Cardinal Well being is without doubt one of the largest healthcare giants in America, supplying medical merchandise and knowledge options for over 90% of U.S. hospitals. However only a few years in the past, its working earnings plummeted $300 million as some segments struggled. When Jason Hollar took over as CEO of the Fortune 500 firm in late 2022, the enterprise turnaround required some severe robust love.
“This idea of relentless simplification and ruthless prioritization was the cornerstone of the change administration and the technique,” Hollar tells Fortune.
“And I take advantage of the phrase ruthless for a really explicit cause, to place slightly little bit of an edge to it, as a result of I didn’t need individuals simply to reprioritize the whole lot they’re doing. I needed them to cease doing sure issues.”
Earlier than Hollar took the reins, sure segments have been costing the $38 billion well being care firm lots of of thousands and thousands of {dollars} every year. Cardinal Well being’s non-GAAP working earnings fell 12% from $2.3 billion in 2021 to $2 billion in 2022, whereas non-GAAP web earnings plummeted 13% from $1.6 billion to $1.4 billion in the identical timeframe. So on his first day as chief government, Hollar laid out a cutthroat sport plan to deliver Cardinal Well being again to its former glory, together with slashing enterprise segments and slimming down the corporate. And to date, it’s labored—the enterprise’ working earnings for Q3 of the 2025 fiscal yr hit $730 million.
Often ruffling feathers is a serious concern of incoming chiefs. However maybe surprisingly, Hollar says that Cardinal Well being’s employees weren’t simply on board—they have been itching for an overhaul.
“[Cardinal Health] is a good place to work. However [employees] have been getting annoyed as effectively that we weren’t succeeding,” Hollar says. “It’s nice to be with a fantastic group of individuals, however individuals wish to win, and we weren’t profitable as a lot as we may have.”
Hollar’s first days in workplace: slashing segments and halting M&A
It’s no simple feat to show round a heritage firm like Cardinal Well being that’s been working for almost 55 years. However Hollar’s “ruthless” strategy was the juice the healthcare enterprise wanted to get again on monitor.
The 52-year-old government first joined the Fortune 500 enterprise as CFO within the thick of COVID, when the enterprise was reeling from uncertainty round these pandemic-era modifications and product liabilities like opioids. The corporate had a big stability sheet restructuring, and a few latest acquisitions from prior management have been driving operational challenges.
Two years later as CEO, he had the intensive data base to show issues round rapidly—so he exited product strains, pulled Cardinal Well being out of a “vital quantity” of nations, and bought off its non-healthcare portfolio.
“There have been quite a lot of modifications carried out in a fairly brief time frame,” Hollar explains. “I noticed that some poor choices on capital deployment was a major driver of a few of these working challenges. So I believed if we did fewer issues, [if] we simplified the operations within the group, after which took these sources and reprioritized it to the faster-growing components of the trade within the enterprise, that we may very well be much more profitable.”
Cardinal Well being’s Medical section, which manufactures surgical and laboratory merchandise, additionally wanted an entire revamp—it had misplaced $16 million in only one quarter, previous to Hollar stepping in. The CEO additionally elevated its capital expenditures and promoting, basic, and administrative bills (S&GA) in speciality progress initiatives. Concurrently, Hollar streamlined Cardinal Well being’s focus. Throughout his first 18 months, he didn’t pursue any vital M&A, and as a substitute put all his power into present merchandise and shoppers. The enterprise later acquired Specialty Networks in 2024 for $1.2 billion.
“It was an absolute pivot from the place we have been. We have been making an attempt to develop in so many alternative methods. We weren’t doing any of them rather well,” Hollar says. “Our service ranges improved dramatically, our productiveness, our effectivity, and even issues like security and high quality are at significantly better ranges. My philosophy is which you could’t simply do among the processes higher among the time—all [are] deep-rooted success throughout the board…otherwise you don’t do any of them effectively.”
Not altering the tradition, however lastly placing within the elbow grease so all staff ‘win’
It wasn’t simply the extra technical facet of Cardinal Well being that wanted a facelift—Hollar says workers have been completely happy to work there, however have been a bit dejected by latest losses. To construct up morale and at last get staff on the “profitable” facet of issues, Hollar delivered an sincere reality.
“I advised the group, ‘There’s one worth we don’t present up with each single day, and that’s accountability. That’s the one we now have to work on,’” Hollar says. “We’re not going to vary the values, we’re not going to vary our mission and imaginative and prescient. What we have to do is we truly simply have to stay as much as them.”
Hollar says he knew precisely what management shake-up would assist him obtain his mission. He separated three of his eight direct reviews, eliminating two of the roles totally. By restructuring the enterprise, he was ready so as to add one other three direct reviews. Hollar was altering up his personnel, and shifting quick—which he says proved to workers that his dedication was stronger than simply platitudes.
“[I] demonstrated to the group that these are much more than completely happy phrases, these are our precise actions, that we’re going to place sources behind the technique that I laid out,” Hollar says. “In the end that led to $5 billion of M&A that we’ve carried out over simply the final 18 months.”
