Jody Hatcher, CEO of Novation and Chair of the Healthcare Supply Chain Association, discusses leadership and the shifting supplier landscape
As President and CEO of Novation and Chair of the Healthcare Supply Chain Association, Jody Hatcher, whose career has spanned more than two decades, is in a better position than most to reflect on the ethical and regulatory shifts that have occurred as the industry has matured.
Throughout his long tenure at the company, Hatcher has seen some turbulent times in the compliance space and learned a lot about effective leadership in the process. And he’s used that knowledge to good effect. To date, Novation remains the only healthcare company to be awarded both World’s Most Ethical Companies™ status and the Ethics Inside® Certification for the last three consecutive years.
When we caught up with him at Novation’s annual Supplier Summit in Las Vegas this spring, he reflected on the ethical sea change that’s occurred in the industry since he began his career in healthcare more than 25 years ago, particularly with respect to the way supplier relationships are viewed and managed.
The collapse of Enron and WorldCom in the early 2000s and subsequent senate subcommittee hearings threw a stark spotlight on conflict-of-interest transactions and negligent corporate oversight, he recalls. Prior to those very public scandals, potential ethics violations were not heavily scrutinized. Now, he says, “every single customer asks questions. They ask you about your requirements around gifts and entertainment, they ask about conflicts of interest, they ask you in detail about your compliance programs and audit programs. And if you rewind the tape prior to 2002-2003, that was just never the case.”
Despite the bumpy road to greater transparency, Hatcher feels the heightened scrutiny ultimately benefited the industry and client interactions. “You no longer have these unstated burdens that used to exist in relationships,” he says. “It used to be that there was an awkward moment when you had a social setting with a supplier or someone else. Now it’s very well understood that if you have lunch with a supplier, you split the bill or pay your own way. And other things just disappeared, so you don’t have the entertainment that used to exist. It’s reshaped the whole market.”
A Collaborative Venture
As the largest healthcare supply chain analytics and contracting company, Novation liaises with more than 100,000 members and affiliates and over 800 suppliers and distributors, big and small. Working with such a breadth and diversity in terms of company size, geography and culture, Hatcher acknowledges that it can be difficult to implement and enforce policies that straddle the various groups. However, in his role as Chair of the Healthcare Supply Chain Association, he is spearheading an industry project designed to help create a more level ethical playing field internationally.
“One of the things we’ve done recently is reach out to the other supplier trade associations. The biggest one we’ve approached is AdvaMed, which is probably the largest medical device lobby and trade association group. They’ve created a code of conduct that spans across all countries so they’re trying to put standards in place that are based here in the US, but also extend into other nations. They recognize that the social norms and other kinds of business practices are different in other parts of the world, but they’re trying to adhere to a standard code of conduct on a global basis. So we’ve been working with them to figure out a way to at least promote their code, leverage what we’re doing with our code, borrow elements of their code and so forth.”
Hatcher says they’ve reached out to other industry trade association groups, including PhRMA and HDMA, as well. “This is an area where I think industry should be collaborating versus competing. This is where you set your competitive views aside. I see it as an opportunity; there’s common ground around business practices, ethics and compliance.”
The Management Mirror
Where his own team at Novation is concerned, Hatcher’s leadership style is simple. He is a strong believer that ethical conduct and workplace integrity are more frequently observed than taught. All of the training programs and oversight in the world is worthless if the head of the company isn’t modeling the values he or she supposedly espouses, he says.
“People watch you. In these roles, they watch everything you do, they listen to everything you say, they observe how you represent and talk about the different parts of the business, including us. And if you don’t reflect the values of the organization around financial practices, business practices as well as compliance and ethics, people will turn away from it. They pay attention.
“A lot of folks look at this as something you relegate or delegate to a department—‘ that’s just the legal department; they need to deal with that,’—and that’s just not the case at all. It needs to be reflected in leadership, and that’s usually where people miss it. It’s sort of like financial accountability—the leadership of the organization owns financial accountability. The leadership should own compliance and ethics as well. If you think of it that way, I think you’ll be much more successful.”
His best advice to leaders and managers? “Spend the time having conversations with your team around the things that you may not think are critical to your business, because if you don’t pay attention to these kinds of things, they will come back to haunt you. It’s an investment in your business that, today, you may not be able to quantify, but long term it will pay dividends.
