Speaker 1: On The Gary Bisbee Show, hear practical lessons from today's healthcare insiders. We'll uncover stories about their challenges, paths to success, and the skills that they've developed. As together, we'll explore how the healthcare economy is transforming. Greg Carpenter is the Distinguished Harold T. Martin Professor of Marketing at the Kellogg School of Northwestern University. Aside from his hobby of politics and running political campaigns, Greg has been a professor his whole career. He's widely recognized as an exceptional marketing strategist, and he's been an advisor to names as diverse as Coca-Cola, Target, the Federal Reserve Board, the Government of Mexico, and Harley-Davidson. Greg discusses how marketing strategy has evolved over the years, from total reliance on building what the consumer wants, to consumers needing to reflect the culture of the organization. This frequently involves innovation and leaders doing what has never been done before. Greg reflects on why healthcare fits this model. We asked Greg about personalization in healthcare. Greg is currently conducting research with five large health systems, where he and his team are interviewing the leaders, frontline caregivers, and patients. Early findings show that each of these three groups define success much differently. Greg reviews how to work through this fragmented organizational culture. Our conversation wraps up with a fascinating discussion about personalization and the differences between Starbucks and healthcare providers. Greg, we're pleased to have you at this microphone. Thanks for being here.

Speaker 2: Oh, thanks. It's nice to have a chance to chat with you.

Speaker 1: It is. Well, let's dig into your background a bit. What came first, your interest in marketing or a faculty position?

Speaker 2: Actually, I was more interested as an undergrad, I thought about getting a PhD in something else. I was an economics and math undergrad, so I thought about getting a PhD in economics. It was a particularly terrible time for academic jobs. So I went off and got an MBA thinking that would be an interesting career. And when I got to business school, I had not had any exposure to marketing. But I took a marketing class and I thought it was much more interesting than the finance I had planned to study. So I stuck with it and ended up with a PhD in marketing.

Speaker 1: Good for you. Well, if you weren't a professor, what would you be, Greg?

Speaker 2: So the only other job I've actually had other than being a professor, I've been a professor all my adult life, Gary, is in politics. So I help people run political campaigns. So politics is my favorite hobby. I love reading about it. I worked on Capitol Hill for two summers when I was in college. So I would do something in politics, I think. I think that's a it's a fascinating game.

Speaker 1: So how have you seen the evolution of the MBA student over time, over the time that you've been a faculty member?

Speaker 2: Let me start off by saying how they're similar first and then the biggest change. So the biggest similarity is the profile looks very similar today than it did 30 years ago. Their average age is around 28. They've all gone to wonderful undergraduate colleges. We tend to have a few more engineers than things in the liberal arts and art historians, let's say. So that's pretty much the same. I think what's different is both their expectations and the kinds of jobs they think about having. There was a you know, when I started, there was a very traditional career path. You left, you know, Columbia, you left Columbia and you went to Wall Street or you left. You went to GE or you went to one of the big or IBM and you started on a pretty traditional career. Now, the career path they expect to pursue is is very different, much more entrepreneurial, much more varied, much less straight and narrow. So that's so they're preparing themselves for to be a much more versatile, much more versatile set of skills than they were 30 years ago.

Speaker 1: Is there as much appetite now for a two year in-person program as there used to be?

Speaker 2: I think the answer is yes and more segment. The answer is yes and no. Among people who are interested in going to McKinsey and Wall Street, the answer is absolutely yes. If you're interested in going to technology, the answer is much more mixed. Some people, you know, technology is one of our biggest hire people to recruit us. We are students at Kellogg. So Apple and Amazon are huge recruiters. But at the same time, people in those in Silicon Valley and elsewhere can succeed without an MBA. It used to be if you wanted to be at McKinsey or Goldman Sachs, you need the MBA to achieve a certain level. You don't need that in Silicon Valley. Some people still find it a useful path, but other people are finding other paths. Computer science, a master's degree in engineering or no master's degree at all.

Speaker 1: Some of them don't even seem to get through undergraduate.

Speaker 2: They don't and it doesn't seem to encumber their success.

Speaker 1: At least the ones we know about.

Speaker 2: As one PhD speaking to another.

