When tackling future readiness, organizations mostly focus on reimagining their customer offerings and experience. But what about strengthening the enterprise core business systems? How are Business and IT leaders using digital to revitalize the very foundation that will keep the business humming now and in the future?

Contributor

• • Brian LeClaire, Chief Information Officer, Humana

Transcript

Sanjog Aul [00:00:00]:
Welcome listeners. This is Sanjog Aul, your host and the topic for conversation is Strengthening Enterprise Core Through Digital. So for growth and profitability, customer focused efforts make total sense for future readiness and relevance, also, customer centricity is key, but what about the core business systems and processes and how are business and IT leaders using digital to reset and then rebuild these internal systems, which are the very foundation that keeps the business humming. Joining me is Brian LeClaire, who is the Chief Information Officer at Humana. Hey Brian, how are you?

Brian LeClaire [00:00:42]:
I’m fine, thanks. Yourself?

Sanjog Aul [00:00:44]:
Very good, thank you so much. So, Brian, as part of digital transformation initiative, I’m assuming you are neck deep in it, how are you allocating your focus, the time, energy and funding and investments towards customer facing versus the internal improvement initiatives?

Brian LeClaire [00:01:04]:
So that’s a really great question and for us at Humana, we have a philosophy of we always start with the customer and we work everything back and so there is no one individual or process or capability inside the organization that doesn’t start with what is its impact on the customer. So as we think about that, there may be times where you have an internal capability, where you have one area of the organization supporting another area, but as we think about that, when it’s doing that, it’s doing that in support of ultimately something that touches the customer and so for us, when we think about digital transformation, we start with the customer, we work back, and internally we think about it not just a digital first mindset, but we also think about a phrase, digitization and digitization refers to the enterprise. We believe we have to look at our internal processes and capabilities. We have to evidence digital operating philosophy even down into the core processes of the organization

Brian LeClaire [00:02:10]:
and that touches IT as much as it will touch areas across the business.

Sanjog Aul [00:02:16]:
So here IT has always contributed towards helping an organization run a pretty lean business operation and we have taken pride in it. Yes, we are supposed to also help with the innovation, but of course, running a lean business is one of the mantras. So if you were to look at business, asking IT what to do with respect to the internal improvements in the business processes, the way things are run internally using digital, what would those be? What are those?

Brian LeClaire [00:02:52]:
So as an example, if you think about digital, you can think about it in terms of three things. The first is optimization, and I think that’s the nature of the question. The second is around process transformation, and the third then is about business model transformation. So as we think about how we are progressing on that digital journey, we’re making investments not just to optimize the organization not just to do process transformation, but also to do business model transformation. When you internalize that for the IT organizations in general, and we have as well been on a journey from being very focused around cost to transitioning into how to deliver and think about solutions ultimately to how do you drive value creation and so when we think about IT at Humana, it isn’t simply about how do we optimize the organization. That’s a very important aspect of what we do, whether it’s investing in self service capabilities that deliver to a Humana mobile app or through the website but it’s also been about process transformation

Brian LeClaire [00:04:03]:
and a good example of that is in our large group business area that has been driving on a major initiative. It’s called launch my group, which is how do we reimagine the process of prospecting group sale all the way to enrolling the members of the group and that being an entirely digital experience and so when we take the technology organization and internal operations, that also then feeds into this idea of how do we create a digitized enterprise and then we can leverage that, whether it’s to optimize an existing process or do process transformation and the example I gave is to launch my group in our group business area.

Sanjog Aul [00:04:43]:
Now was this that the business sought these changes or it said we can deliver, Would you like to try?

Brian LeClaire [00:04:52]:
So for us, we’ve been moving around this whole idea of how do we become an agile enterprise and the idea of being an agile enterprise says we can’t think vertically in stacks. Our customers experience us across those parts of the organization that we tend to think about as staying in our organizational swim lane. So the first thing we had to do was again go back to that, start with the customer and work back, think about the experience that we deliver and then bring the organization together in agile teams and in agile ways, meaning cross functional small business teams or teams and then how do we bring the right talent, the right process change and the right technology to deliver and so if an example was today, I was in a meeting with parts of the organization and they were speaking about how members of the team view themselves as part of the team and they’re not coming to the team as I’m from IT or I am from the business. In fact, when we use phrases like that, we’re drawing arbitrary distinctions between individuals in one department versus in the other. So the IT organization is as much a part of the business as the business is and so when you get into where is it originating from, it actually is starting with the customer and the customer need

Brian LeClaire [00:06:17]:
and that way if we focus starting with the customer, we break down this tendency to see where these distinctions should come from and good ideas flow from that customer advocacy and what they need back into these working teams. Hopefully that addresses your question. It’s you have to shift how you think about the problem space not from where you are as a role in the organization, where you then tend to wrap the customer around your internal processes and distinctions, but start with them and wrap around them the customer and those delineations of where the good ideas may originate from actually fall away and the good ideas originate from the need that the customer has.

