2,000,000,and Still Counting

Just crossed the 2,000,000 mile mark in air miles traveled.  Over a 20-year career, that equates to an average of 100,000 miles logged per year.  Of course that has meant many early morning flights, too many missed dinners at home and a tremendous amount of wear and tear on my body.  But it has also meant the opportunity to meet more terrific people than I could count, to experience the cultures of places like India, Iceland, Kenya, UAE, 48 of the 50 US states, most countries in Europe, Russia, Tanzania and others.  To see the beautiful plains of sub-saharan Africa, the luscious peaks of the Himalayas, the surreal volcanic terrain, glaciers and brilliant blue lagoons of Iceland and the rugged coastline of Nova Scotia.

But even more than all of those things, it has made me a better leader - with a deeper appreciation of the value of differences, the richness of life, the indomitable nature of the human spirit and the power of human connection.  It has made me a stronger person - confident in my stamina and energy and ability to endure extended days, multiple time zone changes, long flights, and longer bouts of intestinal distress.   It has made me a better listener as you have to listen harder to reach understanding when voices and accents don't sound like yours.  It has made me more patient and resilient in facing the inevitable vagaries of travel delays, last minute itinerary changes and stymied plans.  It has taught me how to laugh at myself during the crazy things that happen when you step into taxis and Ubers 20 times a month and check into hotel rooms 30 times a year.

So while I appreciate and certainly benefit from the efficiency offered by all the tools we have at our disposal today to have video meetings on our phones, hold low cost conference calls and communicate via email, text and chat; I have no plans to get off the road.  There is simply no replacement for looking your team members in the eye and hearing from them directly their ideas, hopes and dreams; from sitting down with a prospect to understand their fears, concerns and ambitions; from meeting a customer to hear their passionate (hopefully!) and frank feedback.  Besides I have those last two states to visit - looking forward to seeing Wyoming and Alaska!

So at 2,000,000 miles, I am just getting started!

CEO as the Master Mind

As I was sitting in my office the other perusing my book shelf, a book leapt into my hands.  It is a beautiful book with a deep maroon binding and gold raised lettering on the binding.  It feels good in one's hands.  It had been some time since I had read it so I opened it up and started reviewing my notations.  The book was the "Principles of Self-Mastery" by Napolean Hill.  Napolean Hill was one of the original "self help" masters.  Writing in the early part of the 20th Century, he wrote such classics as the "Law of Success" and "Think and Grow Rich."  If you haven't read any of his work, I encourage you to take up one of his books.  Any of them will do.  I think you will still find his ideas and concepts thought provoking.  As an indication of continued relevance today, all are available in modern electronic form through Amazon and other sites.

I started re-reading the chapter on the "Master Mind" and was struck by how relevant that concept is to modern-day CEOs.  Most people hear Master Mind and they think of a powerful individual, a genius evil or otherwise, a "great man or woman" that makes all the decisions and makes all the difference.  That is the exact opposite of what Napolean Hill meant by his Master Mind.  For Hill, the Master Mind was a "mind that is developed through the harmonious cooperation of two or more people who ally themselves for the purpose of accomplishing any given task."  It is the collective mind of a team.  The great ideas and energy that develops when a team works in sync - when the whole is greater than the sum of the individual parts.

The role of today's CEO - especially ones who run highly technical or geographically distributed or rapid moving businesses (don't most businesses fall into one or more of those categories) is not to know everything or to make every decision it is to bring together a team of highly competent people and create an environment in which - collectively - they are able to punch above their weight.  Are able to accomplish great things because they have mastered the art of working together without the petty, draining friction of political jockeying or professional envy or one-upsmanship that permeates so many organizations.

If anyone doesn't think that this cult of the Hero or savior CEO isn't alive and well - a situation almost always doomed to failure - just ask Marissa Meyers.

Hill's theory actually takes a page from the physics of his day stating that "a mind can communicate directly with mind on the theory that thought or vital force is a form of electrical disturbance" that is picked up - even unconsciously by the other.  Anyone who is lucky enough to have worked on a high performing team and felt the electric energy in the air can appreciate his argument that we are all connected by this "vital force" out in the universe.  And that the truly great leaders are the ones that can harness that vital force of a group of people to achieve a joint goal.  In Hill's mind it wasn't the leader who knew the answer to every strategy question or could write the code or solve the key technical question of the day but the CEO who was provided "by Nature with mind chemistry favorable as a nucleus of attraction for other minds."

