Steve Collis (President and CEO of Cencora)-Ep. 11

(upbeat music) - Mythology is about the stories behind success. Join host Brian Tierney, CEO of Brian Communications as he interviews successful industry leaders to hear the fascinating stories about their personal journeys and the people who have helped them get to where they are today. - Hello everyone and welcome to Mythology. I'm Brian Tierney, CEO of Brian Communications and Future Tense Health. And I'm really looking forward to my conversation with today's guest Steve Collis. Steve is the chairman, president and CEO of Sankora, which is a leading global pharmaceutical organization. Under his leadership, Steve has led Sankora to tremendous financial growth as well as significant global expansion. Sankora now has 46,000 employees across more than 50 countries. In addition to all of the accolades and the continued success of Sankora, I'm also excited to share that Steve will be a keynote speaker at day one of the Health Key Summit on March 12th, which takes place at Sankora's beautiful global headquarters in Kanchahak and Pennsylvania right outside of Philadelphia. It'll be day one of an impactful two days of programming that's gonna be highlighting what's new and what's next in healthcare. To learn more, please visit healthkeySummit.com. Steve, thank you for joining me today. - Hi Brian, good to see you again. - Good to see you too. Let's start at the beginning. You were born in Johannesburg, South Africa. Your grandparents were from Lithuania and Latvia and they moved to South Africa 1913 and 1915 to escape the brutal pogroms that were taking place there. Where people who were Jewish were being murdered, arrested, and they needed to escape to save their lives and to build a future for their children and grandchildren. - I can't imagine what that was like to experience. And when you spoke to your grandparents, did they ever reference those moments or how did that become part of growing up? - Well, part of this came up when I told you recently that I went in '23 to Lithuania and I was actually stunned at the beauty of the country, which was, you know, way an excess of anything I expected. But my grandparents didn't like to talk about the past that much. But what they did used to call Lithuania was Dehame, which meant the home. And it's, they had, you know, memories because they left so much family before, just an interesting historical note. My father was born in 1932. And so if you add 13 years to that, that would have been his moments for 1945. It was on Amstus weekend, the week the Germans surrendered. And he said that literally hadn't spoken to anyone in their, you know, back in Dehame, the home. And just the week after his moments where they were able to get back and found that all the family there, literally everyone on his side, and then I think my mother would have had a similar experience, of course they hadn't met yet, but that everyone was really killed, almost, you know, almost prior to the Holocaust, it turns out. So almost prior to the Germans invading the Dehame. And to be 13 years old and going with your family back to see that, it's hard to kind of wrap your arm around that. It's just amazing. Well, he found that out right, so he was, he was, he was back there. We're able to finally communicate back home. So my grandparents, I can't imagine the pain of that, Gerald. Yeah. When we look at the world today too, it's good for us to remember those sorts of things at times that they're, you know, this is not hundreds of years ago, this hard tragedy. So your mom and dad were both born in South Africa. You grew up in South Africa. What was that like growing up? I mean, a partite ended in 1990. You're a minority population because you're also Jewish, which is a very small number of people in South Africa. I mean, what was all that like? Yeah, so I was born in May 29, 1961. So two days later, the South African government, the nationalist government, the partite government, we could call them declared, they left the Commonwealth, May 31, 1961, and we became a republic. So, you know, I was unaware of all this in 1966 or 1967. There was a huge uprising known as Shalphal, in which the police and the army killed the protesters. And that set off an inevitable end to a partite. And, you know, that nationalist regime, the protests started. The ANC was formed, Mandela's resistance was hardened, et cetera. So, and, you know, that was really a big change. The Steve Collis of 1967, 1968 was happy kid, suburban kid, driving his bicycle, playing sport all the time, you know, going through, eventually going through teenagers, you know, changing to a private high school and dealing with all that. You know, I'd say the next significant political awareness became really in college, which we called university, where I was in the Commerce Department. So, if you're an art student, you tend to be very liberal. If you're an engineer, you tend to be conservative in my university, which was overall, you know, left of where the government was, English speaking university. So, by inclination, actually, a little bit more, you know, less conservative. But there was tremendous strife in those days, when I was at university, in, in, which was really 1978, through '82. There was tremendous amount of, of rioting, of protests, of the police taking very harsh actions against students. And, you know, you had to decide whether you wanted to go one way, alliterating your kids that I'd grown up with, went to junior school with that got, was called band, where they had a full-time policeman watching them, monitoring everything that did. They weren't allowed to interact. There was a kid that I was aware of. There was a medical