Stryker Corporation (SYK) Earnings Call Transcript & Summary

Okay.

Next up is Rajeev Tyagi from Softtek. He's the COO of U.S. and Canada. Hey, Rajeev, welcome to the program.

Thank you, Hunter.

Great to see you. Where are you based today?

I'm in Silicon Valley as well.

Another valley. Great. Love it. A little bit about Softtek.

Been good weather, lately.

Good weather lately, that's good. Well, a little bit about Softtek.

So we're just a better alternative to technology companies in offshore, right? It's an elevated pitch, Hunter, just to get you going. But what we focus is really helping our customer with their digital strategies and implementing IT modernization and cloud transformation, things like that.

So with a bit of a more strategic wrap around it, right?

Absolutely.

Okay. Since you see across a lot of Fortune 500 companies, you're in an elevated role, what's the top advice you're giving tech leaders now?

Very good question. So first thing, everything we heard today from the different panelists, it is pretty hard for a lot of companies and a lot of folks. And we need to be very empathetic about it. So in this current situation, basically giving 3 main advice, right? First one is how do you survive this? How do you build resiliency in your business by just quickly harnessing something, low-hanging fruit. For example, one of the largest fitness gyms in the country is our customer. So their gyms got shut down very quickly. And so we helped them very -- in 4 weeks to come up with their online fitness program, so they can continue to keep their subscribers and engage them. Another Social Security/Medicare company of another country with 120 subscribers, they needed to come up with telehealth very quickly. And so we helped them to get that functionality very -- out, so they can continue to service their subscribers. And there are other examples where a services company, they shut down their offices, they needed to virtualize a lot of their desktop using BDIs, so they can continue to be in the business. So those are like sort of the first survival instinct we helped a lot of our customers to make sure that they continue to survive through this really rough time. And the second advice is a little bit midterm, right? How do you -- I mean, there are a lot of things that Rodney talked about or Rucha talked about, it's the same thing: How do you prepare for yourself for the new normal that's about to come, right? When it's going to come? We don't know. And our biggest advice is stay very probabilistic, right? You have to be very probabilistic thinkers. You don't really know what's going to happen. So you have to create a lot of different probabilities and prepare for it. And one of it has to be with digital, and how well do you know your customers, how well do you understand how their preferences are changing. If you're not doing the right data strategy, then it's going to be hard. And you don't want to be the Canadian phone company in 2007 and don't read the -- how the winds are moving, right? So you need to be able to execute these things and prepare yourself. There are definitely -- even though, as painful as this time might be, there are going to be winners and losers at the end of it. And so how do you position your company to be able to come out of this stronger and take advantage of it. And so that's our second advice. And our third advice is really what's going on in the world, Hunter, I think [ Daphne ] touched on it. A lot of leadership skills, and Shaun and others touched. There's a lot of racial injustice, income inequality. And what we are advising to our customers are, like, how can you use technology to help resolve some of this, right? Can you -- if you move beyond your general boundaries of work, can you actually hire people from other regions that you weren't hiring today? Can you keep your workforce fully engaged, productive and secure by using different ways to engaging it, and that's something that's going to help the community in general.

Excellent. Great insights. Rajeev, when we go back to a hybrid model, any insights, there's a question in the chat right now, insights regarding navigating the hybrid model well?

Yes. So -- and let me just go through the question. So the main advice in the hybrid is to stay engaged with your stakeholders. And that could be your customers, the employees, and make sure you create collaborative tools. So you can continue to engage with them. Be productive, stay secure and, most importantly, make sure that you're providing the quality of services that you're looking for.

Rajeev, great comments, great insights, great thought leadership. Stay with us, okay? I'll circle back to you. Back up to Shaun. Hey, Shaun, a question for you. When you think about how companies are growing organically and through acquisition here in these uncertain times, a little -- any comment on the 2 ideas?