Sanjog Aul [00:07:04]:
So let’s calibrate how far and deep are we going with strengthening the enterprise core? So let’s take an example of a core business function like legal or procurement where we are heavily dependent on contract management. So the question is do you just stop at digitizing paper documents or are you actually making the operation smart by incorporating digital enabled innovations like automated contract review and approval, etcetera.

Brian LeClaire [00:07:35]:
So to answer that question, we’re doing both. This goes back to the distinction between a digital first strategy which starts with the customer work back, understand the needs, take use case approaches to developing capabilities. Use cases will cut across the customer experience which traverses across various processes and then how do you automate that process and make it simple and easy to use? So in the case of contract approvals, we move a while back to an automated process for approvals and we’ve also applied where it makes sense as examples inside of processes robotic process automation, so that we are taking the more routine what could traditionally be seen as manual tasks and we’re automating those as part of the process. So it goes toward this idea that we can’t be digital unless we digitize the enterprise first.

Sanjog Aul [00:08:31]:
Let’s take a quick break listeners. We’ll be right back and perhaps refer back to the same contract management example that we just discussed and see what is the level of proactiveness IT is typically showing. Not just Humana, but overall what are we seeing is IT waiting for in this case like we discussed about legal and procurement? So are we waiting for the legal and procurement leaders to ask for this digital enabled modernization or are we playing Steve Jobs? The reason I use this because the person always said let’s wow your customer by showing them and delighting them with what they’ve never seen. So are we is IT telling leadership in legal and procurement that let us bring something to you that you’ve never seen and we pleasantly surprise them with whatever is possible. So what is the mindset that IT is carrying and how is it dealing with business? Please stay tuned listeners. We’ll be right back and explore.

Sanjog Aul [00:10:19]:
Welcome listeners. We are back and Brian so the question I asked you before we went for break is do we play Steve Jobs? Do we pleasantly surprise or try to surprise business with what’s possible or we wait for the instructions like order takers?

Brian LeClaire [00:10:37]:
So let me try to weave a couple of ideas together as I answer the question. There’s a view of how technology has been seen traditionally. I gave an example of that in the earlier question about how technology organizations have matured over time. If you want to think about it in terms of three eras or phases, and some organizations are in different places than others. So one is it’s this idea that it’s IT is the order taker. In another, it’s IT is a solution provider. In a third, it’s really IT as a value creator. Now the reason that you see this across different companies has to do with how the company and the industry the company is in views technology.

Brian LeClaire [00:11:22]:
If you go to at a high level, there are three critical strategies that any company, any technologist or someone who’s responsible for technology should make sure and think through. One is obvious, it’s the business strategy. A second one is as well is it’s the technology strategy. The third, which tends to be overlooked, is what’s the organizational strategy? At Humana, when we sat down and we said how do we think about this question that you ask? What is the expectation from our customer base? Not just the ultimate customer, but our internal customers as well and is are we demonstrating the right level of thought leadership and how technology can be brought to bear in the organization but the flip side of that is in industries like healthcare for instance, and a number of others, financial services is likely a bit ahead of the healthcare industry. This idea of what is the business strategy versus the technology strategy is becoming very fuzzy. In fact, Those two elements are starting to become highly intertwined in terms of separating what we’re trying to do from a business versus what we’re trying to achieve with technology. If you were to ask me in five or seven years to describe Humana and likely what it is, I tell you it’s a virtual care coordination organization with care delivery steeped in technology and analytics.

