Digital transformation in healthcare relies on data and analytics. Learn how data can link health care strategy with better outcomes/
Digital Transformation in Health Care with Richie Etwaru, Chief Digital Officer, IMS Health
Chief Digital Officer
Chief Digital Evangelist
Digital Transformation, Data, and the Chief Digital Officer in Health Care
Data and analytics will play an increasing role in transforming health care in the coming years. Part of this digital transformation involves connecting health care strategy with more efficient delivery mechanisms based on aggregating and using the right kind of data.
For this episode of CXOTalk, we welcome Richie Etwaru,Chief Digital Officer for IMS Health, a multi-billion supplier of health care and prescription data along with related services. Richie will talk about digital transformation in health care and explain his role as Chief Digital Officer.
(00:02)Healthcare is changing the role of data and predictive analytics are at the center of a transformation of healthcare, and today on episode 110 of CXO-Talk it is my privilege to welcome Richie Etwaru a Chief Digital Officer and my glorious co-host Vala Afshar is here as well. Vala how are you?
(00:38) Michael I’m doing great, I’m doing great. I’m so happy that you didn’t have to look up my name.
(00:49) Vala, take it away.
(00:51) Richie, it’s awesome having you on our show. First of all, I’m a big fan of yours on Twitter. So love to have a social Chief Digital Officer and you certainly are accessible, open and collaborative. So we’ve known each other in the social sphere now. I get to have the privilege to learn from you so why don’t we start with you telling us a little bit about your background and yourself.
(01:19) Hey listen guys, it is such a pleasure to be here. I’m a big fan. I said to Michael earlier that I’ve actually watched every single show.
(01:29) Oh come on! A 109 episodes.
(01:32) I was one of the first people to watch the Guy Kawasaki show, and then I’m friends with Ray so I watched Rays which was the number even or number nine, so I’ve watched them all since. I think the last one I watched was the guy from Pega Systems, so I’m probably back two, there’s probably two that I haven’t caught up on but I’m a big fan of the show.
(01:56) Well thank you. Thank you for watching. Tell us about your professional background and tell us about IMS Health.
(02:04) Yeah, so I’m a geek by design. I’m a nerd. I’m a cool hunter and I just happen to have a decent UI that people will stand. I grew up as a programmer. Born in South America in a British colony.Did everything on the IT side of the world. Started to companies sold them, got bored, came back to the corporate environment, went on the business side and then just decided that I was going to you know, change companies, and I was you know head of aviation at UBS. Came over to healthcare and wanted to study another industry. One wasn’t enough for me and here at IMS as you described it at the beginning, healthcare is going through a massive transformation. Predictive analytics is probably a drop in the bucket of the things that are going on in healthcare and we can talk a little bit about that.
(02:53) But IMS is sort of a lifeblood company, right, so if you think about industries and how they exist. You know, Bloomberg is sort of the lifeblood of the financial services industry. We are good, bad, and different what comes from an industry right. IMS is sort of one of those lifeblood like designed companies that facilitate healthcare. So we provide all of the data that healthcare runs on. Everything from scripts to Doctor information, to real-world evidence, to patient data, EMR records and that type of stuff, and we provide technology to help life sciences companies to take brands or drugs to market. We interface with pharmacies, hospitals and we have got a set of services to go around there.
(03:30)So a really interesting space to be in a really interesting size company. We’re not that big but about $4 million. So still agile but not small enough to not have the resources to do things, and we have got a really good trusting relationship with our customers and were just ready to rock and roll.
(03:48) That’s fantastic. Richie, before we get into your role, Chief Digital Officer, one of the fastest-growing C-Suite enterprise. You are also the author of a new book and you’ll see the book I guess over my left shoulder: Corporate Awesome Sauce. Success rules for generation Y. And tell us a little bit about the book and I love the title and I love the packaging, and I suspect some of the rules in this book or guidance in this book what actually position executives to be able to adapt and really deal with this digital transformation that will impact every business of all sizes.
(04:32) Yeah, you know, so here’s the thing right. I got lucky in my career, right I’ve had a very zig-zag career. I’ve gotten some really really lucky breaks early, and I think most people that have gotten this far would be lying if they tell you that luck didn’t have a little bit to do with it.
