00:00 Welcome to CIO Leadership Live. I’m Lee Rennick, executive director of CIO communities for CIO.com, and I’m very excited and honored to welcome Paul Hlivko, EVP, Chief Information and Digital officer at Wellmark, Blue Cross and Blue Shield. Welcome to the show, first of all, and would you mind introducing yourself and maybe telling us a little bit about your current role?
00:00:25:07 – 00:00:50:06
Speaker 2
Yeah, sure. I appreciate the opportunity to be here with you today and, look forward to the conversation. As CIO, as you mentioned, there’s really three aspects of the role at this organization. I’m at Wellmark, Blue Cross and Blue Shield. it’s which is one of the blues that serves, members and clients and providing health, affordable health care service services and solutions, in the market, ultimately trying to improve our members health outcomes.
00:00:50:06 – 00:01:11:09
Speaker 2
But my role, along with a number of my peers is really to ensure that our market position and the needs of our members are actively met. So as CIO, one of the things I focus a lot on is information security, making sure the assets of our members are protected. Focus on the resiliency and durability of our organization.
00:01:11:12 – 00:01:30:26
Speaker 2
as the landscape of both health care as well as, threat actors evolve, but also that, focus on the effectiveness of the organization that we’re constantly trying to find opportunities to be more cost effective and efficient to serve our members and clients needs. So that’s that’s first and foremost. second, and I’m the enterprise technology leader.
00:01:30:27 – 00:01:50:24
Speaker 2
So the CIO role tends to fill that. And we’re constantly looking at what opportunities do we have to build new capabilities in an organization, build new muscles. so that we can continually compete in an ever evolving and changing, healthcare landscape in this case. and that’s a that’s a full time job in and of itself, as you can imagine.
00:01:50:26 – 00:02:10:19
Speaker 2
Yeah. And third, I think the most exciting part, CIOs tend to be a change catalyst, like we are often tasked with the innovation agenda. and if I just reflect on kind of where a lot of the growth in, the GDP in the US comes from the last ten years, 35% of it’s in the in the tech field.
00:02:10:22 – 00:02:32:03
Speaker 2
so for us, it’s understanding what that growth trajectory is, what the innovation cycles look like. doing the sensing and the sense making and ensuring that we’re bringing the best of that world imported into our organization, our industry. so we can ultimately serve our clients and our members and their health needs in a more effective manner.
00:02:32:08 – 00:03:00:04
Speaker 1
Well, really large remit. And I love that piece around innovation. As you mentioned, you know, 35 of businesses are technology based companies, but you know, really everyone I talked to in your role, every company is technology based, and you’ve got clients who are at different of areas, probably in their journey with technology as well too. Right? So to be responsive to those end users and those clients, but also make sure you’re innovating and growing your technology portfolio as a leader, which you have to do is is a huge remit.
00:03:00:04 – 00:03:21:17
Speaker 1
So I really appreciate your time today. Paul. Thank you so much for joining me here today. we’ve developed this series really to support the tech leader in their leadership and tech journey. So the first question and I ask everyone this question, could you please tell me a little bit about your own career path, and leadership journey to, to date, you know, are there any lessons learned along the way that you could share?
00:03:21:19 – 00:03:52:21
Speaker 2
Yeah, sure. I mean, I think I’ve always identified somewhat as a geek. but I never really fit. I never really felt home strictly in a tech geek, type role and capacity and, I read a book recently by Andrew McAfee, and he termed, you created the term, business geek. And I think it was the first time I felt like it, it connected like I had part of, like, the geek in me from, early days in my career and then, more so in the last, probably 15 to 20 years.
00:03:52:21 – 00:04:13:08
Speaker 2
Like, I really love solving, business problems. And to me, that intersection is tech, the financial markets, economy, and the social sciences too, that come into play. So like, business geek is what really resonates with me. And in the mid 90s, started out, if you could sling code and build websites, you could start a business.
00:04:13:10 – 00:04:13:23
Speaker 1
Yeah.
00:04:13:24 – 00:04:40:02
Speaker 2
So I started out just as a sole proprietor, building websites for local and regional regional companies and really understanding not just the the tech and how it meets the market need, but also how to operate all aspects of a small business. that pivoted me into my next entrepreneurial effort, which was creating immersive virtual tours of residential real estate in the late 90s, early 2000.
