Company culture is key to success, says board member

Podcast: Meet Lauris Molbert, a retired hospitality CEO with roots in rural North Dakota

Company culture is key to success, says board member

Episode Transcript

Courtney Collen (Host): Welcome to this episode of our series “Reimagining Rural Health,” a podcast by Sanford Health. I’m your host, Courtney Collen, with Sanford Health News. In this episode, we catch up with a member of the Sanford Health Board of Trustees.

As of January 2023, Lauris Molbert and 10 other board members help oversee governance for the health system and provide oversight for the strategic direction as well as financial and operational performance. Lauris, we’re so happy to have you join the podcast today. Welcome!

Lauris Molbert: My privilege to be here. Thank you.

Host: What initially attracted you to serve in a governance role, Lauris, for the Sanford Health Board of Trustees?

Lauris Molbert: I was on the MeritCare Board when MeritCare and Sanford merged in 2009. I had gone on the MeritCare Board because there’s a number of things that are important to a community or a state or region: one is really high-quality health care. There are other important elements of a great community and region but that’s clearly one of them. I had spent a lot of time investing and giving back to the communities. I was, you know, a full-fledged businessperson, but I joined the board of MeritCare so that I could help participate in the governance and the participation as a board member. And then when the two organizations merged in 2009, I was the board member who was asked by the MeritCare Board to represent the board in the negotiations of the merger. And so, I was invited to come on to the combined Sanford-MeritCare Board. Started as vice chair and then became chair two years later. But my goal was really to give back and bring some non-health skills, business, board, and complex organization experience to the board.

Host: Would you reflect for a moment on what that’s meant to you, this involvement for so long?

Lauris Molbert: Well, I really am in love with Sanford and what it stands for. How can you not be in the organization that builds its mission, its North Star around health improving the human condition. That basic need can really move your heart. So it is a really important thing to me and it is really easy to line up to,  participate and help in a small way because all the good things that come out of an organization that has that sort of a mission.

Host: What do you enjoy most about serving in a governance role at Sanford Health?

Lauris Molbert: Well, I enjoy the mission and the whole reason we’re sitting around the table, working on strategy and fulfilling the mission. That makes it enjoyable.

And I really enjoy the members of the board and the very talented management team. It’s fulfilling to be with smart people that are dedicated to something as important as health care. So, I look forward to the meetings and being together and working on and solving problems and moving forward with the mission.

Host: It is really a wonderful, diverse, collaborative group from all over which is a huge benefit to Sanford.

Lauris Molbert: It is, indeed. And that is one of the important things of a board to have a lot of different perspectives because if everybody thinks the same or has the same experiences, you don’t really get as full of an opportunity to discuss something. There’s lots of ways to look at the Rubik’s cube of things and different sides and different colors. And that diversity of so many different perspectives of skills and experience and other aspects of diversity brings a better solution set to the table.

Host: Yeah, great insight. Thank you. Tell us how your background and expertise in these areas of hospitality, as a licensed attorney and CPA bring value to our Sanford Health Board, and what specifically you’re looking to contribute to move the organization forward.

Lauris Molbert: The most recent experience, which I retired a few years from, was CEO of a company called TMI Hospitality. It was a company headquartered in Fargo, but it operated 200 hotels in 26 states. We think we had like 15,000 Marriott rooms. And we owned the hotels, we had our own teams operating, staffing the hotels. So, we had, I think it was close to 5,000 employees. And what I think is helpful from my perspective at the board is I’m somewhat familiar with the complexities of large organizations that are geographically spread out. Geographically spread out creates additional complications because there’s different cultures, there’s distances, and there’s complexities around that, which I have some experience with. And just the size of team members, the number of team members and how do you create a cultural, engaged workforce when you have so many people, people from so many different backgrounds. I think I can speak to some of that. And of course Sanford is a very large and complex organization. I think the hospitality experience as CEO does bring something to the table.

Also had the legal background on the CPA. I worked for a company called Otter Tail Corporation for 10 years as chief operating officer. We did something like 50 acquisitions. So, we acquired companies to build a platform that I was responsible for. And in that I learned a lot about the value of culture.

