Sergio Melgar Brings Steady Leadership to Organizations in Crisis

By Billy Host, Hispanic Executive

Sergio Melgar says at his current age, most mornings start with slightly painful physical reminders of his UCLA soccer years. During his junior year, a fractured vertebrae kept him out of action for most of the season, and he had to retrain his body to play in a completely different way. Nevertheless, Melgar still managed to letter that year—while also taking graduate-level business classes.

Sergio Melgar, EVP and CFO, UMass Memorial Health Care Photo by Robert Carlin

According to Melgar, who currently serves as executive vice president and CFO of UMass Memorial Health Care, his morning aches are a minor price to pay for what an early dedication to sports opened up for him, both in terms of employment opportunities and, more importantly, a leadership style that doesn’t just encourage but demands teamwork. “Nearly forty years later, those principles I learned on the soccer field are the same ones I use today in leading teams,” Melgar says. “Without soccer, I’m not sure I would have wound up at my first real job.”

Winning as a team, losing as a team, and growing as a team has earned Melgar a reputation for being the person to call in a crisis. And in forty years, he has yet to see a yellow card.

One Team, One Firm, One Experience

Melgar believes soccer is what got him his first (and perhaps most career-defining) role at Arthur Andersen, one of the world’s most prominent accounting firms. His coach—Siegfried “Sigi” Schmid, esteemed for achieving the most wins in Major League Soccer history—had encouraged Melgar to pursue business with the same tenacity he pursued soccer success. Indeed, Melgar’s record as a letter-winner in soccer and his heavy graduate workload set him apart from other undergraduate applicants.

Ironically, Melgar was originally discouraged from playing soccer at UCLA because of the institution’s size. He wound up starting his freshman year, though, and was given similar advice about joining the team as he was about joining Arthur Andersen. “I was told that they were sort of the blue bloods of accounting,” Melgar remembers. “But I went anyway and had an absolutely fantastic time.”

Immediately, Melgar saw that the teamwork mindset of soccer translated perfectly to his work at the firm. “Arthur Andersen had a one-firm concept that effectively made you work as a team across the entire organization,” Melgar explains. “They made you go through the same exact training. It was almost like a boot camp. We were all shipped to Chicago, and you all had that commonality of experience by the time it was finished.”

No matter the office location, members of the firm felt at home with each other and in their environment. It created a lasting impression for Melgar—and influenced how he would lead his own teams in the years to come.

Steadying the Ground

Melgar’s ability to make anywhere feel like home has served him well, especially in difficult circumstances. He returned to UCLA in 1994 as the first CFO of what would become UCLA Health, but the ground had literally shifted under his feet since he had left. The massive Northridge earthquake of 1994 had damaged the UCLA Medical Center so severely that it was estimated to take a decade to rebuild. “The whole time I was there was essentially a crisis period,” Melgar recalls. But in guiding the organization through that period, the CFO cultivated a reputation for finding the funds and the steady hands for building even amidst intensely challenging circumstances.

Later, as senior vice president for health affairs and CFO at the University of Kentucky, Melgar would help a cash-strapped organization find steady ground during the recession of 2008. “The recession hit when we were in the middle of building new towers in our hospital,” Melgar says. “I had to, obviously very quickly, find liquidity so that the projects could continue.”

Melgar would once again find a way to the goal while working internationally in a CFO capacity for CHRISTUS Health, which was engaged in a deadlocked transaction in Chile. “The two sides were not communicating well, and I think my contribution to the deal was to essentially bridge that gap,” Melgar says. “It wasn’t simply translating Spanish or English; it was translating culturally what was important to the people in South America and in the US.”

Running Up the Score

Melgar came to UMass Memorial in January 2014 during a period of turmoil for the organization. “Months before I was hired, they had been literally put in ‘junk’ status from a credit perspective,” Melgar says. “So, that probably says it all. I think I was brought in because of the reputation I had developed as a change agent.”

Within ninety days, the organization that had lost close to $60 million the year before was looking to turn a profit. It wasn’t easy, and Melgar says it wasn’t one of his happier moments, but eventually he and UMass Memorial transformed the organizational culture from one that, at times, was at war with itself into a culture based on a one-team mindset.

As other leaders in the field point out, not everyone could drive transformation while also successfully unifying and strengthening an organization. “Sergio is a truly unique leader for his ability to drive radical transformation while simultaneously stabilizing an organization, instilling confidence among both employees and creditors,” says Brian Flynn, senior managing director at FTI Consulting and a long-time colleague of Melgar’s.

Through the one-team mindset, Melgar has helped create growth within the UMass Memorial system—growth that, in and of itself, makes the organization an outlier in healthcare. “The defining factor has been that we’ve empowered a workforce that is on a quest for excellence,” Melgar says. “We have a ways to go, but the performance level of this team is very impressive—and the fact that we’ve done it as a team is the most special part.”

The COVID-19 pandemic has, like every organization, affected UMass Memorial considerably. Yet the organization was able to retain its stable S&P rating amidst the crisis, and achieved its highest-ever patient satisfaction scores with the same backdrop. Melgar places the credit for these results squarely on the shoulders of his team, but it’s hard to imagine those same results being achieved without his insight and wisdom—insight and wisdom borne directly from his mornings aches and pains.

Hispanicexecutive.com