student that wasn't allowed to be with the classmates, even when they were doing the anatomy and carving up the body. He had to have his own body, his own cadaver. That sort of crazy stuff. And so, you know, I made a decision to get my degree. And I went to Pricewaterhouse to do my articles of association to become a chartered accountant. And then I had a big crossroads in 1984, when I had to decide that I want to do my national service. And if you didn't do your national service in the left of the country, without completing it, you could not come back. You were sort of considered an outlaw. So I did it. And I was fortunate enough to get into the Air Force. And there was a lot of life lessons I learned there. But also I learned, I used to work with a PC for the first time. I actually had a manager business in my second year in the Air Force. So lots of interesting experiences. But sometimes, you know, the things that you dread doing and that you are reluctant to do, land up becoming, you know, positive, you know, forming, formative experiences for you. So which of course, I'm sure you've heard from other audience, other participants in your show, Brian. Yes, absolutely. It's things that you never expect, turn out to be really positive moments and life changing and kind of help you develop who you are in terms of things. So then you, in the late '80s, you moved to the United States, Orange County out in the LA, generally, in that area. And you're working for a company. And it was interesting when we were talking earlier, how through working for that, with that company, you got to know the folks from Bergen, which later became a Merisaurus Bergen in El St Corb, which was a large company that you were looking to do some business with. And they offer you a job. They say, "Hey, why don't you come on over here and come to work for Bergen?" What was that like that moment? And was it a hard decision to make or was it when you decided to. Well, you know, being, you know, being born outside the country and not really, you know, I now had a son Jordan and I had a wife and, you know, probably was expecting to have another child in the next year or two. So you started to think differently about the future. And, you know, so something about working for a large company that could really help me understand, you know, how to get along in business in America. It had financial stability that had a lot of training programs when, you know, in my background, it had really been more in accounting and financial services in South Africa. And then I had this very interesting experience running for a, you know, a wealthy individual, this, you know, who's the largest shareholder, this medical supply company in Orange County. So it just seemed like it was a good opportunity to learn from a different set of influences, a different set of, you know, stakeholders in a way, a public company. I remember the exact mitigating 401k and having stock options for the first time. So having a proper benefits program because we were, you know, a small company around 10 million revenue in the other distribution business, which was probably more than it is today in distribution terms, but we're still a pretty small business with a lot of the resources and, you know, in training and access that we had. One of my first experiences when I did move to Texas to run the business for Bergen Brunswick, which was called Alternate Start Distributors off the business case plan, was the workforce that we were able to attract. And, you know, I've always been a people person, my whole life. It's just something I think I inherited from my mother. But it was a tremendously gratifying for me to find such high quality employees. And I feel like part of it might have been the difference between the talent we could attract at the, you know, in Texas versus California. And part of that was driven by cost of living. You know, I think that in California, you literally couldn't get by, you know, earning in those days $30,000 a year, you know, because you had tremendous experiences in the past. that you don't, it didn't have in a state like Texas. And so the workforce who had was much better employed at the level of income we could pay. - I remember one time you mentioned to me that talking when you were trying to decide whether you wanted to take this job and it would involve moving to Texas, you talked to your father who said, why not go for it, try it out. What was the, yeah. - Yeah, yeah, you know, it's funny, I often would describe my mother as my role model because she brought such an energy and passion and purpose to whatever she did. And my father was a dentist, so maybe it's not as easy to do that as some of the other causes that we all support. You've been involved in journalism, I've been involved in healthcare, which we describe ourselves as a purpose driven company. But my father said to me, it's enough, go work for a big company, you're gonna learn a lot, it's gonna look good on your resume. You probably won't at this time, you'll have to be able to do the MLA that you always coveted, that you always wanted to do. So think about this as your opportunity to earn a good living for your family and get that experience from a larger company, which understands the US and has deep roots in American society and look at what a wonderful experience you have. And he turns out he was more correct than any of us could have anticipated because that was one of the best decisions I ever made in my life was joining Bergen Brunswick and helping to start this business. - The heart of mythology is we talk about, all of our successes are not all by ourselves and I love some of the things that I've read that you've talked about