Jim Hagedorn
Chairman and CEO
The Scotts Miracle-Gro Company
Jim Hagedorn, CEO of Scotts Miracle-Gro Co served as president from May 2001 to December 2005 and from November 2006 to October 2008. At Miracle-Gro, Jim had served as executive vice president and was a major architect of Miracle-Gro’s success both in the U.S. and in the UK. Following the merger, he was instrumental in the effective integration of the two businesses and served as head of the Company’s North America business. Additionally, he served in the United States Air Force for seven years, where he was a captain and an accomplished F-16 fighter pilot.
The Scotts Miracle-Gro Company has a long history dating back to 1868 when it first got started as a grass seed company. Now it is the world’s largest marketer of branded consumer lawn and garden products and has a culture that values honesty, integrity and transparency. The company cares deeply about the health and well-being of its 8000 strong associates and their families, and ensures that they lead long, healthy and happy lives. The corporate culture highly values innovation, entrepreneurial spirit, flexibility, collaboration, accountability and moral conduct.
Jim Hagedorn has shown remarkable leadership and passion in his attack on health-care costs.
After seeing health insurance costs continually rising – seemingly out-of-control and realizing the lack of efforts from the government and health-care industry to fix the current system, Jim decided to act. He felt it’s up to employers — who foot the bill — to make changes. He made valiant efforts to not only get its employees to eat and live well but also makes them accountable for their actions. The primary motivation for doing was to control escalating health care costs while improving the long-term quality of life of employees.
Jim Hagedorn is known for his determination and commonsense policies incentivizing his employees. Jim’s decisions are based on the harsh reality that our workforce apparently lacks the basic self-discipline to control its caloric intake and exercise every week.
Scott made significant investment in improving employee health. These include free doctor care, access to a low cost fitness facility, access to dieticians, free generic prescription drugs, and of course, free smoking cessation programs. Scotts Miracle-Gro is a great example of a company that has gotten workplace-wellness programs right. Jim is also credited with some controversial initiatives, like asking for detailed medical histories of employees, and potentially firing an employee who failed to stop smoking.
Scotts is in the vanguard of companies seeking to monitor and change employee behavior. Jim was able to motivate and influence employee behaviors at Scotts and demonstrated true emotional intelligence – He had the right mix of all the EI components – self-awareness, self-regulation, motivation, empathy, social awareness and managing relationships. He was self-aware of the potential health dangers from obesity, smoking and diabetes. He lost his mother to lung cancer and instantly gave up smoking after realizing the grave consequences of smoking. He was able to cut medical costs, persuade employees to take better care of themselves without killing morale and spawning lawsuits.
Jim employed various EI styles as he tried to change employee behaviors. He understood the reasons behind rising health care costs and took the bold step of dictating the personal habits of those lesser than himself. Jim knew the complexity of the issue and he was always probing, sensing and responding to build the dynamic capabilities amongst employees. In relation complexity leadership theory, I see adaptive, administrative and enabling functions on the part of Jim to introduce this disruptive innovation of employee wellness program, a business model innovation to lower healthcare costs.
When Scotts doubled what workers paid for health insurance. Morale plummeted, and Hagedorn knew he had to do a better job selling the hike. He applied affiliative style and held straight talk sessions with employees to heal the rift and explain them what he was up against – the rising health costs climbing at a double-digit rate. He laces his sermons with salty language and unvarnished commentary.
Jim sought legal and HR expertise when he wanted to ban smoking and go after obesity. To achieve these aims, he proposed launching the kind of companywide intervention that families use to help an addicted relative. His wellness programs had Big Brother overtones. But he was adamant about bringing down health costs—even if it means being authoritarian. “If people understand the facts and still choose to smoke, it’s suicidal,” he says. “And we can’t encourage suicidal behavior.” He acted as a commanding leader to enforce new policies and fire people who did not give up smoking.
His instructed key executives to sell his initiatives and ready the employees for desired outcome. His visionary style coupled with coaching restored integrity, confidence and trust with employees. To motivate people, he incentivized employees for healthy outcomes and emerged as a pace-setting leader. As a democratic leader, Jim valued inputs and commitment through employee participation at quarterly meetings.
Jim has been highly successful in -
Getting employees involved
Scotts’ wellness program began with CEO Jim Hagedorn’s honest and straight-forward approach with his employees.
Hagedorn wanted employees to know what he was up against. Using a PowerPoint presentation, he showed that his annual health-care bill had soared 42% since 1999, to $20 million, which amounted to 20% of the company’s net profits in 2003.