(04:51) But, some were about five years ago people just started asking me all the time. I was at UBS and I used to go out to colleges and recruit, so we recruited the best and the brightest that UBS. And folks would ask all the time, how did you do it, what did you do. You know, how did you get there? And you know, I would give really silly advice like follow your passions and get mentors and take only calculated risks.
(05:18) And I was lying, I mean those rules really don’t apply in today’s corporate environment because the pace of change is changing, and so we are seeing an acceleration of change and leadership itself has been redefined. I mean yes, you can go back to like you know, Machiavellian descriptions of leadership and assume that you can still run that today.
(05:36)The fact is most of what I’ve done is accurate in (character?) intuition. You know, instead of trying to get jobs, I would try to get fired. And in trying to get fired it allows me to take the types of risks that I would not have usually taken if I was worried about a pay check. Instead of getting mentors I would like to mentor people, because I learned more from the mentoring process than being mentored.
(06:03) So the book is really - there’s a point in the last five years where I got frustrated of just lying to folks all the time, but this is what I did, and I got caught out a few times, like, ‘I’ve worked with you, you don’t actually do any of that crap you’re talking about.’
(06:17)So you know I just wrote a few things down and I started to run it by a few friends and they are like, ‘Yeah, this is exactly what you do.’ And you know started fleshing it out and people just really responded to it and resonated with it. And at some point you know I actually pitched it to a few traditional publishers and got some buy in, and they ran me some covers, and some titles. The cover was like the boring guy with a briefcase on a ladder, and I figured I would go and name it myself and brand it myself.
(06:52) Pretty neat, so link this now to the Chief Digital Officer role. So, it’s a fast growing role and a relatively new one, so IMS health as the CDO, tell us what you do?
(07:06) So you know, I’ll create the perfect link for you. This is the book of what CDO’s should do. If you don’t know this book, this is Ray Wang’s Destructing Digital Businesses. This is the book that actually helps you to figure out how you actually do it.
(07:24) So tell us about your role as a CDO at IMS Health. Tell us about the things that you actually do.
(07:30)So it comes in three stages, right, so I described the CDO as keeping companies from having their Kodak moments. Right, so IMS is going through a transformation, so a lot of that has to do with how we looked at our P & L, and what was some of the traditional things that we sold and what we should be selling. Now there are digital autonomies is in place, so that’s the first part of it.
(07:48)The second part of it is our customers are going through transformations as well, and so from an advisory/services capability, I’m working with customers like Johnson and Johnson, Pfizer etc. to figure out how they avoid their own Kodak moments, many times within an individual brand.
(08:03) And the third part of that is to really act as an evangelist in the P&L to make sure that we’re not you know, mistakenly believing opportunities on the ground within the new economies that are being created by digital opportunities.
(08:17) And when you say Kodak moment tell us what you mean by that.
(08:21) Well Kodak was the slogan for Kodak, and Kodak actually could have figured out digital photography if they wanted but there were you know too worried about the revenues that would come from the film business, and in many ways, Kodak had their Kodak moment, and so does Blockbuster and so has Barnes and Noble. And so I refer to it as the Kodak moment.
(08:42) It’s that point when you realize that your P&L has completely evaporated because someone has replaced your products or services with something that is coming up from an entirely new set of forces in the marketplace.
(08:55) And you think that there are other technology savvy executives in companies, traditionally CIOs, why is it that Gartner believes that you know one fourth of an enterprise will have a CDO. Is it because Chief Information Officers are not guiding companies to avoid their Kodak moment? Or is there some special training, special priorities or a special mindset that a Chief Digital Officer brings to the table that your traditional IT can’t seem to deliver?
(09:27)Well I think Gartner is saying it because it’s click based and it sells research reports. But I think the CIO and I’ve been a CIO right, and a lot of times you’re struggling to become a value creating center, but for the most part you’re a cost center.
(09:46) The CTO and I’ve been a CTO as well, a lot of times you’re out in the front trying to figure out new economics above and below the P&L, but you don’t really have business viability.
(09:56) I think the fundamental difference of a Chief Digital Officer is that 49% of what you do is a general manager, right. you’re looking at bringing in products and services to the new market place and building profitability and you have product management etc.
