The Chief Information Officer of $100 billion revenue Express Scripts Neal Sample has had unusual breadth and depth of experience for someone who is still in his mid-40s. He has a PhD in Computer Science from Stanford, which allows him to dig into the weeds of the technology his team develops with the best of them. He also spent time professionally as a consultant, giving him an orientation and a toolkit to solve a diverse array of problems. He spent time with legendary digital native companies like Yahoo! (where he was Chief Architect) and eBay (where he was CTO of X.Commerce, eBay's venture to bring together a comprehensive set of commerce products and capabilities to help merchants and businesses compete in the world of social, local, mobile, and digital-driven commerce). At American Express, he grew from CIO of the Enterprise Growth unit to become president of the unit.
Sample took his current role for the St. Louis-based pharmacy benefits management behemoth nearly two years ago. As he notes in this interview, information is the coin of the realm for Express Scripts, and he has helped tune his team to drive better insights through better gathering and synthesis of information. His team helps lead the innovation agenda for the company, and he has grown leaps and bounds.
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Peter High: In the 20 or so months that you have been the CIO of Express Scripts, you have been in the throes of a transformation. What was the state of IT and technology when you joined Express Scripts and what changes have you made?
Neal Sample: For 20 years, Express Scripts had primarily grown inorganically through acquisitions. The enterprise’s growth pattern was fairly consistent, they would purchase another pharmacy benefit management company or a related business, integrate it, capture the synergies from the integration, and then leverage those synergies to acquire the next business. From a technology perspective, this meant that they often did not end up with the systems they would have designed or chosen if they had started with a blank sheet of paper. It was not one plus one equals three, it was more like one plus one equals one. There was a lot of technology debt. There were many systems that would have been upgraded if the focus had been on infrastructure, instead of integrating the next company. There were also a plethora of systems. We had 31 development languages. Any technology stack you could imagine was present. Midrange, mainframe, on premise cloud, off premise cloud, it was all there. We had the opportunity to do some clean up, to enhance our reliability, and to become more agile. From a business process perspective, development had been primarily waterfall, which meant that not only were the cycle times long and fairly expensive, but the processes were rigid in their ability to respond to the market.
We had our work cut out for us. We had to decide to start with people, process, or technology. We picked all three. We began a tech debt retirement program and a move from waterfall to agile. We also focused on attracting and hiring in-house talent. Years of outsourcing had left us a little light for the transformation. In summary, I came into an environment that was target rich in people, processes, and technology, and began chipping away.
High: Part of your purview as CIO is innovation. As you have taken care of the efficiency part of the equation, trying to get to that one plus one equals three equation, what innovative ideas have you pursued?
Sample: During the heavy integration period, innovation was not emphasized. Now it is front and center. As we think about growing the company through organic initiatives, the innovation aspect will grow significantly as well. To understand how technology drives innovation and how innovation drives technology at a company like Express Scripts, you have to appreciate that essentially the entire healthcare experience, from a pharmacy benefit management company perspective, is driven by technology. For instance, even if someone gives a handwritten script to a retail pharmacy, the handwritten script goes into a network, it is sent to Express Scripts or another pharmacy benefit management company, gets adjudicated, which means it goes through drug utilization and safety reviews, and then an electronic response is sent back. Technology is involved even when the member does not know it. Another example is our home delivery pharmacy. It is a highly automated robotic system that serves hundreds of millions of prescriptions a year. Our service is better, faster, and cheaper because it is powered by technology.
Finally, the technology that consumers hold in their own hands influences our interactions with them. Folks can download and use our app to find the pharmacies nearest to them, to find the best prices at those pharmacies, and to get generic alternatives that are specific to their plan design. An individual can exert a tremendous amount of control over their own healthcare experience if they are fully technology enabled.
What I find most fascinating is the opportunity to change the game. With technology and big data, we are now able to look at adherence or compliance, which is whether or not an individual sticks to their drug regimen. Adherence to the prescribed regimen leads to a more positive medical outcome, which ultimately will lower the cost of their care. We do a tremendous amount of work with big data. For instance, our InsideRx program allows a consumer to find the best price, regardless of who their provider is. This is powerful tool in a world of high deductible health plans. In the past, it was not possible for consumers to comparison shop drug prices online or to acquire benefits outside of their plan. We would not have imagined this10 years ago, and now it is right in the palm of our hands, powered by technology.
High: You mentioned that one of your transformations involves people. From our past conversations, I know that you are mindful of the need to hire the next generation of technologists, millennials, but that you have also thought creatively about second career hires through your apprenticeship to hire program. What is the rationale behind the program and what value have you derived from it?
Sample: The program provides us with a rich source of talent. The folks who come to us through our various apprenticeship programs have remarkable perspectives from different industries or disciplines. They have decided to get into technology because they want to change careers, they want to re-enter the workforce, or they want to upgrade their earning potential. Express Scripts was facing a conversion where we literally had thousands of contract and consulting resources, but we knew that, especially as part of an agile process, stable teams of employees perform better. Hiring thousands of folks over a short period of time is a daunting task, especially in fields like technology where there is a fairly high barrier to entry. We also realized that we had particular unmet needs. For instance, we have a diverse technology stack with a lot of legacy and we know that many of our COBOL programmers are getting ready to retire. We also know that there is not a replacement pipeline coming out of the current educational system. We recognized an intriguing opportunity to match, through our apprenticeship program, second career folks with our need for COBOL programmers. We partnered with a program called LaunchCode, which is a national nonprofit that started in St. Louis, to create COBOL training courses. The second career folks come in self taught through online training courses, and then use LaunchCode courses to learn COBOL. Several successful cohorts have come through the program, and dozens of these folks are supplementing our workforce. These people have an unmatched enthusiasm for their roles and are filling a gap that was otherwise hard to fill. They are quite productive. It is a powerful win-win situation.
