Monday, February 10, 1986 was my first day as chief executive of Blue Cross of California. At a welcoming reception, the company presented me with a sculpture, nearly five feet tall, of a cross carved from blue ice and artistically decorated with succulent pink prawns. The thing was exquisitely beautiful—and the most apt emblem for wasteful spending I’d ever seen. When I asked where it came from, I was introduced to the company’s pastry chef. My first official act was to fire him. After all, Blue Cross of California was at that time the worst-performing of the 77 Blue Cross plans across the country, with annual operating losses of $165 million. With the organization teetering on the edge of insolvency, ice sculpting hardly seemed like a core function.
A version of this article appeared in the October 2002 issue of Harvard Business Review.