Illumina, Inc. (ILMN) Earnings Call Transcript & Summary

And I'd like to bring Steve Phillpott. Steve, welcome to the program.

Hey, Hunter, how are you doing today?

Great. Good to see you, and great to be with you one more time now digitally, virtually, but just second best.

Right. It's the new world we're living in, looking forward to it.

Hey, what's new with San Diego SIM?

Well, thank you. And on behalf of SIM San Diego Board and all of our members, we like to welcome everybody to today's event. And when we take a look at the event, Hunter, you and I have done quite a few of these events together. I've been at some of your other ones. And each year, we keep saying, "Oh, this is the best event." I do think today's event is probably going to be one of our best events. I think we've got some great speakers. But more importantly, I think we've got some great content. You were doing a little bit of intro before we got started and talking about things to talk about around authenticity around how do we strengthen employee engagement. And I think that's one of the topics in this new hybrid world that we're in, is how do we ensure that employees still are engaged. And so again, I'm really looking forward to the content, Hunter.

Great, Steve. Looking forward to talking later. Thanks so much again, great partnership, going on 10 years.

Yes, likewise.

Take care. Next up, we have Mary Kay Payne. Mary Kay is the Director of Population Health and Analytics at Arch Health Medical Group. A great -- I'm a great fan of Mary Kay's. I think Mary Kay is a great fan of HMG. Great to have you on the panel, Mary Kay.

Yes, I am. Thank you very much.

Take it away.

Hello, and welcome to our executive panel on strengthening employee engagement and their behavioral health during these unprecedented times. I'm your moderator, Mary Kay Payne. Now, more than ever, as leaders, we have to support our workforce as they navigate very different work environments. We live in a different world than we did 7 months ago or even 30 seconds ago. So how do we adapt as leaders? And how do we facilitate that adaptation in our workforce? So luckily, we have an excellent panel of industry experts to provide us their insight into leading this change. Hank Capps for -- Senior VP and Chief Digital Health and Engagement Officer from Novant Health; Shelly Selvaraj, Senior VP of IT of Dexcom; and also Karen Wetherholt, VP of Human Resources, Talent Acquisition, Talent Management & Diversity with Illumina. So if I can ask each of our panelists to provide us a brief overview of your company, and I see most -- Hank, let's start with you.

Good afternoon or good morning. I hope everyone is doing well today, and appreciate the opportunity to spend some time with you. I -- as Mary Kay said, I'm the SVP and Chief Digital Health and Engagement Officer at Novant Health. Novant Health is a $5 billion and growing health system in the Southeast U.S. and has, over the last number of years, really led the way around technology transformation and building out that modern approach to engaging our patients and our team members. So appreciate the opportunity to be here.

Great. Thank you. Karen, if you could introduce yourself and the company.

Hi, Karen Wetherholt. I work for Illumina as the VP of Talent. We are a genomics company, biotech, and we have about 8,000 employees around the world with the majority here in the United States.

Great. And Shelly?

Hi, good day. Thanks. Think of more part Dexcom. Dexcom is a medical device company that has got a continuous glucose monitoring device for diabetes patients. And we are about 5,000 employees spread globally, again, majority of them here in the U.S.

Great. So Shelly, what are the drivers for effective employee engagement? And how have they changed during this period of pandemic?

Thanks, Mary Kay. I think I've done some research and have read research have not changed as far as I can see. The main drivers have always been the manager to engage the employee and the teams that the employee feels really a part of, and then the company. Usually in that order, where a manager has a bigger influence on the team than the company. I think with this pandemic, what I have seen is all of them, the gaps between these 3 drivers is closing. Now everybody, the manager of the team, on the company, we all have to really drive the employee engagement. I see the gap closing in these 3 drivers.

Karen, I understand that you've launched some specific studies on the effect of these changes on your employees and management and how work has or has not changed. What have you found?

