In mid-July, on Johnson & Johnson’s second-quarter earnings call for 2015, Group Worldwide Chairman Sandi Peterson outlined some of the critical IT initiatives that would help the $74 billion company compete — and win — in the rapidly evolving world of digital healthcare.
Included in her remarks was a simple statement: “We are at a tipping point where technology is becoming the medium through which healthcare can become a more effective and efficient system.”
That might be an understatement, given the drastic changes we’ve seen in recent years. But for CIOs in the healthcare ecosystem, it’s a clear nod to one of their best opportunities to drive change and create new value for their businesses. Leading that charge for J&J is Stuart McGuigan, who has built one of the most impressive IT leadership resumes of his generation.
“We need to be well-prepared for the increasingly digital world of health technology, internally, and that’s helped us double down on our efforts to digitize, move to cloud, to more rapidly adopt Agile frameworks, and to heighten our sense of urgency in developing world-class IT capabilities,” McGuigan told us in a recent interview.
We’ve spoken with several acclaimed CIOs about the drastic changes technology is bringing about in many industries (including healthcare). And we chronicled some astounding stories of transformation in our book, Confessions of a Successful CIO.
One of the key characteristics common among those CIOs is the ability — and enthusiasm — to seek the art of the possible, not just power through unavoidable challenges. Among other key lessons learned in his more than 10 years as a CIO at Fortune 100 companies like Liberty Mutual and CVS Caremark, McGuigan has firmly embraced IT’s capability to demonstrate, in his words, “a sense of what’s possible.”
Yes, investing in and using a variety of advancing technologies will help serve patients and practitioners in new ways. But in our discussion, McGuigan focused on the need for speed, efficiency, and consistency — three cornerstones not only for how he has revamped J&J’s technology operations, but also for the company, as declared in its more than 70-year-old credo.
Connecting to company mission
That credo, written by former Chairman Robert Wood Johnson in 1943, can be seen throughout J&J’s offices and heard in remarks by every senior executive. It focuses on the company’s responsibility to its employees, the communities in which it operates, and its shareholders. But first come patients and practitioners.
Many companies have mission statements, but few must encapsulate the aims and objectives of a company like J&J, which boasts about 126,500 employees across more than 265 operating companies in more than 60 countries. Outlining some core pieces of J&J’s digital health push, McGuigan moved between business objectives like speed and consistency and technology opportunities like analytics and cloud, without skipping a beat—but more importantly, he drew a direct connection between those initiatives and the company’s mission of improving patients’ lives.
Each of the seven different technology platforms he’s focusing on — from 3D printing to better create products at the site of care, to data analytics, where J&J is building a veritable “census” of information on patient history and treatments, for example — could result in exponential improvements in patient care.
That’s the sense of what’s possible from the technology perspective. But there’s more. For years, J&J has thrived in a decentralized model, but leadership has driven a mandate to take advantage of its scope and scale to ensure that technology is a competitive advantage for all of its companies.
With that comes the need for speed, for better partnership across functions, and an increased focus on efficiency and consistency in the IT operation. At the beginning of his tenure at J&J, McGuigan focused on operational improvements, and, more recently, he led the implementation of DevOps and building a more agile culture to deliver those on those needs.
“Through consistency in execution, we get speed. And where we get speed, we get improved value,” McGuigan said. “And through standardization, we get consistency, we get quality, we improve delivery on all dimensions.”
To help the company reach its aspirations in digital health, McGuigan has set goals for moving 85 percent of workloads to the cloud or cloud-based technologies by 2018, and in the same timeframe, to sunset, consolidate or move to SaaS approximately 40 percent of applications.
According to McGuigan, they’re ahead of schedule on those dimensions—and in implementing critical new technologies — but there’s still heavy lifting to be done in terms of scaling technology capabilities across the operating companies.
He also sees an increased appetite for change. Earlier in his tenure, McGuigan was pushing for change, but now he sees more of a pull. “We’ve been managing the rate of change capacity, as opposed to trying to push for change from the top-down,” McGuigan said. “Where people are driving their own change, and they’re seeing the benefits of what they’re doing, and they’re seeing improvements in our ability to deliver IT capabilities to our businesses and customers, that’s motivation in and of itself.”
Taking measure of McGuigan’s enormous responsibilities at J&J, it reminds us of a similarly hefty challenge he faced in a previous role. In late 2009, reflecting on the merger that created CVS Caremark (where he served as CIO until 2012), McGuigan highlighted how IT played an integral role in the combined company’s success well before the transaction took place. The vision for the new company, he explained, was to bring together all critical touch-points in the pharmacy ecosystem, from drug stores to retail clinics to customer call centers, and IT would be a major driver.
That merger developed a new business model for the pharmacy business, drastically transforming the industry in its wake. McGuigan is now embarking on a journey to transform J&J in many similar ways—capitalizing not only on his vast experience in leading change, but technology’s capacity to uphold J&J’s longstanding legacy of putting patients and practitioners first.