Daring to Do Mighty Things: A Leadership Philosophy (ft. Clay Ritchey)

Thanks for tuning to Digital Voices podcast, where we chat digital transformation challenges and opportunities across healthcare and life sciences. And now, your host, Ed Marx.

Hi, Ed Marx here. Welcome to another edition of Digital Voices. So glad you are with us. I know you have a lot of choices in what you can listen to and learn from. And you've taken the time to be with us. So I just wanted to say thank you. Today we have the CEO from Veratto, Clay Ritchie. Clay, welcome to Digital Voices.

Hey, yeah, it's great to see you. Thanks for having me.

Yeah, and just to put a date stamp, as we're talking, we have the full solar eclipse going on. So if there's anything weird that happens, you'll know we can always blame the eclipse. So Clay, do you remember where you were during the last eclipse? I think it was like 5 or 6 years ago.

It was 2017, and I don't remember at all where I was. I was probably spending too much time working and not enough time looking up. Yeah.

So we're going to do that as we're, when we're done recording, we're all going to take a couple of minutes and head outside and check it out. But Clay, you and I first met really through mutual friends in the CEO community. In healthcare, it's a small world, and I was introduced to you, and I was like, wow, how have I not met Clay before? You're such an interesting person, and that's what I want to dive into. You've been CEO at multiple places and just excellent, full of lots of wisdom when it comes to leadership. So, definitely want to dig down into that. But before we get too far down the road, Clay, what are the songs on your playlist? Like, what do you like to listen to?

Let's get to the real important stuff. I like that, Ed. You know, I have 2 teenage daughters, so we've been listening to Beyoncé's new Cowboy Carter album lately. It's playing a lot here. And of course, the girls are looking forward to Taylor Swift's new album dropping next week. But when I'm not listening with my kids, I've been getting into a lot of jazz lately. So I recently got reacquainted with George Coleman. So I've been listening a lot to George Coleman. And then also, I saw Lee Konitz play once, and he was playing with the pianist Dan Tepfer, and I'm really getting into his work. He most recently did an album where he took the best of Bach and is doing it in a jazz form, improvising Bach. So anyway, lots of jazz here, whatever, trying to keep up with the girls.

Yeah, no, I love that. I'm going to look those up. That's why we ask the questions. We are creating actually Digital Voices playlist, and everyone has sort of these unique artists that they like to listen to and then make for a great, great playlist. What about life message or mantra? Are there words that you sort of live by, Clay, or you lead by?

Yeah, so I, gosh, one of the, a huge, I love reading about people, people who've done big kind of great things in their life. You can learn so much from others' experiences. And one of the first biographies I read was on Teddy Roosevelt, and he's become one of my most just favorite people in all of the world and in history anyway. And his mantra was, dare mighty things. And I really love that. When I build organizations, when I think about the type of organization that we want to have, we really challenge our teams to dare mighty things. And so, the idea there is, Is don't, don't kind of settle for doing average or, or not taking risks, but, but, but live on the edge a bit and, and, and endeavor to do the hard things and do them well.

I like that a lot. And that, that's another little list that we're compiling as well as everyone's mantra and creating a, a little booklet out of that. Because again, you get these great insights from leaders such as yourself. So Clay, I already alluded to the fact that you've done a lot of, had a lot of important leadership positions in your career. Tell us a little bit about yourself personally and professionally.

Sure. So, I grew up an athlete and I feel like a lot of this kind of competitive nature, but also this idea of being willing to put in the hard work in order to do something meaningful. If you're going to be a lead at something, it's really hard, right? You got to work hard at it. And I think that I learned a lot of that through of being a 3-sport athlete as I was growing up. And then beyond that, I was an electrical engineer, so I've always been a critical thinker and enjoy solving problems. And that really allowed me to start my career as an engineer at General Electric. And then from there, after business school, I really got this bug around healthcare and how technology could really help transform healthcare. And really help bend this cost-quality curve that we've been fighting for decades. And now, I've been CEO now 3 times in healthcare tech companies. And my most recent opportunity is I've been, for the last over 3 years, the CEO of Verado, a healthcare identity company.

