Bob Roth 0:03
I’m by my nature, I’m a curious person and so this idea that the challenges are real, but they have opportunity for solution and the partnership that a board and a leadership team can build in trying to move the ball. Selfishly, my curiosity has never ever wanted for anything as it’s related to healthcare; there’s always something to learn.
Gary Bisbee 0:28
That was Robert Roth president and CEO RoMan Manufacturing and board chair Spectrum Health, sharing what he finds rewarding about sitting on the Spectrum Health Board. I’m Gary Bisbee and this is Fireside Chat. Bob has spent 16 years, first on the Priority Health Board, which is the health plan owned by Spectrum Health or now the Spectrum Health Board. He has also sat on many community boards and he refers to the importance of passion when serving on a non-profit board. Bob commented on the questions he asks when considering joining a non-profit board. Bob led the search for the current Spectrum Health CEO Tina Freese Decker and he reviewed the responsibilities of the governance committee for CEO and board member succession. Bob reviewed the strategy that Tina and her team developed and executed to manage the COVID crisis and the board’s role in supporting management and relating to the community. Bob spoke eloquently about the responsibilities of the board chair and the importance of a clear and positive relationship with the CEO. In response to the question about a board chair’s responsibility during a crisis like COVID, Bob responded as follows.
Bob Roth 1:38
The only marked change from what our role should be in any situation was there was an extra bit of sensitivity on my part, on the board chair’s part, as it related to our CEO. That the CEO felt that they had somebody that they could safely talk to, think out loud, vent if they had to and that they had a partner in the chair of how things needed to be communicated, and so that we could be as absolutely transparent as possible.
Gary Bisbee 2:12
I’m delighted to welcome Bob Roth to the microphone. Well, good morning, Bob, and welcome.
Bob Roth 2:20
Great to be with you, Gary.
Gary Bisbee 2:21
We’re pleased to have you with this microphone. Let’s start by getting to know you, and then we’ll turn to your substantial governance experience and leadership as chair of the board of Spectrum Health. You grew up in Grand Rapids, I believe, can you share a bit of your family’s roots?
Bob Roth 2:36
Sure, it’s absolutely true. I grew up in Grand Rapids. Still live here. My father, as it was actually a German immigrant came to Grand Rapids in 1959 because his employer in Germany actually had a joint venture relationship with a company in Grand Rapids. And that’s ultimately what got him to our little town. And my mother was someone born and raised in Grand Rapids. And they met through a blind date and fell in love. And my dad was actually supposed to go back to Germany after his stint of working for the joint venture but meeting my mother that never happened. And so instead of growing up in Germany, I got to grow up here in Grand Rapids.
Gary Bisbee 3:20
Well, that’s a fun story. Now you attended Kettering University, formerly General Motors Institute of Technology. What was the motivation for that decision, Bob?
Bob Roth 3:29
There were a number of things that came together that I think made that happen. One was, my father was an engineer. And so there was always this engineering atmosphere around our house. I mean, in the work that we did, whether it was in the woodshop or the chores and everything, there was always an engineer’s mind around it. So that was always present. The other thing is, as I got to that age where it was time to go off to college, my parents felt very strongly about this idea that when it’s time to go to college, you need to go away. I was looking at a couple of schools that were local and it wasn’t that they had any issues with them academically, but I could tell that they were – disappointed might be too strong – but they given their preference, it was like you need to go away. And then a counselor at the high school I went to made me aware of Kettering and what was then General Motors Institute, and when I came home to tell my parents about that my dad just beamed because earlier in his career, somebody that he actually reported to was a GMI graduate and he always held that school in high esteem. And so that was the things that got me going there and it was a wonderful way to get an education because it was a full-time cooperative. So it was this combination of your rigorous classwork and then going into a workplace and starting to apply what you learned.
Gary Bisbee 4:50
I suppose the alumni are quite an interesting group, mostly engineering business type people? Have you kept track with them?
Bob Roth 4:58
Yeah, as a matter of fact, my wife I, there was a group of 10 couples that all came out of our classmates. And with four of those couples, we just spent a week in the Outer Banks together. Interestingly enough, many of them have chosen to retire. I think maybe the auto industry, it was pretty hard and fast-paced thing and they’ve retired. But I can say probably today, our most famous alumni is Mary Barra, who is the CEO and chairman of General Motors Corporation. And I actually my wife and I both graduated with Mary.