Speaker 1: You teach an MBA course provocatively called Consumers, Culture and Leadership. Can you share with us, for those of us that won't have the opportunity to take that course, what's the main thesis there?

Speaker 2: I've been teaching marketing strategy for decades now. And the approach in marketing strategy has historically begun with the consumer. You go out and ask the consumer what they want. You build it and deliver it to them. What I discovered looking at organizations is that organizations don't do it that way. The ones that are successful are not successful often with that approach, that it reflects the culture of the organization. And in fact, this became extremely clear to me in working in health care, but also in technology companies, in people who make wine. To be successful, you have to understand that what you offer the customer has to reflect the culture of the organization. And oftentimes that involves innovation. So it involves leaders doing things that have never been done before, that take advantage of the unique culture of the organization to create value for the customers. So being successful with customers is really a combination of those three factors.

Speaker 1: Sounds fascinating. I'm sure it's oversubscribed every year. Well, let's turn to your advisory engagements, some of which I'm familiar with, and they're all fascinating. But it's a diverse group of clients, as we mentioned before. Does it suggest that all companies to some degree have a challenge trying to understand consumers?

Speaker 2: I think that's true. We as humans are not always as empathetic as we could be. We understand ourselves well. We tend to be self-centered beings. And understanding the perspective of other people is difficult. I think it was Thoreau who said that it's a miracle to look through the eyes of someone else. And I think all organizations, even the ones we think of as the most successful consumer packaged goods companies, sometimes struggle with understanding the way consumers look at the world. And so I think everyone has a challenge with that. And we all get in routines. We all get in. We all accept conventional wisdom about the way the world is because it's efficient. And sometimes it's not right.

Speaker 1: Have you noticed among industries there are similarities or differences in how they try to assess the consumer and incorporate it into their marketing strategy?

Speaker 2: Absolutely. The biggest distinction is between, let's call them financially and technology oriented companies, and ones that are less so. So if you think about a high tech company or a bank, they tend to think very rationally and their culture is a very rational one. So they tend to think about the consumer in that way. If you look at other organizations, they tend to be a little bit more flexible in their thinking. So they tend to look at the world in a more holistic way. So it really depends upon the culture of the organization and what they see in the world. There's a saying in psychology I'm very fond of. We're fond in English of saying seeing is believing. There's a psychologist who argues believing is seeing. So what you believe the world is, is what you see. And so your perspective that you embrace influences how you view the world. And also, Matt, one other factor, how successful you've been. The more successful you've been, the more difficult it is to get people to see the world in a different way.

Speaker 1: I could definitely see that. It's possible to answer the question, but I'm going to ask it anyway. Is it possible to think about what was your most challenging engagement in an advisory capacity?

Speaker 2: Health care has been the most difficult problem.

Speaker 1: Let me just say, we'll talk about that later.

Speaker 2: That's easy, health care. But other than health care, the two most difficult assignments I've had, I did some work for a microprocessor company once. Very smart people, very committed to what they do. Very devoted to the belief that consumers don't know anything and are irrelevant to their decision making. And a room full of Ph.D. electrical engineers is tough. So it was a very difficult engagement. I think we were ultimately successful. And the other is a very odd one by comparison. I got a phone call once from the people who own the Queen Mary 2 who asked me to help them grow their business. Because apparently the Queen Mary 2 travels back and forth between London and Southampton in New York about six months of the year. And their challenge was how can they grow the business of transporting people back and forth across the Atlantic by ocean line. So that was a tough assignment.

Speaker 1: In today's day. In today's day.

Speaker 2: Very interesting. I'd say both of them were incredible. The toughest ones have been the most interesting.

Speaker 1: Sticking to the travel motif here, I read an article just a couple weeks ago in a Wall Street Journal about Delta. And how they're holding the middle seat and coach open. Whereas all the other airlines have apparently now begun to sell the middle seat. And they were saying that Delta wasn't sure if they were going to continue to hold that middle seat open. If they called you, Greg, what advice would you give them about that middle seat?