leadership and its role and it's not about being up on the pinnacle and you're the leader, it's about pulling people together. Talk about some of the folks that have played a real role that have helped you throughout your career, that have kind of helped make Steve Collins this incredibly successful businessman today. - So we have to talk about Nelson Mandela because I guess a lot of people do because he's one of the most incredible figures of the last 100 years. But he said if you wanna go fast, go alone, if you wanna go far, go together. And I think that's really been my motto but a few people that stand out Brian, the first person, the person that brought me into Bergen Brunswick was a wonderful gentleman who was a CFO of the company. His name was Neil Demick. Neil was Mormon, very, very resolute Mormon and first one that I'd ever met and certainly first really good friend and still her regarding as a friend of mentor. Once someone has that role with you, even if, you know, in some measures your career has that supplanted, he's still always your mentor and you have that tremendous respect and difference for him and I was fortunate enough to visit with Neil a few months ago. And you know, he was not only a mentor, he was our supporter. He understood what we were trying to do with the business. We needed tremendous road blocking because what we were doing was controversial within the company which was really bright about having a different distribution model depending on what your site of care was. And the manufacturers were recognizing that with different trade contracts. And if we hadn't established this business, we wouldn't have got those contracts. So, but that's all logical. The emotional side was you taking business out of my distribution center, you making it harder for me to make my plan. No, it's not me, it's a competitor, it's the manufacturers, it's the environment but it was hard to understand. So, we needed a lot of internal support. We also needed investment. I'll give you a tremendous example. We had different requirements with regulators, we had different requirements with customers, we had different reporting requirements. Our systems could not work. We almost immediately identified that the legacy AS400 systems in those days wouldn't work for our business. Well, no one wanted to give me the money to do that. So, having the CFO on your side was a little bit like having Washington on your side, you know Hamilton? You got Washington on your side. So, having DeMick on my side was amazing. That's critical. Yeah, I do love that Mandela quote. I've read it before, I'm going to put it up in my office now too. That is a great one. The role of pharmaceuticals too as well. And obviously, there's a lot more that St. Quarer now does, but it's really, it's playing such a critical role in healthcare. More than maybe might have been imagined 20 or 30 years ago, isn't it? Yeah. You know, I was privileged to be at the J.P. Morgan Conference. They asked me to come to like a think tank and I was the only non-manufacturer there. And I was literally with some of the largest former companies in the world. And we were talking about innovation and how things are going to change. So, you know, we do a lot of work around access for medications. And part of that is patient access and the complexity of insurance and benefit verification here in the United States. So, we are doing a lot of that through digital and, you know, machine learning and now AR technologies. So, the head of one of the largest companies in the world was describing how they were listening to a bot call with our bot talking to the insurance company's bot. And how our bot was outmaneuvering the insurance company botany said, "We need to make sure that we carry on supporting companies like Steve." So, they have the best technology. So, they can make sure that our products carry on getting covered. It was just, so, you know, fascinating that with all the innovation that's going around manufacturing, some of these things that you wouldn't, you know, what we do is so important. We are behind the scenes company. You know, people often don't appreciate like your RT department run until your system crashes or you have a cyber security. You could think in a way about the work we do on distribution and supply chain. Everything works well because of how effectively and how productively our industry works. You know, you think about it, we're shipping to over 100,000 sites a week. Healthcare sites, large, from large hospitals to small community physicians, to community veterinarians, community oncologists, to a nursing home. So, we cover all the classes of trade and we're shipping, you know, in really often adverse circumstances, weather circumstances, you know, climate change comes to mind. And, you know, we're shipping, everything's expected to be ordered today and show up in most cases by lunchtime tomorrow. Sometimes much more, you know, I was talking to our Turkish team. We have to do sometimes in Istanbul, one of the busier cities in the world. Seven deliveries a day to meet customer requirements. So, all is adapted to market conditions, to the class of trade, the type of customer that we're serving. So, the flexibility, resilience, durability that a company like St. Cora has to have is remarkable. And the global nature of it, you're talking about a village outside of Istanbul and New York City and, you know, everywhere else in the world, it's fascinating. I mean, it really is. I mean, and to have your team, well, obviously, the tremendously successful, but the emotional intelligence, the wisdom of seeing the world and understanding this isn't the same is over there and we need to understand how