Getting to know your market

As CIO for Quest Diagnostics, the leading diagnostic testing company in the U.S., I not only have to keep information technology operations running, I also have responsibility to use IT to create competitive advantage and to deliver value-added services and products for our customers. Developing market knowledge – gaining a better understanding of the healthcare industry and our customers’ needs – isn’t a sideline activity, it’s part of my role and it’s critical to my company’s growth.

A broad and deep understanding of your business, your market and your customers enables you to identify the products and services that will create sustained value for your customers and sustained competitive advantage for your company. Such understanding, along with knowledge of technology trends, is essential to aligning IT and business strategies to drive growth.

As a healthcare company, we provide services to multiple customers including physicians, hospitals, health plans, employers, insurers, pharmaceutical companies, and of course patients, who are at the centre of everything we do. Because we work with all of these constituents, we have a 360-degree view of the healthcare market and its trends. Seventy percent of healthcare decisions involve laboratory test information, so laboratories such as ours are at the center of many healthcare IT initiatives. We spend a lot of time with our business partners and customers understanding their needs and how technology can have the most positive impact.

From market needs to value-added services

Here are some examples of how we have used our understanding of customer needs and market drivers to deliver value-added IT services:

We recognized that on-line services could make it easier for large segments of our patient and physician customers to do business with us, and so we identified and developed several new Internet-based services. For instance, thousands of patients visit our Patient Service Centers (PSC) to have blood drawn for tests. We know that a key factor in creating a positive patient experience is to minimize a patient’s wait time in the PSC, so we implemented an on-line appointment scheduling service. A patient can quickly identify PSC locations that are convenient, schedule an appointment, and retrieve driving directions. According to our surveys, patients love the convenience of the on-line service, which puts them in control of their busy day.

Another on-line service is the Care360 Physician Portal, used by over 100,000 physicians to order tests and receive test reports electronically. Recognizing that electronic prescribing would be a major thrust in the healthcare industry to reduce medication errors, we integrated electronic prescribing into our Care360 product. The integration of labs and meds in the Care360 physician portal gives physicians critical information when they need it and helps improve the quality of care.

Of course, emerging technology is another market force that determines what we are able to do for our customers. Using technology to drive innovation helps us to differentiate ourselves from our competitors. Point-of-care testing, in which the collection of samples, testing and reporting of results occurs within minutes in the doctor’s office or hospital, is growing as a practice in the healthcare industry as a whole. Quest Diagnostics has recently acquired several point-of-care product companies and is now working to enhance Care360 to interface with these products. This will provide physicians with an aggregated view of laboratory results, whether performed in their offices or our laboratories. Having all of that information available to physicians electronically provides a more comprehensive view of a patient’s health, which otherwise would require manual searches through multiple pieces of paper.

How to be a market-savvy CIO

One way to understand the market is to read about products from a range of industry groups, as well as from trade magazines and journals. On the IT side, we have architects and engineers who are responsible for looking at technology trends through similar methods. It can be hard, because we’re inundated with so many different sources of information, but it’s important to identify three or four key sources that are particularly valuable and try to stay on top of them. We also have people assigned to follow what’s going on from a regulatory and policy point of view, and to summarize their findings on a routine basis.

Also spend time with your customers and business partners; ask questions, listen and learn. Combine that insight with your expertise in information technology and you are well on your way to being a market-savvy CIO and a generator of growth for your company. I was fortunate to work in marketing for our healthcare IT subsidiary, MedPlus, before I became CIO. There I was focused on growth and the customer. I brought that perspective with me to the CIO role; therefore, I did not make IT operations my singular priority as most IT professionals do. Additionally, having responsibility for marketing a customer product gave me a strong grounding in three important customer bases: health plans, physicians and patients. My experience gave me greater insight into the opportunities to leverage IT as a growth engine.

Create a market-savvy IT team

No matter how well you understand your market, you will not generate enough ideas for sustained advantage by yourself. But creating the culture and passion to sustain IT as a growth engine is not going to happen overnight. To create lasting change, the IT organization as a whole needs to have passion for its responsibility to drive growth.