Yes. I think like Shelly said, the drivers of engagement haven't changed, but certainly how we do that has completely blown up in this new environment. I came across a Gallup study recently that really asked the question, has engagement changed during histories of pandemics or recessions. And they actually found that it hadn't. They found that engagement is still directly related to how the organization responds, the practices we put in place, how the executives are engaged and the kind of proactive communication about here's where we are, and here's where we're going. So we took that a little bit further in our regular employee engagement surveys, which we now do quarterly, and found that all the efforts we have put in place in COVID to have meaningful conversations, to have monthly, like, messaging from executives about what's going on and what's happening in our space has worked really well. And our employees are absolutely reflecting a high level of engagement, which we're thrilled about. I think what was interesting, though, is the toll is actually taking on managers, that the managers are using so much effort to engage with their employees and keep this connection and keep the communication going while they too have to manage their day-to-day life and work-life blending and no commute time and stay-at-home school that they are the ones actually feeling the burden. So I think these meaningful conversations are critical, that we keep them going. And I think for leaders on this call to recognize the impact it's having on your leadership team and give them a little bit more care and feeding, so they can continue to deliver for the whole organization.

And Karen, just to follow up on that. What specific characteristics are you finding in managers that are doing well in this world? And how can we support our managers who aren't adapting well?

Yes. I think I'm a huge fan on managers being able to see where we're trying to go. But I think what's unique in this environment and kind of a differentiator is that the leaders who can see, oh, we can get there in a different way, that's what's emerging. I don't have to be at a desk from this time to that time. I don't have to do x, y and z in that way. I can work a flex schedule or I can connect in different vehicles. Or I can be empowered to make my own priorities, and that flexibility is absolutely showing where leaders are really rising to the top.

Okay. Hank, what has been the cultural impact on these many changes? [ And how required ]? And as a result of your company's response to the global pandemic, what has been the impact on the culture in your organization?

I think as they just described that mechanism of engagement, culture is kind of the nervous system that drives it. And so organizations that have that strong cultural sense of purpose and appreciation built into who they are responded in a new context, but it's the same response. And what we found in a flash really, declaration of emergency on March 12, we had to stand up clinical operations now in ways that we've never done it before. And at the same time, transition a huge workforce that had never been anything but in person to remote. And as a growing driving health system with the constant movement that occurs as a part of that, how do you take the culture and make all of that happen all at once? And that's really what we saw, was that need to drive the culture in the care delivery, also in the movement to remote and keep the connection between people around that common purpose.

Now we're all technology professionals in one way or another. But has the overwhelming kind of torrent of technology solutions for remote workforce helped or hindered your efforts?

I'll take this one. I think we talked about -- Display technology summit, but we are talking about now employee engagement and mental health of employees. It has become a lot more important. So for us to really look at all available technology so that we can provide all the tools for them to work efficiently without friction has become very important for the organization. So we have been looking and providing any technology that they're putting up when you take into consideration so that we can offer that to the employees so they can really work efficiently with remote environment.

And Hank, you provide behavioral health services, I believe, in your company. How have you seen behavioral health care evolving in the face of these uncertain times? And specifically, how do you incorporate that in caring for own employees?

Yes. So I think there are a couple of facets to that. First, behavioral health has always been amenable to more technology-driven interactions, but the demand for that has not ever been there to the degree in which it is now. So in an instant in time, demand rose thousands of percent, and people responded by rolling up their sleeves and taking care of each other, in both the sense of team members taking care of each other and then take care of patients. And so the future that I would see is a much more digital approach to behavioral health. It's comprehensive. And it starts with basic engagement on technology platforms to engagement with another individual like a coach to a therapist to a psychiatrist and through all of those pathways. And so we've fairly quickly pivoted to providing all those kinds of services, both for team members and for patients. And the ongoing challenge is that there's more need than there are hours and technology tools to deliver on. And so I think as a society, as a country, we're going to continue to have to be focused on how we continue to scale the services. And in the context of a global pandemic, you have a whole new set of people facing challenges and stresses that didn't exist. So I think a huge opportunity exists in caring for, first, your team members, but also then thinking about how that extends over communities.

Karen, with the recent and very necessary heightened focus on diversity and inclusion, has the new workforce dynamic helped or hindered efforts in this area during this time?