So, tell us about the 3 sports. What were they?

Yeah, so baseball, basketball, and football. And so, and I grew up in a small school, 150 kids in a grade, so it was kind of our duty to play 3 sports.

Which of the 3 do you still play today? Do you do any of them?

I do. I play basketball still, and my daughter, my 14-year-old, is really getting into playing basketball as well, so I'm playing a lot with her. I can't quite play it at full speed anymore.

Yeah.

My brain is too far ahead of my body. It's just a bad recipe for injury. But yeah, the team sport of basketball is really amazing. It's just a beautiful symphony of people kind of reacting to one another and helping each other be better. And so I think it's a great metaphor oftentimes for business as well.

Yeah, and especially because it's real time, you know, as opposed to like football, which is a set play and, you know, it's 3 or 4 seconds long, and some of the other sports. Yeah, basketball is kind of like soccer where it's constant motion and you do have to really know your team and your teammates and their capabilities. And so that's a really good analogy with basketball. So Clay, you mentioned that, you know, you've been a multiple-time CEO. In 2010, I think you made your first successful exit. Can you tell us a little bit about that?

Yeah. So, uh, you know, the hardest thing about becoming a CEO is, is if you're not a founder, is getting that first opportunity. And, uh, I— my first opportunity to be a CEO was with a company called Equinox Healthcare, and it was actually a provider of healthcare services, home infusion services, doing extraordinary things to people, you for patients and patient care outside of the normal care setting inside of a hospital. And it really opened my eyes to, first of all, how hard it is to be a provider, like just how hard it is to deliver amazing care and to do so in a very challenging setting whenever you don't have all of the support structures that you might have inside of a structured care setting at home. And I really feel like That experience has been very seminal for me, helping me understand the complexities of healthcare and also just how important technology can be to delivering better care. I remember in a home infusion environment, the whole goal is to get more of— it's an arbitrage game. That's when I really learned that healthcare is an arbitrage game. You got to get more than your fair share of those services that you get more than your fair share of reimbursement for. So we were constantly fighting for nutrition patients. It turned out that nutrition patients on TPN really were the best long-term patients with outsized reimbursement. And in order really to do a great job of managing these patients, for example, we were early adopters of remote monitoring. We actually would buy all of our patients Wi-Fi-enabled scales so that we could have a high level of compliance to getting their weight and have an accurate weight. So anyway, so it was really— this idea really started percolating with me that technology has a really interesting role here to play in how we deliver care in all care settings. And that led— we ended up selling that business. You mentioned the exit. We sold it to a roll-up that was happening at the time where where another organization was buying up home infusion companies, and we ended up being a part of that platform. But I still thank David Kennedy from Saron Capital today for taking that first chance on me, because it does. I mean, it just takes somebody to believe in you or give you that first shot. And then after that, you prove you can do something, and then it becomes obvious that you're a good choice.

Yeah, no, that's a really good point. I never thought about it that way where, yeah, if you're a founder, you naturally become CEO typically. But if you're not a founder, you have to be hired into that role. And there's founders oftentimes to contend with depending on the age of the company and obviously board of directors and things like that. And you sort of have to, and you're an outsider typically in many situations and you have to Sort of work your way in. But you did the same at Improvada and eVariant. Tell us a little bit about those 2 companies and just how all that came down.

