Tom Raffio’s new book shows how to overcome adversity by ‘doing the right thing’
When I first met Tom Raffio in the mid-1990s, he had recently taken over as CEO of Northeast Delta Dental. They had a lot of problems, and he wasn’t sure which to fix first. So, they began paying for complaints!
If you called customer service with a complaint, they’d send you a check for $25. They might ask some clarifying questions to ensure they understood the problem, but there was no hassle. I immediately realized this guy is very smart.
Well, those checks were flying out the door, and the company started fixing the things customers complained most about first. As their performance improved, the number of checks steadily decreased, and Northeast Delta Dental (NEDD) started taking market share.
Raffio understands, as so few CEOs and managers do, that when people complain, they’re trying to tell you how to make more money. It’s some of the most valuable information any company can get. Too bad so many ignore it.
But Raffio wasn’t satisfied. He’s a devout advocate of continuous improvement. He had already become acquainted with the Malcolm Baldrige National Quality Award criteria earlier in his career. He educated and persuaded his staff to embrace the Baldrige framework to remake NEDD into a truly excellent company.
NEDD became so good they garnered the lion’s share of the group dental insurance markets in New Hampshire, Maine and Vermont. They were running out of companies to sell to. To sustain growth, they added new products and entered the individual marketplace, selling policies to individuals and their families. They bought the naming rights to the ballpark in Manchester to gain name recognition with the general public.
The Baldrige framework is very comprehensive and fits any business in any industry. How many companies have disaster recovery plans? That’s one of the Baldrige requirements, and it’s serving NEDD very well throughout the pandemic.
In Raffio’s tenure at NEDD, in his own words slightly abbreviated, he:
• Grew NEDD from administering the dental benefits of 300,000 people in the tri-state region to over 950,000.
• Increased revenue from $57 million to $344 million.
• Created the Guarantee of Service Excellence program, backing up seven facets of service with customer refunds.
• Grew the enterprise from about 50 to about 200 employees, earning a reputation of “Employer of Choice.”
• Increased the network of participating dentists from 935 to 1,810.
• Spearheaded the creation of the NE Delta Dental Foundation.
Trying to share the formulas and methodologies for his success, Raffio wrote a book with Diane Schmalensee, “Prepare for Crisis – Plan to Thrive – The Inside Story of How One Company Did It Right.”
The book is divided into three sections, the first of which describes how they built an excellent company before the crisis started.
The second part describes how they used their strengths to take care of all stakeholders during the pandemic. They invested $27 million into helping their stakeholders survive. The rationale is simple: NEDD can’t survive without its stakeholders.
The third section explains how they’re emerging from the crisis, even though the pandemic isn’t over. Lessons learned are a key element, as continuous improvement demands we continue to get better no matter how good we already are.
Communication with all stakeholders is key, and Raffio includes many charts, graphs and examples. He includes emails from him as well as from employees, customers, dentists, regulators, etc. They’re clear proof the methodology works.
This is a story about a company that had difficulties to be sure, but actually thrived nonetheless and continues to do so. And they weren’t selling vaccines, face masks or any other weapons against the virus. Can any organization afford to not even take a look?
In Raffio’s own words, “Do the right thing, at the right time, for the right reason, and you can’t go wrong.” Raffio claims the Baldrige training teaches you more than you’ll learn in two years of business school.
A lot of CEOs would like to achieve such results, but how many are willing to do the work?
Ronald J. Bourque, a consultant and speaker from Salem, has had engagements throughout the U.S., Europe and Asia. He can be reached at 603-898-1871 or RonBourque3@gmail.com.
