In this episode of The Venture, we speak with Moritz Hartmann, global head of Roche Information Solutions for Roche Diagnostics. Fueled by its ability to adapt to constant technological change and disrupt via science, the 125-year-old company now uses digital tools and data science to provide insights, drive improved patient outcomes, and deliver personalized healthcare. In this conversation with McKinsey’s Anand Swaminathan, Hartmann explains his mission to innovate the company’s diagnostic solutions through the adoption of new technology, the value in giving product teams freedom to operate without interference from senior leadership, and never forgetting to let patient needs guide the business.
Andrew Roth: From Leap by McKinsey, our business-building practice, I’m Andrew Roth, and welcome to The Venture, a series featuring conversations with legendary venture builders in Asia about how to design, launch, and scale new businesses. In each episode, we cut through the noise to bring practical advice on how leaders can build successful businesses from scratch.
In this episode of The Venture, we share a conversation with Moritz Hartmann, global head of Roche Information Solutions for Roche Diagnostics, one of the Swiss multinational’s two divisions. Adapting to constant technological change and disrupting via science has fueled the 125-year-old company’s longevity; Roche Information Solutions now uses digital tools and data science to provide insights, drive outcomes, and deliver personalized healthcare. Hartmann sat down with McKinsey senior partner Anand Swaminathan. Hartmann explains his mission to innovate the company’s diagnostic solutions through the adoption of new technology, giving product teams the freedom to operate without interference from above, and never forgetting to let patient needs guide the business.
Anand Swaminathan: Welcome to The Venture. I’m Anand Swaminathan, senior partner and global lead for Build by McKinsey, where we build new digital businesses, modernize core technology, and drive digital transformations for clients. Today, I’m delighted to speak with Moritz Hartmann, the global head of Roche Information Solutions for Roche Diagnostics. Over its 125-year history, Roche has grown into one of the world’s largest pharmaceutical companies as well as the leading provider of in vitro diagnostics [IVD] and a global supplier of transformative solutions for major diseases. Moritz, welcome, and thank you so much for taking the time to chat with me today.
Moritz Hartmann: Thank you very much for having me, Anand. It’s my pleasure.
Anand Swaminathan: I thought we would start by having you give a little bit of background about your journey at Roche and how you created this business.
Moritz Hartmann: I began my career in the tourism industry in the late ’90s, working on technology behind a flight-booking engine and hotel directory. I knew I had to pivot away from that, which led me to join Roche in 2005 in a finance role, one that evolved over time into commercial and now product roles. Two constant threads throughout my career have been to work in technology and on frontiers, like the opportunity to open the first direct presence of an IVD company in the Middle East for Roche. Right now, I’m working on taking an incumbent business into a new discipline.
Anand Swaminathan: Over a decade ago, Marc Andreessen famously said, “Software is eating the world.” And today, software seems to be a pillar of growth and differentiation in every industry. In fact, McKinsey research suggests that 70 percent of the highest-performing companies globally already use or plan to use software to differentiate and create growth. It seems that you’ve been on this journey at Roche to create differentiation and growth, perhaps powered by software. What inspired you to build and scale such a software business inside this 125-year-old organization? Was it coming disruption? Was it to become the disrupter?
Moritz Hartmann: I would say we’re putting ourselves more on the proactive path of wanting to disrupt. Over these 125 years, we’ve always been in the business of science and the business of disrupting by science. The current technology shift is not the first one we’ve undergone at Roche, and that’s maybe why we’re still around.
So disruption has certainly been a driver for us. We’ve been using software for over three decades, but the software was there to make our instruments run. Now we’re in the business of using software to deliver insights and make them actionable, using digital tools and data science in the service of patients and driving outcomes. These tools support our core strategy of delivering personalized healthcare, as well as the next step we’ve embarked on: adding insights to that combination of pharma and diagnostics.
Anand Swaminathan: This reminds me of this debate about whether the software business should be integrated into the core business, sit adjacent to it, or maybe even exist separately.
Moritz Hartmann: We’ve seen many examples of start-ups within large corporations that haven’t really achieved expected success. There are specific reasons for that, one of which is very simple: whenever you are part of a larger organization, your next pitch isn’t necessarily an existential one. So it’s very difficult to reproduce a start-up environment within a large corporation. That’s why we took a fundamentally different approach, one based on our unique advantages that we can use to expand.