(10:12)Of the remaining 51%, I think 26% of that is somewhere around CIO, CTO etc., and then the remaining 25% is just outright innovating, right. You have to out think, out smart, out innovate, out play, and out maneuver the competition to the new marketplace before they can even figure it out.
(10:32) So Richie, you mentioned that you are helping IMS Health customers avoid these Kodak moments or another way of saying it is examine their business models to ensure they work in the digital age. And I find it interesting that you’re helping your customers with their business models, how does that happen? It’s an outward facing role at least to some degree as opposed to just an inward facing role, regarding your company, IMS Health’s business model.
(11:09) Yeah I know, it’s certainly dual sided and I love it that way for the mere fact that it’s really still new, and we’re all sort of figuring it out, and I don’t think there’s any CDO experts as yet. Maybe there’s one at Gartner, but we’re still figuring it out right. So we’re sort of procreating it together, which is exactly what happened with CIO’s right 20 years ago.
(11:30) The marketplace is changing for our customers and as a result we have to understand how our customers are experiencing that change so that we can build products and services to help them through that change. So a sort of symbiotic relationship – does that make sense?
(11:44) Yes of course, sure.
(11:47) Now let me talk about digital transformation. Surly this goes beyond marketing, can you talk about the scope and what does that mean for the CDO as you’re trying to digitize your business. What line of business do you work with most, how do you prioritize the effort, you know, what type of input/output do you study in order to determine where to start with a $4 billion company?
(12:13)So I think in order to answer this question let’s think of coolness as an asset that can move through an organization. I think a part of what I do is I make companies cool. I think that’s a part of a Chief digital Officers job, at least in how their role is setup to that.
(12:32)So the marketing team can either be a supplier of coolness or a consumer of coolness, and my relationship with the marketing team is they’re a consumer of coolness that comes from this role. So marketing is more or less an amplifier.
(12:47)I think there was a little bit of the muddying of the waters early on about whether a Chief Digital Officer is a CMO/CIO type stuff, and I think – no offence Vala, I think CMO’s do what they’re supposed to do and it’s very important. But I think somebody got us into some silly conversations about whether a Chief Digital Officer is part CMO.
(13:07)From my perspective absolutely not. The bane of my existence is to make sure that we don’t go out of business. And so – not that we’re close to but we all have to be more hardened about the possibility as change increases and the barriers to entry lowers. I mean we’re seeing the type of industry – and I love the way John Hagel from Deloitte Edge describes this right, we’re seeing the attackers be attacked by attackers before the encumbrance or even overthrown, right.
(13:34)So my role as a Chief Digital Officer is to supply these assets, coolness, innovativeness, you know, forward thinking capability to a set of distributors. Some of those are product people, some of those are marketers, some of that is go to market, some of that is financial, reengineering of a P&L. so don’t necessarily see the chief marketing function or the marketing function as any more or less important to a transformation.
(14:02) What about the role of a Chief digital Officer beyond marketing in terms of the actual operations of the business.
(14:11)So yeah, you own that part of it, right. so you’re essentially starting a new company that has a more digitally influence products and services set that runs the P&L. that’s that part by what I mean 51% GM, so a lot of the thinking that I do is what are the new products that we can bring to the marketplace, what are the new offerings that we can bring to the marketplace.
(14:36)And a lot of those are driven because of the digitization information, processes and in some cases products. So the word ‘digital’ is sort of interesting here because we’re playing in a digitization of markets and that’s why it’s called a Chief Digital Officer in my mind.
(14:58) So here’s what’s cool, growing revenue is cool. Reducing expenses and optimizing and creating a lean environment is cool. Satisfying customers, whether they’re internal or external customers is cool, meeting and a regulatory compliance requirement in order to stay in business is cool. So is all of that what you’re trying to do that you’re calling cool or is it that mobile, social, cloud, app, Internet of Things , is it the technology that’s cool? It’s really the business outcomes that you’re trying to get to that makes it cool, right?
