Interview. with DONALD H. GRUBB. September 12, by Kathleen Kearns. Transcribed by Kathleen Kearns

Transcription

1 R-32-1 Interview with DONALD H. GRUBB September 12, 2002 by Kathleen Kearns Transcribed by Kathleen Kearns The Southern Oral History Program University of North Carolina at Chapel Hill Transcript and tape on deposit at The Southern Historical Collection Louis Round Wilson Library Citation of this interview should be as follows: "Southern Oral History Program, in the Southern Historical Collection Manuscripts Department, Wilson Library, The University of North Carolina at Chapel Hill" Copyright 2005 The University of North Carolina

2 WAKE MED HISTORY PROJECT DONALD H. GRUBB SEPTEMBER 12, 2002 START OF TAPE 1, SIDE A KATHLEEN KEARNS: OK, this is Kathleen Kearns speaking. Today is Thursday, the 12 th of September, I'm in the home of Mr. Don Grubb. Could you just say your name and when and where you were born, and I'll make sure the pickup is OK? DON GRUBB: Don Grubb, born Westchester, Pennsylvania, October 22,1924. KK: So you're from Pennsylvania. Really? DG: Yes. KK: I'm born a New Yorker, upstate New York. DG: Well, we spent time there too. We've moved all over. KK: Really. DG: Started in Pennsylvania, went to Washington, DC and Maryland, went to New Jersey, Nova Scotia, Tennessee, Connecticut and here. KK: Where did you live in Nova Scotia? DG: I ran a company up there. KK: Whereabouts? DG: In Kentville. You know Nova Scotia? KK: I grew up in Newfoundland. DG: Newfoundland, oh. Well, it's funny. My wife has been after me to go to Newfoundland for years. Didn't go when we were up there. We go to Nova Scotia about every three years. So I tell my friends, we're going to come this year, you're going to

3 DONALD H. GRUBB 9/12/02 page 2 take me over to Newfoundland. Never do it. So now I have found a cruise, which goes to Saint Pierre Island, Newfoundland, Iceland, Greenland, over to Europe. So I'm finally going to get her to Newfoundland next year. KK: That sounds wonderful. That sounds like a great tour. Wow. Well, could we start, could you just tell me the years that you were on the board? DG: Yeah. I was there from 1982 to KK: OK. What line of work were you in? DG: Well, I've been in about all lines of work. I've had a career that covers every area from human resources to manufacturing to marketing, and I finally became the president/chief executive officer of a company called Huyck, H-U-Y-C-K, and I moved the company down here. We were the second largest provider of specialty belts and equipment for the paper industry, second largest in the world. We had plants all over the world, and when I lived in Tennessee, I decided I was going to be a southerner. So then they moved me to Connecticut. I announced I was only there long enough to move everybody south. It took me four years, but we moved the corporate headquarters down here, built a plant and have loved it ever since. KK: So what year did you arrive in the Raleigh area? DG: 1972,'73. KK: OK. And how did you become connected with the hospital? DG: Well, we sold the company. So I was unemployed, but I had a nice long contract for ten years, which let me get paid. Just about that time they were looking for a director. So they interviewed me. In fact Harvey Montague was the interviewer. At the same time he was interviewing a banker, Earl Bardin. You met Earl?

4 DONALD H. GRUBB 9/12/02 page 3 KK: I'll meet him next week. I've spoken to him on the phone. DG: Well, it got to the point that Harvey said to me, "We need a person who's a financial man, somebody who understands everything about it." I said, "Well, then you want Earl Bardin. You don't want me." So they turned me down. About a week later, Harvey called me and said, "We have another vacancy, and we want you for the vacancy." So it meant that Earl and I were going on the board at the same time. If you think about that, on a board of seven people, two new people coming on, two new people who were both aggressive, had known each other for years he had been a key mover in bringing us down here. So we knew each other thoroughly. We knew how we thought. I don't know how much you know about group dynamics. But having been a human resources man at the beginning, that's one of my favorite topics, and all of a sudden here are these two new fellows coming on a board of seven people. So it was a great change in group dynamics, particularly because you find on the board that there was some differences. There were people on the board who were having difficulties, but they were loners, and all of a sudden here's Bardin and Grubb, and some of them weren't loners anymore. So it was a very dramatic change in the board. I'm not sure the powers that be really understood what was happening in that situation. KK: What was the make-up? Could you just go over who else was on the board at that time and what their profession, besides being on the board, was? DG: Well, Harvey was there. Harvey's a contractor. Mike Weeks was there, and Mike's a lawyer. I don't remember the name of the fellow from Wake Forest. He was the chairman. KK: Curtis Thompson?

