Scaling an IT Department to Support Growth (and Why Managed Services Makes Sense)

Host: Welcome to the CereCore podcast where we focus on the intersection of healthcare and IT, practical conversations to strategic thought leadership. Let's unpack the decisions, challenges and journey of those whose purpose is to deliver technology that improves Healthcare in their communities.

Today, I am looking forward to our conversation with Varun Gadhok, the Chief Information Officer at Surgery Partners headquartered in Brentwood, Tennessee. Thank you so much, Varun, for joining us today. I am interested in getting your insights on a number of topics so thank you for being here with us.

Gadhok: Yeah, thanks for having me. One of my goals this year was to give back to the community. So, I'm excited to be here and learn from you and hopefully share things here that's been helpful for me throughout my career.

Host: Excellent. Well, we look forward to it. So, I guess we'll just start with that. If you would just tell us a little bit about your professional background and then your role there with surgery partners.

Gadhok: I've been fortunate to be in healthcare on the IT side throughout my career.

I did my undergraduate at University of Iowa. I have Midwest roots and relocated to Kansas City to go join Cerner and at the time they were going through explosive growth, EMRs, electronic medical records are still, relatively in their infancy. I was a consultant there where I was helping implement some of their products -- an individual contributor early on in my career.

And I ended up relocating to Dallas about two years into my journey at Cerner and pivoted from being part of a product company, which was Cerner which implements their clinical products over to a services company with Perot systems, which was Ross Perot's company.

It's since then been acquired a couple of times, and most recently, it's under NTT data and I had the opportunity there to provide support for multiple healthcare institutions including very large IDNs, one of them being Tenet Healthcare, which is headquartered here in Dallas where I reside with my family.

And a couple of other smaller institutions and that was the first time in my career where it wasn't scripted, working at Cerner where they do one thing and they do very well. You have a lot of support around you but coming to Perot and dealing with a multitude of clients during the meaningful use days where there was a lot of incentives being governed given through the R Act to implement clinical products and so I had to learn how to solve problems and work with clients and communicate in different ways and meet them where they're at.

So, it's a lot of fun and a big challenge for me at the time and after doing that for about five years I realized. Boy, I've worked in a corporate environment at Cerner. I worked in a corporate environment at Perot and I dealt with corporate customers within healthcare, but I don't know if I really understand healthcare. I knew that in order for me to live out my career aspirations, I needed to go spend some time at hospitals to understand what the day-to-day challenges are so I could be a better leader back to my teams.

And so, it's one of those areas, Phil, where I took a step back to take two steps forward and I went back to Cerner and took on a role that was a smaller in scope than what I had.

And I traveled to hospitals and I learned from their chief medical officer, the chief nursing officers, lab, radiology, pharmacy and really got to see the complexity that we have within healthcare. And it gave me a new found appreciation for the work that we do from an IT standpoint and how influential and powerful that can be when it's done correctly.

After spending some time back at Cerner, I got a call from Tenet Healthcare, which was here in my backyard. It's an opportunity to get off the road. I took it at the time, not knowing what I was getting into, because I’d only been on the IT side with companies whose core competency was IT.

So, Cerner, you know, IT products and on the vendor side Perot on the services side, and now coming onto the provider side. I wasn't sure how it was gonna be, but I found it to be a great fit. Because you really get to be on the strategic side rather than executing on the plans that you might do as a consultant. You're actually shaping the plans. You're shaping the strategy to help your clinicians and those that provide care and then putting support around it. So, I was around the Tenet environment for about a decade, had met a lot of great people very thankful for the network that it introduced me to and great leadership.

And I really saw, how to run IT at scale for our very large organization - 18 billion plus in revenue at the time and growing. And after spending the better part of a decade there, I knew I needed to branch out and just do something a little bit different. Sometimes you get to that point in your career where you've got --you've built a lot of great relationships. You've done a lot of good things, but you're ready for that next challenge and Surgery Partners came along. It was my first time to be a CIO.

