From Interim To Permanent CIO Of Kaiser Permanente | Straight Talk


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By Peter High, President, Metis Strategy

This article is by Featured Blogger Peter High from his column.


In early 2015, when Dick Daniels took on the role of Executive Vice President and Chief Information Officer of Kaiser Permanente, he did so on an interim basis. He had been a senior vice president with the company since 2008, and as such, was a known commodity. As he notes in the interview herein, he did not feel pressure as such to focus on quick-wins, or to make dramatic changes to the IT strategy or priorities. Things were not broken, but there were strengths to continue to leverage. One of those is innovation. Kaiser Permanente has a center for innovation, and IT plays a significant role in all aspects of the Center, referred to as the Garfield Center. Daniels highlights the role IT plays, along with the other disciplines that come together to make the Garfield Center effective. Daniels’ contributions to the enterprise secured him the full-time CIO position after his brief stint as an interim.

(To listen to an unabridged audio version of this interview, please visit this link. This is the 27th article in the CIO’s First 100 Days series. To read the prior 26 articles with executives from Etihad Aviation Group, Intel, J. Crew, Johnson & Johnson, Deutsche Bank, and General Electric among others, please visit this link.)


Peter High: Dick, you are the Chief Information Officer of Kaiser Permanente, a health care organization that, no doubt, most are familiar with. Your own rise to that role was an interesting one: You had been with Kaiser Permanente, were offered the role on an interim basis, and ultimately, at the conclusion of the period, were given the permanent job. I wonder, especially in light of that interim period, how you set yourself up – how you organized the work in the first one hundred days of your time in role and whether or not that was impacted by the fact that you were there on an interim basis.


Dick Daniels: Well, certainly I came into the interim role from being the leader of shared services for Kaiser Permanente. Since I had been in IT before, I certainly had an understanding of the organization, and I also understood how IT related to other parts at Kaiser Permanente. When I came into the role, the first thing I wanted to do was just keep a steady hand because the IT organization was already on a good trajectory. I knew all my direct reports already and my intent from the start was just to keep the organization moving forward, look at the strategy that was being implemented, and determine what else needed to get done. The way that I went about doing that was I engaged with my direct reports in getting their perspective, and also doing some “voice of the client” interviews—talking with different business partners and getting their perspective. And once I took all that information in, I sat with my direct reports and we came up with some priorities for the IT organization. I made sure I communicated those priorities to both our business partners as well as the IT staff.  Frankly, I think the way I went about that would be consistent with the way I would have approached any new job. It worked out well.


High: Dick, it is interesting that, as you point out, this was not a major transformation. You were not entering into a situation that was a disaster that needed to be fixed. In fact, you had been part of the leadership team that made sure that the IT department was on a solid footing. But, as with any change of leadership, it was an opportunity to fine tune some things, and it is interesting that you went about this “listening tour”, if I can paraphrase what you just described. What were some of the changes, some of the fine tunings that you elected to undertake as a result of what you were hearing?


Daniels: It was not a big change agenda that I needed to instill. As I went about talking with our business partners, it was clear that they wanted us to build on top of some of the successful accomplishments that we already had. The fact is that the world is changing around us and they wanted to see us get even better, and certainly they wanted to see us deliver solutions even faster. I think it was a recognition that IT is core to the delivery of the mission at Kaiser Permanente. I had a fairly simple strategy at an overall level and that was to strip in production system performance which, by the way, should never be taken for granted. We have seen this week where there were problems with production systems and the impact they can have.  I wanted to make sure that we continued to look and see if there were any opportunities to continue to strengthen that.


And then I wanted to focus on delivering new projects because those new projects provide more functionality to our employees internally, as well as our members externally. We look for opportunities to strengthen that and increase our velocity so that we can deliver solutions faster.


High: In order to improve velocity were there associated process changes? Was this the sort of thing of moving to more iterative or Agile type methods in order to develop working prototypes of ideas? What were some of the methods you used in order to ensure velocity was, in fact, hastening as you went through in developing new projects?


Daniels: Yes, you are absolutely right. We already were using Agile in some parts of our IT organization with our business partners in delivering solutions. But, frankly, we wanted to investigate other areas of opportunity where we could leverage that methodology. And what we have done, and are in the process of rolling out, is coming up with a checklist of questions as we are considering a project that will inform us if Agile is the way to go, or if Waterfall is the way to go. By selecting the right methodology for the project, that is going to help us increase velocity.