(15:39)So I operate in the mobile, social, wearable, cloud world, but this is a fundamental – from my perspective at least this is a fundamental study of economics. It’s a fundamental study of supply and demand, and again, it’s the core or the primary goal of a Chief digital Officer is to think about the next generation P&L, where more of the revenues will be coming from new market opportunities as opposed to market opportunities that would have funded value and creation historically.
(16:18) You know I just want to make sure I’m clear because you know, when I think of a company like Uber, you’ve got a six year old company that’s currently evaluated at $50 billion. That makes them more valuable than 80% of the S&P 500. Now, they’re cool because they took mobile, social app and delivered a better experience, and completely disrupted a 100 year old taxi business model, is that what you mean. In other words, taking advantage of…
(16:49)So a lot of the times the outcome is executed by social, mobile, cloud, wearables, censoring of the world, IOT etc., but the study of it requires a deep functional understanding of value creation, right.
(17:07)So let me give you an example. Our customers are providing molecules as chemistry as drugs for folks that are sick, right. you might go back to something like ‘an apple a day keeps the doctor away’, and you might ask yourself, whether we can commoditize information delivered as psychological treatments to actually change their behavior, right. so the doctor is saying to me, ‘hey, Vala take your drugs’. Maybe that’s not good enough. Maybe I want to think about how do I notify your spouse that you’re not taking your drugs, or your care circle or your kids, right.
(17:44)These are using information assets to drive an outcome, right. so that means that your kids would be notified that Vala didn’t take is pills today – dad didn’t take his pills today.
(17:55) Silly example, but the manifestation of this type of deep thinking about the problems of what we solve for, might be social, or mobile, or highly digital. But the problem set that you study is still a valued exchange between you and the consumer.
(18:15) You know we have a comment from Frank Scavo, whose one of the top software technology analysts who said, he’s not buying this line of reasoning and I’m assuming because the notion of the CTO being the cool factor. I’m sure there’s that element to it but doesn’t the CDO need to extend tentacles to go deep into the operations to help the company, and look at its business models and make transitions a long that way and help drive innovation that’s related to operations and business models, customers and so forth? It goes way beyond being cool doesn’t it?
(18:59)So so I don’t think by no means that cool is the only cards, so that’s a good Tweet right there, cool is not the only good currency. There’s obviously other currency. What I think is a distinction of the Chief Digital Officer role is part (? 19:16) cycle.
(19:17) Right, so a CIO is sort of horizontal but mostly vertical still. A marketing individual may think themselves as horizontal, but slightly vertical as well. a CDO is really, really horizontal. Right so I don’t really have staff. I am taking staff from various verticals to create these new opportunities. So yeah as transformation has to happen, and I need you to find the operation corridor to do that, but you have to be very horizontal to be able to make that happen.
(19:52)To simplify it and you know, I actually haven’t landed on this. I just landed on it, so that to CXO-Talk to give me a new a-ha moment. But it’s really like starting a new company to cannibalize the one that you have.
(20:10) So Richie, can you link transformation to innovation through your vertical efforts?
(20:18) Yeah, you know I think we overuse the word transformation a little bit. I think innovation by itself is a movement from one place to another and it’s constant. People tend to think of pockets of innovation as we’ve done transformation in a full circle. I don’t necessarily hone in on the word transformation that much because it kind of leads people to believe that there’s an end state or target state where it’s over. So from my leadership style or my vernacular, or my lexicon doesn’t really lend itself to that too much.
(20:51) I just read in Wall Street Journal that 45% of Fortune 500 companies still do not have mobile adaptive websites. Now, if a company in the Fortune 500 that doesn’t have the four out of 10 decides to invest and build a mobile adaptive website, would that constitute a transformational change or no.
(21:11) No and that’s just going mobile for mobile sake sometimes, so if your customers needed it you would have been you would have been there already, right. does Caterpillar need a mobile website? Probably not. Should they have one? Yeah, maybe for those one off use cases, so no, I don’t see that they’re transformational. You know when UBS went to a mobile platform for banking yeah, absolutely that was transformational, when Chase rolled out deposit a check from your phone, yeah that was transformational.
(21:40)So you know, mobility is not necessarily transformational, every time it’s transformational contextualized to the product or service that you offer right.