I think some of both. I certainly think navigating difficult conversations are easier in person, where you can see nonverbal cues and you can watch body language, and you can see the energy and kind of have that give and take conversation. At the same time, though, working remotely has, I think, created a safe space to have some robust conversations because people can turn off the camera or can choose to be silent and just listen. So I think there's kind of been both sides of the coin here. I think what's critical for all leaders is to recognize that having these uncomfortable conversations, whether it's about racial tensions or divisive political environments or whatever is next around the corner, to have that inclusive conversation about how are you feeling less anchored to the higher purpose of what we're trying to accomplish at work. Let's talk about how you're doing and resources available will help employees continue to be engaged no matter what comes in the coming days.

Yes, [ it sounds great ].

What -- go ahead, Shelly.

I'd [indiscernible] Karen on this one. We are having more conversations on this topic now than the pre-pandemic because of what is happening around. And one key thing is that we talked in the first meeting for leaders to bring humanity to these meetings, right? Just more empathy. We've heard all day from other panelists. We have to bring more empathy. In terms of leaders and managers, also looking at the variability in work output. How do we bring? If I'm able to work much better in this environment beyond the others. And how do they look at so that we can balance the workload so that if a team -- as a team produces similar outcome to pre-pandemic outcome, but individuals may not be able to do between month-to-month, week-to-week. I think that's become very important to work output diversity as well.

Hank, what has been your biggest challenge in supporting your workforce through these changes?

I think the biggest challenge is the uncertainty. So from the moment that we started making all of these very rapid changes to deliver on care, to take corporate areas and technology areas into remote work, it's really been an open-ended question of what's next. And for this sense of that we're in a new interim, not a new normal, at any given point, I think, is just fatiguing to people. And so that fatigue of the new interim intention with the uncertainty, both in personal life and work, with all of the change at one time just means that the support our team members have needed has been exponential to what it might have been in usual circumstances. And you can't remove the context of the world we're in, from the work environment that you have. And how do you have empathy, embrace that and engage with people how they need to engage? And each individual seems to have very unique needs, which is true always, but seems amplified during the current moment in time.

Do you have any specific creative programs that we maybe haven't touched on that you're specifically proud of or really energized that you've implemented for your workforce during this time? And I'm opening that up to all the panels.

I mean one thing that we have to become aware of is just the global nature. The global company -- the technology availability in the last mile from different countries is very different. So we really have to apply that saying, okay, for example, we are having this video conference and somebody's sitting at home. They are able to do that without much interruption. That's not true [indiscernible]. So applying what works within the geography has been very important for us.

I think my comp and benefits partners have been very creative about recognizing. We already provide a suite of different benefits to recognize the uniqueness of employees around the world, geography, life stage, et cetera. And I think they did a lovely job in saying, what are the items we can just pull forward because we know traditionally XYZ program gets implemented in December, say. But oh my gosh, it's May, and the organization clearly needs that wellness bonus or a reminder about mental health benefits or whatever that is. And so they've gotten super creative about pulling those things forward to meet the needs of all employees at the same time.

Karen, as a follow-up question, given your unique position in your organization. For employees who aren't adapting, how do you handle that?

Well, I hate to be a broken record about meaningful conversations but there is something about leaning in to say, a, how are you doing and then doing kind of two-way problem-solving to say, so what would help you? And we actually put together a little bit of a toolkit for the employee to be able to think through, okay, what is it really that I need? Do I need a flex schedule because the kids are home from school, and I have to get them on Zoom? Or do I need to go part-time? Or do I need to take a leave? And so the employee first has to say, what is it I actually need? And the leader goes through the same exercise and says, okay, if I look at, I think, as Shelly said, getting work done, where are the things where we have to be the same and where could we have some flexibility? And then they come together to have that conversation to try and find a win-win solution. And that seems to work generally. There's always an exception but generally, that seems to work well.

Hank, looking back 7 months ago, what is the one thing you would have done differently sooner in supporting your workforce to succeed? Or differently? Differently or sooner?

