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Gray Matters

As the recession makes it harder for workers to become retired persons, AARP has sought fresh leadership with an executive who broke color barriers in the 1960s. A. Barry Rand aims to influence a politicized nation on the rights of people as they age.

Photo: Paul Morse

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By Rick Schmitt

During the months Congress debated overhauling the nation's health-care system, A. Barry Rand, the new chief executive officer of AARP, often heard from members upset about specific proposals or fearful of "socialized medicine." Getting on the phone, Rand tried to explain some of the advantages of the legislation. It was a hard sell.

"Since you don't like big government," Rand, MBA '73, recalls saying, "why don't I just write your name down and make sure your kid does not stay on your insurance. . . . You can continue to pay 10 times what a young person pays for insurance, and you don't need the doughnut hole [protection]. . . ."

He was referring to parts of the legislation that would permit parents to keep adult children up to age 26 on their health policies, that would limit rate increases for seniors that are based solely on age, and that would close a coverage gap in the Medicare prescription drug benefit that often has been ruinously expensive.

The rest of the conversation, Rand says, would go something like this:

Rand: "Does that make you feel better?"

Caller: "Well, no, that's not what I want. I like those."

Rand: "Well, what's the issue?"

Caller: "Well, it's ObamaCare."

Rand: "Do you realize we have been fighting for this for 50 years?"

Then, sometimes, he would relate the story of one Ethel Percy Andrus, a retired teacher and welfare worker in California who once found an uninsured and pension-less former colleague living in a chicken coop outside Los Angeles. Andrus founded what is now AARP in 1958.

"That's how long we've been fighting," Rand says, in an interview in his 10th-floor office at AARP headquarters in Washington, D.C. "This has nothing to do with this administration or any other administration. This has to do with what's right for America."

It's hard to know how many converts Rand made on the telephone. It's estimated that AARP's support of the health-care legislation led 150,000 members to resign?a big number, but one that represents less than 0.5 percent of the group's ranks.

It's abundantly clear that Rand and AARP prevailed. When Barack Obama signed the legislation into law last March at a community college in northern Virginia, Rand and two other AARP officials had seats in the front row. Afterward, "the President came up and talked to us," says Bonnie Cramer, AARP's then-chairman. "He said, 'I could not have done it without you.'"

AARP has long been one of the largest and most influential lobbies in Washington. Nearly 40 million strong, it draws unique clout from the fact that its members constitute about one in five of the voting-age citizens in the United States. Its operating revenues were $1.4 billion in 2009; at the end of the year it had $689 million in cash in the bank. But it is also a group that?just past its own 50th anniversary?is experiencing some midlife adjustments.

Founded as the American Association of Retired Persons (a decade ago, the name was changed to the AARP initials), the group no longer counts retirees as its core constituency. These days, fully half of its members are still working?or looking for work. Thanks to the recession and other concerns, they have no prospect of kicking back any time soon, and may never get the chance.

For an organization whose mission in Washington historically has focused on protecting federal entitlement programs for seniors, such as Medicare and Social Security, from congressional budget cutters, that is a big change. These days, millions of its members are years away from collecting those benefits, while struggling to make ends meet in the here and now.

From an internal perspective, AARP is a three-headed beast?in part a large and influential advocacy group; in part a purveyor of branded financial and insurance products, royalties from which provide about half the funds for its operations; and in part the provider of a boggling array of member services. Most familiar are the member benefits it arranges, including discounts on travel, gym memberships, groceries, cell phones and such. Less well known, especially to younger members, is its network of several million volunteers who work with AARP offices nationwide. Some provide direct member services such as bereavement support, tax preparation or driver's training. Some serve as watchdogs for abuses at nursing homes and other long-term care facilities. Others are foot soldiers in educating and persuading the masses about state and federal legislation, such as the health-care overhaul.

Managing all those matters is tough when, like the rest of the country, people are more polarized politically and ideologically than ever before. That fact was made plenty clear during the health-care debate. A recent Gallup Poll showed that about 60 percent of people 65 and older considered the overhaul legislation a bad idea. However, people ages 50 to 64?the other big cohort of the AARP rank and file?supported the reform effort, as did every other demographic group Gallup surveyed. No surprise there. The 50- to 64-year-olds pay some of the highest health premiums and are among the people most likely to have no health insurance at all.

"This is not your father's AARP any more," says Cramer, a former head of North Carolina's department of aging. In May she finished a two-year term as chairman of AARP's 23-member, all-volunteer board, which sets policy for the group. She and AARP officials readily acknowledge a need to modernize, and to find ways to reach out to the growing number of younger members, without alienating the organization's traditional base.

