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Digital technology’s impact on the healthcare industry is evident in a number of ways, from the wearables on our wrists, to the doctor’s visits we can take from our couch, to the advanced technologies transforming today’s smart hospitals. Tom Miller, CIO of Anthem, envisioned the health insurance company to be at the forefront of the changes in the industry, but there was one thing Anthem IT needed to do first: It had to learn how to innovate.
Miller, who recently took home the Enterprise CIO of the Year award from the Georgia CIO Leadership Association, took his organization to innovation school and then opened up an Innovation Studio for breakthrough ideas to go from concept to prototype to business reality. We spoke with Miller to learn more.
The Enterprisers Project (TEP): What were some of the drivers behind the decision to open up Anthem’s Innovation Studio?
Miller: There are a lot of forces that are changing the face of healthcare. The consumer is becoming the CEO of their health. Along with that, technology is exploding, and it’s impacting everyone’s lives. The cost of care itself is rising, making people more conscious of the care they’re getting, how they’re getting it, and how they can regulate it. Because of these forces, venture capital is pouring into this industry at the rate of $4 billion a year, and most of that is aimed at new technologies looking to create some kind of a breakthrough concept for healthcare.
When I saw that, I knew Anthem had to determine how to be in the game. We had to transform our existing business models and learn how to innovate. As a first step, we partnered with Deloitte, and we went to school on what innovation was all about. For the first year, we partnered with them in the use of their innovation center to learn the ropes, learn the processes, use the tools, and leverage their talent. After about a year, we could grow and hire our own talent, and continue independently on our own.
TEP: What were some of the key lessons you’ve learned so far on how to be a more innovative organization?
Miller: First, there’s a methodology you have to follow to move ideas through a funnel. You’re going to have a lot of ideas, and there will be some ideas that aren’t viable – either because of technology feasibility, consumer adoption, or value. You need a way to collect the ideas, sift and evaluate, and narrow them down to a manageable few that you can then shape and prototype. Your understanding of the concept and its potential grows at every stage of the funnel, and you fail fast on the ideas that don’t look like they’re going to pan out.
Secondly, you need a place where people feel like they can think big and collaborate. Studies show that the higher the ceilings and the bigger the whiteboards, the more creativity and the bigger the ideas that come forth. It really does make a difference when you create environments where people walk in and go, “Wow! I feel different here. I feel like I can think out of the box here.” And they do.
Of course, the team is very important. We’ve hired a couple dozen people now with various skill sets – technology, user experience, design thinking, business expertise – and we put them all together to form scrum teams that go through the process of innovation. There’s a host of other things, but the big three are the process, the place, and the people.
TEP: What are you doing to ensure innovation from the Studio makes its way back to the business?
Miller: I think where many companies struggle with innovation is not in building the prototypes, it’s scaling it and rolling it out for the business. You might have something that has potential, but it’s going to take some money to roll it out, right? It’s going to have to fit into the implementation agenda that’s already going on in the business. These can be barriers.
One of the ways we are getting past this issue is by bringing in a set of executives and hosting a Shark Tank day. Various innovation project leaders pitch their ideas to the executives – who are the large budget holders in the company – so that they can roll their product out into the business. It’s been amazingly successful because it has required both our corporate functions and our field business units to partner together in innovation. It’s been a great way to prioritize the most important ideas and get everybody excited about participating in them, and it gets people involved and engaged.
We also publish everything we’re working on to an innovation microsite that everyone has access to. The entire workforce sees what we’re working on in the Studio via video demos. Additionally, we invite everyone in the company to participate in ideating around a certain topic using collaboration tools. It’s another way we are doing more to engage the entire workforce, which helps ensure innovation isn’t getting stuck in the studio.
TEP: How are you organizing teams to be more innovative?
Miller: First of all, we are making a rapid shift to Agile. At the end of last year, we had 70 or 80 Agile teams in the company. By the end of 2017, we had more than 400. We are transitioning as much work, as fast as we can, from traditional waterfall methods to Agile.
I’m a huge proponent of Agile because it takes care of so many of the challenges that typically exist between IT and the business. You take a handful of business and IT people, put them on a team, and they work together every single day. They check in on progress, priorities, and issues daily. There are no surprises and no escalations because the team is solving the problems as they come up.
And then, of course, another component of the Agile methodology is you aim for a minimum viable product. That forces thinking around what’s the highest priority, what delivers the most value, what’s a definable piece of functionality or capability that can be implemented to do some good. So what you end up with is several releases per year that bring out new functionality that can be put into place immediately to start creating value. That’s much better than waiting for the big thing at the end of a project that often doesn’t quite hit the mark.
TEP: What’s your advice for other CIOs who are looking to drive more value for their companies?
Miller: As businesses and business models become digital, the value actually shifts from inside the corporation out to the ecosystem. In healthcare, traditionally, the value was in processing claims. We’d bring in a million claims a day, run them through our auto-adjudication system, figure out what to pay, how much to pay, when to pay, etc. Being really good at that was what created value for our company and, of course, value for our members, the consumers. But now there are thousands of little interactions that bring value to consumers every day, whether that’s through a health tracker or a fitness app or something else in the digital world.
For a CIO to lead their company into what’s most valuable, they’re going to have to start thinking not about the transactions that are being performed inside their own business, but how they can better operate and compete for the multitude of interactions – or what I call moments of truth – that are out there in their industry. CIOs who want to truly transform their business must start focusing on things like innovation and digital, and data and analytics. For most of us CIOs, it’s a tall order – it’s hard to free up the time to focus on those things. But we have to in order to drive value.
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