If you think about it, diagnostics have always been in the business of clinical decision support. Every single data point—which last year amounted to 23 billion data points generated by our products—is a clinical decision support. And those contribute to more than 70 percent of all decisions. So when we enter the world of algorithms or digital biomarkers, we’re expanding beyond just bringing in new data sources to support these decision points—some of which may not even rely on information derived from blood or tissue samples. That’s one example of how we’re developing this strong right to play out of our core business.
Also, on the pharma side, when you think of the concept of companion diagnostics, digital companions work in the same way, since they basically act in conjunction with a therapy to either monitor a patient’s progression or identify personalization elements like dosage. We believe we have a strong opportunity to give patients an experience and value they can rely on, as they do with our blood tests or medicines. These digital companions also give healthcare professionals the opportunity to quickly adopt these solutions, because they don’t need to rethink the whole concept but just expand the usage of existing solutions.
Anand Swaminathan: You use the concept of leveraging the advantages. One of those advantages usually revolves around talent and culture. It’s no secret that finding the best tech and engineering talent is one of the hardest things to do. And this talent is attracted to companies with a culture of agility, rapid innovation, and hyper-collaborative environments, or companies with growth mindsets. What key talent capabilities are you looking for? Have you had any challenges attracting that talent? Because it seems like everybody else is struggling with that.
Moritz Hartmann: It’s absolutely the case. And I think finding talent really starts with identifying the capabilities you’re looking for. It’s trendy to say you have to act like a software company, but we learned that we have to act like a digital health company. And that’s different from a software company, so we have to find that identity. We’ve made big steps by constantly asking ourselves what kind of talent we want to attract, and one of the things we see as a differentiator for us is our purpose, which is shaping the future of healthcare and changing lives.
There are many talented people attracted to working for a strong purpose, maybe more so than a few years ago. And I think that helps us because we give meaning to what we’re doing. Having said that, we’re also in a bit of a conservative industry. One of the key drivers for tech talent is how quickly you can make an impact on the marketplace. But we’re in a regulated industry and can’t offer that quick impact. So we should be clear about what we can bring to the table. Again, what we bring is our purpose, making an impact through positive change to people’s lives with very stable, reliable technologies people can trust.
For example, take digital health business development, which is much different from our traditional product line. Our therapies and pharmaceuticals are predefined as products years before they hit the marketplace, and our diagnostic processes are tracked to determine whether the initial set of requirements is being met before a product is released. But in digital health, we have products that aren’t yet fully formed, so we need to contextualize them on the customer side to make sure the customer can find different ways of using them.
And these are super-interesting tasks, because you need people who can think through the technology and figure out how to bring a specific technology into a patient journey—the kind of people who ask themselves, “What are the elements I might need to add from an ecosystem perspective? How do I ultimately make this work in the process landscape, even in the payment landscape of that particular customer or that particular healthcare system?” Only if all these elements come together will you be successful. That’s a particular skill we’ve identified, and we need to attract these people to our organization.
Anand Swaminathan: It sounds like, within Roche, you have that purpose, and people are attracted to it. And when you think about software talent, they’re attracted to a test-and-learn approach—creating early wins and finding ways to navigate around roadblocks. How are you thinking about some of the early successes you’ve seen in building out this business? And how do you measure success?
Moritz Hartmann: Again, I think this goes back to the very roots of our businesses. We always look to provide evidence that we are creating value for patients, for the healthcare systems, and, ultimately, for society in our ability to deliver solutions. You start with evidence showing you can do this for one patient. Can you do this for a single case? Can you make a single decision better at a certain point in time? And when you can do that, you can scale it to the next five decisions if you can reproduce it. And if you can reproduce it five times in a single environment, your next step is determining whether you can reproduce it in maybe 20 different cases that also cover some different environments. Only then does something become scalable.
A good example of our evidence-based approach is our tumor board solution, where we decreased the preparation time for multidisciplinary meetings. It’s sometimes very difficult to get the right decision makers to the table quickly, but it’s a critical time for patients who just had all their analysis completed. So one needs to get all the medical minds together with that information in front of them to make the right decision and set the patient on the right treatment path.
A 30 percent reduction in this process time is huge for patients. And if you can do that several times, you can really expand your impact and reach more patients. We discovered we could reduce the preparation time for these meetings by more than 40 percent, which created an economic benefit for the provider. This is the sweet spot, one that combines both a patient benefit and an economic benefit. Such a solution works for the entire system, and everybody benefits. And that’s the basis to scale for the future.