So, I'm the Senior Vice President and Chief Information Officer here at Surgery Partners. We are headquartered in the Nashville area in Brentwood, and about 11,000 employees. We’re in the outpatient ambulatory surgical center business. And so, one of the reasons why I chose to join Surgery Partners is you get to solve a lot of fun problems when you're growing. And we're a growing company and we're a solution to the marketplace. Not only are more and more procedures being eligible to be done on outpatient setting, we are very mission-oriented organization with our mission statement being “enhancing the quality of our patients' lives.”

And to be able to do that in a way that aligns all three towers within healthcare, which is the patients, the providers and the payors -- all three of them being incentivized to work with our business model was too appealing for me to pass up. And you couple that with the cost of healthcare that continues to rise and we're a solution to that. We eliminate over a billion dollars in healthcare costs just because of our low-cost, high-quality outpatient procedures.

So, I’ve been at Surgery Partners for a little over a year really privileged to be here. And hopefully that gives you a little bit more background around just my career journey. Which really, if you kind of step back, it's all about diversity. And somewhat calculated and trying to put myself in different positions and challenges to stretch myself so I can see the aggregate and how it might fit in to one's positive outcomes.

Host: I appreciate you sharing that, Varun. Certainly, we talk to a lot of different CIOs. And folks in leadership positions across our client base and across the healthcare continuum, and it's fascinating to see the different journeys. Honestly, it's those different journeys I think that they kind of feed into the overall philosophies from a leadership standpoint.

If you would maybe dive into a little bit, based on that background, all the things that you gleaned over your career. What would, how would you consider or what would you say is your leadership philosophy, particularly when it comes to building those high performing teams that are absolutely critical in the industry that we serve.

Gadhok: That's a great question. My philosophy has evolved over time, but it's one as you've got to grow within your career more and more one. You want to be more and more conscious of, because the decisions we make impact more and more people as you grow within your career.

We've all heard that the phrase “people, process and technology” within IT. And I've always been a big believer that it's the people aspect of it that should be more dominant. And when we say “people, process, and technology,” it gives it equal weighting.

And I was at CHIME event with other healthcare CIOs on the provider side, and it was interesting to get different perspectives around how other people perceive people, process, and technology.

And the consensus was with healthcare CIO's, 80% of our time should be spent on people. 15% of it should be spent on processes and 5% should be spent on technologies.

When I was younger in my career, more time was spent on technology and as you grow more and more it's people and relationships. And so, thinking about the leadership philosophy knowing that people really are the engine that make us successful. You can further break that down into three categories: one is influence and the ability to influence; one is making good decisions-- so good judgment; and then the third is drive. And we spent a lot of time on this in a leadership course that I had in grad school and this framework has really served me well.

And when I evaluate talent, one you have to be able to make good decisions, you have to have the right level of influence in particular in our leadership capacity. They've given the scope of a role but most importantly are you driven.

Studies have shown if you're not driven by the time you're 16, it's really hard to get that drive. Unless you go through a life event like a divorce or death in the family or something along those lines. And so, as I kind of learned that framework and I went back and reflected upon that in my career. I think any success that I've had is because of my drive and a strong drive will overcome poor judgment. Or maybe you are early in your career and you don't have the right influence. Those two things you can learn, you know to network to have strong advisory services around you to make sure you make good decisions. But that drive is really important and something that I look for you know within my leadership team and those that I surround myself with.

Host: No, that's absolutely critical and great insight there, Varun. I think that feeds really nicely, too, into, as you're as you're leading that team and in the industry that we serve, being nimble is so critical. We're not in a set it and forget it type of environment. If anything, covid certainly taught us that in a very rapid pace in a couple years.

Tell me a little bit about maybe how that philosophy then ties into how you keep that team nimble, able to respond to demands that that pop up whether it be something along the lines of covid or whether it be something in the lines of oh boy, all of a sudden, we're gonna --we're gonna hit some rapid growth this year, through acquisitions or the economy shifts or who knows a brand-new technology comes out of left field and we have to adapt to it in order to meet client demand. So how do you kind of keep that team at that nimble edge to be able to take advantage of all that?

Gadhok: Yeah, I appreciate the way you framed it up, Phil. And I think that to me is one of the more exciting parts about being in healthcare and IT because we see it all whether that's technology disruption or the inflationary costs, the labor pressures.