(21:50) So let’s explore for a moment this link between digital transformation and innovation. Can you say it from the CDO point of view, how do you link the two?
(22:34) Yeah, you see I think that is probably the most important question that we landed on within the context of the CDO, right. so can you transform digitally without being innovative? When Ganesh was on the show and I don’t think he used it and I don’t think he used this example, Ganesh from GE. So they’ve got wind turbines that they sell and you know, they’ve sold them transactional as products, right. and they were able to add a sensor to it, so that they can provide services to monitor wind information and adjust the torque of the spinning capability of whatever that is so that the thing lasts more overtime.
(23:13) Right, that’s a service on that product. Is that digital transformation? Yes because you have a digital revenue stream on top of a once analog revenue stream. Did it require innovation? Yes absolutely.
(23:26)So I think my answer is yes, you have to be innovating all the time in order to find these digital revenue streams on top of these analog type streams that you’ve had in the past. Can you haphazardly land on some and not necessarily innovate? Yeah, probably, but innovation is a big part of what I do.
(23:44)You know, reflective thinking of the customers journey is a lot of what I do. I got to be able to study what do we sell, why do people buy it, who are they buying from our competitors, what would they want to buy tomorrow. And then based on a set of inventions that are there, whether mobile, social, Internet of Things, wearables – whatever it is, how can we create the next generation of products for our customers.
(24:10) So let’s say you were the CDO of my company and I come to you and I say, Richie, as the Chief Marketing Officer I’m confused. I just read this super infographic from Scot Brinker and there’s 1876 tech companies selling their products specifically to marketers in 43 different categories. Richie, help me figure out how to prioritize which technology company do we need to invest in. how would you help marketers today that are essentially drowning in an ocean of tech being thrown at them to help them improve you know their brand relevance and revenue growth so on and so forth?
(24:50)The interesting thing is that you know, Wannamaker, what was it like 50 years ago who said, ‘half of my advertising money is spent. The trouble is I don’t know which half’. And so the thing here is did we actually get better over time. Are we like only 25% we don’t know which half, or have we gotten worse, and now we don’t know which 80% is wasted?
(25:14) I think we’ve gotten worse because there is so many more channels and so many more duplications that is happening. I think we still send about 41 pounds of paper a year to the average American household and I think it’s 5,000 spam emails to the average American adult – something like that. talk about waste and marketing, right.
(25:33)So I think a lot of these vendors are thinking about how do you amplify, how do you distribute, and how do you get to. I don’t think there is a lot of folks that are thinking about how do you calculate – not only how do you get the right message to the right person at the right time, but how do you not send a long message to low in cost.
(25:48)So I would bifurcate by the way and go – and again, sometimes this is sort of the Chief Digital mindset right, it’s what problem are you solving for, what are the tools that are out there.
(25:59) I see a product on multi-channel marketing company that helps you get on all channels. My question is, so what? right, so technology can be digitally precise but tone deaf. And I did this yesterday at the IMs Client Conference; my entire remarks were around defining insight. I think insight is just incredibly overused and that’s because people are getting shut up. They are getting shamed of using big data too much and so they stop using insight.
(26:26)It’s context and precision right. Context is the art of marketing and precision is the science of marketing. Context comes from software, precision comes from data. So we just have to stop wasting on marketing and I think that will help you if we have the vendors.
(26:41) Okay, so we’ve spoken lot about the Chief Digital Officer’s role, so let’s make the leap to health care and tell us what and business models with healthcare and the role of data and the predictive analytics. So tell us about what’s going on there.
(27:00)You know this is probably the most exciting industry to be in, at least from my perspective. Healthcare has gone from what I like to call a design of questions to a design of evidence. I think it happen to us about 15 years ago at financial services. There was a point where you realized that you knew more about your portfolio that your broker. I don’t know if you guys remember that point, but I think we all landed on it somehow. Healthcare is having that moment right now, right.
(27:28)We’re starting to realize that in many cases the consumer, which is the patient or a doctor depending on where you are in the supply chain knows more than the supplier. Right, then this is the democratization on the information – all the Wikipedia’s and web MD’s of the world. We’re getting to a point where the doctor is becoming the patient’s second opinion. So they’re self-diagnosing and then going to the doctor for a second opinion and then they get out and look for a third opinion on Twitter and read Vala’s Tweets to try to switch drugs.