Getting employees policed
Enforcing workplace programs especially related to such personal matters as smoking and eating is always a tricky issue, but Hagedorn, a former F-16 pilot was not one to be discouraged. Hiring a third-party firm to prevent managers from discriminating against subordinates, he managed to institute a smoking ban with the understanding that “If people understand the facts and still choose to smoke, it’s suicidal,” he says. “And we can’t encourage suicidal behavior.” choose to smoke, it’s suicidal,” he says. “And we can’t encourage suicidal behavior.”
Getting employees the resources
Well, talk about fitness is cheap, but Hagedorn puts his money where his health is:
During one of Hagedorn’s straight-talk sessions, workers told him a company gym would make wellness easier to swallow. “Done,” Hagedorn said. But his vision went far beyond installing some StairMasters and throwing up health pointers on the Scotts intranet. Hagedorn built a soup-to-nuts medical and fitness center across the street from headquarters. Operated by Whole Health, the 24,000-square-foot facility cost $5 million and can meet pretty much any health-related need an employee might have, including a drive-thru for free prescription drugs.
When employers don’t stop at just making recommendations, but go that extra step to actually provide a convenient, usable service, everyone benefits.
Get employees accountable
Of course, you can provide the world of benefits to employees, but that benefit is only going to be as good as its usage. This is why:
Scotts’ employees are now urged to take exhaustive health-risk assessments. Those who balk pay $40 a month more in premiums. Using data-mining software, Whole Health analysts scour the physical, mental, and family health histories of nearly every employee and cross-reference that information with insurance-claims data. Health coaches identify which employees are at moderate to high risk. All of them are assigned a health coach who draws up an action plan. Those who don’t comply pay $67 a month on top of the $40. “We tried carrots,” says Benefits Chief Pam Kuryla. “Carrots didn’t work.”
It’s time people realize that their habits don’t affect just themselves but others too.
Getting employees motivated (and rewarded!)
Often Hagedorn will walk around motivating people and making sure people are on the right track. He walks around campus joking, slapping guts, and exhorting people to work out. And with rewards aplenty for good behavior general wellness at Scotts is only going one way – up:
The nudging begets peer pressure. Gym rats earn special pins they display on ID badge lanyards; these have become a coveted status object. Competition for trips to Hawaii, free massages and facials, and other cash and prizes is fierce. One group of employees started having lunch together every day to keep each other from peeling out of the parking lot for a smoke. Doughnuts have disappeared. “The message is: If you’re not trying to do something to make yourself better, then you’re going to pay more,”
Getting employees results
The best part of any program is seeing the results right before your eyes and employees of Scotts are luck to be able to do so:
So far, the company says, more than 70% of headquarters staff belongs to the fitness center. The smoking-cessation program has already had a 30% success rate. The wellness program, which costs $4 million a year to run, is a financial drain. But the company expects it to pay for itself in three to four years.
The Challenges from Tough Decisions
The wellness initiatives raise some controversial questions – One is that people could start blaming unhealthy colleagues for helping push up premiums. Then there are the privacy and discrimination issues: How far should managers intrude into employees’ lives? Scotts has so far been able to avoid getting entangled in any legal issues and employees have whole heartedly supported the medical assessments keeping in faith the privacy safeguards.
Some of the initiatives he introduced include:
- Opening a $5 million fitness and medical center at company’s Marysville headquarters. The clinic employs two full-time doctors, five nurses, a dietician, counselor, and two physical therapists.
- Mandatory health assessment, have it evaluated by medical professionals and then follow recommendations to improve their health.
- Enforce higher premiums on employees who choose not to take the survey and those who don’t follow the recommendations
- Force employees not to smoke — even off the clock.
- Access to medical center for doctor consultation, personal and prescription drugs.
- Offer discounts on health-care premiums, free weight-loss and smoking-cessation programs, gratis gym memberships, counseling for emotional problems, and prizes like vacations or points that can be redeemed for gift cards.
- Use data-mining software, Whole Health analysts scour the physical, mental, and family health histories of nearly every employee and cross-reference that information with insurance-claims data.
The wellness efforts of Jim Hagedorn have paid off, employees fiercely compete for corporate rewards instituted for following healthy habits. So far, the company says, more than 70% of headquarters staff belongs to the fitness center. The smoking-cessation program has already had a 30% success rate. The wellness program, which costs $4 million a year to run, is a financial drain. But the company expects it to pay for itself in three to four years. Other large companies have seen a 3-to-1 return on investment in their wellness programs.
The workplace is an ideal place to have a great impact on healthcare costs. First, they become aware of their personal physical problems, learn how to improve those problems and have support during their personal program. Then, the fiscal health of the company is improved when the health of each employee is improved; thus, the company is enabled to continue providing jobs for its employees. Wellness programs are a win-win solution for employees, employers and our country’s economy.
