George Barrett, MBA '88

George Barrett, MBA '88, was profiled in the Feb 15, 2011 issue of the NYU Stern MBA student Newspaper The Stern Opportunity. The article, as it appeared in the Opportunity, is featured below.

In the State of the Union Address, when discussing healthcare reform, President Obama said, "Instead of refighting the battles of the last two years, let's fix what needs fixing and let's move forward." The future structure of our healthcare system may still be uncertain, yet legislators and executives alike agree that it must look different. George Barrett, Stern MBA '88 and Chairman and CEO of Cardinal Health, says that the recent legislation addressed certain important issues, but needs some retuning.

"Clearly, having tens of millions of Americans without access to affordable healthcare is unacceptable and fixing that is crucial for us as a society," Barrett comments. "Ultimately, fundamental change will come. How quickly and whether it will be through legislative action or organic market forces is a question mark. However, I believe that we have to go down a clearly defined path of better access, better coordination of care, better quality and safety, and work together towards a system in which incentives are more appropriately aligned."

Coordination and cost-effectiveness are central to Cardinal Health's value proposition and the company is taking leaps in the right direction while the reform debate roars on. "We operate in a complex system that is poorly integrated yet very interdependent," Barrett says. "Cardinal Health works across the healthcare spectrum supplying virtually every channel with a broad line of products and services. We work as a conduit between manufacturers and providers making sure that this connection is efficient and that patients get the products they need as cost-effectively as possible. Put simply, we tighten the seams of our healthcare system."

But Cardinal Health does more than the management of the logistics. Barrett continues, "We also support organizations to increase their internal efficiencies. For example, on any given day, we have experts work in hospitals and pharmacies helping to improve the flow of their systems and run their enterprises. We enable physicians, pharmacists and nurses to focus on their patients, by taking care of the business behind healthcare."

Cardinal Health weathered the economic storm, setting several recent 52-week highs and, in its February 4 earnings call, beating estimates and raising guidance to the Street. Barrett says that although the company's diversified portfolio of products and services contributed to this success story, that's not all there is to it. "A balanced business model is extremely helpful in turbulent times because it can smooth out the bumps," he says. "But because we're about cost effectiveness, our value proposition resonates at a time of stress in the system. I'm hopeful that most people see our business as part of the solution."

How do you keep that value proposition front and center in each employee's mind, while operating an organization that is 30,000 strong? "Size requires you to be very precise about the company's business purpose," Barrett says. "The bigger you get, the more you have to reinforce the reason that you're here and encourage this large group of employees to internalize that. You can't touch everyone individually so you need to make sure that the messages you send out are very clear and consistent about where the business is and how we bring value."

When asked about how management teams evaluate organic vs. inorganic growth opportunities, Barrett explains that very few companies can grow purely organically or only by acquisition for an extended period of time. "The reason you need the former is that you have to demonstrate that your core business has a sustainable value proposition." The CEO continues, "The latter is important because, especially in a world as dynamic as healthcare, there are so many new business models and changes in the system, that it is very hard to rely solely on internal capability. At times, you have to access a market or product line through an acquisition."

The firm's 2010 acquisitions bolstered the firm's value proposition. "We look at an acquisition when it can enhance our strategic position and where we believe we can bring value," Barrett says. "We acquire scale where we think scale is important, technology where we think technology is important, and so on. Every acquisition needs to be looked at through the lens of strategic consistency and value creation. For our acquisition of Kinray, it was about expanding our footprint in an important customer segment, but also strategic business balance by further diversifying our business mix. In China with Yong Yu, it was access to a new market and establishing a platform there."
Another compelling aspect of Yong Yu is its unique management team. "The international dimension of Yong Yu's executives was very attractive to us: the fact they had a strong cross-cultural orientation, understanding the needs of a US or European medical device or pharmaceutical company, while at the same time having a fluency in the local market to help create opportunity there."

What Barrett saw in the Yong Yu team points to a more universal truth about leadership. Whether your organization is small or already employs thousands across continents, whether you're just getting started or leading a company through economic turmoil and innovating during vast structural industry changes, certain traits enable great leadership no matter what.

"Effective leaders are as much learners as they are teachers," Barrett says. "They both mentor and learn from the talent they attract. They also have the ability to influence others. In a small organization, this can be done person to person. The larger you get, the more you have to lead by influence and lead things you don't necessarily control. Finally, all leaders have to be self-aware. Your employees will believe in you if you understand yourself and your strengths and weaknesses." In the case of Barrett and the Cardinal Health team, who welcomed this decade with such positive momentum, these traits are more than evident.
Here are some of Barrett's career pointers for you:

What advice would you give Stern MBAs?

"Whatever you do, do it incredibly well and with passion. People tend to think about what they want to do X years from now and then chart each step along the way. The best career advice is to excel at what you're doing – now. Be in the moment. When we look at candidates for development or advancement, the ones that jump out are those who are performing at a very high level with tremendous passion. So, try and focus on the here and now – and be great at it.

"Understand yourself well enough to know the environment in which you thrive. Self-awareness often is something that comes with a bit of age, but it is critical that you start focusing on this early on. We're all different: some need to work on their own, others need more of a social setting. Environment is just as if not more important than the technical nature of your job. So, think carefully about what brings out the best in you and go after it."