And to me one of the one of the key imperatives that I've always thought about in order to be successful and be nimble is you have to understand your business, you have to understand your customers -- not just your end customers that are consuming the product or services that your organization provides. But you have to understand the basics of accounting. How does your CFO think. You have to understand your where your chief strategy officer and your strategic team is taking the team. So, if you're not directionally aligned and have a seat at the table, then you're gonna miss out on being able to predict and forecast the potential opportunities and setbacks that could take place within IT.

So having those strong relationships - going back to the people aspect of it - coupled with earning a seat at the table and you've got to continuously earn that. There's a saying I'll share with you, Phil, that someone shared with me some time back and it resonated with me is, “if you don't have a seat at the table, then you're on the menu.”

Earning that seat at the table will allow you to better predict, better forecast, earn the trust of the team. If you can be a thought leader rather than a delivery partner - meaning someone from the business comes to you and says, can you go do this - that's a transactional element.

But as a CIO where - when you’ve earned that seat at the table - you are hopefully helping the business think through that and you're contributing towards that and with more than just IT and if you can do that, then you can just project more around the potential opportunity and then prepare your teams for the art of the possible and how things may come about.

So that's sort of the people element of it, but also IT has over time because of the technology shift and the cloud shift, has really enabled a more agile based methodology, which allows us to be a little bit more pragmatic. So, once we know say it's Covid and we want to be a little more towards digital or another opportunity presents itself. Once we know where we want to go, they're still opportunities for us to either fail fast or confirm we're going down the right path.

And so, the way I try to frame it up with the team is, if we've got let's say a long multi-year project to do transformation. We don't need to solve for it at once but we do need to understand the direction we're going and let's do it module by module and make sure that we're validating, trusting that we’re validating with our customers that we're going down the right path.

And that allows us to make sure that the efforts that we are spending in the spirit of being nimble are actually taking this down the right path and we can make course corrections along the way.

Host: No, that's spot on and you touched on something that I think we've been challenged with as an industry as a whole and in you know, you'd mentioned even you know, some conversations with other CHIME members and it's been a topic of ours with that CHIME membership for quite some time. And that is the role of the CIO is truly shifting.

Years ago, it was that transactional mindset and it's taking a while and quite frankly. It's still an evolutionary process. Moving the office of the CIO from quite frankly the basement of a hospital or an institution wherever it might be and --and into that executive suite. Where you're having that collaboration, you're earning that trust and you are seen not just as the individual that it makes sure that the network is up or that they can get to their emails, but somebody who is truly helping set that core direction. And saying okay, we're trying to do this. What can we do from an IT department standpoint, from an organizational standpoint, to really leverage things in order to see that impact.

And so yeah, I really appreciate you bringing that up and maybe you could share some nuggets, because I know a lot of your peers out there struggle with this. In fact, I have these conversations constantly around...boy, I just all my CFO cares about is cutting costs and reducing headcount.

Or that's all they want to hear about or you know -- the CEO as long as he never hears from Dr. So-and-so in the middle of the night then I'm okay.

But how have you gone about? Earning that seat. How have you gone about getting on the same page as your CFO and your CEO and in earning that collaborative kind of working relationship.?

Gadhok: Yeah, and as we talked about earlier -- relationships are so important. It's not just managing up -- meaning managing the c-suite and the executive leadership team. You have to be able to partner with your peers. So, you got to be able to manage sideways. You got to be able to partner with your vendors and suppliers that more and more play a crucial role in service delivery and operations. You've got to be able to manage down and all of it has to be communication that's tailored differently depending on the audience.

And so, the way I may speak to our CFO is going to be a little bit different centric than when I speak to my peers when I do it to my team, but they all should have some common language and some common themes because that's how you make sure your teams are connected. So having a seat at the table to be able to share with executive leadership your strategy, articulating it, adding a way to your suppliers and your peers in a way that's executable from their standpoint because you can't do it alone.

You always need the support from whether it's procurement or finance and other departments and then being able to talk to your team and understand that they understand why and--and that's where you probably get a little bit more technical. Whereas when you're managing up and sideways. It's less technical and more business oriented.