Yes. It's interesting. And the one that just pops to mind right out of the gates is Lululemon and then picking up Mirror, which is -- I don't even think I'd call it an adjacent. I think it's a whole new business that they're dipping their toe into. I think all of us have to look at our own businesses and think about --and Rajeev just touched on it --how are we going to augment our businesses, our experiences with customers in a digital fashion. And in health care, you think about now the amount of information that's going to be passing back and forth in a virtual manner, how can you mine that data to start to get insights, to nudge clinical workflows, to start to give triage early on as opposed to having folks sit in emergency rooms or waiting rooms and fill out paperwork. We can start to use technology to reach out. So I think all of us have to look at our industries and look at what aspects the customer is ready for. We don't want to get too far out ahead of ourselves here and start grabbing on to digital solutions that the customers won't be able to digest. But this new workspace, this new reimagine, the new normal that we're living in, all of us are getting used to it. And we're not going to come off of this baseline. Now we may drop back a little bit. I think we don't want to be too aspirational and think that this new norm is a panacea of digital. But there is going to be a new norm, a new foundation of expectation across industry about how individuals can work in a digital fashion. And I think that's going to be a critical aspect that each of us look at our industries and start to measure what the customer is ready for and what portion that we think we can play in and have unique value that we can bring.

Well, I love your example of Lululemon buying Mirror. I think that's brilliant. It really is helping facilitate, enable or leading with the business about reinventing the whole go-to-market, right?

It is for sure. And Peloton, which many of us probably use, I hadn't heard about it. I didn't really understand what the model was, started to read a little bit about it. And I heard from a lot of my friends, "Oh, I'm getting Peloton, I’m getting Peloton." And their whole model was around subscription base. And that was something that, again, as we think about procedures, should we be selling large capital equipment or should it be subscription-based, where services are wrapped around it. I ended up -- there was a lot of pressure in my house, I've got 4 kids and everybody is like, "Oh, if we're going to be stuck here, we need to get a Peloton." And I was like, "There's no way we're getting like a $2,500 bike. We're just not going to do it." Then I started poking around just reading about it because I was interested in their whole business model. I was like, wow, subscription-based and 0% financing for 5 years is $50 a month. I was like, okay. I tried to keep it a secret. My wife was hounding me too much about getting it. Finally, I told her all right it's showing up. It's 4 weeks out, though. So it's -- I think that subscription model and how you actually bring these digital solutions to your customers is just as important as the actual technology that you're implementing.

Well, we had a huge health shift, too, and a huge work-life balance shift, too, right? My Peloton is 7 weeks out. I ordered it about a week ago. So I'm with you on that one. Fascinating.

Yes. If I had taken that insight too and I could have picked stocks early on. I should have seen that 4 weeks as something to jump on that bandwagon early.

All right. Stay with us, Shaun. I'll circle back to you here in a minute. Rucha, you're up next. Rucha, when you think about reimagining and reinventing basically a pretty traditional grocery store idea or business model, what are you thinking about? Where is the edge for you all? And what's next?

The edge is giving all the options to customers. I'm -- we are not the ones who want to decide, should you always be doing online grocery shopping or not. And that's what it is. I think just staying close to the customer, watching them and providing all the options. And we have seen this. We have seen customers who never would even think about going on digital media and online shopping or something, they are doing it. And you can look at the studies, 62% of people said they have tried it in this short time frame. So that is available. You want to pick your own grocery that is available in a very, very safe way. And the safety, there's a technology aspect of providing safety as well, right, ordering temperature checks or counting how many people come into the store. We've had some counties where they said you can only have -- capacity is restricted. So you can provide technology there. And there's a contrast to procedures as well, in-store expedience, right? Special hours for vulnerable customers or checking the high-traffic areas. And there's technology to clean your stores as well. There is all kinds of plug-ins for technology. But overall, I think the edge is absolutely provide all the options to customers. Right now, they want more omni-channel options, more we want to get into the pantry onwards rather than just saying, when you start thinking about -- when you order, rather than just really start ordering, we want to go steps ahead of it. Go to your pantry and think about what are you going to think about ordering. So I think it is about giving all the options that they want to shop with us.

Rucha, thanks for your comments. Stay with me. I'll be back to you here in just a minute. Hey, Maria, you're up next. When you think about going back to work, what does it look like?