all these things pull together and what it's like in different parts of the world. Well, you know, one of the fortunate outcomes, you know, in my career and, you know, you look back on now and just having finished 50 quarters, probably quarters as a CEO, which I didn't realize. And my predecessor, Dave Yosto, also would have mentioned in terms of those you go along with. You know, he sent me a sack with coins in and there were 50 quarters in there and I thought, "Good, this is good. I've got a lot of money to put in the parking meters because some places still take those and I prefer that to all the apps." So anyway, it was, you noted that I'd finished 50 quarters, but so, you know, one of the things you learn is the value of teamwork. And, you know, we've always had tremendous teams and we respect other cultures. So a couple of lessons that I've learned in 2013, we bought World Korea and that taught us to be very global in nature. World Korea was already present in about 50 countries and had major divisions like in Latin America and Asia. And we'd never done business there before. And we had, you know, I give you one example, an extreme example. We had four people working in Vietnam. One of the requirements we had was for every location. You have to do weekly cash flow forecasts. What if you have four people working in Vietnam? What do they need to do weekly cash flow forecasts? They have no revenues. So we had, you know, we had to change things. We had to learn. It was a wonderful learning experience and really set us up to do these tremendous acquisitions that we've done with Alliance, Healthcare and Pharmalex in particular. And World Korea has landed up being an acquisition that we could be tremendously proud of. But the organizational muscle that it gave us has been most profound and set us up well for a global future. You know, the other lesson I'd say is not necessarily related to international. In '96, I did my first acquisition after two years of the joining the former Bergen. And, you know, everyone just thought, well, these people will leave. They were in a small town in Southeast Alabama. Well, we invested behind them, you know, within four or five years, they had gone from, you know, 30 million in sales to a billion dollars in sales. I'm getting you not. The population had gone from six or seven associate population to, you know, 100 or 200. And, you know, we became the heroes. And whenever we posted for a job in Doathe, Alabama, we got so many people applying. So, you know, things have changed and businesses change and supply chain needs have changed. But we still have our presence in Doathe, Alabama. And we, until recently, had some people working there from acquisition in '96. Actually, we still do, I think, here. Yeah. The trend, I mean, it's huge and global, but it's also in every community that you can imagine. And really changing the lives of those in that community too when you think about it. Yeah. Yeah, I think. I think some of the most interesting things that Sankara does is around helping, you know, we have very large complex customers. Think about Walgreens, of course. Think about ExpressScript's part of Signal. You know, think about cars of health in the U.S. You know, think about boots in the U.K. And think about the huge pharma companies we work for. But we will also do a lot of work with helping small and medium, you know, developing companies, develop their commercial infrastructure. We do tremendous work with community veterinarians, oncologists, pharmacists, small rural hospitals that have, you know, very different issues to the pains and Jefferson's of the world. Praise the veterans of the world. So, you know, I think we have to be flexible. You know, if you ever looked at what is a requirement to be a leader of this company, you can't be arrogant. It would be a death blow. I'll tell you why. You have to deal with confidently with the CEO of Novotis one day and then a small community pharmacy and you have to be attentive. You have to be appreciative because if that small community pharmacy is part of a big buying group and that big buying group wants to know that the CEO cares about his members. They won't stay with you. So I feel like, you know, you need to be flexible. You need to be really respectful and you have to be authentic and interested. So, you know, those are some of the requirements. But they also the requirements that make acquisition successful and make, you know, global respect and global participation work. Talk a little bit about the foundation. You've expanded that greatly in terms of what the Sincurror Foundation is doing in terms of, you know, improving the health of communities, patient populations, also animals as well as human in certain parts. Yeah. So, talk a little bit about why that's so important to you. And I think, you know, we were very influenced by this, you know, the purpose-driven corporation. So some of our board members really encouraged us. You know, there were two in particular. One of them was Doug Connan from Campbell Soup, who was on our board for a while and really encouraged us to think about being a purpose-driven company and he had spent a lot of time on that. Another one was Dick Gock, now that it implemented at the two companies that he'd been a part of. And then my board director, my lead director was Jane Haney, Dr. Jane Haney, who'd been FDA director. And we had, we met a lot actually with companies. One of the most interesting to me was Beckton Dickinson. Beckton Dickinson has been tremendously successful, is a supplier to us and also, you know, a contracting partner with us and like we do work with them in hospitals and that. They actually lead into new markets with