Will Healthcare Continue to Outperform in a Weakening Market?

At this year's JP Morgan healthcare conference, there were the usual receptions, "speed date" meeting schedules, crowded hallways, busy restaurants, the rumors of "protestors," and overpriced hotel rooms.  But there was also a sense that maybe the roll that healthcare has been on may be slowing.  The boon has been fueled by both long term and short-term factors and it is the short-term factors that may be starting to fizzle out.  The trend toward inversions that has driven many of the largest deals in the sector may be peaking as Congress takes an increasingly dim view of the practice although some deals will still be rushed through in the first half of this year as companies try and take advantage of the distraction of a Presidential campaign.  The stimulus to the industry provided by the HI-TECH act and the Accountable Care Act has largely washed through the system.  And most of the companies with products in advanced (PII or better) have already taken advantage of the booming market to go public or get acquired.

There is no doubt that healthcare has been on a roll over the last 5 years.  The sector has outperformed in almost every metric against some very stiff competition from the Tech sector especially (see below).  As the market overall is clearly weakening as we enter 2016, the question is whether outperformance in a strong market will turn into underperformance in a weak market.  The good news is that while no sector is likely to keep up the pace set by the bull market of the last 5 years, the healthcare sector has some basic underlying strength created by long-term demographic trends, the continued advance of innovation and a favorable overall political climate.

• Over the last 5 years, healthcare stocks have outperformed every other sector and all market indices.  Healthcare related stocks are up 128% vs. 78% for Technoogy and 50% for Financials.  Nasdaq is up 89% and S&P 63%.
• That is because revenue and earnings growth for healthcare companies has outpaced the market as a whole - in 2016 companies in the S&P 500 are projected to grow revenues by 5.2% and earnings by 5.6%.  Healthcare-related companies are projecting growth of 7.4% in revenue and 8.1% in earnings.
• Growth investors are increasingly "overweight" in healthcare with an average of 20% of their holdings in the sector.
• In 2010, IPOs of healthcare companies were 11% of the total and raised 8% of the total capital raised.  In 2015 in a shrinking pool, those numbers were 41% and 22% respectively making it the most active sub sector in 2015.
• Biopharm was the most active sector with 61% of total sector proceeds in 2015.  Most (70%) of those issuances were supported with "cross over" or pre-IPO raises.  
• As of January 15th, 22 healthcare issuers are currently publicly on file with a large backlog pending.  The 22 represent 2 MedTech/Diagnostics, 5 Services/IT and 15 biotech/Pharma/specialty Pharma. 
• Reflecting the overall softening of the market, in the last quarter of 2015, trading performance post-IPO dropped from 2.4x to 1.1x.
• Follow on issuances were very strong in 2015 with a record high volume of $39 B - 2.5 x the previous record of $16 B in 2014.
• Global healthcare M&A was up 76% over the previous record in 2014 - driven in part by an increase of the "mega-deal" with 13 deals valued at more than $10 B especially in Pharma/biotech.

Most of this data came from an excellent presentation by JPM bankers during the conference. Also, Bloomberg, Factset, Morningstar, Lipper FMI, Dealogic, Company Filings

In the Arena

What is it we would like said about ourselves as leaders?  Hard worker. Fact-driven. Sensitive to the perspective of others.  Capable of walking in other people's shoes and seeing the world through their eyes.  Gracious. Driven. Smart.  Communicative.  Visionary.  Trustworthy.  Fearless.  Decisive.  There is likely to be solid agreement that these are good - even necessary - attributes for a successful leader.  But there is one trait that is absolutely essential.  One that every single leader of import and impact has exhibited.  Perserverance.  If you lead, you will inevitably fail.  You will inevitably be criticized.  You may even face disgrace.  You will face sacrifices and setbacks.

One of my favorite quotes of all time epitomizes the type of perserverance that is needed to take you forward.  It is from Teddy Roosevelt's famous 1910 speech at the Sorbonne, "The Man in the Arena."

"It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better.  The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly...who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement and who at the worst, if he fails, at least failed while daring greatly, so that his place shall never be with the cold and timid souls who neither know victory nor defeat."   