And so, I think being conscious and purposeful and how you communicate to the different audiences will earn you a lot in terms of respect because now you're meeting them where they're at in their world instead of them having to become IT experts and translate what you're saying into what that might mean to them.

The second piece of it which I think is really exciting for IT. As you mentioned, the CIO’s are being tasked with more and more and in earning that seat at the table. It's no longer that transactional element. It's an expectation that you are strategic with the business.

And we are uniquely positioned as CIO’s, which is, I believe a horizontal department. So, we have touchpoints with every department in corporate and our facilities. So, we think-- we see things uniquely that perhaps a marketing department may not see or HR department may not see and that brings us a huge opportunity to be the connective tissue towards the business and the technology.

So we can uniquely identify dots that can be connected and if we go on offense again, not being that delivery center where someone comes to us, if we can go on offense from time to time and say we found value here, and we found value here, but by connecting them we're not splitting the pie. We're growing the pie, and making those connections can really build a lot of credibility and increase the span of the influence because now you're again reinforcing the strategic partnership and you're not there just to listen in and carry out what the organizations functions are. You are actively listening, you're understanding the business, you understand each department -- their challenges, their opportunities. You are the connective tissue back and then pull all those pieces together to increase the value proposition for your customers, and we shouldn't take that for granted. Because that is a huge opportunity and companies that do that well can often be the disruptors that we see within the industry that really move the deal forward.

Host: Now just some great highlights there, Varun. You know to you talked about meeting people where they are, right? And so, it goes back to the old adage, right, you'll walk in their shoes or are you-- you've got to try to understand the perspective of the other folks inside of the organization what they're coming from, what their day looks like what --what's important to them. And even the language they speak, right?

So that may mean as a CIO, digging through your the books behind you and --and finding that old accounting manual, right? It's like, okay, let's-- let's dust this off and come in really try to understand that and—and you made another point earlier as you were talking about-- the mission of the organization and you made it made point that having the executive and that leadership team all on the same page when it comes to that mission, regardless of if the perspective is the CEO, CFO, CIO, CMO on down the line is just absolutely critical.

And then as leaders, from a communication standpoint, making sure that the folks that are doing those transactional roles or doing the other jobs, understand the why. And when you understand the why it doesn't become a transaction, it becomes a mission. I think that's what's so exciting about working and being in healthcare is that mission really is there and --and we see it every day.

So, certainly appreciate your insights on that. I know based on your background and based on some of the things that we've been doing together, you know managed services has been a strategy that you see some value in and so a lot of leaders-- and in fact, we did a survey with HFMA-- there was about half of the CFO's that were surveyed said managed services and IT. Yes, absolutely makes perfect sense. Why shouldn't it. They use managed services throughout the hospital whether it be a cafeteria, the laundry, the emergency room, the pharmacy- whatever, right? There's a myriad of things that they do, but IT has been a little lagging in that regard. So, if only half of them are thumbs up, the other half were not there yet.

Was there a tipping point in the organizations that you've been a part of -- for you personally or even maybe some caveats that you could call out, given your unique background of being in Perot Systems that was a whole bunch of about managed services, and then in a Tenet and now Surgery Partners where you could offer just some guidance to the rest of the market who's saying, maybe I should look at it? Maybe I shouldn't? What should they be looking for? What are those areas where it just makes sense. And more importantly, I think the why.

Gadhok: Yeah, I saw first-hand when I was at Perot Systems, which was providing managed services to other healthcare customers. The value that we were providing to their customers, and we had developed a core competency in certain areas that our customers just didn't have. And we have we were doing it so well-- at scale -- and being able to leverage economies of scale from a price standpoint.

We had a 24 by 7 global team. I flew to India and I stood up that team. We had a team in Guadalajara. We had a team in the United States and other companies came to us because they weren't ready to make that investment. It may not have made sense for them to make that investment. It wasn't a core competency for them and they didn't want to make it a core competency for them.

And so, I saw the value first-hand in a partnership. And sometimes you as an organization have to take a step back and say, if we don't have a core competency here, should we go develop it or should we leverage a partner that's already solved for this and can do it at scale so that we can focus on areas we do want to be our core competency.

