John Sculley Has An Rx For CX

The former CEO of Pepsi and Apple is applying “the same basic ground rules” to his current role as CMO of healthcare venture RxAdvance: “You start with solving a really big customer problem.”

John Sculley Has An Rx For CX

by Keith Loria

Posted on 01-22-2018

John Sculley, of PepsiCo and Apple CEO fame, has made a career out of transformation. These days, he serves as CMO of healthcare venture RxAdvance, whose cloud-based platform is proving to be a big shot in managing pharmacy costs and eliminating inefficiencies.

Sculley’s approach comes from a combination of lessons from his book “Moonshot!: Game-Changing Strategies To Build Billion-Dollar Businesses,” a compilation of career lessons provided by CEOs, entrepreneurs, and company founders, derived from his 40-plus years in marketing and business.

“The opportunities to use exponential growth technologies to transform healthcare costs are huge,” Sculley told (Indeed, last week Amazon, Hathway and JP Morgan announced their plans to form an independent health-care company for their employees—a move that could one day have implications for the entire industry.) I COULD ADD SOMETHING ABOUT WALMART HERE, OR TAKE OUT REFERENCES ENTIRELY/GK

Read on as Sculley elaborates about those opportunities, as well as his thoughts about customer experience and its impact on building a branded business. Tell us a little about RxAdvance. What is the company doing that’s different?

Sculley: RxAdvance is what’s called a PBM, a pharmacy-benefit manager, [and] the market we address is about $840 billion a year. RxAdvance is a cloud-based platform that focuses on prescription drugs. … [This year] we expect to be over $2 billion in contracted revenue. Our goal is to potentially build one of the largest platform companies ever. The healthcare industry, we believe, will be completely transformed in being able to eliminate tens of billions of dollars of avoidable drug-impacted medical costs.

This is the most opportune transformation that I’ve been involved with since I was with Apple. Speaking of which, how did your experiences at Apple and Pepsi prepare you for the healthcare sector? And how has RxAdvance started to transform the industry?

Sculley: This is a giant industry, so it would be an exaggeration to say we’ve transformed it. We are hopefully becoming a role model of what’s possible and what’s practical and the incredible cost savings we can achieve. What I learned as I came out of the tech industry is that you don’t start with the technology. You start with the customer—in this case, the patient. How do you do that?

Sculley: Solve really big problems for patients and you can become patient-/customer-centric. You develop the big business architecture and employ through the technology, particularly on things that are going to be highly scalable, like workflow process and automation. It’s the same basic ground rules I’ve learned throughout my whole business career. You start with solving a really big customer problem. It’s all about the customer experience. Can you talk about what emerging technologies you are seeing in the space and how it is fostering innovation?

Sculley: The opportunities to use exponential growth technologies to transform healthcare costs are huge, yet until now cloud-based computing or big data analytics hasn’t had broad-scale success. The high-tech industry is now taking the healthcare opportunity seriously, and so are mainstream health payers and providers. It’s reasonable to expect some major success stories from new, entrepreneurial companies solving big problems in healthcare over the next five years. What are you keeping an eye on?

Sculley: Cloud-based, smart process automation. This is what we do at RxAdvance in the Rx ecosystem. We generate actionable analytics that transform the complexity of rules-based transactions into solutions that cross the entire continuum of care. The result is billions of dollars of potential cost savings for health plans and shifting more and more transparency and control to physicians and patients.

In the era of machine learning, computers will increasingly learn from sensors and be constantly updating data interpretation. Sensors in wearables are now at the tipping point where medical sensors can measure and report all kinds of useful clinical data. Over the next five years, we will see population health data converge with genomic data, creating machines that can diagnose as good as, and sometimes better than doctors. You wrote “Moonshot” in 2014. After being involved with the healthcare space for a few years now, what lessons have you learned that you would put into a new version of the book?

Sculley: I wouldn’t change anything in terms of the basic thesis, which is customers have never been in a more powerful position. It’s because technology is enabling so many choices to be put in front of customers that the loyalty of a customer is only as good as the latest offer you give them. It’s elevated the power of customers, and they are even more powerful than traditional brands.

For example, I came out of the CPG industry, [where] the value of a brand is no longer defined by massive advertising behind a mega-brand campaign. The value of a brand today is the entire experience that the customer has, which could mean looking at the opinions of other people with that product or service. It may mean, how quickly was that product delivered to my home? Did I get it in two hours or one hour? How satisfied was I with the customer service?

The whole way that one thinks about building a branded business is entirely different than it was back when I was at Pepsi. … We’re in an era where customers are incredibly powerful, and they’re being enabled every year with better choices and easier ways to do things. So it’s all about satisfying customers and paying more attention to the opinion of other customers than large, megabrand advertising campaigns that were so important in the past. What are the key tenants of creating healthcare in a digital world?

Sculley: The first thing is, you have to have a platform, and the concept of platforms is a new way of thinking in the healthcare industry. Healthcare always starts with, “What are the rules?” “How do you deploy things in hospital systems?” “How do you deploy things in health plans?” And so the healthcare industry doesn’t traditionally have a history of starting with the customer. It always starts with the institution, so the change is getting people in the healthcare industry to appreciate a real transformation, the ability to make healthcare delivery sustainable, and taking information across the entire continuum of care.

You’ve got to start from the patient’s point of view and move back through the health professionals, through the physician specialists, through the formularies, through the pharmacies, through the health plans. All of these things have to be integrated. You have to be able to design and deploy a highly intelligent workflow process automation. What do you envision for RxAdvance in 2018? What is the company excited about?

Sculley: I think 2018 is going to be an incredibly big deal for us because we’re growing at an exponential rate. I think between now and 2020, there are many contracts that are coming up for renewal with pharmacy-based managers, and they want to learn more. We’re estimating that by 2020, we’ll be doing at least $14 billion in revenue, which will be a big accomplishment for us.

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