Gary Bisbee 5:33
RoMan Manufacturing is a great American story. Can you describe RoMan Manufacturing for us, Bob?
Bob Roth 5:39
Sure. Ours is a two-family, family business. It’s the Hofman family and the Roth family. And the name RoMan, the R-O comes from Ross and the M-A-N comes from Hofman. The company was started by Mr. Bob Hofman and my father Dietrich. They actually started the business relatively late in their careers. It was in the industry that they had worked in together since my dad came to Grand Rapids and went to work for a company called Kerkhoff Manufacturing, as did Mr. Hofman when he was discharged from the army. And so they had worked together since 1959 and in 1980, decided that they’d done this for other people for most of their careers and maybe it was time to do it for themselves. So they started RoMan. My dad was the engineer and Mr. Hofman was the salesperson and they had a tremendous relationship. Theirs was a 50/50 partnership, which a lot of times conventional wisdom says, “Hey, somebody’s got to have 51% and have control.” But they didn’t look at it that way. They figured that it might take sometimes a little bit longer to come to a decision, but as they built that consensus, then everybody was invested in driving it towards success. And still to this day, our families, between the Hofman family and the Roth family in our second generation, are still 50/50 partners in the business. So it’s really been a wonderful experience. I joined here in 1987, a few years after I had graduated from GMI. And so this is year 33. And we transitioned to ownership of the business from the founding generation to my generation back in 1997. Again, because Mr. Hofman and my father started it relatively late in their careers, we had kind of an early succession relative to the age of the company.
Gary Bisbee 7:31
How is it that you ended up becoming president and CEO then, Bob?
Bob Roth 7:36
Kind of an interesting story. So at that point in time, it’s now the end of 1996. Our parents had done all the things that of transitioning the ownership of the business. And up till that point, my dad was the president of the company. And they had allowed Kurt Hofman and Rob Hofman, two Hofman sons and myself, we were on the board of directors, but again, we were probably more apprentices than anything. But as it came, and my dad called a board meeting and said, “Okay, come January 1, Bob, and I aren’t going to be owners of the business anymore. And if we’re not owners of the business anymore, I don’t see how I can be the CEO. So you boys are going to have to decide who’s going to be the president of the company. And before my dad literally finished his sentence, both Kurt and Rob in unison said, “It’s Bob.” And I think the neat thing is, is they had confidence in my operational ability, but they also knew that as it related to the ownership aspects, because again, their family’s 50%, my family’s 50%, that I would never violate the things that Mr. Hofman and my dad did about how we build consensus about where are we going strategically, what does this business mean to our families, and the principles that we’re going to operate it on, and that I would never try to override them just because I carried the title of president. And we’ve behaved that way since 1997.
Gary Bisbee 9:02
How’s COVID affected RoMan?
Bob Roth 9:05
It’s been an interesting journey, to say the least. We were deemed a critical manufacturing so we did not close our operation. And so really, it came to us in what I’m going to describe as a phase A and a phase B. Phase A was the health and safety aspects of COVID and our need to rapidly make sure that our business was providing a safe work environment for employees. And so all of the things that we had to do related to that, plus all of the changes in laws both at the federal level, like with the CARES Act, as an example, and a number of executive orders from our governor here in Michigan. And so phase A was getting those things implemented and getting them right. I’m proud to say that we’ve not had a COVID case at RoMan manufacturing. We’ve taken it very seriously. Phase B was the economic piece of the equation. And our business is in the industrial capital equipment market. And we were pretty confident that with all of the unknowns and the uncertainty that COVID was bringing into the marketplace that companies were our typical types of customers, were going to be focused on two things. One was preservation of working capital, which is their payables, their receivables, and their inventory, as cash is king. And the other thing that they do is they just absolutely slash and cut off their capital equipment budgets. And so we saw our sales plummet over the four-month period of May through August. And in September, thank goodness, we’ve now seen a recovery and are now backtracking at what our plan was coming into the year. And again, our plan never anticipated COVID when we set that up almost a year ago. So it’s been an interesting ride.