5 DONALD H. GRUBB 9/12/02 page 4 DG: Curt Thompson, but Curt went off the board very shortly after that, and John Weems came on. Then Mitchell came on the board. So that was the make-up. The board was well, let's see, who was the one from the county? KK: I don't have my list with me today. I can't remember either. DG: It was a change in the county representative about that time also. It was a board in which Bill Andrews was the chairman, the president of the hospital, and I think what happened was this was a hospital which was relatively small, and Bill had done a tremendous job in getting it started, getting it there. But the staff he had under him were very weak. They were losing money, and suddenly here comes two business people on the board who are saying, "We're not used to running an operation where we're losing money. What can we do about it?" This was a real dynamic situation in which we're saying, "You've got to adopt some business practices in this situation." It got to the point it happened that my daughter was taking a master's in hospital administration over at Duke. Bill Andrews saw her one day over there and said to her, "You know you're father thinks that a hospital can be run like a business, and he doesn't understand hospitals." Well, my daughter backed away from him. In Nova Scotia I'd been a trustee on the Branchard-Frasier Hospital up there. So I had some hospital experience before this. So I think all of a sudden there's voices on the board saying, "We've got to change this situation. We've got to do something to make put this hospital in a way in which." In management you have a team management that can take the business or the hospital or whatever to a certain point. Then they've sort of exhausted what they can do with it. They accept what the situation is. "We've done a great job to get it from here to here. We're doing all this charitable work. We really

6 DONALD H. GRUBB 9/12/02 page 5 can't expect to make money. The doctors are putting great demands on us. So we're doing a good job." They're not seeing, where do we have to go from here. So in my mind it became very clear that we had to make a change in the management approach or a change in management and decided there is no way you can change the present management staff. KK: You mean no way to train them to think differently and that sort of thing? DG: To train them, yes, that's it. Bill was a great visionary. I used to say to Bill, "Bill, you're a thinker. You're a dreamer. Hire the best operating manager you can find because you don't like to run a hospital. You hire a very strong operating manager and let him run this hospital, and you go dream where we're going to be in the next twenty years." Bill had under him three of the weakest managers I have ever seen. Bill at that stage in his life didn't feel happy, didn't feel secure enough to put a strong guy underneath him. You'll see in management many times-you judge the top guy on how strong the people are underneath him. These were weak. So the first thing that I did was say, "We need to give Bill Andrews a contract." I talked the board into giving him a contract. After we got the contract signed, and the county and everybody was happy with the contract, then I said, "OK, now let's replace him." KK: Had he been working with no contract up to that point? DG: No contract. KK: Was it just a verbal agreement. How was it? DG: He just worked. He just was employed. Nobody even thought about it. See, my approach was, if you give him a contract, then you're guaranteeing him

7 DONALD H. GRUBB 9/12/02 page 6 severance pay. You're guaranteeing him an income for a period of time, and you put that in place first. Then you raise the question of a replacement. We finally decided, OK, we'll go out and find somebody. That's how the transition was made, and Bill retired, went into consulting work and was happier then. That's what he was good at. Nobody else could've gotten that hospital going. But at the same time, he reached the point where-we all reach the point where hey, we're not ready to take it to the next stage. So then we went out, and I don't even know if I was on the nominating committee to find a replacement. But somehow I got involved in the situation, and I heard the comment that there were three candidates and three members of the committee. Each one liked a different person. I don't remember that. I don't even remember the other two people. But as soon as I met Ray Champ and interviewed [clock chimes], I had made up my mind, and I can remember the interview. KK: OK. I just didn't want to lose your words. DG: We'd better stop this because it will be banging. There we go. [Stops clock.] KK: Thank you. DG: I can remember we had John Packer, Dr. John Packer, I don't know whether you've heard his name or not. But John was one of the best, most respected doctors on the board, has since died. John and I were interviewing Ray, and Ray asked John or asked both of us, "Do you really want to make changes in this hospital?" John Packer said, "No." I looked at Ray and sort of went like this because I sort of thought he was going to get up out of the chair and leave. Why is he wasting his time. I said, "Now

8 DONALD H. GRUBB 9/12/02 page 7 John, let's review this. Let's talk about the things you're unhappy with and what's not being done." We went over a couple and I said, "Now you tell me you don't want changes made." "Well, you're right. We'll make changes." And from that point on, Ray was sold on coming. Then the next thing you had to do in that situation was you had to be sure that Ray got his staff where he wanted to be. You usually come in, you don't want to make wholesale changes, but fortunately Ray read the situation very rapidly, changed the people and next thing who arrived on scene was Doug Vinsel. You've met Doug? KK: Briefly, yes. DG: I can remember Ray and I interviewed Doug, and when he left he said, he said, "There's the guy we want." So I said to Ray, I said, "All right. Tomorrow I'm going to call him up and I'm going to convince him to come." Doug will say today that was one of the things that really helped make up his mind, that somebody bothered to call up very quickly. And with Ray on board and new management underneath of him, then the hospital started to go. KK: Do you feel like you and Mr. Bardin were the two who really introduced more of a business mindset when you came on the board? Were there others on the board who responded to that approach? DG: Oh yes. The whole board responded, particularly one of the ones you had which was Mike Weeks. Mike had been a loner on that board, and it was funny because again in the group dynamics thing, they used to place namecards down. They wanted to sit you in a certain spot. Mike was all the way down at this end of the table and the chairman was up at that end. I was sitting across from Mike. We got to talking one