When I was a young businessperson, I remember thinking, I want to be the best businessperson. I want to be the best and make the best company. And I thought, OK, here’s what you must do. You must work hard. And I realized, well, that’s not it. Because everybody really, there’s lots of people that work hard. And then I thought, OK, here’s what it must be. It must be strategy. It must be the one that has the best ideas. They work hard, they’re the best ideas. They win the game of business. And then later, and this was where I learned so much from the Otter Tail experience, was it the first two: working hard and great ideas strategy, that’s just table stakes, that’s a given. There’s a lot of smart people, there’s a lot of great strategies.

It’s really all about culture. I think in some ways I am a big proponent of and understand dynamics around culture. And so, I think that is an attribute that I can, or do, bring to the board in some ways.

Host: How does this concept of experience and culture translate to Sanford Health and your hope for our patients, our residents, our employees, through that patient or employee experience?

Lauris Molbert: It’s a really good question. When I started at the hospitality company, it was really struggling. I was recruited to turn it around, so to speak, and it was full. These 5,000 employees, it was full of very talented people, but they were not culturally connected and engaged. And so we spent a lot of time on that and building a culture and enhancing a culture.

And it fundamentally, what I believe it is, one, you communicate why you exist. What’s your purpose? And then you celebrate people living your purpose and your values. And suddenly, over time, people start feeling hey, this is a great place to work because one, I can contribute, I can make a difference. Two, they trust me to make a difference. And three, it’s a very reason I want to work here is we’re focusing on our purpose. And in hospitality, the purpose is guest satisfaction. The guest experience.

And people that work in hospitality love what they do because they love … a general manager, a desk person loves to turn around somebody’s bad day. They come in from a long day of travel, they had a bad meeting. Whatever reason, they’re, they love turning that person’s day around. And in health care, the people that are attracted to health care are attracted to healing or helping. And so culturally I think what I’ve learned from hospitality that I think applies to health care is, and Bill Marriott, they call him Mr. Marriott, who was kind of the last leader of Marriott that was a Marriott. His famous saying was, “take care of your employees and they will take care of your customers and your customers will come back.”

So I think the cultural thing for the health system and for the hospitality is if you really focus on your employees, help them engage them, celebrate them, communicate with them, you can create a company that’s focused on ultimately your customers. In this case, patients.

Host: As a board member, what is your philosophy or approach?

Lauris Molbert: It is sometimes difficult because board members are not management and management is not a board. There’s a line between the two and it’s sometimes very hard to draw the line. And a lot of companies unfortunately don’t really think about it as well as they should. And they don’t really honor it. I’ve always said a board’s role is really two things. One is to pick the right CEO and the second is to ensure the stability and sustainability of the organization, which means thoughtful strategies, understanding of risks. So, the business and here the healthcare actions and their insurance and all the different things have the right strategies and they’re being executed on. And they understand risks. The reason board members should kind of draw that line is they really can’t run the company. They’re not supposed to. We have meetings, you know, like four or five or six, seven meetings a year. We really can’t run the company and we shouldn’t. But we can and we do represent the community and the stakeholders. By ensuring that we have the right leadership and the right strategies, those are the kind of ingredients of a very functional board management relationship.

Host: How has your experience as executive vice president and chief operating officer helped you guide Sanford Health as a member of the board? We talked about hospitality, of course, but talk for a moment about Otter Tail.

Lauris Molbert: We acquired companies and then we integrated as we were trying to grow. What I personally learned was that there are lots of, in addition to the importance of culture, there were a lot of different types of cultures and they sometimes fit certain types of industry. But what essentially learned is the value of essentially making sure that a company has great leadership. That they are focused on what’s best for the company, not what’s best for themselves. And so great leadership, a great strategy, and a focus on a healthy culture. When we saw these different companies that we considered to acquire and to pull together to make a large platform, it was almost like a laboratory, an experiment of what really worked and what didn’t. And most often when we made mistakes with acquisitions, which we did, in some cases, we just didn’t really understand the individual leadership team and they were not the quality that we really should have relied on. And we didn’t really understand the quality of the culture. And without those two, you really can’t be successful.