Well, you know what, at Improvada, it was a really fun time because, you know, we were about a $50 million business when I started there. And, you know, we were just about halfway through the HITECH Act and all of this huge rush towards digital transformation, moving from the paper records to everything being digital and in EHR. And, you know, at that time, you know, if you interview a med-surg nurse, for example, they would say that like the computer became like the 5th patient, you know, in their 4 or 5 patient, you know, responsibility. And, you know, if you think about it, that was really one of the biggest inhibitors at the time. Like, As you went digital, it was really becoming a productivity hindrance to our care teams. So, Improvana was all about digital kind of security and authenticating and being able to have secure access to that information. And we ended up being kind of a great spoonful of sugar to help the medicine go down a bit for those care providers because we made the security invisible so that you could tap in and tap out quickly. And actually create a better experience as that care provider is trying to adopt technology into their workflow. And that's what I really realized in healthcare when you're dealing with these types of mission-critical elements, that the provider's always going to do what's the right thing for the patient and what is the easiest thing to do for the patient. So, we realized that we really weren't in the security game as much as we were in the productivity game. How do we make it efficient? How do we really take the burden off the provider? And, you know, that was just a good example of like really my eyes opening to how technology could make a big difference in workflow and how important it is to understand the workflow in healthcare whenever you're developing technology for healthcare. We grew that business over 5x over 4 years, and we took it public during that time period. And, you know, we had all of the the fun of ringing the bell on Wall Street, but also all of the unpleasantries of being a public company. And eventually, we ended up taking it private again to Thoma Bravo, who was this amazing private equity partner. And we thought it was meant to be because Improvado was here in Boston, and Thoma Bravo took us private in their 12th fund, and they called it the TB12 Fund. And Tom Brady, TV12. We just thought it was clearly meant to be for us to partner with Total McBrombus. That was a great ride. And then after that experience, I really wanted to have an opportunity to get back in the high-growth opportunity again. And that's what led me to Verado. And Verado was a Goldman Sachs-held CRM for healthcare company. And I was really passionate about that opportunity because A typical B2C company is going to spend somewhere between 12% to 15% of revenue on how they market themselves, engage their customers in a really sophisticated way, how they acquire customers and create lifetime value from them. When I thought about healthcare, I realized that we were spending somewhere between 2% and 3% of revenue. Think about the gap between 2%, 3% and 12% to 15% in a typical B2C organization and really trying how do we engage our consumers and help create lifetime value for them. At Evoliant, we were at the forefront of thinking about how do we help healthcare become more sophisticated at the way they think about the acquisition side of consumerism. And, we also saw this kind of trend where, you know, all this investment was being made in population health and trying to anticipate those patients that are going to become— that may be acute today, but will become chronic. As we start thinking about moving also to more of the value-based care, it became clear to me that behavioral change was a key part of how we unlock that real potential of all these investments we're making in data around—

Yeah.

using data to help us identify those patients at risk. And we really thought that a CRM platform like we were building at eVariant would be able to really tap in and deliver the tools to help really deliver that behavioral change at the point of engaging the consumer and the patient. And we had a really fun run there. I ended up having an opportunity to— we sold that business to to Healthgrades, which is now WebMD, and become a big part of their platform going forward.

So Clay, I imagine some of the commonality between those first 3 companies as you're getting set to move to Verato is one of the conundrums or challenges I know I had when I was CIO of all these different health systems was the whole identity piece. It's like, and I loved Improvada. We used it at several of the organizations where I came from. To your point earlier, it did enable a smoother workflow because it was very clumsy and frustrating in the beginning. But is identifying whether it's a patient or whether it's someone internally, an employee, is like having the proper identification, like knowing who these people were. I mean, it seems like that's a common thread in a lot of these companies where you were, where you're going to run into that issue if your customer hadn't had that solved. So, yeah, tell us a little bit. So you've had these experiences now. Why did you choose Veratu? Right.