Gary Bisbee 10:56
We were talking earlier and you mentioned, of course, you went through 2008/2009 and the economic downturn. How does that compare to the current COVID-induced downturn?
Bob Roth 11:07
The dynamics have been very similar. I think the only difference is, I’m hoping, and again, this snapback to our pre COVID volume of business is very recent, again, that’s September. I’m hoping that the duration of the interruption is shorter than what we experienced in the 2008/2009 period. That was about a 14-month interruption to our business. Where if this ends up being a 4-month interruption, it’s going to be less painful in its duration.
Gary Bisbee 11:42
Well, let’s turn to your wide-ranging governance experience, Bob. In addition to being the chair of Spectrum Health Board, what other non-profit boards do you currently sit on or have you recently sat on?
Bob Roth 11:53
Sure. Another one that I currently sit on and happen to chair is the American Welding Society, which is a professional and technical society. It’s a membership organization of about 70,000 members worldwide and is focused on promoting the art and science of welding. Closer to home, served 8 years on the Grand Rapids Community Foundation Board of Trustees, served some years ago on the Grand Rapids Chamber of Commerce, and had the pleasure of chairing that board. A small philanthropic organization called Home Repair Services, I had the pleasure of serving on the board with and Home Repair Services enables homeowners to be able to fix and maintain their homes and again, try to keep people in homeownership, as opposed to necessarily renting. And then I also did a 6-year stint as an elected official as a trustee of the community I live in which is Grand Rapids Township. So I had a little taste of politics as well.
Gary Bisbee 12:54
I’m not going to pursue that right now.
Bob Roth 12:56
Yeah, please don’t.
Gary Bisbee 12:57
That’s the next podcast. So what do you find rewarding, though about sitting on nonprofit boards, Bob? It’s interesting. Some people are very active, as are you and then some people, of course, don’t seem to ever be active in this regard. What do you find rewarding about sitting on the non-profit boards?
Bob Roth 13:13
A couple of things. First off is that these opportunities to serve are aligned with my personal passions. And of course, when you look at the whole spectrum of not-for-profit activity, I don’t think there’s a person that couldn’t find something that they aren’t passionate about and that really sparks their interest. And so for me, part of this service has been in alignment with the mission of those organizations and things that put a smile on my face and energize me. And so there’s that component. The other component and I learned this after the fact, it wasn’t something I gave a lot of thought to going into it, but these opportunities to serve on boards of not-for-profits, has put me into contact in, I’ve gotten to know and friendships have developed with other people of all kinds of walks that I would have never really had the opportunity to meet and learn from and work with if my only channel was my business. And so I think about all of the informal mentors that I’ve had because of my service on not-for-profit boards is pretty impactful.
Gary Bisbee 14:28
What are the primary responsibilities of a board member of a non-profit organization?
Bob Roth 14:34
Again, because I’m kind of a simple Simon guy, I always like to break it down to its absolute basics. And so that simplification is, boards are responsible for what and management and/or staff is responsible for how and obviously working together on how those things get developed. So in that, again, there’s this fiduciary component, right, that when you’re talking about a not-for-profit, there isn’t a shareholder group per se that we would think about in the private sector, whether it’s a publicly-traded company or non publicly-traded company. And so who is the owner? Well, the owner is really the community that’s being served. And so you’re representing that community, that constituency in both the fiduciary manner, in the sense that the resources that are provided to the not-for-profit are being used wisely and aligned with the mission. And so that’s a really powerful piece. And then the opportunity to share experiences with the management or the staff of the not-for-profit to give them perspectives that within their channel, they might not have had the benefit of. And so again, I think, as much as I just talked earlier about how it’s probably broadened my horizons, I think it’s also an opportunity to broaden the horizons of really dedicated and hardworking management and staff.
Gary Bisbee 16:02
What would you say the most challenging decision that you’ve had to make as a nonprofit board member?
Bob Roth 16:07
With one of the larger national, not-for-profits that I served on the board with, the executive director wasn’t a good fit and the process of navigating the board through the decision about what that was going to look like if this individual needed to be exited. It’s a very large board, there were 35 members on the board. So the communication and transparency were challenging with just when you have that many people. And so that was probably one of the most difficult and challenging things that I’ve experienced in not-for-profit board work.