Host: You have some involvement in committees within the board. We talked extensively about your business experience so far. Talk about how that adds value to your involvement in those board committees specifically.

Lauris Molbert: So right now, I’m chair of the Nominating and Governance Committee. And I’m also chair of the Special Transaction Committee. The Governance Committee is this group on behalf of the board that considers these issues of where’s management’s role, where’s the board’s role, and do we have the right board members? Do we have the right skills and experience in other aspects? And so that is something that I really enjoy and have had a lot of experience. The Special Transactions Committee, that’s a committee that considers essentially growing the company through mergers and so forth. Well, I did a lot of that. Every discussion, every opportunity. They’re all different, but they have some basic kind of elements to them. And so, from a governance standpoint, it is something that I have a lot of experience in the transactions and growing through mergers and other. —

Host: Yeah, I can imagine that experience brings a wealth of information and insight to those committees. Lauris, what do you look for in terms of measuring success of the company mission?

Lauris Molbert: In so many ways, people think about, well, did you make money as a sign of success? And that’s more of an output or an outcome. It’s the real focus should be, if your mission is to promote healing or health or your mission is to have guests that are satisfied or whatever it is, you should measure those things. Because that’s why you’re in business is to create a great guest experience or to have a great insurance product if you’re part of Sanford or have a great quality outcome in curing diseases and so forth and success in research.

So, the things that you really are in the purpose of you should come up with some measurements. So, I think way too many companies, not to suggest that financial outcomes aren’t important, they are – but they’re more of the output. The focus should really be, and you should measure. And there’s all kinds of measures. There’s quantitative and qualitative and there’s all kinds of key performance indicators that you can develop that are a dashboard of are we moving in the right direction? And one really important one: how do your employees feel about where they work? Or are they engaged or do they do they feel they’re supported? You know, there’s lots of ways because culture is a really, has a big correlation to success and you can measure culture.

Host: What do you see as the disruptive forces impacting this organization in particular? Health care in general?

Lauris Molbert: That’s a really good question. There’s one of and it’s the classic macro-disruptor is technology. It is being digitized. Using technology isn’t just now just like a tool. It’s like fundamentally the, it’s kind of the DNA of a company and the ability to be productive and more effective, and whether, whatever you want to call it, there’s, I’m chair of a bank board. That area has a lots of innovation going on in fintech, financial technology. I was in the hospitality business that has a similar kind of counterpart that’s really robust called proptech, or property tech. And then there’s medtech of course.

So there’s a bunch of innovation that is going on that will disrupt the rules of what has always worked. And unfortunately for many companies, innovation rarely comes from incumbents. People that are in the business have a very difficult time innovating and changing and it typically comes from outside of the traditional businesses. So that’s a big disruptor. And it’s a concern because for the health of this organization, we need to be innovative. We need to take steps to be that disruptor and challenge our own model and it’s impact.

Host: Yeah. I was going to ask you your thoughts on Sanford’s commitment to advance rural care to make sure that everybody has access regardless of where they live.

Lauris Molbert: Well, I grew up in a small community of Steele, North Dakota, which had no stoplights but did have a stop sign or two.

Host: Yeah. You really understand rural.

Lauris Molbert: I do. My grandparents homesteaded in North Dakota, my Swedish – my dad’s Swedish parents, immigrants. My grandfather, when he landed in North Dakota, it was still called Dakota Territory. So my roots go very deep and I very much care about rural North Dakota and North Dakota in general.

And in our, in our whole footprint, it’s super challenging because many of these communities are getting smaller, maybe don’t offer the great jobs that they, and opportunities. Our clinics and so forth aren’t close by so access is difficult, but one of the things that will be necessary if rural America is going to be maintained or grow or become more vibrant is a really solid health care system where they can, no matter where they live, they can access good health care. So in considering, if you’re going to build a business in Steele, for example, there’s a lot of great hardworking and smart people there.

