Tivity Health CEO Donato Tramuto is well-equipped to lead the Tennessee-based fitness and health improvement program provider, with more than 35 years of healthcare industry experience and a deep commitment to global healthcare access.
As CEO, Tramuto executed a big turnaround in Tivity Health’s performance by harnessing the lessons he learned through a number of adversities he’s endured and overcome over the course of his life, and engineered a creative sale of one of the company’s non-performing divisions, adding nearly $1 billion of valuation to the company. In 2008, Tramuto founded and served as CEO and chairman of Physicians Interactive Holdings (now known as Aptus Health), a global provider of insight-driven digital engagement solutions for healthcare professionals and consumers.
In 2011, Tramuto founded Health eVillages, a non-profit organization which provides state-of-the-art mobile health technology in some of the most challenging clinical environments in the world. He is also the chairman and founder of the Tramuto Foundation, which helps individuals and organizations achieve their educational and healthcare goals.
Chief Executive sat down with Tramuto to talk about the turnaround at Tivity Health, how his personal leadership style has evolved over the years and the story behind Health eVillages. Here’s what he had to say.
The keys to Tivity Health’s turnaround after he took over as CEO
When I came on board three years ago, remember I had been chairman for a year, and I have to be perfectly honest with you, when I was chairman, the board had asked me to step up to be CEO. I turned them down. I did not believe that I could do this again, having done it many times before. I knew that this would be an enormous amount of effort, and quite frankly, I didn’t want to move to Nashville and, I look at those reasons today, and I say to myself, “Wow, that would have been a huge mistake.” But I finally did accept the position, and I did what I had normally done. My appointment was announced on August 5th of 2015, and I literally spent from August 5th until the day that I actually took over, which was on October 29th, I had met at least half of the employee population, either by phone or in person.
So that’s 1,500 people that I had interviewed. And I shocked a lot of people. Many of them would say, “I’ve never spoken to the CEO in the 10 years that the CEO had been here,” or, “Gosh, nobody has ever asked for my opinion.” I followed the advice of my favorite philosopher, “You don’t want to make the wrong mistake,” and I didn’t want to make the wrong mistake. And I knew I would make mistakes, but I wanted to make sure that I could jump off the diving board with as much information and knowledge as I could possibly gain.
And I’ll tell you, when I assumed the position on October 29th, I have to be perfectly upfront: I knew what I had to do. We had two divisions. We had one division that was losing a lot of money. I had another division that was making money, but when you combined the two divisions together, we were still losing money because the one division was losing just enormous amount of money every single year. And so I knew that my choices were the following: to try to save it, and I did not want to be the Don Quixote. I didn’t think that this was worth the dollars and the time, yet I didn’t want to shut it down because I didn’t want to put 2,000 employees on the street. So I used my collaborative IQ, which I talk about in my book. I am a firm believer the higher your collaborative IQ, the more you can get done. And so, in the first four weeks, after having tons of data, and having had an enormous amount of understanding of what had happened over the years, and why would we not be able to save this division under public scrutiny. We’re a public company, and we’re trying to repair and save, and at the same time, meet quarterly earnings and be in the limelight and the spotlight. I knew it couldn’t be done. But I did believe that we could do something creative.
And I brought this to the board about a month later, I had enough data. The board could not at all argue with the data that I had. I was able to show them how I thought we could get the company profitable. I was able to walk them through what I believe could be the future for the company, and I was able to walk them through what I thought we could do to move that division that was losing money, to move it into an organization where it could grow and it could survive. Fast forward into 2016, we did something that had never been done before—we actually had paid another organization to take that division. Now, mind you, we had put a billion dollars into that division that was losing money, and now we’re about ready to pay someone $25 million to take that division off of our hands.
If you look at my past, I think when you’ve been through as much adversity as I have been through in my life, that you’re no longer fearful of the impossible. Having lost my hearing at age 8, and having had limited hearing over a 10-year period. Having been bullied, having been made fun of, having lost my brother in a car accident during that time, then my sister-in-law died in childbirth during that time, my grandfather was shot at his clothing store, in a robbery. Having had all of those adversities, including what happened to my friends who lost their lives on 9/11, and I was supposed to be on that plane. Having had all of that in the backdrop, I think what you learn as a leader is to understand how nothing gets done without people. How nothing, in terms of the decisions that you make, get effectively done without taking some risks. And how creativity and innovation can only be sparked by your knowledge of what other people believe you should do.
I think that this decision I made, I have to say, it turned out to be a very successful move. But I’m not sure that I would have made those decisions had I not had the experiences of my own adversity, and my own perspective of how courage, and how collaboration, and how innovation is not about innovating, but it’s about integrating as well. If I didn’t have all those experiences, I can tell you that I’m not sure that I would have come to the same conclusion that I came to two years ago in 2016, which was to move this division over to someone who I had had experience in terms of working with, and that was Jeff Arnold. And the commitment about people, that I could have shut it down and put 2,000 people on the street, but I was committed to showing some compassion, and gaining, if you will, confidence from the board, through my collaborative skills over a 14, 16-month period.