9 DONALD H. GRUBB 9/12/02 page 8 night, and it was obvious that Mike was looking for somebody to back him up with some of the things that he wanted to do. He made some comment about where we were sitting and I said, "Mike, I'm going to give you a lesson in group dynamics. We are in the most strongest position at this table outside of the chairman, because sitting here we can command the room. This is where you want to be." So we talked about this over the years. Well then, Mike becomes the chairman. You know what Mike did to me. He moved me from this spot right next to him. He had learned his lesson about it. He was not going to let me sit out there and command the room. [Laughs.] KK: Interesting. DG: But to show you the difference. He decided we needed a strategic plan. I got the job of doing the strategic plan. So I went to John Packer, and I said, "I need a doctor on this committee and I want you on the committee." He said, "No I will not get on a committee making long range plans." I said, "Why not?" He said, "Because I was on one here, and we spent a year, and we produced a document which is about two-inches thick, and nobody's looked at it since." I said, "John we're going to do it in three months, and it's not going to be over four pages long. It's going to be written that even doctors will understand it." He said, "All right. I don't think you can do it, but I want to see what happens." He got on the committee, and we produced a plan, which is about three and a half pages, and then we sat down with the doctors. We said, "One of the things in this long range plan is we will not buy a piece of equipment for you unless it's life saving or we can justify the cost of it. It's going to pay for itself."

10 DONALD H. GRUBB 9/12/02 page 9 They said, "You can't do that. If we want a piece of equipment, you have to buy it." I said, "No. We've got pieces of equipment sitting all over this hospital that nobody is using. You can't use it. You're not using it. But you made us buy it. Not going to happen again. You tell us you want a piece of equipment, we'll do an economic study. We're going to tell you how much each procedure is going to cost, and if we say it's going to cost you six hundred dollars for a procedure and you say all we can charge is three hundred, we don't buy it." They didn't like that. Finally John Packer stood up and said, "You docs have to understand. It's a new regime here. Don's right. We are not going to buy that piece of equipment unless you can justify it. So new rules because we're going to make money in this hospital. We've got to or we won't be here." So it was a whole change in atmosphere and attitude. KK: Who else was on that strategic planning committee? DG: I couldn't ever tell you. In committees, I like to get good people on the committee, but I also don't like to be held up by committee action. So we got the thing through it, and I have no idea who was on that committee. One of the other persons who was on that committee was Margie, the black gal. KK: Debnam? DG: Debnam. Used to have a great problem with Margie and I because we liked each other very much, but we were completely different in our approaches. I'm a morning person. She's an afternoon person. Her committees met at noontime for lunch. My committees met at seven-thirty for breakfast. Margie was on my committee. Margie

11 DONALD H. GRUBB 9/12/02 page 10 many days would arrive as we were leaving [laughs] because she couldn't get up in the morning and get going. But great friends, she was a good director. In fact there were not bad directors, and as we talked about the changes that Earl and I were able to get, everybody was receptive to it. It was just all of a sudden somebody was saying, "Hey, we don't have to lose money. We don't have to do these things this way. We can do it a different way." Then you add Champ to the picture who is saying, "Certainly, we can do it that way." It was quite a change. KK: Can I just back up a little to fill in a couple of little details. So it was Harvey Montague who invited you to join the board? DG: He was the head of the committee. KK: How did you know each other? DG: We didn't. Had no idea. I don't know who-. I think the timing was the situation in which all of a sudden there's announcements in the paper that I'm retiring, and somebody at the hospital said maybe somebody knew I had been the president-elect of the Chamber of Commerce and that sort of thing. I had formed a group of fifty, got a group of fifty started in the area of all the leading business people in the area. So somebody might have known the name or somebody might have said, "Hey, this is a businessman. He's retired now. He's probably looking for something to do." And I was. I started a consulting business, and I was on about ten boards, but I still wanted to do something locally rather than spend my time traveling all over the world on all my directorships. So that's sort of the way. I didn't know anybody. I knew nobody at the hospital. I knew nobody on the board.

12 DONALD H. GRUBB 9/12/02 page 11 KK: OK. When did you first meet Bill Andrews then? When you had already joined the board? DG: No, as part of the interviewing process. Bill had to be apart of that. That would be the logical part of it. Now as it turns out, my daughter became a vice president at Rex Hospital, and her husband was the head of the pathology group at the Rex hospital. So they were involved in that hospital, and I was involved in this hospital. We had great discussions about hospitals. KK: I bet. What are their names? DG: Kanich. Kanich, Donna Kanich and Bob Kanich. KK: K-O-E- DG: K-A-N-I-C-H. Bob decided about two years ago that he was ready to retire, and so he said to her, "I'm going to give my six month notice," and she said, "Well, I only have to give three months notice, so I'm going too." I said to her, I said, "Donna, I don't understand this. You're fifty years old. You're retired and I'm still working." She said, "Poor planning on your part." So they're both retired now. KK: When you and others interviewed Ray Champ for the position, what attributes did you find particularly attractive in him as a candidate? DG: Well, you start with the fact that he had great experience and a good track record. He obviously was aggressive. Spoke well, presented himself well, intelligent. He would listen, and you could see him listening and absorbing what was being said. One who knew where a hospital had to go and knew how to get it there. I don't think Ray, at the time he took over that hospital, I don't think in the first six months he said, "Twenty years from now, here's where we're going to be." I think what he said was, or