The question we all need to ask ourselves  as we consider whether we are prepared for leadership is whether we are willing to enter the area - to dare greatly, to know the great enthusiasm and the great devotions, and to spend ourselves in a worthy cause.  Because if we do, we will likely know the triumph of high achievement.  And that is the true fulfillment of leadership. Not the money or the titles or the awards or the recognition.  But to get in there and get your face marred by dust and sweat and blood and to know that you used up your essential strength and energy in the pursuit of a grand goal.

Why CEOs Should Read Dr. Seuss

The other day I was putting together a tribute to my daughter for her 8th grade graduation class book.  Along with pictures of her cute 3-year-old self and her 13 oh-so-grown-up self, I was looking for some quotes that reflected that lessons that I hoped she was taking forward with her to the right of passage that is high school.  After agonizing for awhile (it was much easier to pick out the photos), I remembered one of the books I used to read regularly to her and her older sister.  It was certainly one of my favorites and - I think - theirs.  Right up there with "Click, Clack, MOO" and "When you Give a Moose a Muffin."  While I loved those too, I loved to read them, "Oh, the Places You'll Go" by Dr. Seuss.  While the larger message of the story may have been a little weighty to absorb for young children, it was certainly clear to me.  And it was a rare time reading it that I didn't end with a lump in my throat.

I took the book from her bookshelf and sat down to find the perfect quote - 5 lines of wisdom that would fit in a half-page ad.  But while reading it, I realized that the wisdom in that Dr. Seuss book was just as important for me in my journey as a CEO and business leader.  The core messages - that everyone faces obstacles and times when they feel lost and all alone -  is one that is critical for anyone trying to build and lead companies and lead a life of accomplishment.  It seems the qualities of perseverance and tenacity matter as much for Buxbaum, Bixby, Bray and Mordecai Ali Van Allen O'Shea as they do for anyone else with grand plans and big dreams.

The happy places and detours and dead-ends that Dr. Seuss describes - The Place Where Boom Bands are Playing, the Great Heights where High Flyers are Flying....as well as the Not-So-Good Streets, The Weirdish Wild Space and the terrible, dreaded Waiting Place - are all places and stages that I recognize.  All of this serves as a reminder that the good times will always be somewhat fleeting and that the inevitable Bang Ups and Hang Ups that lay ahead  are there to teach us valuable lessons along the way to our next triumph.  That is if you find the fortitude to stick to it and work hard to UnSlump yourself.

After finishing the story, I put the book back on MY bookshelf.  I reflected on the Hakken Kraks I had vanquished and the ones that lay ahead.

I plan on reading it at least 1x year.  These are lessons that I need to remember as much as her.  And I know we will both succeed, it is  98 3/4 percent guaranteed.

http://www.amazon.com/Oh-The-Places-Youll-Go/dp/0679805273
https://www.goodreads.com/work/quotes/2125304-oh-the-places-you-ll-go

Metric Overload Syndrome

Following the adage, "what gets measured, gets managed," many managers (my early CEO-self included), think that every every process and every data point needs to be distilled into a "metric" that is tracked and reported and monitored.  That approach inevitably leads to "metric overload" a syndrome whose primary symptom is an abundance of numbers and graphs and trends followed by a general lack of true understanding.  Some managers get so caught up in the process that they spend as much time designing dashboards and driving their teams to assemble and mine increasingly meaningless and arcane minutia as they do actually growing the business they are trying to measure.  This "metric overload syndrome" has only gotten worse as data has proliferated and databases grown.

Complex dashboards filled with esoteric data points can actually serve to distract attention from the true key drivers of a business.  They can lull managers into a false sense of security thinking that "ok, we are tracking everything so we must have a handle on things."    In fact, a preponderance of metrics generally means that the team doesn't truly understand the essence of the business at its core.  They are monitoring many things leading to a lack of focus meanwhile the business is stalled, profitability flat and true product innovation is nowhere to be found.

In short, "management" may boil down to measurement but leadership certainly doesn't.  Leadership is found in understanding a business at such an intuitive level that you instinctively zero in on the small number of elegantly simple metrics that truly reflect the health and prospects of a business.  It is easy for a smart person to come up with a lot of things to track and monitor.  It takes far more effort and work to get to the point where a few well-designed, simple and instantaneously understandable metrics are used to illustrate the trajectory of a business.