Brian LeClaire [00:12:49]:
It’s shifting from being an insurance largely with health care focus to a healthcare largely with a bit of insurance focused. That’s Humana in the healthcare industry. So this question of who is demonstrating thought leadership a catalyst as you’re moving from the being focused on cost through solutions to value creation. To really get into that value creation place and space, it has to be a partnership between the technology and the business area, the internal customer and so at Humana, what we do is we will sponsor technology scans where we will with members from the business leadership segment leaders. We will go out, whether it’s to spend time at Amazon or Apple or Google or Microsoft or others. We will sponsor those thought provoking sessions usually at the vendor location or the partner location and we speak to what are the trends, where are things going and what are our challenges and how can we leverage technology to do that.

Brian LeClaire [00:13:57]:
What we found was we needed to also back to the organizational strategy piece. We needed to think about our structure and we introduced an operating model change a few years ago where we brought a part of the organization forward whose responsibility largely but not completely was taking ownership of that boundary of being and helping be the thought leader. I’m not saying that we’re a set of Steve Jobs, but the expectation is we are collaborating together as though we were together Steve Jobs, hand in glove, understanding technology and how technology can solve our business challenges and problems. We have an internal instrument that we deploy, it’s called our trusted partner experiant tool and it measures a number of things, one of which is how we’re performing in the thought leadership dimension and what we found through applying that tool internally is our partners, the business expect us to be demonstrating that and so an expectation that’s placed on us, but likewise becoming business technologists is an expectation that’s being placed on our business leaders.

Brian LeClaire [00:15:11]:
And it’s an ever sounding drumbeat that as business strategy and technology strategy become intertwined, technologists have to think differently about how they do what they do and business leaders have to think differently about what they do, meaning thinking more like business technologists and that convergence and the ability to do that will determine the success of most companies, not just in health care, that some industries are a little bit ahead and some industries are a little bit lagging. As I spend time outside of Humana with peers, I hear that is a very consistent message, whether you’re selling coffee or you’re running a railroad. When you think about drones and how drones can help understand what’s happening in that place in space, or whether it’s car and automating a car and the experience of driving a car, this idea that business strategy and technology strategy are becoming intertwined and the roles blurring, if you will, and challenging our individual values in terms of value creation, this is something that we all need to embrace.

Sanjog Aul [00:16:16]:
You mentioned about this term business technologies. Pretty fascinating but someone, for example, from legal or procurement leadership, would you expect them going forward or even today to prod technology folks to say, hey, let’s go to Apple and Google, let’s go figure out what’s new and then let’s go and figure out what we will do together. Is that what’s happening on the ground today?

Brian LeClaire [00:16:39]:
It is and literally in the last day in a conversation with folks in legal, we speak to this how do we think about being value creators because it gets toward how do we think about the realm of the possible and it moves and shifts away from am I operating as an advisor or someone internally organization who doesn’t have impact on the customer and this goes back to Bruce Broussard, our CEO sits and he will literally message the leadership of the organization that we all, regardless of our role in the organization, whether it’s a direct interface with the customer or internal supporting one another, those actions, even down to the internal supporting one another, ultimately have an effect and an impact on our customer and without our customer and success, we are as a company will not be able to be successful and so when you translate that back into this idea of even internal legal, even procurement, and thinking about how we enable that journey is an important message for delivering on that promise to the customer of that experience that if we delight them, they’ll keep coming back and that’s how we’ll grow the business.

Sanjog Aul [00:18:02]:
Now, one risk a lot of people say when you speak about strengthening the enterprise core and try to invest towards it, many people would turn it down saying that you’re just trying to package a continuous improvement type initiative and saying, yes, you are trying to strengthen it and you’re trying to digital enable it and that results in many times executive support and funding turned down. How do you prevent that?

Brian LeClaire [00:18:31]:
First you have to look at what your criteria for decisioning investments is and some investments are, they’re mandatory and they’re important and one must do those, whether it’s a compliance or related type of an issue. In other cases, if you start with this idea of the customer and work your way back, even on something that’s internal, you should be able to articulate the value that it has and the positive effect that it has on the customer and so it really starts with shifting your mindset around how you think about what an investment is and ultimately where the benefit of the investment goes and so even something that could be an internal process improvement, go back to a contract review process. If you look at that and you say yes, it’s speeding a process up through automation and automated decisioning, then as you tie that back to the fact that it allows you to speed up your ability to meet a customer needs, because as a company you can become more agile, you now have created a path forward to look at something that traditionally may have been more of an what’s the ROI benefit of something versus how does it help improve the customer experience? If you get and you have conversations about that, then it becomes what’s the relative effect or impact on the customer? As opposed to comparing what a number from an ROI perspective could be or should be this versus that and that helps ground you in terms of this idea.

