cross and Blue Shield Association • Board member, National Institute for Health Care Management • Board of Visitors, Wake Forest University School of Law INDUSTRY PERSPECTIVE: “The first step to creating a better health care system is being honest with ourselves about the scope of the problem we face. This means recognizing that the current system isn’t sustainable and that current reform measures don’t do enough to rein in costs. Once we accept that fact, we can begin to take responsibility for our roles in the crisis and resolve to make the tough decisions that will curb spending and shore up our system.” INTERESTS: History, sports FAMILY: Married with two adult children

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