Guardant Health, Inc. (GH) Earnings Call Transcript & Summary

Next up, we have Pat Calhoun, Pat, the CEO of Espressive; and Kumud Kalia, the CIO of Guardant Health. Pat, great to see you.

Yes, thanks for having us, Hunter.

Take it away. Your interview.

Good to see you, Pat.

Kumud, thanks for joining us. So let me introduce myself very quickly, and then I'll let you do that as well, Kumud. So I'm Pat Calhoun, I'm the CEO and Founder of Espressive. We're a pioneer in AI for enterprise service management. My background is, prior to this, I was SVP of Product at ServiceNow, and I was responsible for their service management applications. And really the reason why I started Espressive is because I had a lot of CIO conversations, and the story that I heard was very similar. What I was hearing was that organizations were really leveraging service management tools to help digitize the back-office processes. But when it came to the employee experience, it was like 1995. People are still calling and e-mailing for help. There's very little automation that happens. And as a result, MTTR times are actually very long, SLAs are being breached and the cost of managing a help desk is really high. So that's sort of the foundation of what built or why we created Espressive. Kumud, why don't you go ahead and introduce yourself as well as Guardant.

Yes, thank you. So I'm Kumud Kalia, I'm the CIO here at Guardant Health. I'm actually a six-time CIO, which is another way of saying, if I keep on trying it, I'll eventually get it right. I've been fortunate in my career to have worked across multiple sectors, and most recently in Guardant healthcare. We spoke earlier, I was just in some of the earlier sessions, in those conversations around data and analytics. And people may not know this about Guardant Health, but our tagline is conquer cancer with data. And so clearly, we think about that all the time. So this is a very mission-oriented company. Our mission is to make cancer a disease you live with, not die of. And so I think that's a very noble mission to be engaged in. I haven't been here very long, joined in January. And I think, like when Jim was talking about his experience of reentry at Johnson, the pandemic hit just a few months in and so that changed a lot of things. And for Guardant, it changed us in more ways than one. And then we actually launched a COVID-19 testing business. So we've got all sorts of different protocols here in the office. We have staff here in the office right now. And so, yes, lots of unpredictability this year, which we've all experienced, not just from the pandemic forcing us to work remotely, but also in terms of business models and what we do, how we're trying to help and contribute to society.

Awesome. Awesome. Well, I've known Kumud for quite a few years now, and Kumud, you're a true visionary, so I'm really honored to actually have you join me. I had a couple of questions I wanted to run by you. You've been quoted as saying that the pandemic has transformed the employee experience into a digital experience. Could you explain what that means?

Yes, absolutely. I think most of us think about remote work as work people used to do in the office but they now do remotely from their homes or wherever it is they're coming in from. Actually, I think there's a discussion to be made there, which is the things you could do in the office, you can't always do at home. So many of those things you can, but a lot of them you can't. You can't tap colleagues on the shoulder and ask them for some help. So you're going to find other ways to do that. And that also extends outside the work to social experiences, right? So you also socialize with your colleagues at work. That's a big part of the work experience. In fact, later this afternoon, I'm going to be hosting a virtual holiday party for our employees and their families which is not something I thought I'd be doing earlier this year. If we take it back to work, I think the cognitive load has gone up with employees. They're using a lot of these tools, whether it's Zoom like this. They're probably slacking at the same time while they're in the Zoom meeting. And the context switching frequently, not just in work sessions, but also they may be helping out a child with homework in between or even during some of the work activities they're engaged in. And so I think they have some scarce time to find out how to do things, and that's, I guess, how come we're having this conversation is we've been able to leverage our technology to help with that transformation.

Yes, that's awesome. You talked about the fact that it's no longer possible to tap your neighbor, to ask questions, and that certainly has created a lot of challenges for a lot of organizations. And most of our customers and prospects that we talk to have actually seen, post pandemic, an overall increase in 35% in help desk tickets, actually not just in IT, but also in HR, and even in finance in some cases. And what I believe is that it's definitely a function of the shoulder tapping, but it's also the fact that a lot of us are now forced to use technologies much deeper than we used to and so understanding them, how to use them, et cetera. A lot of folks had never actually really worked from home. So I'm kind of curious, do you agree with that? And how are you solving for that at Guardant?

Yes, I think that's a great point, because it was only probably in the first couple of weeks of remote working that we had some training sessions for people on how to use the tools. And so that was done mostly in-person. And then after that, we sort of automated it. And so a lot of that stuff, we did actually push into Baristas queue to take care of and saw some great results there. But as people go deeper into their tools, they probably still want, at least the first few times, somebody helping them and talking them through something. So it's now not just how do I use Zoom, it's I'm trying to annotate a document and share it with people and it is glitching out, like, what am I doing wrong? That's a whole different level of problem than they otherwise would have had. Because they wouldn't have been doing that stuff, right, in a normal Zoom collaboration, where maybe one person is [indiscernible] and everyone else is sitting around the table. And so because of that digital experience, they now need to have a deeper understanding of the tools they're using. And there's always like submenus and options they're having to find. They need help. They don't have time to figure out those things. So as we transitioned some of the more routinely or frequently asked things into Barista, we were seeing something like mid-40% deflection of tickets. And what do I mean by that? What I mean is queries that were coming in, 45% of those were being handled right by your service before they hit one of the help desk staff in our service desk. So that's great because it frees up their time so they could work on some of these more nuanced questions they're going to get. And some of them people are going to be asking for the first time, right, and will be encountering some of them the first time. Well, you can't triage those things if you're doing like 300 calls a day, right? So now they've got quality time to spend on helping our employees be more productive and solve some of these sort of what seems to be edge cases and then become right part of the protocol now of how you work from home remotely.

Yes. Awesome. And we're going to get you into the 50s and the 60s, I'm sure. So...

I'm looking forward to that. Looking forward to that.

Yes. Absolutely. So just one last question, and I know that we're down to minutes here. But the CIO's role has definitely changed through the pandemic. What we're talking about here is IT, but this is so much more than IT. So maybe you could share a little bit about your thinking there.

Yes. I think many of the CIOs like to think that we're the hero that comes in to save the day. I think that is a bit of a false narrative. I think that's doing a disservice to a lot of my C-suite colleagues. We're running a business here for the benefit of our patients. It takes many people to make that happen. In fact, what I'm going to do is I'm going to drop this nice background that Hunter sent me and see if I can show you. That's the real office behind me, right? So there are people here working in our lab, right. There are operations people. There are HR leaders helping to make this happen. Facilities people are keeping this place safe and cleaning. There are cleaning crews. There are catering people here, making sure we're well fed while we're here in the office. And so I think what's happened is the CIOs have enabled a lot of that to happen. So we're a part of the strategies that we're using to open this -- to have this hybrid working relationship with our employees. But we're certainly not front and center, right? So our HR team are the ones communicating with our employees. Our facilities team are keeping the place safe. Our operations team are running the land and making sure we're still serving our patients. But a lot more dependent probably on IT than they used to be. So I really see it as the CIOs have had to collaborate much more than they used to, but not necessarily where the stage is.

Awesome. Awesome. Well, we're out of time. And thank you so much for joining me today. And Hunter, I'm going to give the ball back.