In addition to that, we are also looking at Dev Ops—this new model of development—and we are building a strategy around implementing Dev Ops as a methodology, and that is going to further increase velocity as we get that rolled out across our organization.


High: I wonder, especially during that interim period, did you have any focus on developing some quick wins—especially as you are talking about delivering some things more hastily? Were there actual specific ideas you were focusing on to deliver during that interim period to prove success to some extent?


Daniels: The organization was already on a good trajectory, so I did not feel compelled to try to do any quick wins. However, I did feel like the immediate work was to build deeper alignment, both with our business partners and within the IT organization, and to clarify the priorities. As you know, technology is so pervasive now. It is important to select the right priorities because a justification can be made for using technology in any number of ways. I wanted to just insure that the priorities were clear, and have everybody aligned on the right priorities, so that we could have the kind of impact in the organization that we need to have.


High: May I ask, how long did you have the interim title? Was that a period that was defined at the outset of it, or was that something that was a bit more fluid?


Daniels: It was not determined how long it was going to be, which was quite interesting, but overall it was about six months. Frankly, I think that was probably good because, first of all, it gave me an opportunity in those six months to demonstrate that I was capable of leading the organization. And also, given our size and the magnitude of the position, we needed to go through the proper process. There were other candidates, some internal and external who were considered for the position, and in the end, I was grateful to be selected.


High: You have been with Kaiser Permanente for a bit more than six and a half years, if I have my dates correct, and prior to that you have a wealth of experience in the financial services space. These are both dynamic spaces with a lot of change associated with them, but obviously very different as well and perhaps different rates of adopting innovative new technologies. As you moved from the financial services space to the health care space, I am wondering what similarities and differences that you noticed in joining Kaiser Permanente and thinking about the rapidity with which technology is adopted and used, and the extent to which you are dealing with a tech-savvy general populace in the company and among the company’s customers.


Daniels: Let us start with similarities. The responsibilities that I had in financial services were what I would call “mission critical”.  I was responsible for some securities processing systems that—we processed I would say on the order of two hundred billion dollars a day. And that is mission critical—whenever there was down time, that can have big impacts when you are operating at that level. In coming into health care, we look at the implementation of electronic medical records in hospitals where we are taking care of patients. I would say it goes beyond mission critical. It is life critical. The idea that the systems need to be available all the time, the operations of the business, I will call it, is critical and the reliance upon the technology is inevitable and unavoidable. That part is very similar.


I think the differences that I am experiencing here at Kaiser Permanente are all of the changes that are being made in the industry. In financial services there were changes because there were mergers and acquisitions and that was driving a lot of the change that was taking place. But in health care, the Affordable Care Act is affecting all of the entire health care industry and that is driving a lot of change in the industry. Between the Affordable Care Act and the fact that it is a highly regulated business, that is driving a lot of the work that needs to be done. And all of this work needs to be done in a way that does not interrupt operations. Those are some of the similarities and differences that I see.


High: It is fascinating as you note the number of different forces—internally and externally—that would have a significant impact on the strategy that you pursue. You need to be cognizant of regulation. You need to be cognizant of the Affordable Care Act, in this case, in order to contemplate your plans going forward. As you have formulated your own IT strategy and helped drive that forward, can I ask you the methods that you use—both in engaging your colleagues across Kaiser Permanente’s business, but also taking into account some of these external forces, including the ultimate customers of Kaiser Permanente—how do you leven your plans to include all these different perspectives and voices?


Daniels: Well, it starts with our mission because that is a place where all of our business partners, as well as everyone in the organization, we all emanate from there. We cannot deliver on our mission of delivering high quality affordable health care to millions of people without technology.  I think that is the place where I always start because that is that common ground where we can move from there. We try to reinforce and anchor all of our efforts to our mission.


The second big thing that I try to do is focus on our members. We have experienced some great growth over the last eighteen months, adding over a million members to Kaiser Permanente. We crossed the threshold of ten million members that we serve in our organization. We want the technology that we provide to be convenient for them and be easy for them to use. As an example, we had over 140 million visits last year to our website,; over fifteen million secure emails were sent from members and patients to their caregivers; and we have some other functionality where people can schedule their own appointments on line—and we had over four million of those done last year. We want to provide good, convenient functionality that allows members to interact with their caregivers and have a good experience being a Kaiser Permanente member.