Trying to motivate or mobilize its huge membership can be as daunting as a double-sided jigsaw puzzle. You have to be 50 to join, but that may be the only demographic trait all members share. They span the political spectrum?as likely to be Democrat as Republican, or Independent. They occupy every income level and every state of health. They are Baby Boomers?and the Boomers' parents. Because minorities account for a small share of the AARP ranks?only about 7 percent are African-American or Latino?the organization often is accused of white-bread banality. But AARP is so huge that it has more black members than the NAACP and more Latinos than the National Council of La Raza. The challenge of leading them all now falls to Rand, a pathbreaking figure from the corporate world who became the chief executive officer of AARP in April 2009.

Addison Barry Rand knows something about leading social change under daunting circumstances. One of the first black salesmen hired by Xerox Corp., he helped turn the copier maker into a leader in hiring and promoting minorities and women. Later, at Avis Group Holdings, the rental car company, he became one of the first African-Americans to run a Fortune 500 company. A "son of the '60s," he once said his professional life was as much a part of the civil rights movement as bus boycotts and lunch-counter sit-ins. Maurice Cox, vice president for corporate development and diversity at Pepsi-Cola Co., says of his friend: "He may have been the first real Jackie Robinson of the business world."

Rand's business experience sets him apart from other recent chief execs at AARP. His immediate predecessor, William Novelli, came to the organization after founding a public relations firm and working on progressive causes such as an antismoking campaign for kids. Novelli succeeded Horace Deets, a former Catholic priest, whom Fortune magazine once dubbed "the second most powerful man in Washington." Rand was hired to bring a fresh eye to managing the business side of AARP, whose operating revenues have tripled during the past decade. "Barry puts a diverse face and a diverse leadership mantle on AARP," says Keith Meyer, a partner at Heidrick & Struggles, an executive search firm that worked with the AARP board in hiring Rand. "I assure you that point was not missed."

An elegant, somewhat private man, Rand grew up in Washington, D.C., the son of strong-willed parents. His mother, a schoolteacher and principal, and his father, a postal worker, stressed education and achievement. His grandfather, a Methodist minister, stressed discipline and good works.

Corporate America in the 1960s was not a welcoming place for a middle-class black man?even a young one fresh out of American University with a marketing degree. Discrimination in the hiring of blacks in scientific and technical positions had lessened, but companies still feared that their customers might not buy products from black salesmen. Just getting an interview at a major company was an accomplishment.

Rand crashed a job fair at a Washington hotel, obtaining the suite numbers of several large companies that were interviewing candidates. His source was a receptionist who remembered him from his days as a local high school sports hero. (He says he was a physical player, once fouling out of nine straight basketball games.)

"I started cold calling," he says. Knocking on doors, he got offers from eight of the nine recruiters he spoke with. One was Xerox.

Xerox had a front-row seat to the inequalities and injustices that blacks felt. In 1964, riots erupted in Rochester, N.Y., where its headquarters were then located. Then a kind of corporate upstart (its first big-selling copier was introduced in 1959), Xerox was seen as more willing to take chances. In 1968, its top management issued a manifesto of sorts that made affirmative action central to its business plan and corporate culture.

Rand was hired that same year as Xerox's first black salesman in Washington. As more blacks joined the company, he helped form support groups where black employees would meet outside the office at homes and restaurants to hone their skills and share personal and professional experiences. The "caucus" groups, which eventually became a vehicle for blacks to win more equitable treatment from management, have been expanded over the years to include forums for other minorities and women.

The first sales territory Rand was assigned included parts of downtown Washington that had been ravaged by racial violence. He became a standout performer but was repeatedly overlooked for promotions. Rand tells the story of getting a plaque from Xerox in 1970 for being the top sales representative for his region. He says he took the award home to show off to his father who took one look and shook his head.

It was a nice prize, his father said, but where was the money?

"I stood in front of him dazed by his question," Rand wrote in a 1999 essay about his Xerox career. "Don't ever let anybody fool you again," his father told him.

He took the advice to heart. Rand began setting specific income and career goals for himself. He made a list of personal milestones he wanted to achieve before his 30th birthday. The list included getting an MBA?which he did at Stanford at age 28.

The goal-setting became a lifelong habit. Years later, when he was hired at Avis, he had the company announce his appointment a few days earlier than planned, so that it predated his birthday. He had planned to be a CEO before age 55. "There was no way I was going to come so close and not achieve it," he explained in an interview for Take a Lesson, a 2001 book about black achievers.

At Xerox, Rand quickly emerged as someone who not only was driven to succeed but also was revered by his peers and subordinates. He became famous for his ability to motivate his team, once showing up in a Superman costume at a Xerox sales conference. "Barry was a sales icon at Xerox," says Anne Mulcahy, former chairman and chief executive of Xerox and a long-time colleague and friend. "People wanted to work for him. He was a talent magnet."

