When Gail McGovern took over the American Red Cross in 2008, the organization was running a deficit and tarnished by scandal. Annual budget shortfalls ran into the hundreds of millions, and her predecessor was ousted after having an inappropriate relationship with a subordinate.
“We were in deep financial trouble,” she said.
Ms. McGovern, who held executive roles at AT&T and Fidelity before taking a teaching position at Harvard Business School, brought an executive’s eye to the problems she faced.
Bureaucracy was slashed, decision-making was centralized and layoffs thinned the organization’s ranks. The cuts were painful at times, and Ms. McGovern was criticized for putting public relations ahead of relief work.
But after more than a decade on the job, Ms. McGovern is still C.E.O., and the Red Cross is busier than ever.
While the organization is best known for its large-scale relief efforts after natural disasters, it responds to some 60,000 events a year, including mud slides and house fires. This year, wildfires in the West and a succession of hurricanes has strained the organization, which has had to reinvent its disaster-response protocols during the pandemic.
The organization also supplies about 40 percent of the nation’s blood. But those efforts were complicated early on when schools and businesses — where most blood drives take place — were closed.
Ms. McGovern said that despite the enormity of the disasters her organization was confronting, she still had hope. “I am the eternal optimist,” she said.
This interview was condensed and edited for clarity.
You were part of the first class of women to attend Johns Hopkins University. What did you take with you from that experience?
It helped me in my career. There were 50 women and 1,900 men. I had a great education there, but what it really also taught me was what it felt like to be the only woman in the room. I don’t remember taking any classes where there were other women. So you learn how to hold your own, because you have no choice.
What did you learn from the corporate world that you’ve been able to apply to your work at the Red Cross?
What is really profoundly different at a nonprofit is that you really have to not only lead with your head, you have to lead with your heart. If you explain the changes you are making through the lens of the mission, people will do anything for you. But they need to know, and understand, how their actions are going to impact the mission.
At AT&T I’d tell people to calm down. “It’s only telecommunications,” I’d say. “We’re not saving lives here. Let’s not panic.” I always was unflappable at Fidelity. “We’re just managing money here,” I’d say. “We’re not saving lives here.” That schtick does not work at the American Red Cross.
But you had to make some painful cuts when you took over.
Part of the reason we had a deficit is there was a lot of duplication. When I walked in the door, there were 720 different chapters, and each chapter had a C.E.O., a local board, their own marketing, their own email platform, their own finances, their own bank accounts, their own treasury, their own purchasing. I had 69 different contracts for T-shirts. So a lot of it was just consolidation and turning to a classic headquarters model. The first year we were able to save $15 million just by managing our purchasing function.
I didn’t hear a lot of complaints about taking all that back-office stuff and centralizing it. We withheld merit increases for a year, and I didn’t hear a peep. We had to do layoffs and I didn’t even hear much squawking about that.
How has the pandemic impacted your ability to operate?
We’re delivering our mission exactly as we should, but the way we’re doing service delivery is different. The first place where we saw the impact of this was in our biomedical organization, which provides 40 percent of the nation’s blood supply. It was kind of stunning how fast that occurred. We watched blood drives start to get canceled rapidly. Schools were closed, businesses were closed. But the team stood up new blood drives in sports arenas and parking lots.
The thing that we needed to do was tell elected officials, “Hey, you’re creating a different health crisis. You need to tell people it’s safe to donate blood.” We went to Larry Hogan, who runs the National Governors Association. He got the word out and boom, people started showing up. But then many hospitals started postponing elective surgery, so now we’re seeing we have a surplus.
And what about when it comes to responding to disasters?
The way in which we are responding to disasters has radically changed. Without a pandemic, we open up large congregate shelters and we provide cots and blankets and three square meals a day and mental health counseling and comfort. We’re face to face, giving hugs, wrapping people in blankets.
Now we’re putting people in hotels. There was one point where we had about 25,000 people in hotel rooms, and this creates some challenges. They’re spread out all over the place, so our volunteers have to travel to be where they are. We’re giving them boxed meals.
With the wildfires and hurricanes, this has been the busiest disaster year that I have experienced here.
Do you believe that is in part because of climate change?
Well, I’m not a climatologist or, or a scientist in this area, but what I can tell you is the water temperature is going up. And our modeling is not as predictable as it used to be at all.
I know you’re not a climatologist, but you’re highly educated. Are you studiously avoiding a political lightning-rod issue, or is your mind truly not made up about the scientific consensus that human activity is changing the climate and making weather more severe?
Well, I’m not trying to be coy, but I can tell you that since Covid, when everybody stopped driving around and taking airplanes, the carbon footprint is improving. So we’re definitely playing some kind of role here. But to what extent is that the only element? I mean, what I’m studiously focused on is what is the impact of the American Red Cross.
Am I trying to avoid politics? I want to tell you that one of our fundamental principles is neutrality. So I studiously avoid politics because that’s part of our psyche. And I have to tell you, it’s liberating. It is liberating. I have taken it outside of the Red Cross and into my personal life.
We’re still very much in the middle of this pandemic; we’re still in the middle of a hurricane season. What are your biggest concerns looking out for the rest of the year and into next year?
I worry about the fatigue of my volunteers. And I would be worried with or without the pandemic, because there’s just so many back-to-back-to-back-to-back disasters. It’s not healthy to keep absorbing that much sadness. I worry about them running themselves into the ground. This is going to sound cheesy, but it’s really a fact: Humanitarianism is like an addiction. You see a need, you jump in and fill it, and you just want to keep doing it. But I worry that they’re running themselves into the ground.
This is a tough time for our country, and the other thing I worry about is the need. We can give people financial assistance if their home is severely damaged or destroyed. But I worry about the mental health of the people that are impacted by these disasters. Imagine that you’re in Louisiana, you were evacuated, you’re living in a hotel room. You finally get the green light, get to go home and miracle of all miracles, your house is still standing. And now you’re getting evacuated again because of the next hurricane.
People want to help. They’re helping virtually, they’re helping in person and they are donating blood. So I have great faith. We’re going to get through this. I think this time next year, you and I will be going, “Wow, what the heck was that?” I really believe when we’re all set free from captivity, we are going to be so happy and kind to each other. It’s going to be glorious.