The other thing that I try to do is make sure that we are connected with our business partners throughout innovation. That is just a big part of our DNA at Kaiser Permanente and I want to make sure that we are connected in terms of working on innovative new technologies and innovative new methods of serving our members and patients. There are a number of innovations that we are working on that are going to improve the experience for both our members and patients. One simple example is when you are getting ready to go to the doctor we want to allow our members to check in remotely. Just like you check in for your airline and you print out your boarding pass before you leave home, we want people who are going in for their doctor’s appointment to be able to check in—and maybe they can even make their co-payment on line before they head out. I think being connected so that we are doing innovative things together is one of the ways that I try to make sure that we stay connected.


High: That is wonderful that IT has such a role in helping drive forward ideas like the ones you just described. Dialing a little bit further into innovation, do you have a portion of your team who is looking one, two or three years out as to what new innovative technologies or new innovative ways to use data on behalf of the company or your customers? Or is it something that is spread across a broader set of people as a partial portion of their overall responsibilities?


Daniels: It is a form of both. We do expect that the innovation is taking place across the organization and within each arena. But we also have a dedicated team of people, and we have a dedicated center, which I would love to show you sometime if you are ever out here on the West coast. We have a Center for Innovation, and we have some dedicated people from technology, we have some dedicated people from operations, and we have some dedicated people from our facilities organization. We have 39 hospitals and this center, we call it our Garfield Center, is where those three groups come together and now we can work on innovation together. We have templates for how we build facilities and if we want to try something new, we need to make sure that the technology is there to support it. We want to make sure that the operations people agree that this is something that is going to work, and our facilities people are engaged. We are always looking at new ideas. It is just full time positions for some people where we can always look at new ideas and see what we might incorporate so that we can continue to make forward progress.


High: I also wonder, Dick, what role do external partners of yours play in all of this? No doubt, an organization of your size you must have a number of key strategic relationships, as most organizations of your size would. How do you think about engaging external partners as sources of new ideas? Is that the way in which you think about at least a portion of your relationships with external parties?


Daniels: Absolutely. And there are so many ideas and so many platforms out there that are available and we cannot afford to do it all ourselves internally. We absolutely embrace external partners and using external platforms that can help us move our agenda forward. At the Garfield Center, we do bring in technology partners to bring in their technologies, give us a chance to learn how those technologies operate, and look at how we might be able to utilize them in improving patient care.


I would like to give you one quick example. I was at the Garfield Center one day and I was somewhat teasing the staff there because as I was walking through I noticed one of the Nintendo Wii systems. I was teasing them, “You are playing games over here? You are supposed to be working!” It was quite comical. But what they explained to me was that the physical therapy people were looking at the Nintendo Wii in certain games and looking at, as people played those games, the range of motion they needed to exercise. We were looking at using the Nintendo Wii in our physical therapy unit to have people increase their range of motion as they were going through physical therapy. And I thought, “How creative is that?!” That is nice because instead of just having them move, they are playing the game and they get immersed in the game and they start to increase their range of motion. That is just a small example.


High: That is a very creative idea. I am glad you mentioned that. Before I let you go, Dick, I wanted to ask you a more general question. As that last example suggests, and your earlier example of some of the innovative things you and your team are working on suggest, there are a number of ways in which you are leveraging rising trends to Kaiser Permanente’s advantage. I wonder if there are other kinds of trends as you look a year or two or three out that particularly excite you?


Daniels: Well, I will tell you I am still excited about these mobile platforms. We see this growing use of mobile technology, across the globe and the capabilities that these devices have. I am excited about how we are going to be able to leverage those. I will give a couple of other examples.


We want to provide the ability for members to visit with us remotely via video so you can have a video conference with your doctor. That is exciting to provide that kind of option to members so they can just have a video conference with their doctor versus coming in. The fact that those devices have a camera—if I have a wound, I can just move the camera over so my dermatologist can take a look at it and give me some guidance.  Things like digital membership: rather than have a hard copy or a plastic card, maybe we can have that card digitized. Even in our in-patient settings within our hospitals, having a flat panel up on the wall and from that flat panel we can do things like video conference with a specialist when it is necessary. We can show the patient’s schedule for the day so they know who is coming and when. We can allow them to order their meals, and they can order them right from the flat panel, or even provide patient education on the condition that they are in the hospital for. We just see a ton of opportunities and, frankly, it is a great place to be. I have always enjoyed technology a lot and it is great to be in an organization where we can continue to use technology to provide a better member experience for our members and patients and to move our organization forward.


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