Well, you really hit it. So with all those experiences I had, one of the things I realized is that, you know, look, there's many things that are going to contribute to us really realizing the full potential of this digital transformation, this journey that we've been on in the last, you know, 15, 20 years, another 15, 20 years ahead of us, I'm sure. But, it was very clear to me that one of the most seminal, most important elements that I believe was holding us back from reaching our full potential with those investments was this basic concept of identity, knowing who is who, and trusting that we know who is who. Because, literally, in a world where you don't understand who is who and you can't truly identify in all the different applications I have and all the different databases I have, and data sources I have, how can I trust that this data belongs to this patient and that is the same patient that I have over here, data around in another data source? Until we can truly have a method of trusting that we know who is who, then only then can we really bring those data sources together and have a complete longitudinal view of that person. And, I really saw that as one of the biggest reasons why I wanted to come to Verado because Verado had the two other things that you really need. to make that work. So, first of all, we had a huge problem that I thought was seminal. Maybe if we do this right, one of those kind of top 10 technologies that enables healthcare in the next 10 years, in our decade. Second, Verado really had a product, you know, unique technology that was extraordinarily different and differentiated from our competition. If you give Verado 100 identities you want to resolve, we're going to tell you 98 of them for sure we know who they are, 2 of them we won't know, If you give that to the typical competitive technology, they might tell you 70 to 80 of them, but another 20 to 30 they don't know, right? So, we had something that was really differentiated. And then thirdly, we had a really strong brand. People trusted us. And, as you know, in healthcare, trust goes a long ways. You want to think about kind of, this is important. These are important workflows where patient outcomes are on the line. Having that trust is really important. I think, if you have technology that's really differentiated, you have earned the trust of the marketplace, and you're solving a really important problem that could be one of the most important things we solve in the next 10 years, those things all came together in a really beautiful way at Verado. That's why I was super excited to come and join the organization.

Yeah, I know when I was CIO, even though we had pretty sophisticated systems, there were still plenty of times where It was kind of iffy because we maybe misidentified someone, didn't have the right person. And not only could it be a safety issue, but also it's just frustrating from a patient experience point of view. And also internally, it just causes a lot of rework. I was really excited. I know the news has been out for some time now, but being a Clear— so I have to self-disclose here, I'm a consumer of Clear. When you When you both came together in this partnership, that was pretty exciting to me. Can you share a little bit about the reasoning behind this partnership with Clear?

Yeah, so one of our visions at Verado is that we want to be able to help manage identity across every touchpoint in the care journey. And historically, Verado has done an amazing job of being able to manage that data once it's in your data systems, like when it's already on your backend, if you will. We do a great job of helping you wrangle that data, associate that data with the right person, and therefore you can have trusted data that you can really manage the care experience and all the analytics you might want to do around that. What Clear brought us in the partnership was the opportunity to take that opportunity, the understanding who is who, not only in the backend, but also to the frontend, so that now every front door, whether it be digital or physical, that a patient walks into or a consumer walks into or knocks on, that we'll be able to put the CLEAR technology in front of that that allows you, first of all, to verify the identity through identity proofing in a very easy way to do it. I remember back when I was at Improvada, we were doing identity proofing for EPCS, electronic prescribing of controlled substances. We were using knowledge-based protocols to do that. I remember I would go see a customer, and the physician would just throw crap at me. So, because it was so hard for them to get identity-proofed and couldn't be able to get their ability to do EPCS, and it was causing all kinds of friction, we were really happy to see that CLEAR had figured out a lot of good ways to make that much easier in today's world so that a high percentage of folks within 5 to 10 minutes are able to get identity-proofed. And then from there, you've got their opportunity to do authentication along the way. And in the same way that we see your experience at the airport being transformed. We see that similar opportunity to transform your experience of how you might enter into a hospital system's portal or a physician's practice's portal and be able to start really identifying who you are, trusting that identity and that security associated with that so information can be shared. And, you know, the other reason we think this is really important is that when you go back to the HITECH Act, the HITECH Act used meaningful use standards to get the whole marketplace to move. And when it came to patient engagement, they actually put the measurement for meaningful use on the provider, not the health system. So patients have, you know, if you're seeing 5 or 6 different specialists and primary care physicians and, you know, throughout your care journey, that's 5 or 6 different portals you might have for many of these patients. So we thought, you know, we really thought we saw this great opportunity to bring Clear as a partner in to help really streamline that end-to-end process and have a good understanding of what's happening on the front end. And then be able to carry that through to the backend for all your historical data. And now with Verado, you have one platform that gives you end-to-end visibility, a true longitudinal view of identity.

Yeah, no, it's very key. Yeah, if you're going to achieve the digital transformation that we talked about, that's sort of like, for me, it was kind of a fundamental, just sort of a baseline thing. You got to know not only internally, but also your customer base, who these individuals are and then make that experience as easy as possible. Clay, you've had this fantastic journey, which we've been unpacking a little bit, of being a multi-time CEO. What are 1 or 2 key leadership skills or traits that you carried with you in all 3?