00:04:40:05 – 00:05:01:03
Speaker 2
we were one of the companies that were first in the market. so I really got a taste of what being early on, the innovation curve felt like and trying to sell tech into, kind of sleepy real estate industry at the time. and right during the.com bubble. But like reflecting back on that, it was a three sided platform and we didn’t even know what that was back then.
00:05:01:06 – 00:05:20:10
Speaker 2
Right. So it brokers on one side, distribution channel on another side. And we had photographers doing the actual image capture on the other. So it’s just that reoccurring revenue model and platform businesses like we experiment to back in the day, but we didn’t really have the words for it. Ultimately, the scale was, less interesting. that that small business scale for me.
00:05:20:10 – 00:05:44:27
Speaker 2
So I found myself in financial services for the next 13 years. wealth management in particular, for a while. always technology roles in, top ten, top 15 commercial banks in the US. rode right through the financial crisis that was responsible for what was called the originate and sell program, trying to unload the 11th largest bank in the country’s balance sheet.
00:05:45:00 – 00:06:11:29
Speaker 2
which was quite exciting, and stressful at the same time. and ended up on the other end of an acquisition and then was implementing Basel two capital regulation. So kind of the flip side of the financial, crisis. and working through how banks do stress testing, I chose after that to kind of go down scale work at, I think it was 24th or 25th largest bank in the country, was on a big M&A spree.
00:06:12:01 – 00:06:34:04
Speaker 2
so new set of experiences, implemented Dodd-Frank and then really did a digital banking transformation, as that industry was going through kind of the fintech. so loved it. chose healthcare ultimately because it was earlier on the innovation curve, like fintech. It already happened. Health tech was kind of coming onto the scene and share tech was coming onto the scene.
00:06:34:06 – 00:07:03:06
Speaker 2
I really connected well with the mission, of serving our members and helping improve health outcomes. and have been here ever since. But I think what’s fascinating about my career is ran through the dotcom bubble rant. It was in financial services during the financial crisis, ended up in health insurance and health care during a global pandemic. so, so just so happens to be in a have a heavily changed, driven environment at the right times, which I learned a ton.
00:07:03:09 – 00:07:26:25
Speaker 2
two things I would share is just kind of career lessons. one always say yes, like I’ve said yes to every opportunity k of my doorstep. So make sure that kind of there’s this potentiality mindset, abundance mindset, growth mindset. and it it I’ll take it or wherever the next adventure goes. And then second, one thing I love about tech and just business in general is the team sport.
00:07:26:28 – 00:07:38:27
Speaker 2
Like there’s almost nothing that gets done by one person. so I played sports growing up, and being in a team sport, is really rewarding, because you end up working with great people to get good outcomes for your company.
00:07:39:04 – 00:07:57:22
Speaker 1
I love those tips. And when I, you know, reflect on what what you were talking about. But with your career journey, you know, it always seems to me that that part of that team or that team spirit is the end user and the customer, and that being in that first stage real estate, you know, place where you were doing these modernizations of the tours with digital and tech.
00:07:57:25 – 00:08:22:25
Speaker 1
In the end, it was the end user, right, that was getting that experience and having that opportunity to engage with something you’d normally have to drive 300 miles to go and see or whatever, right? So it sounds to me that you’ve always had the customer, at the center of what you’ve been doing, the end user, and, you know, and I guess working through those crises, the crises have really allowed you to to maybe view that in a different kind of lens along the way.
00:08:22:27 – 00:08:40:16
Speaker 2
Yeah, absolutely. I did mention it, but the last, both here. Well, Mark as well as, my prior, role, I’ve always had an opportunity to, to lead not just technology, but the customer experience function like it’s been a passion of mine from day one. And I think it the roots of it go all the way back to owning a business.
00:08:40:18 – 00:08:48:13
Speaker 2
Yeah. Like when you’re owning your own business, the only thing that matters is meeting the needs of the customer. And everything else really falls from that.
00:08:48:16 – 00:09:16:03
Speaker 1
Yeah. No, I appreciate those insights. Thanks so much. and this really probably segue as well into the next question. When we chatted last, we talked about, you know, the business, transformation and modernization journeys. You’ve worked on. And, you know, I had mentioned to you that, many CIOs I chat with talk about data and cloud, and they’re still looking at ways to up some optimizer, maximize cloud, some of, you know, are looking at, I mentioned to you repatriation back on site with servers, that type of thing.