13 DONALD H. GRUBB 9/12/02 page 12 what a good executive says is, "This is the path I've got to move. Now I'm going to take it. I'll get one step done, two steps done." And I can remember Earl Bardin, Earl became the chairman and did a good job. I remember saying to Earl one night-i was not on the board-saying to Earl, "When are you going to get finished building down at that hospital?" He said, "Oh we're about finished." I laughed and I said, "You're never going to finish with Ray Champ there. With the way the hospitals are moving, you're never going to get finished." He said, "Oh yes, we're doing the last project now." [Phone rings.] KK: Should I stop it? DG: She'll get it. They were, just to me, the impression of what you think of a well-rounded good executive who's ready to make the next move into a bigger situation. KK: He'd been in Huntington, West Virginia? DG: Yes. KK: How long had he been directing the hospital there? Do you recall? DG: I can't recall. Don't remember. When he came in, see he also had, in this hospital, you also had a real political situation. You had county commissioners who were constantly unhappy with things being done at the hospital. You had a newspaper which was very unhappy with what was going on at the hospital. There was a lot of politics. In fact, in my opinion, I made one completely wrong vote on that board. KK: What was that? DG: It happened the first meeting I was to. At that point the newspaper was after the hospital about releasing documents. We got a court case, and we had lost the court case, and the question was, do we open them up like the court told us or do we appeal to

14 DONALD H. GRUBB 9/12/02 page 13 the Supreme Court? We'd already lost the appeals court. I'm the new man on the block sitting there with all of the discussion going on about what would be the ramifications if we opened and everything. The lawyer saying, "Yes, we have a fifty-fifty chance that it can be reversed." I'm sitting there, and I had had a lot of lawyers work for me, and in fact at one point I sued every competitor I had in the world and won. I'm saying to myself, "There's no way in the world we can win this case." But I thought, "How can I vote against this when everybody else is going to vote in favor of it?" The vote would've been taken in the public. So here's the newspaper going to hear this, that Grubb voted against it, and I was going to suddenly going to be a focus of attention, and I didn't need that. So what did I do? I voted along with everybody else to do it. I can remember walking out of the room and saying to Mike Weeks, "I think we just made a mistake." So what we did, we spent fifty thousand dollars and the Supreme Court wouldn't even hear it. They wouldn't even look at it. So you had all these political aspects roaming around in this situation. KK: After that decision was made and the hospital lost the case, did opening records really make much difference in the end? DG: No. All the things we talked about that night, the impact on certain politicians and this sort of thing, didn't mean anything. The relationship with the newspaper continued to be bad. See, you also had the political situation there in which we had a main hospital in Raleigh. We had four branch hospitals, and those hospitals were guarded in such a way that you couldn't touch them. We were losing money with all of them. So, how do you handle this because the politicians, each one are elected

15 DONALD H. GRUBB 9/12/02 page 14 from their area? So we said, "There's no way you can have a frontal attack on it. But also you could convince people that if they're really losing money, you don't have any future then why should we keep them?" So we devised a plan, which Becky [Christian] says was my plan, which said, "Here's the criteria by which we're going to measure them. If they lose more than this much money in a year, we've got to close them up or change them or do something else to them." Everybody bought that because they hadn't really understood how much money they were losing. So we set up the criteria and everything. In my opinion, the hospitals, most of them, disappeared within two years at most. But I left the board. I never realized how those hospitals kept working until not too long ago. I was out at the new hospital out here, and I saw Becky, I said, "Becky, I said this thing is five times as big as any of those branch hospitals that we never could get closed down." She said to me, she said, "Well, Don you know what the problem was. The fellow that was put in charge of those branch hospitals didn't understand that our objective was to close them down. He kept fudging the figures making it look all right." KK: Oh my goodness. DG: I said, "I never knew that." But it was a very highly political situation, and Ray walked into this and has done a good job with the political situation. KK: Where did Doug Vinsel come from? DG: I don't remember. KK: You don't remember how you got in touch with him? DG: No. KK: Did he come on right after Ray Champ was hired, right in that same period?

16 DONALD H. GRUBB 9/12/02 page 15 DG: This is twenty years ago. I'd say my remembrance is something like six months. See the first task was to get rid of the people who were under him, and all three of them went. The financial man was the last one to go, and then, see, Ray had to have an operating manager. He did what Bill Andrews should've done. He hired a good operating manager. In my opinion, I recommended Doug Vinsel as the president of Rex when they were looking for a president back some time ago. Experience shows that they'd have been a heck of a lot better hiring Doug than the one they hired, because the one they hired didn't do a very good job. I think Doug can run a hospital. I'm not sure he has the strong aggressive desire to do that. I think if somebody came to Doug today and said, "We've got a hospital over here in Timbuktu. You want the job?" Doug's comfortable, and I'm not sure Doug would take that job, which I think is a mistake for him, but everybody has to judge what their career objectives are. I think Doug could run this hospital. I think it would've been well to make that decision some time ago and have developed somebody in the hospital so that we wouldn't be out looking some place else for a replacement for Ray. KK: Now that Ray has announced his retirement. DG: Tome, in my way of management, that is a mistake. If I ever had to go out of my organization to get a replacement for somebody, then that was a failure on my part. It would be a lot harder for Ray, he would've had to go to a real program of getting somebody ready to take his place. He would've had to start saying to the board, "I think this guy's ready. I'm going to have him come into the board meetings. I'm going to have him spend more time with you. I'm going to give him these projects to do." It would've had to have been a real development program to do that. It might not have