their purpose, with their philanthropy on, with their foundation. And, you know, they help establish an environment where their products can be successful and very, because they improve infrastructure. So, you know, one of the interesting things the most, I'll just tell you one of the most visible projects we did is we built warehouses for vaccines in Port-Aprins in Haiti. We helped finance, you know, we found credible partners, we don't do that ourselves. We know that we need the right partners. And, you know, that's the sort of work that we do. We have tremendous foundation partners. We have partners that take care of families whose kids have pediatric cancers. So what happens in those instances is the drugs may be covered, but one of the parents will lose their income. So then the whole family goes into a tellspin which could result in, you know, homelessness in addition to pediatric cancer. So help support the family, help them while they're going through the treatment and you won't have, you know, an economic crisis, which is affected by a diagnosis. So those are the sort of things that I think our foundation helps with. And, you know, I think recently we had a really smart idea which was actually quite extraordinary insightful. We had our venture capital fund, which is also being a new strategy that is working hand in hand with some innovation ideas that our teams have. We are going to donate our, you know, 10% of our profits from those deals when we sell them or, you know, when they have the next liquidity event to the foundation. So we can help, you know, and create an enduring legacy. So when we think about our name change, St. Corrin, which we'll talk about, Brian, I'm sure, it really is, you know, a transition to a purpose driven company that takes itself and it's role very, very seriously and anticipates that we'll have that role for generations to come. So you need to change to that global brand and that global purpose driven organization, I think, which in our case is extremely authentic. Yeah. It comes from the top, but probably just as importantly or more importantly, it's supported throughout the company, throughout those 46,000. I think most of our team members feel very strongly about being in healthcare and affecting patients' lives. Yeah, and that kind of comes, let's talk about the name St. Corrin. I mean, it's a bold step, but it does, you've said, you know, how it reflects the reality of what the company is now. Well, we really wanted to do a program called Global Unites and go to a global brand and we did a lot of studies at Meriselsburg and, you know, we are fond of it because we've had, it's been such a success since formation in 2001 and the two predecessors of companies both had their own strengths and brought essential elements. If you think about forging in an iron, you know, where the Merisels side and the Bergen side both had very important elements for us. And you know, it took, it probably took about half of my tenure to have people stop talking about this merger that happened in 2001. So it was a very, it was a very profound event in people's lives who stayed with the company. But, you know, it was really time to move on from that and have a name that we could reflect our global branding or effect our purpose. And you know, we wanted to find a name that was really relatable to our central role in society, the core role we play in healthcare and healthcare infrastructure. And this name, you know, the more we played with it and the more we thought about it, we couldn't have come up with a name that, you know, is, is reflects that global brand and reflects this, how central we are to the infrastructures of companies and countries and patients and health systems. So manufacturers, we want to be that essential partner to them. So I think it's, I think it's been a great step for us and it is really part of how seriously we take and how confident we are in the future of our company. Yeah, it's very memorable and you quickly get what it's about, St. Cora, you know, it tells the story as soon as you hear it too. What I want to touch on the other thing, you talked about, you know, mentors like Neil and how they shape your success. For young professionals that are just getting into the industry, offer some advice on the importance of mentorship, meeting people, getting out and about. Yeah, I know, I know everyone's tired of hearing a lot of CEOs of my generation or talking about the importance of being in the office, but I do think, you know, I just look at the visits I've had and I find that, you know, and of course everyone's different and we have, you know, we're doing some work with the working genius. We've been doing a lot of work with those models and all these programs for me do is reinforce how different we are as individuals and we have to bring that to the workplace. But, you know, I've been privileged to work with a lot of great teams, my executive management team now comes to mind the different quality sets. And I think for you to sit down and have that direct relationship without the distraction of screens and phones flashing and it is so important. You know, I would say that try, try, even if you are working remotely, try to come in and try to meet with people or just do a lunch with people, right? That human touch, that human association I think is also important. You know, having very good experiences from having our leadership meeting here, you know, just before the holidays last year, we had, you know, 200 people literally from all over the world come and get together. And I think we've seen dividends from that with ideas, with new relationships, with best practices that don't get shared as much, with