How his personal leadership style has evolved over the years
I think a lot of my own compassion, and my understanding of how to treat people certainly finds its origins in the difficulties that I had, and the perspective of how people helped me through it. And how I believe that each person does bring a unique potential, and it is the responsibility of leaders to unleash that potential, no different than what I did in the business model of getting the division that wasn’t doing well into somebody else’s hands. And so I think a lot of that was crafted during those 10 years when I was isolated, and those 10 years when I immersed myself into reading, and really understanding the success of other leaders. Now, the reason why I like your word evolution, because what happens is that then you go into the business world, right? And I think when you say you’re a compassionate leader, I think that many of the tough leaders equate that to weakness. And I do think that there was a period of time when I had graduated from college, and I took my first job in business, that I wasn’t as compassionate. And partially because I watched other leaders who were not compassionate, and I thought that that was the right model, and the right direction. Well let me tell you, those earlier years, I’m not afraid to share with you, that I failed a lot. That I wasn’t as successful as I think I have seen in the last 25 years.
But I will say, the first 10 years of my career, I watched and observed, and I was convinced that what was in my internal compass was not correct. But I changed that. I had an event that happened in the mid ’90s that changed my perspective immediately, and it was an acknowledgement that compassionate leadership does not equate to weakness. That it is a segment of being strong, because you’re not avoiding the tough decisions, what you’re doing is you’re building the kind of trust, and you’re instilling the kind of compassion where you can get people to follow you, and believe in you, and where you can get people to really understand the strategic comparatives of the organization. So I think that, for me, it’s been validating, if you look at what has happened in my career from 1993 onward.
On what inspired him to create Health eVillages
I really think you have to go back to September 11th, 2001, which changed my life. I’m a firm believer that nobody cares what you do until they know why you do it. And I don’t think that I had a clear sense of mind why, until the events of September 11th, having lost my two friends and their three-year-old son, and having changed my flight ticket the day before to go out to LA, and recognizing that I could have been one of those 3,000 individuals who lost their lives. It was a significant wake up call. So since 2001, I have really developed this notion that nobody cares what you do until they know why you do it. And quite frankly, companies can have double bottom lines, that you can be profitable, and you have to give back, and you have to wrap your arms around a cause. So in 2001, we launched the Tramuto Foundation, which has been now a very successful organization, granting college scholarships to young seniors, high school seniors, who have had some challenge in their lives. We’ve put now more than 70 students through the program. These students now are employed in major organizations. We mentor them. We’ve helped out hundreds of organizations whose desire it is to make the world a more just and fair place.
In 2011, I was on a plane heading to Europe, and I came across an article that still haunts me to this day, and that is in our lifetime, one billion people will go to their graves prematurely because they never had access to a healthcare worker. Six million are children who die each year, because they had no access to a healthcare worker. I found that absolutely horrifying, that the most advanced time period in our lives, that we could actually accept that 15 percent of the world’s population is doomed because of their zip code. And so, I launched Health eVillages because I had this perspective that perhaps maybe what I was doing in my commercial organization, I was the founder of Physicians Interactive, which developed a medical app that could be used by physicians and nurses across the entire world, I had this perspective that if I could donate the medical app to an organization, a non-profit organization, could we reduce that one billion number? I’m not that naïve to think I could eliminate it in my lifetime, but I was determined to make some dent in that number. So, Health eVillages was launched in 2011. It is all about collaborative IQ. We only have a few individuals that work in that organization. What we do is we collaborate with organizations whose staff members are already positioned in a certain country or region, and we provide them with support, whether it’s the technology that we have donated, or whether it’s my picking up of the phone and using my network, and contacting individuals, like I did in east Africa, in a small village. They did not have a cell tower, and I picked the phone up and I called one of the companies that provide internet access, and basically got them to donate, if you will, the cell tower.
Or if it’s the need to build a maternity ward, as we did. I picked the phone up and called my friends, and we raised a half a million dollars, and we built a maternity ward, so that the mothers who are expecting their next baby will not have to deliver a baby on the dirt floor. We have reduced infant mortality from 100 deaths per 1,000 births down to 20 by bringing our medical technology and working with the local community in Mawala, a small little village in east Africa, working with them to educate the villagers to use the mobile app to identify who in the community has a high risk factor in terms of their pregnancy, and getting them to a community health center, to working in south Sudan where we have donated an ambulance. And the reports are coming back that we’re saving lives every single day. And so, Health eVillages stands for heal the villages, and it’s been a remarkable opportunity to make this world a better place through some of the initiatives that I’ve just identified.