And maybe somebody would invest in the business, but will they invest in the business if there’s no health care access to health care? How are they going to recruit employees to that community and so forth. So it’s not only important for our existing rural patients and individuals who would access Sanford. It’s also, I think, super important because it could be a growth opportunity for the regional or rural areas to come back to kind of more vibrancy. They were very vibrant in that farm times, but farms have gotten bigger and bigger and bigger. It’s just part of scale. And so there needs to be some diversification in economy and this could be one way that that could happen if there’s just access to better health care, you can recruit people and so forth.

Host: Yeah. Really interesting rural perspective from a personal lens. So thank you for your insight there. What is your existing vision or any goals that you have for your time as member of our Sanford Health Board of Trustees?

Lauris Molbert: Well, I feel very lucky and privileged to be back on the board. I was on the board when the MeritCare-Sanford merger occurred. And then I, you know, I think I served nine years or something. I was chair for part of that and I was also there when, you know, the Bismarck merger happened, Bemidji happened. So I was, I saw a lot of the good that came from the expansions through mergers because in health care, because of the sense of scale, one plus one can equal three.

It just allows for much more technical expertise, and investment in innovation and tertiary care and all the things that are needed in today’s medicine and health systems. Scale is important. So I’m really excited about what’s ahead.

Host: Do you have a North Star that guides your decision-making perhaps when the path forward isn’t very clear?

Lauris Molbert: There’s a couple things. One, you should really have a sense of the company’s purpose, why it exists. And you should have a personal purpose or understand what do you stand for? And have like something to check in on because sometimes you’re offered opportunities and they seem interesting or there’s nothing else going on. But it’s really important I think, to have this discipline around does this fit the company? Are we staying true to who we are and who we want to be? And is it staying true to who I am?  The other thing I’ve always thought is large companies, and this is something that was always an ethical thing for me, large companies have the right to do, they have lots of things, they have, you know, they have scale, they’ve got lots of talent, they’ve got resources. But I’ve always thought, and this is not my phrase, I borrowed it from somebody, but it’s more important you have the might to do things, but you should do them if they’re right … not just because you have the might. And that is something that is a really important thing to me because you can, you know, you can legally do a lot of things, but is it really right? Does it fit your values? Does it fit your long-term view of who you are and where, who, why you exist, that kind of thing.

Host: What motivates you?

Lauris Molbert: Oh, you know, right now I’m in a season of my life that you know, I’ve retired from being a CEO. My motivation is so many people helped me in my career that I’d love to give back. Like some experience that I had, if I have any wisdom, whatever that wisdom is, I don’t know. But just some sense because a lot of the things that are being faced by young management teams or management teams is some things have been, you know, kind of, there’s been examples of things that worked and didn’t work or what about this. So and then just that support to keep going that you’re going to have, you’re going to have difficulties and troubles with keep going kind of thing. So just give back in whatever experiences that I have that would be helpful or related.

Host: Wonderful. What are you most proud of?

Lauris Molbert: I think there I’d say there’s two things. On a personal note, I’m really proud of my family. I’ve got three children and four grandchildren. And then my children are married. And I’m just so proud of who they are as a person. They’re all living really productive lives. They’re great parents. It’s just, that’s a really, a really cool thing for me. And that makes me, and I was just spending time yesterday with my two granddaughters in Fargo and it’s just wonderful to see what a great mother my two daughters are. That kind of thing.

Host: Really special.

Lauris Molbert: From a business standpoint, the thing that made me so proud is watching people grow. And I’ve watched so many teams around me that have achieved more than they ever thought possible individually and as a team. And that really makes my heartbeat. That’s what I love to see.

I’m really excited about the future of Sanford. You’ve got a great leadership team, you’ve got a great culture, you’ve got a board that really is leaning in and doing the right thing around governance. So, I think the future is really bright.

Host: Lauris Molbert, thank you so much for your time. It was an honor and privilege to spend this time with you getting to know more about our Board of Trustees. Thanks for all you do for Sanford Health.

Lauris Molbert: It’s my privilege. Thank you.

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