The other thing I'll mention is, oftentimes you hear some stories around so and so went to managed services and maybe they didn't realize the value coming out of it. And I found that when I was at Perot and Tenet and even here at Surgery Partners. It's those agreements can be very value add for both parties. If you view it as a partnership. And if you view them as an extension of your team. You treat them the same way, they're in the loop as to what's going on. It's not just being managed through service level agreements. And, we did this and I want to see this percentage move here. If you can manage them as if they're an extension of your team and treat them as an extension of your staff, they will want to go and please you. The staff just like your own staff will want to make sure that you're meeting and exceeding your expectations. When it starts to turn into an SLA conversation on a regular basis or sort of a customer vendor relationship.

Host: Mhm.

Gadhok: That's where I've seen that the quality starts to diminish a little bit. Just because I was there, you know, people didn't want to work on the account where people didn't treat them well.

Host: That’s right.

Gadhok: Yeah, talent doesn't want to. If you're on a managed environment and you're serving 10 customers, your top talent wants to go somewhere where they can make the biggest impact.

And so the ability to communicate with respect and trust and to see them as an extension of your team and a true partner, is very important if you are in managed services or considering managed services.

But again go back to what my decision point is to as to whether you should consider it or not in general, you know kind of comes down to what your organization is, what your mission is, what your strategy is. But boy, I always look at us as fiduciary stewards of the company's investments and if someone else has solved for it at scale. I have to really think twice about trying to solve for it internally, if it's not a core competency, because I know I can get better value and better quality at scale than I would be able to do otherwise.

Host: Ah yeah, great insight. You mentioned the two organizations or however many there are working as one. That's sometimes easy to say and difficult to put into practice. It's one thing to say. Okay, we can do it at a senior leadership level. But how do you, how do you institute that all the way down through the organization?

Gadhok: Yeah, one, it is really important that you have senior leadership buy in. And whether it is through town halls or sort of broader company-wide communications that it's reflected that perhaps an outsourcer is a partner. There are really simple things you can do to reinforce that on a consistent basis like why we always say our IT is one team. One team, right.

Doesn't matter what the badge is on your name card. Whether you're Cisco and you're providing networking services to us, whether you're Citrix and you're providing presentation layer services, or whether you're CereCore and you're helping us with managed support. We are one team.

That communication and reinforcement goes a long way. Then you also have to keep your end customer in mind -- the one who's consuming the services.

They don't need to navigate from, oh, let me transfer you to this person over here. Then let me transfer you to this company over here. That's where you start to lose a lot of value and confidence from your end customers. And so, bring in other teams that are providing services to you in a way that it's seamless to the customer.

Then again reinforces that this is our IT team regardless of who's providing the services to the end customer. It's all the same and if you can pull that off, both at the transactional level-- from say someone who's calling the help desk for an incident to again at the leadership level in terms of setting the strategy of one team. Talking the talk not walking the walk, but reinforcing that through your actions through your communication, then it can really be the glue that takes it from top down and then reinforces from top up or from bottoms up rather.

Host: That makes a lot of sense. We talked a little bit about how do you keep your team nimble with the ability to address those things that pop up from time to time. I think you've kind of laid out a really nice framework of hey, if you've got partnerships that can focus on those key areas that they can do at scale and at high quality.

It really does kind of free up your team to be able to do those nimble, mission-focused things that are really critical to the organization, not only from a growth standpoint, but then from a customer service and satisfaction standpoint. So, makes a lot of sense, makes a lot of sense. So yeah, we always like to wrap these up with kind of an open call for advice.

So, you know, if you had to summarize, a couple of things that you've gleaned over your career or another CIO is out there saying Hey, Varun, based on your experience...

What words of wisdom, nuggets of information would you share with me, it might be things that they're not thinking of, things they haven't thought of before, whether it be tied to looking at managed services, whether it be tied to building relationships throughout the organization. Kind of a free-form for the last several minutes as long as you want to go with those nuggets of pearls of wisdom.