Gary Bisbee 16:45
What are the major differences between sitting on a non-profit health care board compared to a non-profit non-health care board?
Bob Roth 16:55
Great question. I think the first thing that pops into my mind is complexity. I’ve not experienced any other board work, whether, again, not-for-profit, and I actually serve on some for-profit boards, but in any way that is as complex as the healthcare industry is, and all of the different constituency, obviously, highly regulated, and so important to the community. So first thing that pops into my mind complexity. Second thing is typically scale. I was talking about the American Welding Society that that has, for its size, pretty significant assets in the Grand Rapids Community Foundation that has an endowment of over $300 million dollars. So these aren’t small enterprises. But in comparison to healthcare, still small. And so healthcare is this and when you start to talk about multi-billion dollar organizations, it is both complexity, size/scale, whichever you want to call it, that are very distinctive in compared to other not-for-profits.
Gary Bisbee 18:02
How much time do you think you spend on nonprofit boards, generally?
Bob Roth 18:06
Probably more than might be typical, because frankly, it’s been a little bit of my own personal succession strategy. So I’m probably spending, with the boards that I serve on 20% of my time, and somebody might look at that and say, “Well, how are you doing your own job,” which would be a legitimate question. But as I, kind of approaching closer to the end of my career here at RoMan than the beginning, this board work has allowed me to create space at RoMan for the senior leadership team to basically take on more responsibility. And so there has been some thought in that. And it’s not a derelict of duty back to RoMan, but really more of a thoughtful way to help me transition and help my own management team continue its growth. So yes, it’s, it’s about 20% of my time.
Gary Bisbee 19:01
What advice do you have for listeners who might be interested in joining a non-profit board?
Bob Roth 19:05
I’m going to go back to the thing about passion. I think if you’re going to choose to serve in that way, there’s got to be a personal connect. And if it’s not something that you’re passionate about in its mission, then I would suggest you kind of keep looking for other opportunity. That’s first and foremost. The other thing is I would recommend is that if you are either invited to serve on a not-for-profit board or you’re targeting that you really should take the time to talk with current board members as well as the executive director, CEO, whatever that top position is to try to get an understanding of expectation and board dynamic. I have had a couple of experiences where the board dynamic was one where there wasn’t a lot of generative conversation, there wasn’t a lot of strategic thinking. And what I found for myself was, well, I can read all the material and if all we’re going to do is report out, and it’s always same old, same old, not that, that didn’t make the mission of that organization any less valuable, but as far as, did I feel like I was able to contribute and conversely, was I expanding my horizons? And so those tenures were relatively short and in retrospect, I think I could have figured some of that stuff out earlier had I asked the right questions.
Gary Bisbee 20:40
Well, let’s turn now to Spectrum Health, which of course is an integrated delivery system, has its own health plan, Priority Health? What was your first involvement with Spectrum Health, Bob?
Bob Roth 20:50
That’s the perfect lead-in because my first experience was Priority Health. I actually was asked and join the Priority Board some now 16 years ago. And the connection, a wonderful person by the name of Kim Horn was the CEO at that time. And our Chamber of Commerce was very active in having these forums around healthcare. And I became passionate about it because of the expense to our business. And as the expense was going up, I questioned, were we doing all that we could as an employer to make sure that there’s value for what we’re paying? Are we engaging our employees in the right way? And I got asked to sit on some of these panels and give an employer perspective. Well, Kim was also sitting on a number of these same panels giving the industry or the insurer perspective and we got to know each other. And she was one that approached me first about joining the Priority Board. And one of the requirements in Priority’s charter is that, and I forget the exact percentage, but some percentage of the board members must also be members of the health plan. Well, I happened to be a member of the health plan. So that was also a qualifier. And that’s where I got engaged. And, and I really felt the opportunity to start to learn from the inside, which then helped me understand things that we could do as an employer to do better by our employees as it related to this important but ever increasingly expensive benefit.
Gary Bisbee 22:20
What have you found to be the most rewarding about serving on the Spectrum Board?