High: You have a bachelor's and a master's in the discipline from the University of Wyoming, as well as a master's and a Ph.D. from Stanford. It seems like that level of education has fallen out of fashion. You have the Peter Thiels of the world, who ironically has an undergraduate and a law degree from Stanford, saying that even an undergraduate degree is no longer necessary, and that people ought to start businesses straight out of high school in lieu of going for the next stage of education. What value have you derived from having studied a discipline so deeply?
Sample: I started my doctorate because, in large part, I envision myself as an educator. However, being at Stanford in the doctoral program in the 1990s, it was impossible to not join a startup, at least as a consultant. When I started at Stanford, I had to sign a consulting agreement that said I would limit myself to a single consulting day a week. My first impression was, “Gosh, why would I need even one day, I am a student.” By the end of my second year, I was negotiating with the university to get the one-day limit removed.
Going from teaching and developing a depth and knowledge of a discipline to building systems was an eye opener, and was what drew me away from the academic path. There was a moment, when I was in the startup community, where I could have easily not finished my doctorate. In fact, I did not complete my doctorate until after I joined Yahoo. At that point, it was a powerful time to have a deep understanding of the technology. During the time I was Chief Architect of the Consumer Products Group at Yahoo, you built the software yourself. The open source movement was just gaining steam and many of the products we count on today for data and analytics were just getting started. Having deep technical savvy was important because you were essentially building the platforms that you used.
Peter Theil’s comments have some validity because now that there are a lot of off the shelf, open source, and turnkey solutions, you do not necessarily need technical depth. However, if you are going to operate at the highest levels with the highest level of effectiveness, being a little bit overeducated, versed in the art, and having a deep understanding of your discipline, are only assets. My education is not something that gets in the way. My ability to sit down with developers and review their Cascading Style Sheet (CSS) for their front-end presentations sometimes shocks them. It also builds credibility within the team as they see me as somebody who understands what I am doing. It also helps from a decision-making perspective because I have the ability to evaluate a product opportunity in the technology space and understand it as well as, or in some cases better, than a vendor provided solution. An advanced degree is not for everybody, but as you get to the peak of a career, it is certainly helpful and can only lead to better outcomes.
High: Throughout your career you have joined new industries. Thinking across your career, how did you come up to speed on the terms, metrics, ecosystems, etc. to ensure that you were connecting the dots appropriately?
Sample: I always encourage folks to take a significant risk that teaches them something when they move to a new job. Sometimes the risk might be that you stay within the same company and relative level of seniority, but move to a different function or discipline. Or maybe you stay within the same industry and function, but you take on a role that has significantly more scale. Or conversely, you keep the same function and scope, but you move into a different industry. In each of those situations, whether you are changing scale, function, or domain, there is a real opportunity to learn. However, you still add tremendous value because by keeping one or two of those variables fixed, you can draw on your existing skills and previous experience. With my move to Express Scripts, healthcare was a new space, but the move was at a scale and within a function that I was comfortable with. The real key was learning about pharmacy benefit management. I started my preparation the traditional way. Before joining the company, I did a lot of independent online research about the company. Then I expanded that out to see what analysts thought of the company, the sector, and the market. I tried to get a 360-degree outside in view. After I had this foundation, I reached out to senior leaders of the company to test the hypotheses I had come up with and to get the inside out view. Then, I worked on matching the outside in view with the inside out view.
High: During the early stages of your tenure, were there advantages of not being aware of all of the shibboleths and norms?
Sample: If you are intellectually curious and willing to be vulnerable and express that you do not know something, a tremendous amount of opportunity opens up. If you ask fairly naïve questions, sometimes you will get an answer that simply improves your knowledge base, but every once in a while you will get an answer that makes you ask, “Why do we do it this way?” Then, you can push a little more and say, "Have we thought about alternatives?" From there, you can start building analogies from previous experiences, share new perspectives, and create some interesting value. Doing that requires both curiosity and vulnerability on the part of a new executive. When I joined Express Scripts, a fairly extensive learning process and a willingness to admit what I did not know led to interesting opportunities in an industry that, although being somewhat mature, is ripe for innovation.
High: We have talked about some rising trends, are there others that you are particularly excited about as you look a couple of years out?
Sample: High utility wearables are an exciting area where rapid progress is being made. For a long time, people have talked about the potential of wearables like integrated speaker systems in a jacket or pedometers in shoes. To some extent, this has come to bear; you can measure your steps and you can find your lost keys. However, within healthcare, we are already starting to see high utility wearables that allow us to do more. We can use data and telemetry to get metrics on our clients that can be used to help enhance their healthcare outcomes. For instance, the watch I am wearing not only measures my activity and motion on a regular basis, it also takes my heart rate, and measures sleep times. All of those things are data that contribute to an overall health picture that we can leverage to improve outcomes. In the future, these devices will be more sensitive and have more discretion. We are on the cusp of wearables being able to interface with the human behind them and make a real difference.
Peter High is President of Metis Strategy, a business and IT advisory firm. His latest book is Implementing World Class IT Strategy. He is also the author of World Class IT: Why Businesses Succeed When IT Triumphs. Peter moderates the Forum on World Class IT podcast series. He speaks at conferences around the world. Follow him on Twitter @PeterAHigh.