17 DONALD H. GRUBB 9/12/02 page 16 been Doug. It might have been Becky. It might have been somebody else. But I would be much happier if when Ray said he was going to retire that the board said, "We've got a replacement right here." Because when the new fellow comes in, new fellow or girl, there could be a real upheaval because hospital administrators tend to bring people with them. Ray brought people with him. Jim Albright, when he took over at Rex, brought people with him. In Ray's case, Ray brought good people with him. In Albright's case, he brought weak people. When he brought the people with him, then the hospital starting going downhill. KK: Who all came in with Ray Champ or shortly after? Who did he bring? DG: He brought in Vinsel. He brought in Becky. I know there are a couple of others that he brought in. They all fit well in there. You didn't find the Etta Creeches, who had been there forever. You didn't find her saying, "Oh he's bringing these people in here and they're not any good or they're disrupting things." The team seemed to work well together. KK: That's remarkable actually, because from talking to a number of people I get the feeling that there was a lot of allegiance to Bill Andrews. DG: Oh yes, there was. KK: So that would not have been easy to come in and work with people who had been loyal to him for years. DG: They had and the loyalty was well deserved. But again the process of which he left, it wasn't a case of calling Bill in some day and saying, "Bill, we think it's time for you to go. We'll pay you a month's salary and you're gone." It was a well orchestrated

18 DONALD H. GRUBB 9/12/02 page 17 approach that was good for Bill and good for the hospital. Bill accepted it. If Bill hadn't accepted it, it would've been a different situation, but he accepted it. KK: Did he accept it easily or did it take some time for him to kind of-? DG: I was not close to Bill. It seemed to me that he accepted it easily, but he might not have. I was close to Etta, and I didn't hear Etta saying things to me, you know, "Bill's very upset about this." I think each one of us in our career reaches the point in which we say, "It's now time for us-. I'm not sure I want to go through the hurdles I'm going to have to go through. All of a sudden the dynamics have changed." And I think Bill recognized that the dynamics had changed. There was going to be much greater demands on everything. Then hopefully he said to himself, "I really don't want to go through this. I can go out and get consulting work and I can be happy." I never discussed that with Bill, but I hope that's the way he really reacted to it. It was certainly no feeling from Etta that we had done the wrong thing or anything at all. But I was not that close because Bill was only there about a year after I joined. Bill would probably say that I was one of the prime movers to make the change, and that's fine because I was. But I thought we did it the right way, and I thought it was good for the hospital. KK: Was his health a factor in his accepting the fact? DG: Yes. I think he was recognizing that he had health problems. You put those things all together. As I said, I don't think anybody could've handled the situation to get that hospital started because it was started in an unacceptable place. It was the black hospital, the charity hospital, and there's still doctors today that won't go to Wake. My doctor won't go to Wake. In fact, none of the doctors that I go to for anything go to

19 DONALD H. GRUBB 9/12/02 page 18 Wake. I'm going to Rex tomorrow morning to get a cataract operation. I didn't even think about going to Wake. KK: Do you know why your doctors feel that way? DG: I think part of it is convenience. Part of it, these doctors have been around a while, and it hasn't been too long ago until-. People still, the old Raleighites still think of Wake Hospital as the charity hospital. In fact, I told you that I recommended Doug Vinsel for that job. The fellow who was the chairman of the board at that time-don't ask me his name because I can't remember it he and I served on the foundation down at Glenayre retirement home. I knew they were looking for a new president. I said to him, "Why are you going all this searching all over the country when you've got a guy right in town that can do it?" He said, "Who's that?" I said, "Doug Vinsel." "Doug Vinsel." I said, "Yeah, he's the second man over at Wake." His attitude was, "Somebody from Wake come over and run Rex? Oh, that can't be." I don't know what word to use, but it was just, "They're down here. We can't consider it." See, the same attitude existed when Rex was trying to decide what they were going to do about a year ago, two years ago. The logical combination, the logical thing to happen in this area, was for Rex and Wake to go together. Then we could stop the duplication that we have between heart operations and all this. That would have been the most logical thing to do. That's not what happened. Part of it was the stigma of Wake. Rex, the people, the old Raleighite people--. The chairman of the board in Rex was not an old Raleighite family. He's a guy that came in with IBM. What did they do? They had conversations between them, and at one point it looked like they were going to go