Bob Roth 22:25
That I have been in 16 years of constant learning. It seems that it seems that the upslope on the learning curve, there’s no flattening. I’m by my nature, I’m a curious person and so this idea that the challenges are real, but they have opportunity for solution and the partnership that a board and a leadership team can build in trying to move the ball. Selfishly, my curiosity has never ever wanted for anything as it’s related to healthcare; there’s always something to learn.
Gary Bisbee 23:01
When did you become the chairman of the board?
Bob Roth 23:03
That was just a year ago. And so I’ve now served 8 years on the Spectrum System Board, so transitioned from the Priority Board to the System Board and had the pleasure of leading our search process when Rick Breon, the previous CEO had announced his retirement, after gosh, 17 or 18 years of dedicated service. So I got to lead the search process. And we obviously selected Tina Freese Decker, which has been just a great decision on the part of the board. But as a board, we thought having maybe some continuity of somebody that was so intimate in the search process to then move into the board role, so that we could bring some continuity to that whole transition and onboarding, so to speak of Tina into the CEO position. And again, I hope it’s gone well, I think it has.
Gary Bisbee 24:05
It’s gone very well looking at it from the outside. And you’ve covered the answer to this question, but what are the main responsibilities of a board chair?
Bob Roth 24:13
I think one of the things that, that board chairs need to be very cognizant of is just because your chair, that doesn’t mean the expectation is that somehow you are the smartest person in the room. And so I think the board chair’s, as it relates to the board of directors itself, is to be that voice that keeps the conversation within the right track and frame and that there’s not just scope creep and all those types of things and be that reminder to fellow board members about what are our vision, values, and mission and make sure that as we’re talking about things that we don’t lose sight of those and that’s aligned. And then I think on the interaction between the CEO and the board chair, is that the board chair is there to be a sounding board for the CEO, the person that they can think out loud with a little bit, they can throw up some test balloons and see if they float or not and do that in a way. It’s also if there are, let’s say, broader community concerns, as it would relate to the organization, that the board chair is there to communicate those effectively to the CEO. And that’s what I see that role as. Never that the chair is, by that anointment, somehow the smartest person in the room. Because I am definitely not.
Gary Bisbee 25:45
Well, how do you think about board succession and recruiting new members, Bob?
Bob Roth 25:49
Great question. We have used, at Spectrum for a number of years, one of the standing committees of the board of directors is the governance committee. And the governance committee has really two main functions. First is, to the question that you just asked, is about board succession and developing a pipeline of potential board candidates. And the second one for us in the governance committee is what we call board education. And so we feel that ongoing education of our board members is an important part of the duty and the responsibility. And the governance committee drives that piece of the equation. And so I mean, literally specific to the board chair position, if we want to focus on that for a minute, I mean, literally about the time that I moved into that position, the governance committee is already starting its work about, “Well, when Bob’s term is up, what does that look like?” And of course, we use a matrix of attributes and, of course, against all of us as board members, as well as what our terms of service are, we have term limits, so we have to manage around that. And so that we’re always looking at as talent from the board is retiring off, to make sure that we don’t have any gaping holes in the skills, attributes, experiences of our board members, being cognizant of that. Plus gives us an opportunity to look ahead a little bit and see, are there emerging things. Cybersecurity would be a good example of that. Ten years ago, really a nonissue, so to speak, or if it was we weren’t thinking about it, but today, you know, it becomes kind of a major issue. So do we have talent on the board that has a perspective around that?
Gary Bisbee 27:35
Is your term as board chair a three-year term?
Bob Roth 27:38
It’s a two-year term, but the bylaws for Spectrum allow, by the board chair’s choice, that they can serve an additional year after their term as immediate past chair. Dick DeVos who’s the previous board chair has chosen to do that. His predecessor chose not to do that. I’m going to choose to do that. I think again, it just helps with the continuity. And Dick’s been a great resource for me as I moved into the role, somebody that I could call or email and make query of and so I would want that opportunity for the next board chair.
Gary Bisbee 28:17
Why don’t we turn to the coronavirus outbreak, which you’ve obviously lived through his board chair, not anticipating I’m sure that? But when you became aware of the COVID crisis, what were your first thoughts?