00:09:16:06 – 00:09:28:03
Speaker 1
and you mentioned to me that you’d led a major tech, modernization in your role. So I’d love to hear more about that. And then maybe your approaches to technology modernization. any advice that you could share?
00:09:28:06 – 00:09:45:07
Speaker 2
Yeah, sure. yeah. I kind of chuckled. I think when we we talked about that. Yeah, I recall, yeah. I mean, this is a large water front cover. I won’t probably do it justice in a couple of sound bites, but I’ll try. the first thing I want to do is like, I want to recognize our team members, like, I.
00:09:45:09 – 00:10:09:06
Speaker 2
They they deserve all the recognition in the world. the last eight years, going through a substantial modernization effort, both the people that were here when we started it, as well as people that came along the way, like, there’s no way we would have been as successful as we were, their investment themselves, upskilling their mindsets, shifting, being willing to learn new things, work in a way that creates healthy conflicts.
00:10:09:06 – 00:10:29:08
Speaker 2
So we get the best ideas, like I, I first want to just acknowledge that and all the great work they’ve done. but, a little bit into our transformation here, like it was a wholesale reboot of tech, coming from financial services and health insurance, we had a number of opportunities. financial services tends to be known as a little bit more progressive.
00:10:29:11 – 00:10:50:06
Speaker 2
so there are a lot of plays that we ran, in that industry that could easily fit, an insurance business and health care. so just to rattle off a few for context, rebuild our entire reference architecture look much more like an internet scale company now, new culture principles, because how people work matters quite a bit.
00:10:50:08 – 00:11:14:06
Speaker 2
New IT operating models have the people ended up working for a different leader? which was a pretty substantial change. we supported agile adoption 7 or 8 years ago and are continuing to do that more broadly across the organization. Now outside of tech, we brought in crowd sourcing, which is open talent models and access to untapped skill sets in geographies all across the world.
00:11:14:08 – 00:11:38:24
Speaker 2
and a whole host of other things in the cloud was kind of, I don’t know if there’s the pinnacle, but it was a big aspect of it is, as you mentioned, we finished our cloud migration three years ago. just so happens to be great because we were well prepared then for the pandemic. But yeah, we really, had that as a key aspect of our transformation, because we wanted access to innovation.
00:11:38:26 – 00:12:12:14
Speaker 2
that was by far the most important aspect of it for us. And getting the deep pockets of some of the big tech companies, and their innovation cycles and being all just that in our organization move at a faster pace, was a was was a critical importance to us. but what I would share well, I kind of chuckled when you brought up people were repatriating like, I think the mental models are one of the most difficult things for CIOs and other enterprise leaders to get through, because we so often think about the next three years and the ROI of the next three years.
00:12:12:14 – 00:12:32:17
Speaker 2
And we’re going to get to this when I talk about gen AI to, and yes, you could try to build a financial proforma for the next three years, five years, whatever you choose to do. But what people often miss is the option value. Like what? What options is this going to open up for you in year six, seven, eight, nine and ten?
00:12:32:20 – 00:12:51:21
Speaker 2
Right. And the financial markets have been dealing with option values for a long time. They have a black Sholes model that’s existed for 40 years. to do valuations on options like you can use the same actual model in your business cases to think about your six, seven, eight, nine and ten rather than just the here and now.
00:12:51:24 – 00:13:14:20
Speaker 2
so for us, cloud migration, like we made that decision in 2016 here. I made that decision in 2013 and my last company and who knew in 2017 transform our architectures. We’re going to come on to the scene, and the cycle of AI is going to speed up. Like, I didn’t know that when we made a cloud migration decision.
00:13:14:22 – 00:13:37:03
Speaker 2
But I can tell you now, sitting here like that is the option value, like getting a cloud migration behind us, working through kind of your typical technical debt and modernization as you do that, working through how people need to work and operate differently. When your, our public cloud infrastructure like that prepares you for now, what’s coming on the scene with AI and Genii, which we didn’t know at the time.