(27:58) so that whole shift in the information ecosystem is driving a lot of change here. So healthcare companies, they need a lot more evidence, they need to know more. You’re no longer providing answers to questions or matching questions to content, which was what financial services was right. we don’t know anything about the stock market, so the broker basically just provided answers to us.
(28:19)So the consumer side of the industry has evidence so we really need to understand context very, very, very properly. So it’s a deeper study of information. It’s a more precise study of information and I think we are getting closer to understanding each customer to a segment of one. We’re not there as yet, but as patients specifically I think that’s very important for the doctors specifically.
(28:42) So when you say, be specifically, what is actually happening when you sat understanding the patient as a segment of one and so forth. What’s actually taking place and what’s the mechanism driving it?
(28:56)SoI think there’s three large forces. One is patients have more information and so they can make better decisions about care. Right, so the sanctity of the doctors bubble is bursting – what does that mean? It means that whatever prescription you write you’re going to have low (effort? 29:12) on it or it will be swapped out by some sort of alternative medicine, whether that is a generic or some sort of preventative stuff, or some sort of black magic from some craze, that’s the first part of it.
(29:23) The second part of it is from a regulatory standpoint the entire economic of the industry is changing because of Obamacare and the accountable care organisation model, where doctors are not necessarily – they are practicing less as of what we thought of what doctors are and more as nine till five workers because they are looked at from an outcome and efficiency perspective, so that’s the second.
(29:43)And the third is just a supply site, right. So this single molecule supply is falling off and we’ve got to figure out how to find new cure for different types of diseases and there are not a lot of blockbuster diseases left and it is a lot more specialty diseases. And so the launch of a big blockbuster drug that has a reach of 3 billion is probably going to be very scarce. Now we are looking at therapeutic classes that have patients that are 250,000, and how do you bring a drug like that to market and how do you make an investment case to capitalize the R&D needed to cure for some of these drugs that only affect 200,000 people. Right, it’s sometimes they are called orphan drugs and sometimes they are called specialty drugs.
(30:23)You think about those three things moving together at the same time, and then you add on social, mobile, big data and all of that type of stuff on it. I mean this couldn’t be a more exciting time for a CDO/T.
(30:36) So we have a question on Twitter from Frank Scavo and he asks, how has IMS Health monetizing prescription data, and what does that mean?
(30:48) Yeah you know, I think there are always where we are using information obviously within the right privacy constructs and to the right compliant constructs to help pharma companies and other entities in life sciences a better understanding where patients are so that we can deliver products to those areas. Sometimes it’s geographies, sometimes it’s countries, and sometimes it’s just pockets of people that have economic instances that are economic realities, where we can steer our customers to be able to bring better services.
You know, co-pay cards for example, is a really really interesting service that we provide that allows us to inform our customers about where there are patients who simply can’t afford drugs.
(31:35) So the role of data, talk to us more about the role of data in digital transformation and specifically in healthcare. Especially IMS Health is a multibillion aggregator of data, so I think this strikes particularly close to home for you.
(31:55) Yeah, we have actually grown the data aggregation business quite a bit by pulling in new vocabularies. Right, and I think real world evidence is part of that. I think growing geography to be able to cover more of the world is a big part of that as well. This is a precision business right, if you do something wrong here you know it’s not like you lose your 401K – people die. And so information is at the core of getting life sciences correct, and so this is one of the reasons why you know, why we are so passionate about how we help our customers.
(32:32) The other side of a new information supply chain that is starting, which still needs to be understood is what wearables and the centering of the world is doing, right.
(32:41) So, if we just pivot for a second and stop thinking about old world data and start thinking about New World data, right and you think about the sensors that measure your heartbeat 24/7 365. Well, unless you are chronic patient that is kind of silly to measure your heartbeat 24/7/365 because you are probably driving hypochondria more than anything else, because my heart is racing right now – my battery power is at 4%.