breaking down barriers. So I would say be open, be, you know, be passionate about what you're doing. Don't worry as much, if I had to give advice to my younger self, I'd say don't worry as much about what your peers are doing, worry about, you know, managing your career for the long term, which means doing something that's important to you, but also is intellectually stimulating that you, you know, identify with the values of the company that you're working with and be open to new challenges. I mean, you know, I would never have had a chance. I thought I was joining a huge company in '94 when I joined Bergen Brunswick, you know, probably I think in those days with maybe 11 or 1200 team members and, you know, about a billion dollars in revenues, maybe it was about two billion in revenues actually. But it's amazing what you can do now with a company, the training you can get, the fact that you can work in so many different countries. And with now? With saying, we recorded 262 billion in revenues for fiscal year 23 and, you know, and I'm fond of saying this, I actually said it on mad money two weeks ago. You know, 262 billion, I'm very proud on that. 3.3 billion is an operating income. I'm very proud of that number, probably, you know, even more proud, but taken together, those two numbers are terrifying for a business person, right? Because, you know, it's a very small percentage, you know, under 1.5% of the company's 4%. So everything has to be managed extremely well. The financial expertise that a company like Senkora has is remarkable. The way we have to manage everything, the way we have to manage our cash flows because our cash flow will still come out to operating income. So quite remarkable and requires just a lot of expertise. So what you said about working in different companies in different countries and learning to be flexible and adjust to the market can also be said about the different staff disciplines, right? You know, whether you're in marketing communications, such as you are or finance or sales or the incredibly precise operational expertise and regulatory compliance needs. We have just think about all that dexterity you need and everything has to work together and that's why you need strong purpose and that's why you need strong identification from the 46,000 team members. It is amazing. Steve, when you think about how large the company is, how many countries, all the issues about what you're doing, too, and some of it has to be kept refrigerated and shipped and talking about being in Haiti and being in London and all the other places that you are in and the margins being so lean, too, as well. And that sense of team, it's really, it blows me away. It's really exciting to have this conversation and to see how the company has grown under your leadership and the kinds of people that you attract that share that passion on a global basis. It's really, really remarkable. I'm really looking forward to the Health Key Conference Day 1 again, March 12th at Senkora's headquarters, a chance to gather people there and again, in the same way to learn. People from a lot of different types of backgrounds, people from large companies, people from startups, venture capitalists, all this kind of coming together to learn to share. And then day two at the Comcast Technology Center on March 13th, where we'll have some terrific speakers as well, like Greg Devins, the CEO of Independence Health Group, Madeline Bell, the CEO of Children's Hospital, Phil Adolfi, as well as Andy Slavitt, who led the COVID task force for President Biden. So we've got a lot of different types of people coming together for those two days. And I really want to thank you for your support and that you're investing in people getting together, learning from each other. It all comes back, doesn't it, too? It really does. It does. And thank you for you spending the time to do this and give, give people like me a chance to share our experiences. And hopefully it does, you know, we need, we need some, we need a lot of more positivity in our society. So if any, a small way, we can both contribute to that. I know we're happy to do that. Thank you. Well Steve, thank you so much for joining me today. I'm really thankful. And I know those who are listening to this podcast will really enjoy it and take away an optimistic sense of, yes, I'm going to do that. I'm going to do what your father said. Give it a try. Go take that, you know, inspired. We are in the end inspired by our moms and dads, aren't we? And when you think about the road that your grandparents came across to get here, God bless them and one word and upward. Thank you, Brian. Thank you. What a wonderful way to end. It's very hard for me. Thank you. Great. I hope you enjoyed this conversation with Steve Collis, the CEO and chairman of St. Cora. Steve will be joining us on day one of the health key summit March 12th, coming up soon. Day two of the health key summit will be on March 13th. And that's going to be at the Comcast Technology Center. We have terrific speakers from a bunch of different industries and backgrounds all about how we're redefining, changing and making health care better. During these two days of programming, you will hear from Steve Collis and some of the other incredible speakers like Greg Devins, the CEO of Independence Health Group, Andy Slabit, who led the COVID response for the Biden administration and Madeline Bell, the CEO of Children's Hospital of Philadelphia. And if you're interested in learning more about the health key summit, come on down, check it out, go to healthkeysummit.com. It's a wonderful opportunity to be around smart people who care and you'll learn and you'll make new connections. you there.