Red Cross CEO's 'Trial by Hurricane'
Still New to Job, Chief Deals With Disasters, Debt
Friday, September 12, 2008; Page B01
The disasters hit even before Gail J. McGovern became president and chief executive of the American Red Cross: Two weeks before she took charge, the charity was fined for failing to adequately manage its blood supply, and a week later its disaster fund was depleted after responding to the Midwest floods.
For McGovern, a veteran manager of large companies and a marketing guru, the task could have been just another turn-around of an embattled organization. But two weeks into her new job, she made her way to China, and the mission became much greater.
On a visit to Sichuan Province shortly after the earthquake hit, McGovern recalls being stunned by the breadth of the devastation. "You're driving through the most idyllic scenes you can imagine -- bamboo valleys, pristine mountains -- and you come around the corner and half the mountain was chopped off," she said.
McGovern listened to a 7-year-old girl talk about the trauma, showing where the bodies of her dead classmates lay tangled in the rubble of their collapsed school. She snapped pictures of the girl on her BlackBerry. "It made me so committed to the mission," she said. "And here's the corny part: It really restores your faith in humanity."
A longtime corporate executive, McGovern took the helm of the nation's biggest disaster relief charity three months ago at a perilous time. The 127-year-old Red Cross's near-mythic reputation had been tarnished by its fumbled response to Hurricane Katrina, faltering fundraising and a string of leadership scandals that made McGovern the seventh interim or permanent chief in as many years.
And now, with the nonprofit organization saddled with debt as it responds to the latest flurry of storms, including Hurricane Ike, forecast to hit Texas late today, McGovern's honeymoon has been short-lived.
"Everyone says, 'Boy, this is trial by fire,' " McGovern, 56, said in a recent interview at the Disaster Operations Center in the agency's Foggy Bottom headquarters. "No, this is trial by hurricane."
When it comes to natural disasters, McGovern is a rookie. But she's learning quickly. After listening to an in-house meteorologist brief senior staff on Ike's likely path, she asked the weather whiz, "Did you just pick this stuff up on the fly?"
McGovern relishes this job, calling it a career capstone. Her to-do list is long, and she is in a hurry. A chief concern is raising money. Although Hurricane Gustav largely spared New Orleans the death and destruction of Katrina three years before, the Red Cross took out loans to mount a $70 million relief effort for evacuees. This week, it began a campaign to raise $100 million to recover those costs and replenish the disaster fund.
McGovern speaks of the Red Cross as a consumer brand desperate for a makeover. If only more Americans heard stories about how the Red Cross saves lives, she said, they would donate money, volunteer and give blood.
"This is a brand to die for," the former Harvard Business School professor said, leaning forward in her chair. "I feel so strongly about the mission that I want to scream it off the rooftops. We live in a very generous society, and I'm confident people will help."
McGovern wants to make the Red Cross, with 30,000 employees and 700 chapters, more efficient. Before she was hired, the Red Cross laid off 1,000 employees, most of them at the Washington headquarters. "I love to cut through bureaucracy and get the elephant to dance," she said.
In her 24 years at AT&T, McGovern rose from computer programmer to the executive in charge of the consumer-markets division and its 40,000 employees. She later was a division president at Fidelity Investments before joining the faculty at Harvard, where she taught marketing.
"At the end of the day, I was counting revenue, I was counting sales, I was counting widgets," McGovern said. "But here, I feel like I am counting lives impacted."
McGovern competed against 170 candidates for the $500,000-a-year job. Past presidents -- such as Elizabeth Dole, now a Republican senator from North Carolina, and Mark W. Everson, a former IRS commissioner who was ousted from the nonprofit agency after an extramarital affair with a subordinate -- were chosen in part because of their Washington star power.
But McGovern was selected because of her management experience and potential to turn around the faltering organization.
"Isn't it great that we have someone that really has had that business expertise in developing and working with a brand and recognizing the power of it?" said Bonnie McElveen-Hunter, Red Cross board chairwoman. "She's an individual who also has the ability to build a team and execute superbly."
McGovern has impressed some of the Red Cross's fiercest critics, including Sen. Charles Grassley (R-Iowa), who led congressional inquiries and called for changes to the charity's structure.
"She's sincerely committed to these reforms and committed to being aggressive in raising money and reestablishing the integrity of the organization," Grassley said. "If she carries out as sincerely as she stated it, then I think things will work out very good."
McGovern has been smoothing relations with government officials, business sponsors and community-based groups. When Gustav struck, the response was widely applauded.
"It was one of the greatest examples of material logistics you've ever seen," McGovern said. "I keep clowning around that I'd love to bring my colleagues from Harvard here to see it."
Then she circled back to her sales pitch to return the organization to solvency.
"I would like to live in a world," she said, "where we're not fundraising episodically with each storm. Our mission is so much bigger than these epic storms. Our mission is to be there for the American people every day."