20 DONALD H. GRUBB 9/12/02 page 19 that way. But the stigma in my opinion was the answer; so they ended up being part of UNC. There's a lot of politics involved in that too, but that was not the logical combination to me. They were much better if Wake and Rex had gone together, but I said to Ray at the time-we talked about it I said, "They'll never go for it." KK: Because of that old animosity? DG: Yes, and more of the stigma of, "Oh, we can't be a part of that organization." The people who think that way don't go over there and see what it is. They still think of it as the semi-private room, wards, black people and poor people and all these things. They never stop to think how much money that hospital is making despite the fact that they're writing off millions and millions of dollars of charity care. That's good management. Rex wasn't doing that well. KK: I'm just checking how far we are-we're OK. Wake and Rex did have discussions during that period so, what, three or four years ago? DG: I don't think it was quite that long because Jim Albright was still-. If I knew exactly how long ago my daughter retired, because he was still the president when she retired. I think that's been like two and a half or three years. They had discussions because Rex knew they had to do something. They couldn't sit there the way they were because they were losing money. They'd gone out and bought a lot of doctors' practices, which they were losing money with hand over fist, and they were in trouble, and there were discussions. They were not publicized discussions, but it was mentioned to me that they were having discussions, and I made comments. I knew the chairman of the board over at Rex, and I can remember making some comments to him at times, "You know, that's the logical thing to do." But it also

21 DONALD H. GRUBB 9/12/02 page 20 happened that he was an IBMer, and the fellow who was in charge at UNC was an ex- IBMer. KK: Ah ha. So that made a difference? DG: Yes. KK: OK. OK. I'd better turn over the tape. We're getting close to the end of this side. END OF TAPE 1, SIDE A

22 DONALD H. GRUBB 9/12/02 page 21 START OF TAPE 1, SIDE B KK: OK, we're rolling again. DG: We've talked about politics and the board and everything. At one point, I was in charge of the committee in charge of data processing. I know absolutely nothing about computers, and in fact I know nothing about this one. I just told my son in law, "This is what the computer's doing." He said, "It can't do that." I say, "Well, it's doing that." So I'm in charge of the committee. I said, "This doesn't work. We're not making any progress." Because the board members at the hospital are different from any board members on any business board. The board members get into details. They run committees. They're involved in everything. That's not the mode of a business. So I say, "We've got to do something about this." So I say, "I've got to find somebody who understands computers and get them on the board." So I hunted around and hunted around and I found a guy named Sussengutt. Have you heard that name before? KK: I have. DG: [Coughs.] Excuse me. Sussengutt. Well, Sussengutt was an IBMer. He was probably one of the brightest people they had. He just knew everything about computers. He had a physical problem in that he shook a little bit so everybody said you've got to recognize that he's got Parkinson's, but don't worry about it. So I said, "We've got to bring Sussengutt on the board. We have a vacancy." I think it was Margie Debnam's vacancy. To me it's a logical approach. Nobody on the board understood computers. We've got to do that. We present it to the county commissioners who at that point had to approve. They couldn't nominate. We nominated, but they had to approve. Lo and behold, they turned it down.

23 DONALD H. GRUBB 9/12/02 page 22 KK: Why? DG: Said we have to have a woman. I say, "I don't know any woman who understands computers the way Sussengutt does. We're going to get Sussengutt on the board." Well, now we have a big battle of who's the most stubborn person, me or-? Nobody on the board's arguing with me. The board says, "We've got to do that." The county board is saying we've got to have a woman. So this goes on for, I don't know, maybe two or three months, but all of us being completely stubborn. Somebody came up with the bright idea, "Why don't we have two nominees? Why don't we put a woman and Sussengutt? We understand why Grubb's got to have Sussengutt. Because if we let him run computers, we're in real trouble." So, suddenly a name surfaces from Cary, Jean Ladd. All of a sudden we have Sussengutt and Jean Ladd on. Jean didn't stay very long. I don't know if you met her or not. She was very capable. I don't want to say young because she's not that young. Younger than I am though. Very attractive, very nice person and it worked out fine. But that was sort of the politics you went through. You had to have representatives on the board from each one of the districts. Like you had Mitchell from Fuquay-Varina, and John from Wake Forest, and Montague was from Cary. So you had to be balancing that along with gender and race and everything else. But it works out. It works out. KK: That was actually one of the things I wanted to ask you about. I didn't know how it happened, but I knew the board of commissioners had insisted on a woman being on the board, and I wanted to ask you the context for that. So that's great.