That's a great question, and thanks. One of the things I've really tried to adopt is a lesson I learned actually in business school where I read an article, a case around Southwest Airlines and Herb Kelleher and how did he create such an amazing, unique experience for flying that Southwest Airlines did at the time, completely transformed the way that experience you had in flight. And he really had this employee-first culture that if you first take care of your employees and have an employee-first culture, they will take care of your customers. And then your customers will take care of your shareholders. That's really the right way of thinking about how you build a great company and how you lead a great company. I really have tried to embrace that thought along the way here as we build cultures at Grotto and other places I've been fortunate enough to be CEO. How do we create a culture where we attract and retain the best employees in the world at what they do? That we give them the opportunity to take risks and to make some mistakes, but at the same time, do big, important things. If we do that right, then we know that they will take care of our customers and then our customers will, through word of mouth and through rewarding us with their business, will take care of our shareholders. That's the first thing that I try to do. The second thing is, I've really learned that it's important. It's one thing to say, always do the right thing, which is absolutely probably a secondary mantra for me. There's no real black, gray area. Just do the right thing. If we do the right thing, almost always good things happen. But what I've learned is that it's also helpful to have some good definition of what it means to do the right thing inside of your organization. At Verana, we have 3 things that we do. One, we tell our employees that we want you to make a difference in everything that you do, whether it be make a difference because we're solving big, hard problems in healthcare or make a difference with the things you choose to do today to help our customers be more successful or help your coworkers be more successful. So, make a difference. Second, we say, be trustworthy. We just really want you to always do the right thing, have high integrity. Be the best in the world at what you do. Be a trusted advisor to all the folks around you. The third thing is, we tell all our employees that we want them to be customer obsessed. No matter what you do, make sure that you're over— we like to say that we want you to kind of under-promise and over-deliver, whether that be your promises to your customer, your end customer, or Even the promises you have internally to the folks that you work with that are customers of you from an internal customer's perspective. Those are some of the things that I think I'm trying to transcend over my 3 experiences. Doing that at scale is the hard part. I think those are the things I try to bring.

No, I like those, Clay. Those are really good, and I can see it evident in What would you say, let's fast forward 10 years, your daughters are now graduating from college and you're the speaker and the commencement speaker. What advice would you give new college grads heading out into the world?

Yeah, well, I think the first thing I would tell them is, you know, make sure, first of all, you have a tech— I'm going to rewind a little bit. First of all, when you're thinking about what you want to do in college, make sure that you've got a technical degree. You know, it's one thing to major in marketing or major in philosophy, but also make sure that you have a technical degree that shows that you can problem-solve, you've got critical thinking capabilities and skills, and something that can really not only be put to work. Second is, make sure you You know, invest in getting an internship, co-ops, like go work as soon as you can in the area, in the field that you want to go pursue. And I think that the sooner you can do that, more likely you're going to be highly attractive to, you know, to somebody who's hiring folks without a lot of experience coming out of college. And then I think the third piece of advice I would give is Be patient. Like, you know, you're young, you know, you can't break this, you know, absent doing anything illegal and getting yourself in jail. Like, you know, take risks and don't worry about making a mistake. But while you do that, make sure that you really dedicate yourself to being an expert at something. Like, really build a skill. You know, one of my favorite movies, uh, when I was growing up was this movie called Napoleon Dynamite.

Napoleon Dynamite.

You know, uh, he basically learned that he needed to have a skill in life in order to be successful, right? And, you know, you got to have a skill. But like, what I've learned in your career is your career is built upon skills and on success. So, you know, take the time to build those fundamental skills, uh, and your whole— you know, it won't pigeonhole you, it'll just give you more options, right? But, uh, I find sometimes these, uh, folks coming out of college, they think about— they want everything now and they're not willing to be patient enough to build the skills to really have some success and, from there, build a career off of that momentum.