These technologies are new, so you won’t have the most senior person in the organization calling the shots. The talent needs to explore and pilot things every day. And the answer ultimately lies with our customers, not within our organization.Moritz Hartmann, global head of Roche Information Solutions for Roche Diagnostics
Anand Swaminathan: In the software business, learning is one of the key constants—learning how to change, learning from successes, and learning from failures. Software businesses know how to internalize learnings, and they know how to rapidly adjust and evolve. But sometimes I’ve found that it’s a new muscle for incumbent businesses to learn, internalize, and evolve. I’m curious: what are some of the reflections and learnings you’ve gained from building this software business? Has anything surprised you along the way?
Moritz Hartmann: There is this question about how deeply one understands technology. How much of an early adopter, or even a pioneer in terms of trying new things, are people? Sometimes there’s a bit of reluctance to try things that appear complicated. But in fact, many of these supposedly complex things are quite easy.
It’s probably an advantage that the healthcare industry is not an early adopter. I mentioned my background in tourism, which was one of the first industries to digitize, and we were forced to learn a lot very quickly. I was personally surprised by the many quiet pioneers out there who are very curious. Curiosity, I think, is a key requirement for people working at Roche. You just need to provide them with a few good examples and first steps to help everyone realize that disruption is not a threat but an opportunity—and an opportunity we can lead.
Another example is the VACC leadership journey that we’ve been on for a couple of years. I think it’s fundamentally important to differentiate between a command-and-control leadership and the ability to challenge the status quo, to think beyond boundaries. This [shift in thought] is transformational, and these technologies are new, so you won’t have the most senior person in the organization calling the shots. The talent needs to explore and pilot things every day.
And the answer ultimately lies with our customers, not within our organization. And the VACC leadership journey at Roche helps instill that mindset within the senior leadership—to embrace and act on that feedback to further develop organizational thinking. And that, to me, is both a fundamental advantage and maybe one of our most difficult challenges—to break out of an incumbent business into a completely new technology area.
Anand Swaminathan: Can you expand more on VACC and tell us what it stands for, so our listeners know what you’re describing?
Moritz Hartmann: VACC stands for visionary, architect, catalyst, and coach—four roles you take on as a leader to enable and empower teams, rather than telling them what to do. And that approach is a key element of successfully functioning product teams, which quickly iterate with customers. Decisions need to be made within these teams, not anywhere else. And VACC leadership techniques allow us to help teams take the next steps—for example, through a catalyzing question, by helping them architect a broader vision, or by coaching individuals on their personal leadership.
Anand Swaminathan: You’ve brought out this very important point that when you’re building, you’re considering what your customers actually want, what patients actually need. Any thoughts on how successful businesses build and scale by thinking about the customer? What are some of the things you’ve done to bring that voice and dimension of the customer into the fold at Roche?
Moritz Hartmann: One of the key elements is quickly understanding the customer and their problems. So one question that I constantly ask is, “What customer problem do we want to solve?” And many times, we don’t know this, especially as an organization that follows the science and is sometimes more driven by opportunities than needs. But to build a business, it is fundamentally important to look at customer needs and constantly validate everything you’re doing. We’ve seen many examples of how you think you’re doing the right thing, but an easy validation with a customer shows how wrong you are.
For example, we had a solution to measure glucose, which we believed was tied to the concept of freedom for our customers. So we created a campaign with pictures of the product and patients standing on top of a mountain, which we associated with freedom. But one day, we had a symposium, and one of our customers using this solution gave a speech saying, “I really appreciate this product giving me the ability to stand here in front of you and give a speech. For me, this product expands my personal freedom.” And I thought, “He’s not standing on top of a mountain; he’s standing at a podium, giving a speech to an audience.”
Afterwards, we decided to test two different images using a social media channel: one displaying a picture of a person standing on top of a mountain, and another of a person in a suit standing in front of an audience giving a speech. We thought it was clear which one was more attractive. But we had 11 times more likes for the picture of the person giving the speech. So even if you think you’ve done everything right, the feedback can tell you how wrong you are and how much more effective you can be with something else. And although it’s a marketing example, it applies equally to product development. This is why constantly working with customers and listening to their feedback is fundamentally important.
Anand Swaminathan: Moritz, it’s been such a great discussion, and I’ve loved the insights you shared. I appreciate hearing about your journey and the creation and the evolution of this business. Thanks again for taking the time and sharing your thoughts.
Moritz Hartmann: Thank you very much, Anand.