One salient example of this point for me is the progression of how we tracked customer AR during my tenure at MDeverywhere.  Initially we started out measuring all the usual statistics- days in AR, percentage of AR over 120+, percentage of AR between 90-120 days, patient AR vs. payor AR, AR by payor, AR by provider, AR by procedure and/or visit type, etc.  As our customer base grew, this report also grew - exponentially.  It soon got to be such a tome that it became very time consuming to produce at the same time that it was becoming increasingly useless as a tool for senior management to quickly assess the health of this key process.  And while each of these data points are interesting and potentially important in specific instances or scenarios, they all represent lagging indicators - indicators that tell you there is a problem only once it has been around awhile when it is likely to be difficult to fix.  

Then came a big "aha" - instead of tracking a complex and muddy soup of metrics that often hid the underlying meat of the matter, we realized that the health of these important processes could be boiled down into three simple numbers - all of which should be at or very close to 100%.  Clean Claim Rate, Percent of Denials Worked within 5 days and Initial Resolution Rate.  A quick scan of three numbers for every client every month with anything below 100% flagged, told us immediately if there was an issue brewing - one that would have shown up eventually somewhere in the morass of lagging indicators that we used to track.  What was once of report of 100 pages or more became a report of 2-3 pages.  Not only were we finally tracking the right thing - enabling us to quickly zero in on issues before they became problems, we freed up precious time and mindshare to tackle other issues requiring real creativity and blue sky thinking.

This is just one example of many that I can think of throughout my career.  Whenever something seems overly complex or complicated, I know that we haven't yet done the hard work to distill it to its essence, that we don't yet fully have a handle on it.  Complexity is easy, it is simplicity that takes hard work and leadership.

When a Company has Grit

There has been much written recently about the importance of resiliency or grit in achieving anything significant.  Angela Duckworth cites it as the most important determinant of success in her now famous TEDtalk.( http://www.ted.com/talks/angela_lee_duckworth_the_key_to_success_grit). She says... "In education the one thing we know how to measure best is IQ, but what if success in school and in life depends on much more than your ability to learn quickly?"

In her research on West Point cadets, sales people, school children and school teachers, Duckworth states that "there was one characteristic that emerged as a significant predictor of success - and it wasn't social intelligence, it wasn't good looks, it wasn't physical health and it wasn't IQ.  It was grit." She goes on to define grit as "passion and perseverance for very long term goals."

And while one can think of many examples where that statement is certainly true for individuals - Nelson Mandela, Winston Churchill, Steve Jobs all immediately come to mind for me; I think grit is equally important for companies.  Companies have a "life" cycle just like people do.  And they rarely progress in an even, predictable trajectory.  There are ups and there are downs.  Highs and lows, Successes and failures.  Good years and bad.  And just like the response of individuals to setbacks and hurdles will help determine their ultimate success; the response of companies to a product failure, a customer loss, a major vendor or partner dispute funding challenges; will ultimately determine its fate.  

At MDeverywhere, 2012 was one of those years when we learned what we were made as a company by how we handled the challenges that inevitably came following years of tremendous growth and progress.  We had our fair share of challenges that year but we also proved our mettle and fortitude by exiting the year stronger and more prepared for the opportunities and new challenges ahead.

What we had set out to do was hard.  As is anything worthwhile.  There had been set backs along the way.  There always are.  Truly successful companies  learn from those setbacks, are better ultimately for them and never lose sight of the goal.  Determination, resiliency, grit - call it by whatever name you prefer - it matters.  We  had struggled in the wave of system transitions driven by the incentives to drive EMR implementations in the government's HITECH act; we had lost a friend and colleague too soon to a sudden heart attack; and, we had to do some painful restructuring that had us saying goodbye to others as we prepared for the future. The struggles were real and the resulting changes difficult.   But we knew that we were a part of something special.  That we had that unique magic that happens when a set of individuals melds into a team to build something special – to build something lasting.  

Sometimes when you are working your way through a tough transition, it is easy to lose sight of the accomplishments and the progress.   It is often during these times of struggle that the most significant leaps forward are made.  Such was the case with 2012 for MDe.  Our team made some significant leaps that year that helped us meet our challenges head on and got us back solidly on a posture of growth and expansion.  Although the year was hard and there were many sleepless nights, the company was better off for having gone through it - coming out stronger and more confident of in our staying power.  And I was a better leader for all the same reasons.