(33:10)So, there is a fallout going from where we are sort of capturing too much information that can drive hypochondria to create noise. So if we think about wearables and that new dataset for healthcare, that will drive the digital health and sort of evidence to the human body, we’ve got to think about the frequency in which we measure them. And what that means is that I don’t have to measure my heart you know, passed once a month in order to get value out of it, if once a week doesn’t really help me that much, and then once-a-day creates hypochondria, and we actually going to weigh these things? Probably not. Are they going to be embedded in our beds and steering wheels? Yes. Will the pharmacy become the smallest hospital with the biggest wearable? Absolutely. Well ATMs become the smallest hospitals with the biggest wearable? Yes, because they have figured out delivery and privacy already.
(33:57)So these are the types of thingsthat a Chief Digital Officer is sitting and going yeah, it’s great that Silicon Valley can build the next smart watch or Fitbit but let’s think about the problem differently.
(34:07) We have a question – and I realise Ritchie that at any point we can lose you, Brian Fanzo on Twitter asks, curious with all the change and the growing technology, you know how do you hire those with the proper ‘Swiss army knife of skills’, talk about hiring into your organisation or working for you, what do you look for candidates as a CDO?
(34:37) Yeah, look I look for people that have done different things. I look for people that have done a lot of different functions, and I think about people who have worked across different industries. This is not the type of job that has a vertical trajectory. On any given day I am meeting with product, marketing, communications, operations, compliance you know, it is a very very horizontal looking job.
(35:05) You know, someone asked me you know the last time I was on one of these sort of interviews whether I thought the CDO would be the tech like seat level of job that would probably likely make CEO easier than a CIO or a CTO, and absolutely yes because you have a GM component to it and then you are operating and output.
(35:25) Do you use start-ups as a external source of innovation to supplement your own internal innovation efforts?
(35:35)Absolutely and we acquire as well, right. So you know, we think about partnerships as again supply and demand. So perception, there are suppliers of perception and there is delivery of perception – I’m sorry supply and delivery right.
(35:50)There are products, they are process, a platforms, so we look at innovation as well. Inside and out, there are people we supply from and we’ve worked with some folks, and we’ve made acquisitions. I think IMS has acquired Aperture two years ago, a Seattle-based start-up company and you know, we are probably going to get into some hackathons and it should be interesting to see whether we can do the type of work that Boxx is doing and the CTO of the US with some of the healthcare data that the government has and to be able to spin off some of these new market opportunities.
(36:20) We have a question from Twitter again, I look at my questions on Twitter and the ones from Twitter are much smarter, so Zachery Jeans asks, will we see crowd funding enter the drug/healthcare industry and if so how.
(36:38) Yeah, and Zachery Hi! Absolutely, right so here’s the thing. That when you think about this type of massive change inside of an industry, the word for me that describes the outcome is democratization, right, and if you think about Uber and or in many ways, the entire collaborative economy is about democratization.
(37:02) Right, so as barriers to entry lower, and connectivity increases, right because of the networking of the world there is going to be a democratization of everything. Yeah, should there be the equivalent for quick starter for drug discovery? Absolutely.
(37:18)The challenge here is that you know, the cultures haven’t blended as yet, right, so the scientists of the world and not necessarily Tweeters. I can’t tell you of how many brilliant inclinations I’ve found that have never watched a TED talk, write one brilliant inclination that I’ve found that don’t know that kickstart exists.
(37:35) So, there is sort of like a cultural crossover that has to happen with healthcare to get some of the brighter minds to leverage some of the new economy type tools or thinking. But I think we are absolutely there, especially in the specialty markets where you might find you know, very wealthy individuals that want to pull together in certain things. Lime disease is a big one, and I mean there is some indicators that lime disease is one of the next global epidemics that could potentially be upon us, and the way we measure (spyroties? 38:03) today is still largely outdated.
(38:09)You mentioned measure, how do you go about measuring the results of what you do as a Chief Digital Officer.
(38:21) It’s very difficult. It’s probably one of the most difficult things I deal with every day, and so what I do is I also help on the business development side. And so in that second half of my job where I’m working with customers, at least I help to drive revenues, right. But core to the transformation side, like any Chief Innovation Officer would tell you it’s very very difficult. I think as we start to realise that some of these new products and services, we are going to be able to see some revenue impact all we are going to see some profitability on this sort of, you know second company that supposed to cannibalize the first one, or at least be adjacent to augment. To me, it still early and it is probably one of the most difficult things that I deal with.