I think that's sound advice. What about taking care of yourself? How do you recharge your batteries and sort of remain fresh because, Clay, you're building these companies. You have young daughters, a lot of stuff going on. How do you sort of take care of yourself and stay fresh as a CEO?

Yeah. A couple of things. First of all, I'm trying to get really good at taking this thing, just like we tell our kids, and setting it aside and having several hours a day where I'm not tethered to it. It's really hard. As a CEO, you think that you can't not— how can you not be available? But, of course, you can. I try to take 2 to 3 hours a day and be untethered from these devices that connect us with things that take the energy from us. Second is, I've gotten a little bit older and I've found that— we talked earlier, like, it's really hard to play sports, things you used to do to stay competitive. I spend a lot of energy on a regular basis now thinking about wellness and what that means for me, whether that means my diet, exercise? What do I do to take care of me and to fill myself up with opportunities physically to have a clear mind and perform? And then lastly is I try to feed my spirituality beyond just my physical wellness, but also mental wellness with whether it be reading. I'm trying to do more reading now than I ever have before, but also reading things that are that aren't always just about building a healthcare tech company? How can you go and learn from and truly immerse yourself in other things that are happening around us so that it makes you a better, well-rounded person? Because you start realizing that the more well-rounded you are, the better you are at being a better parent, being a better leader in a company, and also kind of, if you can recharge your batteries and give some of that example for those around you. I think it also is a good example. So those are a few things I've been trying to do. It's not easy, but I try.

No, Clay, those are great. And in the time we had together, we learned some new jazz artists to listen to that are doing a variation on Bach. That's going to be super interesting. I'm definitely looking that up. And basically the overall theme is Dare Mighty Things from Teddy Roosevelt. And you shared a lot about your journey in terms of the hard work and the ethics that you learned growing up. As an athlete and just with your technical degree and then how you got into healthcare and the different companies. We spoke a lot focused on Verato, obviously, because that's where you're currently CEO, but the importance of the concept of nailing down identity. And then we talked a lot about leadership, was my favorite part, sort of like the skill sets that you had to draw from across all of those. And you summarized them beautifully talking about Developing a people-first culture, because people take care of the customers well when you do that, and customers obviously take care of the business aspects. And then the culture that you sought to create and have created at Veranto, everyone should make a difference, number one, be trustworthy, number two, and have this customer obsession. And we sort of ended on some good advice for everyone, whether you're graduating from college or you're just recharging your batteries as it is today in terms of Disconnecting yourself from the phone on a regular basis, keeping care of yourself physically, mentally, and spiritually. So, we covered a lot of ground, Clay. Is there something we missed or anything you want to double down on? I'll give you the last word.

No. Well, great conversation. I really appreciated it. And thanks for the time. And for me, I just want to come back to this, All this work we're doing with digital transformation, whether it be, I'm moving my data from an on-prem data center to the cloud, or I'm truly trying to connect all my data sources so I can truly do analytics that I can trust and can really move the needle with how we think about managing risk and outcomes for our patients, or whether it be AI, getting ready for AI, and how we really have trusted data that can train an AI algorithm to make sure it's to give us the best answer as possible. None of those things can be done without trusting who is who and the basic concept of identity. And I think it's really given everybody an opportunity to rethink their identity strategy and really connect it to where they're heading, not where they've been, but where we're going as a healthcare community. And I think it's just such an exciting time with all these opportunities with digital transformation to revisit identity and get it right. From there, Everything else will fall in place.

Yeah, no, I completely agree with that. First things first. Clay, this has been wonderful. Thank you so much. And in the time, in our 30 minutes together, no one can see this because this is all audio, but we went from super bright outside and it got almost pitch dark. I was like, you know, I didn't want to stop our recording, but it got like pitch dark and now it's brightening up again. Pretty phenomenal that we recorded this during the solar eclipse, which won't happen again for many, many, many years. So again, thank you, Clay, for, for being my guest. And thank you everyone for listening and sticking with us.

Thank you for listening to Digital Voices Podcast with Ed Marx. If you enjoyed this episode, subscribe on your preferred streaming service and leave a rating and review. And most importantly, thanks again for listening.