Speaker 2: Well, I, of course, want to talk to a few consumers, but I think the motivation for it is correct in the sense that one of the things that happens with COVID. And I've done actually published some research in this recently is that fear overtakes people's decision making. And a demonstration of a tangible commitment to reducing that fear is would be valued. Now, how that's going to change as the fear level changes is hard to know. But I think it's a commitment on the part of a devotion of resources on the part of the organization to demonstrate that they're, as I said, devoted to reducing the fear of passengers who travel. In that sense, it makes a lot of sense from a consumer perspective.

Speaker 1: Well, let's turn to health care. You mentioned health care. And, of course, we were joking a bit before if it was 20 or 25 years ago, health care probably wouldn't have been all that interested in anything about the consumer. But they're coming around. Where did your interest in health care come, Greg?

Speaker 2: Again, answer the question two ways here. My exposure to health care began at an early age. I may have mentioned to you I come from a family of physicians. My grandfather was a surgeon. My father was a neuroanatomist. My brother's a surgeon. So I grew up around the table listening to all kinds of things about health care, but decided to do business instead and worked on this problem about how organizations become more successful with consumers. And that led to an engagement with the HMA. I met you, in fact, at a GE event talking to people from GE Health Care and led to this introduction, reintroduction in some sense from you on how some of those same issues were operating health care. So I went from looking at how corporations transformed themselves to be more effective with consumers to beginning to think about health care. It's been about 10 years now.

Speaker 1: And you actually led very successfully a consumer collaborative for the Academy that was very well received. And I know you've conducted a study. What were your early or what are your early findings from that study, Greg?

Speaker 2: Just to put it in some context, the study was to look at the state of customer orientation or this idea of being customer focused in the context of health care. We have five health care systems that allowed us to interview both the leadership in the organization, the people who deliver the care, the physicians, nurses and staff, as well as patients. I'll start simply. The first conclusion is that those three groups see the world in very different ways and they see success in very different ways. And part of the challenge in aligning health care and being consumer focus is that there are even different definitions of what success is from the leadership perspective, from the physician perspective and from the patient perspective. So the challenge in this is that like organizations that have fragmented cultures, that is different. University is a great example. We have faculty, alumni, benefactors, all kinds of students, all kinds of all of them have different interests is how do you align those in a common focus to achieve an outcome that's successful for everyone? And I think health care issue is that there are different agendas, different definitions of success and aligning those is the challenge. And so we were able to identify a few ways in which people overcome those differences and align them to be more successful.

Speaker 1: So we've used the term personalization to describe how a health company can direct its services to individuals or consumers. Can you define a difference in how business generally would look at personalization and how health care companies look at personalization?

Speaker 2: I think Starbucks is the prototypical example of a corporation that thinks about personalization well. You walk into a Starbucks in a country where you don't speak a local language, Gary, I guarantee you can get your coffee exactly the way you like it. The temperature, the amount of milk, the amount of foam, everything. They've understood personalization and this empowerment of the consumer very well. Health care is very different. We as a consumer expect that level of personalization in health care. But the difference in health care is that we lack the expertise and the experience and the systems, in fact, value consistency. The systems look for consistently good outcomes, whereas you and I as consumers look for personalized outcomes. So there's a fundamental inconsistency between what the system is trying to create and what we're trying to create. And in a place like Starbucks, the virtue is that what we're trying to create, the personalization that we create, is also what the organization is trying to achieve. That is, our success as a consumer makes the company successful, whereas personalization health care creates inconsistency in the delivery of health care, which creates all sorts of issues.

Speaker 1: Over the last 10 years, the consumer has increasingly available data about health care, clinical care, and so on. And whether it's on your iPhone, your computer, and that's just accelerating almost exponentially. What do you think that's going to mean, a more educated consumer with more personal data? Maybe that alignment or lack of alignment you're talking about might begin to kind of realign itself. What is your thought about that, Greg?

Speaker 2: The first thing they'll do is empower the consumer a little bit more. Not in the ways we think about, because the data is always not very meaningful. I have a PhD, but I don't understand my blood work when my physician sends it to me. But what it does empower me to do is to have access when I want and how I want. And so part of the challenge in health care is consumers try to get some sort of influence in any way they can. And so gaining access to the information when they want it and how they can access it is very important. But I think that it doesn't change the balance of expertise between consumers and physicians. So it gives us more leverage and more satisfaction in some sense, but it doesn't address the fundamental issue.

