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Customer Value Stores Health Company Essay

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Updated: Jun 18th, 2022

Customer Value Stores (CVS) Health is an American health care innovation company that aims to help people improve their health. Its major goal is to grow into one of the most customer-centric company in the health care industry. It owns several subsidiaries, including CVS Pharmacy, CVS Caremark, and Aetna among other brands. The corporation was founded in 1963 by Stanley Goldstein, Sidney Goldstein, and Ralph Hoagland. Upon its founding, the company operated as a provider of health and beauty aid. Seven years later, it added pharmacy services. Expansion was facilitated by a merger with Melville Corporation. The two worked together throughout the 1980s and the 1990s, until CVS Corporation became a standalone brand in 1996. It has been criticized for engagement in deceptive business practices, corruption, and privacy violations. The company’s leadership can be cited as one of the primary pillars of its success.

Top Leadership Traits

The complexity of the company’s business model and its evolving growth strategy require highly skilled leaders who possess vast knowledge and experience. Moreover, they should be able to perform exceptionally in order for the company to attain its mission and vision. The company maintains that leadership can be nurtured. In that regard, leaders must master new competencies that are out of their comfort zones. Relying on natural capabilities is a strategy applied by poor leaders who fail to achieve their goals. CVS Health believes that leadership development is a process that incorporates three factors, namely coaching, feedback, and evaluation.


One of the leadership traits that can be identified in CVS Health is accountability. Accountability refers to the willingness to accept full responsibility for certain actions or outcomes, whether they are positive or negative. In 2014, the company’s leadership decided to halt the sale of tobacco products in its stores, a move that received mixed reactions. According to them, selling tobacco products and cigarettes in a place where health care services were provided was wrong (Abrams, 2014). At the time, the decision was projected to cost CVS approximately $2 billion annually in revenue, which accounted for 15% of the company’s total earnings (Abrams, 2014). The decision was difficult to make because it affected the company’s bottom line adversely. However, the leaders were convinced that eliminating tobacco products from their stores would improve the health of Americans significantly. The corporation’s leadership took accountability of their actions because their mission is to make the health of their customers better. Therefore, selling tobacco products in their stores was a violation of their promise.

The top leadership was lauded across the US for the decision because few organizations would risk lowering their profits in such a way. Tobacco products pose several health risks to the public. However, many companies ignore them because of the money they earn from selling cigarettes and other products. Giving up billions of dollars in favor of improved health outcomes is a sign of great leadership. They decided to align their actions with the beliefs that underlie their mission (Abrams, 2014). Since then, accountability became one of pillars of the company’s organizational culture. Studies have shown that employees become accountable because they see their leaders make decisions that align with their organizational beliefs.


Innovation leadership refers to a leading technique that influences employees to develop creative products and services. Innovation is one of the major characteristics of CVS Health. For instance, the company is reinventing pharmacy through its Pharmacy Advisor program and the Specialty Connect programs (Merlo, 2018). The company’s CEO, Larry Merlo, believes that pharmacy care is one of the avenues through which they can improve the quality and cost of, as well as access to health care. He argues that pharmacy is facilitating the provision of better care to the people they serve. The company is undertaking many innovative projects and programs that are aimed at attaining the aforementioned milestones. For instance, MinuteClinic is mitigating the challenge of physician shortage and an increase in the number of insured Americans (Merlo, 2018). It provides high quality and affordable care to many Americans. It encompasses a wide range of services, including vaccinations, chronic disease monitoring, screenings, and acute care (Shi and Singh, 2019). MinuteClinic are designed to collaborate with and complement primary care facilities. The CEO has also commenced a project that is focused on the application of telemedicine within MinuteClinics.

Teamwork Promotion

As mentioned earlier, the company’s main goal is to help people improve their health. CVS is made up of a diverse group of employees with different skills, personalities, and motivations. Therefore, team building is an essential aspect of the firms’ success. CVS is known for a culture of high-performing teams in which members enjoy the opportunity to perform individually (Shi and Singh, 2019). The leadership team gives team members the freedom to make critical decisions on matters that are important to the company. Team building comprises several steps that include hiring the best talent, creating teams, and allocating resources to facilitate their growth (Shi and Singh, 2019). According to the company’s CEO, caring for employees is an important leadership trait that guarantees success. In that regard, he conveys confidence in their ability to attain company goals.

One of the approaches used by CVS leaders to attain organizational goals is team building. Teams are created, comprising individual with different talents and skills. Members are then given the accountability and responsibility to make decisions and attain goals using personalized strategies and techniques. The communication of clear expectations and outcomes accompanies the process of giving members responsibilities (Shi and Singh, 2019). In order to enhance the attainment of objectives, responsibilities are matched to team members based on their capabilities. Delegation of tasks depends of individual skills. Team leaders collect feedback from members and act on them to improve their experiences.

A Major Challenge

A challenge that affected CVS health tremendously was maintaining the privacy of patient information. The company has dealt with several lawsuits involving the violation of privacy statutes with regard to sensitive data. In 2009, CVS was accused of violating the privacy of millions of patients during the process of disposing patient information. This lawsuit tarnished the company’s image because unauthorized access to any form of personal information is a serious issue. The US Department of Health and Human Services (HHS) and the Federal Trade Commission (FTC) accused CVS of failure to train employees on proper disposal methods and the failure to implement policies and procedures to guide the disposal process (Shi and Singh, 2019). The Health Insurance Portability and Accountability Act of 1996 (HIPAA) Privacy Rule requires all entities that handle patient information to keep it private.

The lawsuit was a big blow to the company. CVS was fined and agreed to toughen its information privacy practices. In that regard, they paid a $2.25 million fine to the government (Shi and Singh, 2019). In addition, they implemented a vigorous mitigation action plan that include the creation and implementation of Privacy Rule compliant policies within the company. Other corrective measures include employee training on proper disposal of patient information and punitive employee sanctions for violation of the policies. HHS and FTC took an active part in monitoring CVS in order to ensure that the corrective action plan was implemented as agreed upon (Shi and Singh, 2019). Employees no longer toss prescription bottles with patient information into open dumpsters that can be accessed by authorized people.


CVS Health was founded in 1963 as a health and beauty services company. Since then, the organization has undergone several changes into the multinational corporation it has become. Its growth in the past decade can be attributed to the leadership of its CEO Larry Merlo. The top leadership traits that can be identified from the company include accountability, innovation, and the promotion of teamwork. The cessation of the sale of cigarettes and tobacco products in all its stores was a move that demonstrated the firm’s accountability toward improving the health of its customers. CVS Health aims to be the best customer-centric health care company by incorporating innovation into its operations. Privacy has been a recurrent issue that has affected the firm. In 2009, CVS paid $2.2 million in fines for exposing patient information to authorized individuals through improper disposal. In addition to the fine, the organization trained its employees on proper information disposal and implemented policies for the proper disposal of data.


Abrams, R (2014), The New York Times, Web.

Merlo, L (2018). ‘Evolution as a health care innovation company’. Payorsolutions.

Shi, L. and Singh, D. A. (2019). Delivering health care in America: A systems approach. 7th edn. New York, NY: Jones & Bartlett Learning.

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