00:13:37:03 – 00:13:49:23
Speaker 2
Right. So I think thinking through option value of what doors open up after the initial, business case is often missed by enterprise leaders. I think it’s one of the most important things when you think about transformation.
00:13:49:25 – 00:14:06:19
Speaker 1
Interesting. And so, like, you know, now that you’re, you’re in a very prepared. Well, you’re you are prepared, right? You’re prepared for sounds like the Boy Scouts, but you’re prepared. but, you know, when I think about things like quantum, then you’re prepared probably for that as well too, right? So again, you know.
00:14:06:24 – 00:14:07:21
Speaker 2
That’s a whole different.
00:14:07:21 – 00:14:09:16
Speaker 1
Topic. Well, I mean, there’s a there’s.
00:14:09:16 – 00:14:16:22
Speaker 2
A difference of deep tech and digital tech, which I maybe well okay. Until we get to where we are.
00:14:16:24 – 00:14:32:25
Speaker 1
Yeah. Yeah, yeah. But I’m just saying that those types of things that because, you know, I often talk to a lot of leaders and they say, well, I spent, you know, MLMs and LMS is a long time. Right. So it’s almost like saying, okay, what are those things that have been around for a long time that we know?
00:14:32:25 – 00:14:55:14
Speaker 1
Yeah. Three years. Great. We have a three year plan, but in 6 to 7 years it’s probably going to, you know, the innovation is still going to happen. Right. So that’s why I mentioned quantum. it’s one of my favorite things to pepper into the conversations because I’m trying to learn about it myself. but yeah, it sounds like you’ve built this total plan, as he said, to be prepared for those, you know, immediate three years, but into the future.
00:14:55:14 – 00:15:13:13
Speaker 1
What what what what will we be prepared for and what might we expect to come along. So I appreciate that. So this segue as well into the next question as well too. So we chatted about, you know, this modernization journey that you went on. and you mentioned at the beginning that it did involve structuring teams and talent differently.
00:15:13:13 – 00:15:33:19
Speaker 1
Now, I know I was speaking to one CIO lately who said they’re totally restructuring how their teams are built out because of things like generative AI and and having their data in the cloud and looking at ways in which they’re going to enhance that customer experience. So could you talk a little bit about that and maybe share, you know, how you’re thinking about, the digital talent of the future?
00:15:33:21 – 00:16:09:00
Speaker 2
Yeah, sure. so I’ll, I’ll cover two things on digital Cloud in the future. One is like right in the right, in line with what you asked for around how we structure teams. And then second, I think there’s a convergence of, three things that are happening that are going to be impactful to future operating models. but first, yeah, I mean, ultimately getting team members, multi-discipline skills together and closer to cut that customer and closer to value and have clear understanding of the value which is then connect to the company strategy is like a holy grail we’ve all been after.
00:16:09:02 – 00:16:33:08
Speaker 2
I think what’s changed in the last few years is this like legacy project operating model where like teams came together temporarily, they kind of knew each other, which any new team isn’t great. And then nine months later, they deploy something into production, of business value. And that nine month mark is when they’re the highest performing team. Like, they weren’t as good when they came together.
00:16:33:10 – 00:16:54:05
Speaker 2
They get to their peak when they get all the way to the other end of the change, and then we dismantle them. Like that’s how companies manage change and projects forever. and I think now it is, almost widely understood that that doesn’t work like it keeps you further away from the customer. It doesn’t create high performing teams.
00:16:54:08 – 00:17:19:23
Speaker 2
So we’re systematically, as you mentioned, I mean, we’re tearing down kind of the org I call them now the legacy agile teams and technology and reconstructing multi-discipline product teams across the organization. So that people that need to work together are better multi-discipline from different parts of the organization are together. They’re more persistent. They understand the customer they’re working on behalf of, they understand the value they’re trying to create.
00:17:19:25 – 00:17:42:14
Speaker 2
and that that actual structure then is a much higher performing structure because they can be more autonomous. They’re more connected to the strategy. They have the expertise that’s more localized. So I do think and back to my earlier comments like that is a much better team sport, right? So if you know the people you’re working with rather than it’s temporary on projects like that’s a much better team sport to play.