(39:03) Okay, so we’re entering the segment of the show where you’re going to get hit with tough questions. And I’m going to keep going to Twitter because they have one of the top tech analysts in the world Esteban Kolsyk asking a question, he starts with the comment, you know the questions and scenarios that we are discussing are just evolution on current models, so what is truly disruptive or revolutionary today in healthcare from your CDO perspective.
(39:30) First of all I’ve got to say hi to Esteban as well…
(39:35) You knew the hard questions were going to come from Esteban.
(39:40) You know, I think when we look at this stuff and again it is an issue of supply and demand, right. So real world evidence I think and arguably has many different things; it’s real world data plus real world evidence. Healthcare, very largely has been – I stumbled upon a molecule that happens to be a therapeutic class of sickness, so let’s make a gag, right.
(40:10) We really haven’t studied the demand side of sickness enough, we are prevention enough, but with things like wearables and being able to have sequence to human genome and being able to use cascading lasers and spectra microscopy, to be able to evidence the demand site that the business bears. We are going to find things that are wrong with the human condition, that we will then go and look for brands, as opposed to finding brands. You know like many people would laugh and debate that restless leg syndrome was made up, right.
(40:45) Hey guys I’m at 1% and I was wondering whether we should close off sort of a little bit more smoothly than me passing out virtually.
(40:57) Okay, then let’s close off and offer the audience a piece of advice for organizations who want to undertake a digital transformation. What are some of the key challenges that you have seen and how do you overcome them? And you can talk as fast as you want to get the information in.
(41:17) I think it’s about operating corridor, so you really need to get a buy in at the executive level that we do not believe that the model that we have today is going to withstand 40, 50, 60 years.
(41:33) I think you have to find the operating corridor and it starts with the CEO that has the foresight. Most of the CEO’s that have the foresight are able to push back on a board and the stakeholder says, yeah, you know what your quarterly results are not going to be amazing for the next three quarters and they are either going to be a little bit less than amazing and I can tell you, we’ll be around for 30, 40, 50 years as opposed to getting you really good quarterly results in the next three or four quarters, but I’m not sure that 20 years from now we have a strategy.
I think when you can find that operating corridor, you’re going to be a CDO that’s going to have fun. If you don’t have that operating corridor you’re going to have a difficult time, and it’s about that we live in a attack of quarterly performance, and if you look at that attack and the pressures of Wall Street, it’s very unlikely that you’re going to have a 20 year strategy.
(42:25) Richie, thank you very much for dropping all that science on us in the last 42 minutes. Really glad to connect with you on our show, and I look forward to writing a summary of your thought leadership and appreciate you being on our show.
(42:42) Hey man, listen…………
(42:46) Okay, and just as his battery died…
(42:51) You know Michael, I think he was going to say, you guys are really smart, love your show and I hope I can come back. I think that’s what he was going to say.
(42:59) Absolutely Vala, that is definitely what he was going to say. So, we have been talking about the Chief Digital Officer role and some digital transformation with some intersections into healthcare on episode number 110 of CXO-Talk. I am Michael Krigsman, with my gloriously fabulous co-host, Vala Afshar, and Vala I hope that your weekend is full of innovation and digital transformation.
(43:37) and disruption. I don’t want disruption and I don’t want to transform my weekend either, but I do want to know who is our guest next week, because I believe that we have a pretty extraordinary guest.
(43:48) Our guest next week is Tim O’Reilly.
(43:52) Tim O’Reilly, of O’Reilly media, fantastic. I hope that all you guys that are watching tune in and we have a very very extraordinary guest not unlike any of our previous guests next week.
(44:03) All of our guests are amazing and I would like to ask everybody before you go, would you please sign up for our mailing list because we’d like to know who you are, and we would like to give you special things that are you’re going to find useful and compelling. Okay, see you next time everybody, thank you for joining, bye bye.
IMS Health www.imshealth.com
Johnson & Johnson www.jnj.com
Published Date: May 15, 2015
Author: Michael Krigsman
Episode ID: 110