Bob Roth 28:30
My very first thoughts were, in the rearview mirror, quite naive. First off, I thought it was a foreign problem, a China problem, or maybe an Italy problem and not our problem. How quickly that changed. I also naively thought that, okay, this is a really bad flu bug, if you will, and really was uninformed out of the gate about the dynamics of COVID-19. And maybe a little bit tainted because we had a operation in China during the SARS thing and I was making still frequent trips to China during SARS and never felt threatened by it. And so that led a little bit to my, out of the gate, naive view. I can say that that quickly changed for a number of reasons. I think, first off, my own curiosity didn’t allow me to be trapped into that. And then the senior leadership team at Spectrum. They were, I have to say, way out in front of this. And they made it purposeful that we weren’t lagging as a board. And so the communication with us really, really ramped up and for a period of time was literally daily communiques and we were having every 10 to 14 days, we were having board meetings, not the full agenda stuff but very targeted around issues that the senior leadership team was facing in executing this. And here was an example where again, a good relationship and communication between senior leadership in a board and how we can work together to figure out a path forward. When it first hit, and we went on full lockdown, there was tremendous pushback in our community, from the clergy. And I think rightly so. Because for people that are at end of life, or in serious condition, even if it’s not going to result in death, that clergy play a really important role. And they felt basically, they were locked out. And so there was clergy contact, written emails, and telephone calls to board members. And so it was a topic that we had to wrestle through together with senior leadership, trying to find that correct balance between spiritual and emotional need in time of crisis. And obviously, all of the things about managing something that is so contagious. We worked through those things and found balance points and helped management communicate back to our broader community about what we’re doing and why we’re doing it. And so that came out of this whole process.
Gary Bisbee 31:12
What responsibility does the board chair have during a crisis like this?
Bob Roth 31:18
I think the only marked change from what our role should be in any situation was there was an extra bit of sensitivity on my part, on the board chair’s part, as it related to our CEO. That the CEO felt that they had somebody that they could safely talk to, think out loud, vent if they had to, and that they had a partner in the chair of how things needed to be communicated, and so that we could be as absolutely transparent as possible.
Gary Bisbee 31:52
This has been a really terrific interview, Bob. I’d like to pursue one other topic. Of course, leadership is all-important in a crisis, for both the CEO of an organization and a board chair, what are the most important characteristics of a leader in a crisis?
Bob Roth 32:11
Calm, rational, and transparent. Communicate, communicate, communicate. I think we learned that we needed to communicate both rapidly and often. And that the CEO needed to be seen as the leader of that communication. Didn’t mean that all of the communication had to come through the CEO, but the CEO had to be an integral part of that. But they, a calm, rational, transparent leader. If your leader wasn’t seen as calm, let’s say the opposite frantic, that that can actually do more damage. And again, where I also throw in rationale is because you can’t be calm, and being interpreted as aloof. So calm, rational, transparent,
Gary Bisbee 32:58
I assume the same characteristics would apply to a board chair. But let me ask the question directly. How do you think a board chair needs to act in a crisis like this?
Bob Roth 33:09
Again, I think you’re right. I think it’s similar attributes in that sense. But now, it might not be, in this particular case, where you got to have the public face, but that that face is shown internally, so that, first and foremost, the CEO sees calm, rational, transparent, and that that transfers to the entire leadership that they understand that the board is there, that they’re aware, that they care, that they’re supportive and willing to take action, and again, in a transparent, rational and calm way.
Gary Bisbee 33:46
Bob, thanks so much. This has been an excellent interview. We very much appreciate your time.
Bob Roth 33:51
Well, thank you. I truly enjoyed it.
Gary Bisbee 33:55
Fireside Chat with Gary Bisbee is a Health Management Academy podcast produced by Think Medium. Please subscribe to Fireside Chat on Apple Podcasts or wherever you’re listening right now. Be sure to rate and review Fireside Chat so we can continue to explore key issues with innovative and dynamic healthcare leaders. In addition to subscribing and rating, we’ve found that podcasts are known through word of mouth and we appreciate your spreading the word to friends or those who might be interested. Fireside Chat is brought to you from our nation’s capital in Washington DC, where we explore the strategies of leading health systems through conversations with CEOs and other interesting leaders. For questions and suggestions about Fireside Chat, contact me through our website, firesidechatpodcast.com or email@example.com. Thanks for listening.