24 DONALD H. GRUBB 9/12/02 page 23 DG: Margie Debnam supplied both things. She was a black woman. Now in the world of directorships, a black woman could name her price. Every business board had to have a black or a number of blacks and a number of women. So a black woman. In fact, I was at a conference at one time, and I forget who the black gal was. She was writing a presentation, and she said, "I look out there and most of you out there are white. But you realize I can get on more boards than any one of you can." [Laughs.] It should be. It should be. We should have everybody. The hospital board should represent everybody. Now, I'm not sure how this board works today. It's so big. I mean the ideal board should be in the range of seven to nine people. I think they've got like fifteen or so, which in effect says to me there's a lot of hangers on who aren't talking. The problem is you get a subject, and everybody thinks they have to talk about it. So you have a lot of redundant examples in which each person has to give an example to solidify. So the chairman has to be very shrewd with a board as big as this one is. KK: I imagine. You said earlier that you thought it was a sign of good management to have someone just below the leader trained and ready to go. This was in the paper before your time, but I think it refers to the people beneath Andrews who you were talking about earlier. This was something that was in the Raleigh Times in 1980, and it said that the administration of Wake had been reorganized to find a successor to Andrews and it placed three men in line to succeed him. They were Roy B. Clark, who was senior vice president for fiscal affairs, Henry C. Scott, who was senior vice president for community services, and Red Wells, who was senior vice president for operations. I understand that these were the three who were let go after Champ came on board. My

25 DONALD H. GRUBB 9/12/02 page 24 question is, was the newspaper right that these people were seen as possible successors? Was it planned that way at that time? Do you know? DG: The only thing I can say to that is that this would be a logical way to do it. If somebody was saying they were looking for a logical way to do, it would be to divide the hospital that way and put the three in charge. But then you have to select very strong people, and they were not strong people. Yet, maybe from Bill's perspective, he thought they were strong. But one of those, after he was let go with Rex, went to another hospital. He got pushed out of there. These were not strong capable people, and this was very obvious. Very obvious to me. I had no question. In fact, sometimes in my career when I put a person in a job knowing those below them are weak, I've said to them, "Don't let them all go at the same time. Phase it out." Then I've had people who I've done that to come back and say, "I can't. I'm going to have to get rid of them all. I can't take a year to get rid of them." When Ray rapidly got rid of two of those and the one a little bit longer, in my mind I had no question that that's what he should've done. No question. And at that point there was sort of an attitude that I call, "if you find it, we'll tell you about it." When I ran my board, I always told them all the warts and the sores along with all the good things. I had a feeling with the management of the hospital when I went on it, it was sort of, "Well, we're not going to tell you anything, but if you find out about it, then we'll tell you." The board members were not spending much time down in the organization trying to find out what was going on. It was obvious we had weak managers who didn't want to. If you're a weak manager, you don't want to tell about the sores

26 DONALD H. GRUBB 9/12/02 page 25 because then you've got to explain why they're there. So that might have been the purpose of what they were doing, but they picked the wrong people to do it. KK: OK. That helps to know. DG: There again, see that comes back to what I was saying about group dynamics, what happens when you have two people coming in suddenly and evaluating these people and saying, "What in the heck is going on here?" You've got two people who never in their lives have put up with losing money. So you've got to find some way to do it. I've taken over companies when they've been losing money like mad, and the objective. You've got to find some way. You can't put up with this. You've got to find a way to make money, and the hospital has got to do the same thing. KK: Harvey Montague, when I spoke with him, said the same thing that you said earlier, that there were three people on the search committee and that the three of them had different candidates in mind when Ray Champ was hired. DG: I've heard Harvey say that, and I don't remember that at all. KK: Really. DG: Because in my mind I only remember one guy. It was Ray Champ, and to me that was it. The decision had been made, just how to get everybody agreeable. KK: So you weren't on the search committee? You weren't one of those three people? DG: I don't think so. KK: OK. DG: I don't think so, but I know that when they went to Huntington-I think the search committee went to Huntington to interview, to see Ray's hospital I didn't go.

27 DONALD H. GRUBB 9/12/02 page 26 That's not surprising, but if I'd been on the search committee, I probably should've gone. All I know is I wanted to get involved in that selection and make sure it was right, but I wasn't on that committee. So then you've got to be Machiavellian. You've got to find a way to get involved. KK: So how did you do that? DG: All I remember is interviewing him with John Packer and us agreeing, "Hey, we've got to go to work and get him done." So you just keep telling everybody how good the man is. KK: When the board was getting ready to start this search, did you articulate among yourselves what it was you wanted? I'm sure you did. DG: I think they even made up a man spec of what they wanted. KK: A man spec? What's that mean? DG: A specification for what characteristics should this man have. I shouldn't call it a man spec, should say a person spec, because there are some good women executives out there. My daughter could've run the hospital. In my opinion she was the best executive in our family. That's an aside. We don't need to waste time on that. When the new president came into Rex, first thing he did was fire three vice presidents and call my daughter in and say, "You have their job." So all of a sudden she was in charge of engineering, safety, security, all the services at this plant. Before that she had run the cancer clinic and the one-day surgery, all the glamour part. He said to her, "I can hire somebody to run the glamour part. I don't know who I'm going to get to run all these services." So she is running the laundry and all those things. In fact, Wake and Rex went together to run a laundry.