Yes. I think that when everything kind of broke, the first thing that we really did was to try to set the stage for the immediate action that needed to be made. But I don't think that we looked far enough out to give people some of that sense about what was coming next. Some of that's because we didn't know, and some of it was because we hope that it would be different than what it was going to look like. And so I think that hindsight being 2020 and knowing what we know now, we would have made some decisions that were longer term very early on and taken action to help those team members adjust to that new interim that was in place. And I think that would have helped with some of that uncertainty and some of the challenges that I spoke to earlier.

Great. And boy, this time frame does really go by quickly. I want to kind of wrap up with each of you speaking about, do you have some key takeaways for our audience or some strategies that you really want them to consider going forward. Shelly?

I think I heard this from other panelists and also here with Karen and Hank, bringing more empathy listening to people now is more important than ever before. Just listen more. That means leaders and managers spending more time. And I just say, I felt like in the beginning in March 2020, I was working 20% lower and being 20% less effective. Now talking more and more, I'm working probably 10% more, become 90% effective, I'm still improving. I think allowing that technology that is very important for everyone.

Great. Hank?

I think it's about culture and driving it home in a new environment and the intentionality to create connections built around that culture.

Great. Karen?

Well, I think this new environment creates stresses that are unique to this time. And I would encourage leaders to get your teams to find ways to refuel. Cut those meetings down 10 or 15 minutes so that people have a break. Turn your video off. Encourage people to not work from dawn till dusk with purpose because they're reluctant to do it. But we need time to refuel in new ways because the grind is different.

Great. Great advice. I want to thank our panelists for participating today. They've given us some great insight and some things to really think about as we try to support our workforce now and going forward, and be ready for the next -- hopefully, no, there's not a next pandemic, but the next challenge that we might have in our workforce. Thank you, everyone.

Thank you.

Great job, everyone. Thanks so much.

Another great digital summit and a great partnership with San Diego SIM chapter. I want to invite Barb Munro out to the stage. And Barb, closing comments.

Yes. So once again, our ninth annual summit partnering with HMG Strategy, Hunter, and I think it was a great one. I'd like to thank you and [ Kimberly ], [ Tom ], the rest of your team for helping place this together. I'd like to thank our sponsors, our Advisory Board that was very thoughtful in putting the content of this session together. And of course, thank our speakers, our panelists. I thought they did a fabulous job. The content was spot on. And honestly, I was skeptical that we would pull off what was typically a full-day session into 2 hours, and we did it. And I think it was very well done. So before I turn it over to you, I have one plug to make, I would be remiss. Our -- my Co-Founder, Yasmin Shah, who cannot join us today, she is following The Amazon Way and has an Amazon delivery service, that she's a partner off with Amazon. But she has put out a challenge to everybody at this summit, our SIM members, non-SIM members, anybody who would like to participate and respond to her post that she made about the summit. She has offered to donate $1 for every like, every comment, every share up to $1,000, that she will award to a student here in San Diego. So we're all about our student scholarships. And then at the last minute, I thought Paul Peabody, who is our academic liaison committee board member, said he would match her contribution. So I encourage everybody on this call and right now on the chat, I'm going to put the link there, for everybody to like, comment, do whatever, but we would love to raise $2,000 to give to local technology students here in San Diego. So with that, I'll turn it back to you, Hunter. Thank you.

Great. Thank you, Barb. Love it. So Steve, I saw you're back on the stage here. Do you want to say a couple of comments?

After Bob's -- or Barb's comments, how can I top that? Those are some great comments. And again, just diddling what she said, thank you to everybody that helped put this on. And don't forget to do the likes because we are really -- a big part of the chapter is about giving back to that next generation of technology professionals. So thank you in advance.

Awesome. Great. Great to be with you, Steve. Thanks. Hey, final shout out to our partners. Thank you to Darktrace, Informatica, Sonatype, Zerto and Ivanti. Because of you all, we're able to have today's summit, and we're going to write a nice check to the San Diego SIM chapter that I know goes back to really good use, right, Barb?

It goes to those scholarships. Again, thank you all for [indiscernible].

And look, enjoy your fall and the autumn here, and we look forward to a debrief call and planning next year's programs.

We look forward to it, Hunter. Thank you again.

Take care, guys.

Thank you, everybody.