Brian LeClaire [00:20:08]:
Is it bettering the customer because again, the message at Humana is the way to win is through customer retention, loyalty and improving and growing your customer base. If you start there and do what’s right by the customer and work everything back from that, these things that may appear traditionally to be internally funded things, it can be much easier to discuss and align in terms of the investment for those improvements.

Sanjog Aul [00:20:39]:
Talk about strengthening effort with anyone in business that means to them you’re going to rip and replace or you’re going to shake things up, which is unacceptable to them because they also like stability. So it’s like changing tires off a moving car. How do you accomplish that?

Brian LeClaire [00:20:56]:
So the first thing is how do you begin to think back about how these things help improve what your goal is relative to your customer? So again, I may sound like several times, if we start with the customer and we move back, you begin then to understand the value of something. Once you understand the value of something in the context of what it means for the customer, you begin to then grapple with how do I bring about the change that is necessary? So I would tell you, getting alignment around the thing to do starts with understanding the value and the benefit it has relative to the customer because I find that most areas become exceedingly passionate about the initiatives that have a good customer benefit, even very large ones that could conceivably be seen as disruptive. Once you get to that point, then it becomes about two things, execution and change management and so I would tell you in general the focus around execution is good, but it’s that you really have to then pick up and not lose sight of the change management because the change management helps you think about where would be the potential areas that you may be disruptive in operations and how should you approach the rollout, if you will, of a capability and bringing the organization along so that it’s ready for it and so not unlike a project where you have four dimensions, which is scope, budget, time and quality. You have to always think about those four equally but it’s too easy to then begin to focus on one and you’ll lose, for instance, quality.

Brian LeClaire [00:22:46]:
So you, as long as you sit and say it’s about the customer effect and impact, it’s about managing the execution, but it’s also about managing the change and a strong change management focus is the way to think about and mitigate changes that are, to use the example you gave, changing the tires of the car while it’s running.

Sanjog Aul [00:23:09]:
So one is to make these changes in a spot basis opportunistic approach to fixing the foundation but frankly, if you’re going to strengthen the foundation, you ought to do it entirely but we are seeing many cases where people would do it wherever they feel it’s going to serve their agenda or they would do it in a siloed manner. How do you prevent that and allow a holistic strengthening without breaking the bank?

Brian LeClaire [00:23:39]:
So for us, we our cultural mantra with leaders. In February we had our annual leader forum. The message there was enterprise thinker. So we have been very explicit with our leadership that we have to be enterprise thinkers. For us, it comes back to our business strategy, which is called integrated care delivery. Our view is if we start with our customer, it could be members and patients and we focus on meeting them where their health is and the way to do that is to think about their primary care, their in home care, their behavioral needs, social determinants of health, pharmacy needs, and so forth.

Brian LeClaire [00:24:25]:
And we bring that together focused around improving outcomes for them. We will lead to better clinical outcomes for our members and patients, which will have the benefit, lower overall costs, which allow us to offer a differentiated product in the marketplace, which allows us to grow membership, which allows us to be successful as a company. We do that because our business strategy depends on operating in an integrated manner. Therefore, from a I’ll go back to the organizational strategy. Our organizational strategy is really heavily geared toward emphasizing being an enterprise thinker, being an integrated thinker and so for us, we’re very explicit around messaging leaders, the need to think holistically. That doesn’t mean that they forego their responsibilities as it relates to their function in the organization. What it says is as I’m making a change, this goes back to the change management concepts.

Brian LeClaire [00:25:27]:
As I’m thinking about making a change, I need to look left and right and I need to be thinking about what’s the left or upstream or right downstream effects of the change I’m making and let’s make sure I’ve taken that into consideration and I’ve worked with individuals that it may affect so us in that regard. It’s a very strong cultural emphasis in terms of driving the need for leaders to be enterprise thinkers.

Sanjog Aul [00:25:57]:
Once again, thank you Brian for sharing your thoughts and insights about how organizations can leverage digital to strengthen their core systems and enable a future ready business that is relevant and profitable. Thanks so much.

Brian LeClaire [00:26:12]:
Thank you very much and listeners.

Sanjog Aul [00:26:14]:
I invite you to find related conversations on our website@ciotalknetwork.com.

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