28 DONALD H. GRUBB 9/12/02 page 27 KK: That's right, yes. When was that? When did that happen? DG: Oh, that's probably has been about five or six years ago. KK: There's something else I wanted to ask you about the search. Well, do you remember any of the details of that man spec or person spec? DG: No. The one who could probably tell you better than anybody else is Etta. See, Harvey might remember what it was, but see Harvey would've gone right by the man spec. Harvey is a finagler and a good man. I like him very much. But Etta would know whether one was made up. KK: OK. OK. When he was hired, did the board give him any specific marching orders? Did the board say, "This is what we'd really like you to be doing?" DG: No. I don't think so. I don't think so. I think in the interviews and in the discussions he got a feel for what had to be done. Ray's the kind of executive that came in and said, "I've got a feel for what it is. I will tell the board what I think needs to be done. The board can give me some general outlines." But the executive should be the one who's saying "Here's the direction we're going," and he should be taking the board with him, not him trying to follow the board. There were certain things that the board will say, "We want this," and they say, "OK, I'll accommodate that." But in the hospital as well as in any business, the prime mover has to be the CEO. That's really the way. I mean if you had asked the board whether they needed a rehab set up there, they wouldn't know what you were talking about. Ray has to come up and say, "We need a rehab set up and here's what we should have." He's got to start saying to the board, "We need this, we're working on plans. We'll have that for you." As I say, he starts throwing the pebbles in the lake and developing the ripples, and each pebble gets a little bit bigger,

29 DONALD H. GRUBB 9/12/02 page 28 and the ripples get bigger and all of a sudden the board says, "Where's that plan? We've been waiting for this thing." So when it comes he's got a receptive audience. Well, Ray was very good at this. KK: OK, how do you sum up the differences in Mr. Champ's management style from Bill Andrews'? DG: Well, I think Bill had reached the stage in his career where he was not the energetic aggressive leader saying, "I've got to go build this hospital twice as big as it is, and I've got to do these things." He was sort of a laid-back type of style. Keep out of trouble. That's not unusual in a lot of places and it works very well in a lot of places. Ray was the aggressive newcomer. After you've been the head of an organization, it's yours. You're not unhappy with a lot of things. A new man comes in, it's not his. So he doesn't hesitate to make changes. He doesn't hesitate. In fact, one of the worst thing that can happen is a president, a top guy leaves and then goes back six months later to see what's going on. That can be disaster for his morale. Well, Ray was the change artist. He had to change things. If he had come in and adapted Bill Andrews' style, he wouldn't have lasted. He would've been unhappy. The board would've been unhappy. He'd have been gone. He had to come in and say, "These are the things we have to do," because we had to grow. We had gotten to the point where we were starting to change the losses to make some money. But that was only the first step. We couldn't stay where we were and continue to do that. We had to move. So Bill was not a change artist. Ray was a change artist. That sort of sums it all.

30 DONALD H. GRUBB 9/12/02 page 29 KK: OK. OK. I'm not sure where this came from, but there was something written that said that when Bill Andrews made his last report to the board of directors that he said afterwards that when he first came to the hospital in 1957 he had nothing but blueprints and dreams. There was no water, no sewer, no streets, no hospital and talked about seeing the empty field where the hospital was later built, and then it said after the board approved the hiring of Champ, Andrews kicked his feet up on the boardroom table and shouted hurray. Do you remember this? DG: I don't remember that, but it could have well happened. I think once he accepted the fact there was going to be a change, and he thought about his whole situation and what was going to happen. Bill was a student of hospital administration, and he knew what was going to have to be done in the future. He knew all the challenges that were going to be there. I think he had looked at his health situation, looked at his family situation and said, "No, I really don't need to go through this." I think he was probably very relieved when the change was made. As far as I know Bill and Ray got along fine. Ray would invite him back for different things. KK: Now, Ray Champ came in for a lot of criticism from the newspapers in the mid-eighties when you were on the board, the editorials asking for him to be removed. DG: I don't remember that. KK: Oh, this was '85, and I certainly do know about the long history of the relationship between the newspaper and the hospital. DG: I used to go down and talk to the owner. KK: Frank Daniels?

31 DONALD H. GRUBB 9/12/02 page 30 DG: Frank Daniels. In fact I went down to talk to Frank one time, and he was criticizing Andrews for taking his wife on a trip. I said to Frank, I said, "Frank, you know you're criticizing Andrews for things that you do all the time. You're criticizing him for taking his wife at company expense and you're taking your wife at company expense." He laughed and he said, "No, I'm not." I said, "You're not?" He said, "No, Internal Revenue won't let me." He said, "They jumped all over my father one time about that he was such a large percentage owner of this small business that this was a personal benefit if he took his wife." So we have always paid for our spouses' travel. I said, "OK. I'll back off on that, but you know everybody else does it." I said, "You ought to get off his back." But I don't remember what they were yelling about Ray, but I know there were hard feelings there. KK: Yes. Well, some of this I think is residue from the lawsuit that you mentioned earlier, the newspaper's lawsuit against the hospital for on the open records issue. Is there anything else that you would like to say about the suit? DG: No, to me it was a goner from the beginning. Yes. That was an irritant to the newspaper, but they had young people on the newspaper who were out to make a record for themselves. How could they make a record by saying nice things? So that was part of the problem. They really had young inexperienced reporters working for the newspaper in those days, and so they were going to be critical of everything they could be critical of. KK: I was just looking quickly through my notes to try to remember what it was that they were criticizing. Let me just look real quickly. Oh, there was an issue about