Speaker 1: Let's stay on health care, but move to the pandemic. You made reference before, you're a co-author in a paper in Pandemic, We Buy What We Know. Can you just share the thesis of that article with us, Greg?

Speaker 2: About four years ago, I started this paper well before COVID, obviously. We looked at the impact of consumers of contagious disease. And believe it or not, there was not a lot of research done on how contagious disease affects consumer behavior. The only evidence seemed to be that people bought less. Well, if you observe the pandemic, what you discovered is that store shelves were empty and so people were buying more. So what we looked at was really the impact of fear on people's decisions. And what we found was that fear and disgust is the other way psychologists describe it. Together, make us especially averse to anything that's unfamiliar. So normally, as you probably heard me say, Gary, humans are programmed to avoid things that are unfamiliar. But when the pandemic comes along, when we're fearful, this gets turned into overdrive. And so we, for example, studied people's purchases of all crazy things, Oreo cookies. We looked at the presence of flu in people's community, the amount they searched for it, and the sale of traditional Oreo cookies versus Oreo cookies with different fillings, like green tea fillings. And the more there is a flu in your neighborhood, the less you buy of the novel Oreo cookies. The point is that anything foreign is seen as unfamiliar and is seen as a threat. So even in these areas where there should be no consequence on our behavior, no one thinks they're going to get the flu from an Oreo cookie. But nevertheless, we take every conceivable action to try to reduce the threat.

Speaker 1: Will we see longstanding change in marketing strategies kind of across the board, not just in health care, due to the pandemic? Or will this just go away and we'll forget it and move on?

Speaker 2: I think the two biggest changes are going to be, one, is that organizations have recognized in the pandemic that, let me rephrase it this way. Some organizations have thrived in the pandemic. What they've discovered is they thrive by focusing on what they do best. So McDonald's stock has zoomed up through the pandemic. And what they do, they limited their menu. They limited their menu because they had to restrict the amount of people who could work in the kitchen. And what they discovered is by focusing on their best sellers, they've done incredibly well. So focus, I think, will stay with us afterward. Second thing is this idea that we can be innovative. We can meet over Zoom. We can have a meeting. And by the way, in Zoom there's no hierarchy. Everyone's in a box. So suddenly organizational hierarchy becomes less important and we can do things much more quickly. And I think from the consumer perspective, we expect things to be done quickly and efficiently. And I think that's going to remain. The telemedicine. Why do I have to go to see my doctor? Why can't I just Zoom in and send a photograph of this thing on my arm that I'm uncomfortable about? So I think those things, there'll be a lasting change in terms of focus, in terms of innovation, and also in terms of the role of the consumer in terms of what they expect.

Speaker 1: This has been a terrific interview, Greg. Let me ask another question, if I could, about leadership. And that is, do you think that the pandemic is going to cause boards of directors to kind of re-evaluate the characteristics of a top CEO, let's say, in terms of the next generation CEOs? So will the pandemic have an effect on the skill level of CEOs, healthcare and non-healthcare alike?

Speaker 2: So it goes back to the question, almost the first question you asked, Gary, about the MBA students. We were training them for predictable careers. And I think what the CEOs that are going to be successful in the future are not only the CEOs who are good at the highly structured, complicated problems like you see if you're a CFO, but they're also going to have to be good at the highly unstructured, complex and unfamiliar problems. I think that's the big difference. 30 years ago, the CEOs were, if you're the CEO of General Motors, you are a finance person, most likely. And that was a very, very familiar problem, just very difficult. Today, the problems are not just difficult, but they're novel and they're completely much more complex than the other ones. So I think you're going to be looking at people who are better with these unstructured, complicated problems that are the ones that are going to be more successful.

Speaker 1: Maybe even more demand for the MBA degree, Greg.

Speaker 2: I hope so, Gary. I hope so. We're working on it.

Speaker 1: Greg, thank you very much. This has been, as expected, an absolutely terrific interview. Much appreciated.

Speaker 2: Thank you very much, Gary. Pleasure to talk to you.