Gadhok: Yeah, now I appreciate that opportunity and it's fun to have these conversations, because it allows you to reflect a little bit --not just on your careers-- but the values that have made you successful. Also some things you've learned that maybe you realize maybe weren't the right way to do things. And so, you shift and evolve your values over time, along your journey.

You know at a macro level I think what has been really helpful for me is being purposeful in my career. Recognizing what you want and then being intentional about it and knowing that your career doesn't always go in a straight line or in an upward trajectory. It's okay to take one step back to take two steps forward. Knowing what good looks like to you. It doesn't have to be-- it's sort of like the weather--you don't need to know precisely what the weather's gonna be like, but you should know in the summers it's gonna be like this.

So what is sort of that 10-year, 15-year, whatever your career aspirations are, where are you directionally going and then being able to introspectively look back at yourself and saying, “If I continue down the path that I'm going, am I gonna get there?” And if the answer is “no” then you have to do some soul searching and make some adjustments along the way. But if you don't do that, you're likely not gonna get to whatever destination you have in mind.

You need to surround yourself with good people. I've been really privileged and fortunate to have a lot of mentors in my career. People that have influenced my decision-making, helped me make me not just a better leader within the organization that I work at, but make me a better father, make me a better husband, and so surround yourself with good positive people that are rooting for you and you in turn root for them.

And this is advice I got from our CEO a long time ago, which is, recruit a personal board of directors. And so, I have a personal board of directors where I can reach out to for council for advice and they're rooting for me and on the flip side I'm rooting for them. And it's reciprocal, you know, it's not a one-way relationship. Relationships when they're reciprocal are always the best ones and their long long-standing and sustainable.

And so, think about blind spots you have in your career where you want to learn a little bit about so we talked about accounting as an example. A lot of IT people don't have an accounting background and maybe they're not in a position where they're managing budgets and so they haven't had to go learn it. But if you are one perhaps where you're growing your career and you're getting accounting questions and you don't really understand how to navigate that, it may be difficult to know where to start.

Sometimes picking up the book is not the easiest place to start, because you may just need very specific narrow advice. Having someone perhaps that is a CFO or an accountant in your network as an example can help you accelerate the value you can bring to your organization and fulfill your career. As well as it's just fun, right? You're gonna hang out with people that you enjoy being around. And so, it's I don't see it as a chore. I see it as something I enjoy doing connecting with my board on a routine basis and catching up with each other and supporting each other.

Be vocal about your aspirations. If you know what you want to go do, make sure you spend your one-on-ones with your management to make sure they understand what you want to go do, because often times I've seen people that are very good at what they do and have a high ceiling in terms of their capabilities, but they don't necessarily express that they have that aspiration.

And so, if you don't express that I want to go do X, Y and Z then it's difficult for management to mobilize and position you into different ways so they can help you get to your end state. So, one of the things we do is we take a look at who are top talent is and top talent can range anywhere from entry level to mid management and higher and we're trying to be really purposeful. Hey, we have someone and every goal we've given this person, they've knocked it out of the park. How can we help stretch them? If they are driven, going back to driven, if they are driven, then we're gonna invest in them and we're gonna give them different experiences so that they can continue to live out their aspirations.

Part of it is they have to want it. One of the CIO’s I worked for a long time ago talked about one mistake management often makes is you take the talent and you take the opportunity and you say hey this talent can fill that opportunity and you put it together. But if the talent doesn't want that opportunity, then it may not be the right fit. And so just vocalizing what your aspirations are with management can help open up doors for you that maybe wouldn’t be opened up otherwise.

And then lastly, I'll just finish with this -- it's the people business. Right? As much as us technologists like to talk about the latest automation or artificial intelligence and new security tools and what have you. At a management layer, it is all about relationships and people. So, be a good person, surround yourself with positive people, understand the business. I always view myself as a businessman first and CIO second. And if you can do those things generally good things will happen.

Host: Yep, agreed. Well wonderful, Varun. Thank you so much. Really appreciate you taking the time, and I know our audience is going to enjoy hearing from you and as always great seeing you. Thank you very much for your partnership, and we look forward to great things to come.

Gadhok: Yes, thank you.

Host: Thank you very much.