It's interesting. I so vividly remember when our office closed and we were making bets on how long it's going to take. And so we had this moment in our head that we're leaving the office now, and there's going to be a Monday, a week from now or 2 weeks from now when we're all going to come back and we're going to turn back the light switch. And we all realized this is not how it's going to be. And at this point, I don't think it's going to be an event. I don't think that anybody is going to -- there's going to be this Monday when everybody comes back to work. So when they come back to work, it will be gradual, it will be in different stages. And because of the -- all of the regulations and health considerations, I don't think the new work-life is going to be the same as it was before. And there's going to be -- if you think about it, on any given day, even for the companies that are not digital first, a large percentage of your workforce is not going to be in the office. And so the companies will need to rethink what we come to work for. And is it that now that we've learned that we can actually be productive working remotely, will we be doing some of -- more of the transactional type of work remotely and then maybe coming back for more of the social connection, more of the time together and what would that look like? So I think it would be different. And even in this hybrid, I don't think we're going to be fully remote and never come together in the office. That would be a very miserable reality. So I choose not to think that this is going to be the case. But in this hybrid model, the one thing that has to be true is that we have to change the way we communicate, change the way we document things, the way we engage with each other, as if we are fully remote in terms of the clarity and crispness with which we communicate. And so that would be, for me, I think the biggest thing that companies need to realize that relying on osmosis and everybody meeting in the hallway and making decisions in the hallway that we are so used to and so comfortable with, like this is no longer going to be the case. So I'd say that like if we -- if there's one thing I'd think about is how to be much clearer, much crisper in communication and also teaching ourselves to overcommunicate. If you said once to one person, it doesn't mean that everybody knows it and everybody got it, and making sure that information is available, it's crystallized and their insight that people can get from it is really, really important.

Maria, thanks for coming on the program today. Stay with us. I'll be back to you here in just a minute. Hey, Rodney, a follow-up question for you. When you think about everything digital now in analytics and social, what's on your mind regarding analytics driving business decisions?

Yes. It's a great question. It's at absolutely top of mind. I kind of mentioned before that our business model has traditionally been one based on a lot on relationships. And when you have that kind of close relationship and that contact with people, you can sort of intuit what you're going to go and do next and when you have that taken away to a degree and replaced by the things that we're doing, you’ve got to fill that void. And so we're like very focused on sort of analytics around our customer base, our markets and really introducing that into our business planning and decision-making process like everywhere we can. And so it's become -- it's always been important, but it was supporting, and now it's really becoming a primary focus for us, a really important area.

What does winning look like to you in that space?

It's a good question. Winning looks like your anticipation of what's going to happen and what customers need is in line with what actually plays out. And you -- we're sort of at the right place with the right services for our customers that go and help them solve all the many challenges that everybody is having right now. Like for me, that's success.

Excellent. Excellent. Thanks for coming to the program, Rodney, stay with us. And Rajeev, final comment from you regarding the future here, right? So it's digital, digital, digital, everything in the cloud, everything virtualized, right? It’s safe and secure. What's next?

So it's part of everything. As you said that we want to stay probabilistic, right? So the brick-and-mortar shops are not completely going away. But the new normal is going to have a mix of all of different things. What's really in the future is about cognitive, right? So we're building upon data. And data is enabling digital. But as -- what we're seeing in the future and some of our customers are already doing it, is using cognitive ability of AI and machine learning and starting to really separate themselves from other competition, right? So one of our customers, a big, large restaurant, and they have restaurants all over the airport and restaurants -- retail stores. And they need to be ready with something for the future where Rucha talked about contactless, they talk about touchless, right? They want to be able to operate at the airport without having to -- anybody to be able to touch their screens to pay or anything of those sorts. And those are already -- they are already using a lot of their digital technologies and cognitive ability to anticipate what the customer's need’s going to be and digitize the rest of it. And so a pretty exciting future in front of us.

Hey, Rajeev, thanks for coming on the program today, and thanks for supporting the HMG Network and platform. How can people get in touch with you, though?

Well, I will leave my e-mail as well. It's my first and last -- first dot last name@softtek.com, but I'll put it on the chat, so everyone can reach out. We are here to help. The whole idea is that we're touching so many customers, we learned so much from them. And if any of our friends here on the HMG panel, anybody wants to bounce some ideas or need some help, it's not about business, it's about helping each other, feel free to reach out.

Rajeev, great job. Thank you for supporting us, and thanks for being here. Hey, Shaun, great to see you. Thanks for being here today. And Rodney, yourself as well. Rucha, always good to see you. Maria as well. This might be the best panel in 3 months, no kidding regarding reimaging and reinventing the work -- the future of work and the future of business. So thank you. I'll send you my author's note for my new book, digital copy and the book when it comes out in October. And you each are nominated for the top tech executives for 2021 recognition program that we're launching here in the next month. So stay with us and stay connected.

Thanks.

Thank you.