In 2013, Brent Stutz of Cardinal Health was hunting for a place to plant a new innovation center. Given the center’s focus on building new technologies to support the healthcare industry, some suggested that Silicon Valley or Boston were obvious locations. But Stutz was convinced that it’d be hard to move many of the company’s top technologists out of Dublin, Ohio, where $102 billion Cardinal is based, and that he wanted a spot where senior executives could visit regularly, as opposed to once or twice a year.
“If we’re enabling our business to do incremental and disruptive innovation, it needs to be pretty close to our headquarters,” says Stutz, Chief Technology Officer for Cardinal’s pharmaceutical business.
The problem was that many of the places that Cardinal’s real estate team identified felt “incredibly boring,” he says. “You’d get off the elevator on the third floor of some boxy building, and it looked just like you were at any other Cardinal Health location.”Stutz also was working with a build-out allowance of under $2 million; his boss, Mike Kaufmann, suggested keeping the project under the radar from a spending perspective, so they could move quickly.
As Stutz was beginning to despair about finding the right spot, he got a call from a friend, Bob Myers, who runs Pillar Technology, a digital development firm. “I’ve found your space, and I’m gonna show you,” Myers announced. He drove Stutz over to a Halloween pop-up store in a strip mall. It had a street-level entrance, and was walking distance to a few bars and good restaurants.
“When our senior leaders came, they had major reservations about it,” says Stutz. “There were crazy witches popping up when you walked around it, since the Halloween store was just closing down. They were like, ‘You want this to be your innovation center?’ I said, ‘Just trust me.” Stutz reports to both Cardinal’s Chief Information Officer and the CEO of Cardinal’s pharmaceutical business.
The Vision
Stutz dubbed the new center Fuse, since the vision was for it to be a place where Cardinal’s technology expertise, healthcare industry knowledge, and customers’ needs would all come together to ignite new projects. “When you come to Fuse, it’s all about the customers. It’s customer-in.” Visiting employees and executives “would leave their business unit affiliations and their badges behind.”
At Fuse, Cardinal wanted to create a distinction between the technologies it uses internally to run its business, and the commercial technology it deploys to customers like pharmacies, hospitals, and oncology infusion centers. There was a sense that the teams building commercial technology needed more opportunities to interact with and build with customers, and they needed to embrace more flexible development approaches like agile, lean startup, and design thinking.
Stutz likes to say that Fuse works on solutions for hospitals, specialty clinics, and pharmacies. And, he adds, “we are starting to build solutions for patients, [as a way of] enabling our existing customers to build better relationships with their patients — think B2B2C.”
Context-Switching
Working with the Columbus-based architecture firm WSA Studio, Stutz transformed the former Halloween store, adding a bright orange vestibule, an iris scanner for secure access, a large poured concrete table that would bring people together for lunch, and lots of glass. “In our huddle rooms, you can see who’s in there together — everything’s open and transparent, like we want to be.” There are no cubicles — just high and low tables that fit about six employees. “My team size for an agile or design thinking project team is from six to twelve,” Stutz says. “So teams are either one table or two tables.” A team typically focuses on a specific customer project or exploration, like medication adherence, or consumer wellness.
There is a ping-pong table in Fuse’s front lobby that gets heavy use, and a game room with an Xbox and Wii that employees brought in; those get used less often, Stutz says. But the bean bags and large TV in the game room serve as a comfy place for code reviews. “You’ll find a team sitting in bean bags and use the big monitors for their Macs, doing code reviews and talking about requirements,” Stutz says.
Installing a kegerator in Fuse’s kitchen required roughly “30 hours of executive meetings about the risks that someone would get drunk at Fuse,” and the company would be liable. But Stutz prevailed, and a Fuse employee used some of his “spark time” — four hours of undirected project time every other Friday — to build a device that monitors both who is using the kegerator to dispense beer, and how much beer remains in the keg. There are some common-sense rules: employees chip in for beer; the keg doesn’t get used before 4 PM; and interns don’t have access, regardless of their age.
“When people are coming to Fuse from their daily job, you want to hit them with a little shock and awe,” Stutz says. “You’ve got to have people context-switch. We didn’t want senior executives to act like they act at headquarters.” But another benefit of the non-traditional space is that Fuse helps Cardinal attract technology talent — from data scientists to user experience specialists to research analysts — who might not otherwise consider working for the company.
Staffing, Events, Projects so Far
Work on Fuse started in February 2014, and employees began moving in that May. Roughly 100 people work out of Fuse — though about 20 percent of those people don’t use it as their primary workspace. “They may be a sales VP who has brought in a customer with a pain point, where they want to do some design thinking work with them,” Stutz says.
“I have a finance person and HR person who sit at Fuse,” he adds. “We have a completely different review system for hiring, for budgeting, for performance reviews” that offers more flexibility than the “mainline” processes at Cardinal. As an example, leaders commit to approving the funding for new product development in 48 hours or less — after an experiment has met its targets. That’s in contrast to a year or more of developing a business case and presenting it to a committee that may or may not give it the go-ahead.
One of the higher-profile projects to emerge from Fuse is Cardinal Health MedSync Advantage, which helps pharmacists identify patients who would benefit from medication synchronization, so that patients can pick up all their medications in just one trip. That offering was developed by a Fuse team in collaboration with Cardinal Health Innovative Delivery Solutions, which was responding to an issue a customer had flagged.
Fuse regularly hosts hackathons, tours, student coding bootcamps, and after-work meetups on topics like lean startup, agile, and the Hadoop programming framework.
While the initial plan was to set up Fuse with its own P&L responsibility, with the ability to launch new offerings, that has changed. Fuse has built a reputation as a place that can get things done fast, and bring customers into the development process, Stutz says. But he has acknowledge the need for allies within Cardinal’s lines of business, some of whom will rotate through Fuse on assignments. The notion now is that Fuse will serve as test-bed, and that once projects prove their worth, “we’ll scale and commercialize them through the businesses.”
In the two-plus years since it opened, Cardinal executives now believe that Fuse “has done as much for our brand as our new marketing and advertising campaigns,” Stutz says. “It has created a sense that Cardinal is willing to listen to our customers.”