00:17:42:17 – 00:18:03:08
Speaker 2
and ultimately it increases your cycle times. A lot of people think about cycle times is how fast you deliver something to market. But I think about learning. Yeah. Like how fast does the organization learn? Is the real cycle time that matters. And then the second thing I’ll mention on future talent, I think there’s a convergence of generational change in the workforce.
00:18:03:10 – 00:18:38:18
Speaker 2
low-code no code. And Jenny and Jenny. So generational change, 55% of the workforce in a few years is going to be millennials and Gen Z. Millennials are already the majority. and 61% of workers have used Gen Z either personally or professionally. Low-code no code platforms are maturing to the point where there’s predictions Gartner other making them that in a few years 60, 70, 80% of the applications are going to be built by citizen developers or using low no code solutions.
00:18:38:21 – 00:19:03:27
Speaker 2
And then I think gen I was the kicker, right? If you’re unsure how to do that, you now have a quite powerful model to help you. It can code for you, it can teach you. It knows, how to solve problems effectively. It’s like you combine a digital savvy workforce with low code, no code solutions that allow anyone to solve problems with tech and gen.
00:19:03:27 – 00:19:27:22
Speaker 2
I think you get a very different, digital worker of the future digital team member of the future that I think’s going to force, CIOs in particular, to rethink the operating model yet again. So I think these product teams help. but you have to now think about the democratization of engineering. but with governance, and a whole different light.
00:19:27:22 – 00:19:32:09
Speaker 2
So I think this is just going to fuel the next version of operating models in our profession.
00:19:32:12 – 00:20:00:06
Speaker 1
Yeah. I really love these insights that you’re providing today. I mean, it makes a lot of sense. There’s a telco company that I, interviewed the CIO and with their engineers now they are they’ve created an engineering hub that’s, you know, driven by Gen. I, they’re seeing productivity times and values and collaborate collaboration too, because the gen AI is motivating people to collaborate, you know, online in a specific place.
00:20:00:06 – 00:20:21:02
Speaker 1
So they’re seeing a huge amount of productivity with that model, with their teams. And it is democratizing how their teams work together as well, too. They’re not siloed. So, and, you know, the next question just leans right into that because we are, you know, learning these types of things of how I.T leaders are utilizing AI to build productivity, and value in the business.
00:20:21:04 – 00:20:45:14
Speaker 1
I was just at the CIO 100. We talked a lot about internal productivity with teams. you know, you’ve talked about generational roles, technology and you know, the future of work. So, we’d love to know your thoughts about gen AI on the technology curve. you know, what do you see as the impact to business society and the workforces?
00:20:45:17 – 00:21:08:00
Speaker 2
Yeah, I mean, I it’s hard to it’s hard to be on a podcast these days. And I talk about Genii. Yeah. so, two thoughts. and just reflecting on all of the other, media I have consumed on this topic, try to offer some different perspectives. so, so first, I just kind of just traditional my first set of thoughts are going to be positive, like AI.
00:21:08:01 – 00:21:34:02
Speaker 2
And that’s generally where I’m at. Like, I think this is going to be, one of the next technological curves. We all we all go on, whether you call it the cognitive economy or the information age, whatever we’re going to call it ten years from now, we’ll figure that out. so a number of positive things I want to share and then, a little bit of framing or consideration actions that aren’t, as I think, prevalent, and in the media cycles today.
00:21:34:05 – 00:22:09:03
Speaker 2
So first positive, like just kind of similarly internet, I mean, this is going to untap all the trapped knowledge, or some of the unevenly available and distributed resources in society. I think Bill gates was recently on a podcast. I mean, he said something I think I feel is true. unlike other digital tech, whether it was mobile, whether it’s the internet, he thinks AI and Genii in particular will get to the undeveloped countries almost as fast as the G7.
00:22:09:06 – 00:22:33:09
Speaker 2
so I think that’s a great, solution for society. Yeah. and you could think about all sorts of complex problems that could, benefit from that actually happening. education disparities. yeah, that’s a good example. we could sit we could we still have, supply chain issues with the distribution of food. Yeah. distribution of drugs.
00:22:33:11 – 00:22:56:04
Speaker 2
so there’s a whole set of wicked problems that, are needed both in developing countries, but also in some of the G7 that need to support them. beyond that, I mean, I think, in our industry, like the AlphaFold tech, that was AI under the covers from DeepMind, is able to produce protein structures to accelerate drug discovery.