At Quest Diagnostics, we started by creating a new vision for the IT organization that focused on growth, as well as on how we wanted to be viewed by customers and business partners. We drafted the vision with a small number of staff and then gave the whole organization an opportunity to participate in the process. Then we launched several teams composed of individuals from all levels of the organization, who were tasked with driving changes to our IT processes and metrics that would enable us to achieve our vision: to deliver solutions that enhance the company’s value proposition; to focus on creating competitive advantage in the marketplace; and to be recognized for innovation and performance As CIOs, we are in a unique position to use our knowledge, insights and technology expertise to drive growth for our companies. IT is more than an enabler of business efficiency; it provides a competitive advantage. But only if we align IT strategies with growth. This is our obligation and responsibility. It is not a choice.

Mary Hall Gregg is CIO and vice president, information with Quest Diagnostics in Madison, N.J., and a member of the CIO Executive Council. Before joining Quest Diagnostics, she was deputy CIO at the American Red Cross.

(Companion article) What does it mean to have Market Knowledge?

By Reynold Lewke and Steve Kelner

The c-level competency of Market Knowledge is about understanding the market in which a business operates – the business context. This can include the competition, the suppliers, the customer base and the regulatory environment.

People demonstrating this competency have a strong detailed understanding of the market in which their business operates and how it affects their business. They know the customers they serve, the competitors, suppliers, and the regulatory environment and how to address them. This competency is usually an underlying requirement of the leadership competencies of Strategic Orientation, Commercial Orientation and Customer Impact.

At basic levels of performance, leaders can see obvious industry trends, the products and the customer. At middle levels of performance, executives see where that market is moving in terms of emerging trends. At high level, leaders understand interrelationships among the various elements of the market and see how trends could create new customers, affect relationships with competitors and cause other potentially profitable change. These leaders may also create initiatives that directly or indirectly drive changes in the market.

How to develop Market Knowledge

Developing Market Knowledge is in some ways easier and in some ways harder than other, more behavioral, leadership competencies. It is easier in that to get up to basic or even middle levels of performance simply requires hard study of the market issues, and there are likely to be many people who have that understanding better than the CIO and can share it if asked.

To get to the strategic levels, however, it is less about simple knowledge and more about having true insight into the market – both depth, in terms of detailed understanding of particular elements of the business and market, and breadth, in terms of being able to span multiple products, services, geographies, or businesses. The proof of this is being able to identify the levers by which business may change. If IT issues can be wedded to the external market, it is entirely possible to create a unique and difficult-to-match niche in the market.

Readers wishing to improve their performance in this critically important competency first need to examine organizational readiness for the CIO to leverage Market Knowledge, and then assess their personal readiness. Some questions to ask include:

Organizational • Does the organization have an articulated strategy? Does it live the strategy? • Is the organization “linked in” to the external market? To what extent is it market-driven versus technology-driven? • How complex is the business? Is it simple and straightforward, or does it include a wide variety of products, customers, and business models? Is there a coherent focus on the overall direction of the business?

Individual • Do you understand the drivers of the business and all the different aspects of the market that apply to it, including competitors, history and business priorities? • Do you see your role as formulating direction, or following the way things are done or just executing plans? • How strong is your ability to perceive the feelings, beliefs and preferences of others? Can you see a situation from others’ perspective rather than just your own, no matter how you may disagree with it? • How good are you at conceptualizing complex information? Can you identify patterns in people and their behavior as well as in systems or processes?

Based on the answers to these questions, you can then decide how you can develop your Market Knowledge and use it to the benefit of yourself and your company.

How key execs rate on market knowledge

At the Outstanding level, CEOs are tracking competitors and industry trends at a much higher performance level than are CFOs, who are still getting a handle on the various subsegments of the broader market. Both are performing better than CIOs, who are just beginning to know their markets well: CEO = 5.2, CFO = 4.6, CIO = 4.2.

These benchmarks rate executive performance on a scale of 1-7 (see rating legend). Plotted scores are the average of all scores from the 50th to 85th percentile range. Data derived from 25,000+ executive assessments conducted by Egon Zehnder International.

Executive behavior rating legend: 1= Knows immediate operating context 2 = Knows general market basics 3 = Knows own market well 4 = Identifies sub-segments of the market 5 = Looks beyond current context 6 = Identifies emerging niches and opportunities 7 = Sees how to transform the industry

Reynold Lewke is Egon Zehnder’s North American CIO Practice Leader, and can be reached at [email protected] . Steve Kelner is Global Knowledge Leader of Egon Zehnder’s Talent Management and Management Appraisal Practice Group, and can be reached at [email protected].

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