In 1999, however, he was passed over for the top spot at Xerox; the company hired an IBM executive who barely lasted a year. After 31 years, Rand headed to Avis, where he led the company in a period when it made big market-share gains in the United States and Europe. After Avis, he became CEO at Equitant, a major outsourcing firm, which IBM acquired in 2005. Rand has served on the boards of Campbell Soup and Abbott Laboratories, and since 2006 he has served as chairman of the board of trustees of Howard University in Washington, D.C.

When AARP began searching for a new CEO two years ago, Rand wasn't an obvious candidate. Former chairman Cramer says Rand looked, on paper, to be a businessman who grew up in a narrow professional world. More than comfortable financially from his years in the executive suite and with the younger of his children off to college, Rand was not looking for work.

But as the selection process proceeded, AARP began to see Rand as a social activist dressed in a business suit. And Rand was not without interest in the challenges of aging, having cared for his father for the last eight years of his life at Rand's Stamford, Conn., home. "It is difficult with families to properly take care of your parents. You are so emotionally involved in it that it takes over much of your heart and soul," he says. "You get to the point where you need much more sophisticated care, and most people just can't afford it. . . . I realized that aging in America was so dependent on your financial status that it was not going to be a good experience for most Americans."

He began to see in the AARP job an opportunity to have a leading role in what he saw as the defining social issue of 21st-century America: fighting for the rights of people as they age.

When Rand was offered the AARP job shortly after President Barack Obama was inaugurated in January 2009, it was not clear if the new administration would make health-care reform its top priority. By the time Rand started work in April, the landscape had been revealed and Rand faced a steep learning curve. He spent weeks being schooled by AARP experts on health policy and legislative strategy.

From the beginning, health-care reform looked like a mixed bag for AARP members: Millions without health insurance stood to qualify for free or discounted coverage, and new limits on the cost of prescription drugs, another big issue for aging workers and retirees, were in the works, too. But also envisioned were cuts in Medicare. People were anxious about the expanded role that government would play in administering and regulating the new system. Baseless claims that the plan would lead to Orwellian "death panels" denying critical care to seniors and the disabled were frothed up by conservatives.

While AARP did not formally endorse the legislation until November, its early involvement in the debate raised red flags for some seniors as Rand was settling into his new gig. Many posted anti-Rand comments on an AARP blog site. "You should be ashamed for knowingly turning your back on the very people you are supposed to be advocating for," one member wrote. "You are a disgrace."

"AARP can kiss my butt!!!" another declared in a parting shot. "I will not support this socialist org. any longer."

An Atlanta-based organization called the American Seniors Association, offering itself up as the "conservative alternative" to AARP, began to solicit the disaffected, playing on the fears about big government, tax increases and "death panels." Fighting back, Rand hosted town-hall-style meetings at AARP headquarters with Obama and other administration officials to help explain how the health-care legislation would, and would not, operate.

AARP poured millions into an ad campaign to puncture what it called "myths" that had come to cloud the overhaul debate, including claims that it would lead to a government takeover of the health system and the dismantling of Medicare. "The issues weren't around the pain that people were feeling," Rand says. "The issues were around ideologies."

Its lobbyists kept pressure on members of Congress to deliver. The final razor-thin margin meant that every vote was crucial. If AARP had been on the other side, virtually all observers believe, the legislation would have failed.

In the wake of the victory, Rand has been speaking to AARP groups around the country about how the new law will work, while sharing his vision for the organization's future. In May, Rand spent a day meeting with city leaders in Detroit where he held out hope that the new law would help mitigate current inequities in health care that affect blacks and other minorities. "We have opportunities in communities of color . . . to help reduce the disparities that kill and disable too many of our people," he declares.

The visit also promoted his goal of turning AARP into a hub of volunteerism, capitalizing on the interest of Baby Boomers who seek out public service as they age. A year ago, AARP started a website that connects people by ZIP code with service opportunities in their neighborhoods. The venture was launched in a glitzy production with the entertainment industry.

Rand got rock-star treatment from an audience of AARP members and local leaders at the amphitheater in a local museum. A city council member presented him with its "Spirit of Detroit" award. Members crowded around him for autographs and photo opportunities.

"We have 50,000 AARP members in this city," he told the crowd. "We can rally 200,000 people . . . to help rebuild Detroit."

A man with an encore career, Rand is convinced of nothing so much as this: "People don't want to sit home and do nothing with their lives. People are saying they are young enough, strong enough, smart enough, capable enough, and they say to themselves, 'I think I still want to make the future.'"


RICK SCHMITT, a former staff writer for the Los Angeles Times and the Wall Street Journal, is a writer based in Washington, D.C.

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