00:22:56:06 – 00:23:21:13
Speaker 2
we’re able to actually identify tumors, using convolutional neural networks almost as accurate or sometimes more accurate than than humans can in radiology images and other types of scans. so I think it’s going to accelerate the access to healthcare resources, lower the bar for accessing knowledge, and hopefully solve some of the disparities that exist in every society.
00:23:21:13 – 00:23:56:13
Speaker 2
So, like, I’m very positive on AI in general right now, a little bit of framing. I think we might have the timing a bit off on some of this. so we think a lot about like the reinforcing loops, like 100 million users fastest growing, consumer application with, with with, ChatGPT. The media cycle jumped on top of that, which is more reinforcing behaviors on earnings performance, which had companies trimming and claiming it was AI because they were getting rewarded for their earnings performance.
00:23:56:15 – 00:24:28:25
Speaker 2
we we have two biases. Like we have a forecasting bias where we tend to be overoptimistic. and we have recency bias. We see something here, something. And we think that’s the answer. so that kind of fuels the optimism around it. there’s this debate of are innovators going to benefit the most from AI and AI, or is this maybe the incumbents for the first time, because we have all the data assets, like do the incumbents having the data assets actually slow down the adoption?
00:24:28:27 – 00:24:54:01
Speaker 2
because that’s where most of the fuel is, that needs to be given to these models. So like there’s this yin and yang between whether it’s the innovators or the incumbents or some, combination thereof that play out. You mentioned quantum. So like AI is going from deep tech, right? So we made a technical, invention which was the transformer through digital tech, meaning industry can actually adopt it.
00:24:54:01 – 00:25:16:23
Speaker 2
But a lot of what you hear today is still technical. progress. Yeah. Here as many stories of like industry being completely reshaped yet like it’s starting in small chunks. and I fully expect it to accelerate over the coming months. Yeah, but like all of this, you have to take into account and think of the framing of like, how fast is this going to happen?
00:25:16:25 – 00:25:53:21
Speaker 2
And the last thing I’ll say about it is, I think Benioff last week or the week before compared copilot to Clippy 2.0, I don’t think it matters. and this is sort of back to playing the long, long game when I talked about cloud. Like the thing that matters right now for AI is preparing your workforce, thinking through the change management process, thinking about how to reshape business workflows, thinking how to bring it into the mindset of everyone in the organization, because it’s going to be impactful, like it is the worst it ever is going to be.
00:25:53:22 – 00:26:00:05
Speaker 2
Right now. so, like if you’re going to play the long game, it’s not necessarily about that three year ROI.
00:26:00:10 – 00:26:00:21
Speaker 1
00:26:00:23 – 00:26:23:26
Speaker 2
It’s about years 4 or 5, six seven, eight 910. Because when it is very impactful, maybe it’s a year from now, maybe it’s three years from now. You actually have to start the change process right now. Like you have to start it with your workforce. Rethinking your, business processes, like working on change management, building skills and muscles in an organization that may not exist.
00:26:23:26 – 00:26:39:21
Speaker 2
So, I’m very excited about it. Like, we’re getting started, in a very responsible way, as you can imagine. right now. And I think it’s going to provide endless opportunities for improving society, as the tech continues to mature.
00:26:39:24 – 00:27:09:23
Speaker 1
So I appreciate that. And, you know, it really ties back into our first or second question around your own digital transfer, the transformation that you have taken the business through, being prepared, you know, understanding that there may be new things coming out that might impact on just the general value of a piece of it. And and looking forward like, you know, as you said, beyond that, three years to really look at how to continue to improve business, not only, in with your internal processes, but obviously for that end user and the customer, I and I really appreciate you.
00:27:09:23 – 00:27:15:00
Speaker 1
Thank you so much, Paul, for joining us here today on CIO Leadership Live.
00:27:15:02 – 00:27:19:14
Speaker 2
Likewise. Appreciate the time. And wish you all the best. Lee, thank you.
00:27:19:16 – 00:27:27:01
Speaker 1
Thanks. And if you’re interested in watching this or others, videos, please don’t hesitate to head on over to cio.com. Thanks again. Paul.
Paul Hlivko, EVP, Chief Information and Digital Officer, Wellmark Blue Cross and Blue Shield
