There is safety and power in numbers but Ajit Singh is something of a contrarian. Who else but one would consistently challenge a system that remains deeply rooted in age-old style of operations? Notoriously known for its highly fragmented structure, pervasive disorganization and entrenched interests and practices, the healthcare and medical field is one where potential breakthrough ideas and even revolutionary technologies struggle to survive. And yet, Ajit Singh’s long journey to motivate change and redirect these entrenched systems towards greater effectiveness is yielding results – a little bit at a time!
Ajit Singh started off his career at Siemens in 1988, and ultimately ended up spending nearly two decades here across multiple CEO roles in US and Germany, with the last held position as CEO of the Digital Radiology and Medical Informatics business. He left Siemens to join the upcoming start-up, BioImagene as President and CEO until it was acquired by Roche in 2010. He now serves as the Managing Director and General Partner at Artiman Ventures, based in Palo Alto, and focuses on early-stage technology and life science investments.
There are so many lessons that Ajit Singh has imbibed over the years – be it at his long-standing career at Siemens, or as CEO of a start-up, or as his current role as VC – and yet there is one lesson that sticks out from the others. And that is the need to overturn entrenched systems by introducing inefficiency, and thus driving innovative disruption. We at AnuPartha set out to chat with Ajit Singh to find out his story on navigating the labyrinths of working within these deep-rooted systems in the medical field and most importantly, how he uses inefficiency as a tool of disruptive force to bring about transformative change.
It was a hard hitting insight that has guided him since his early 30s. According to Ajit it’s all about the dialogue. “A dialogue happens when two individuals listen to each other’s view point or listen to each other with genuine curiosity to understand the other person’s view point.” Simply put, he says it’s about the ability to not just understand what one is saying but also what they really want to say. And this is when innovation can happen. Throw in some inefficiency here and that’s when things get going!
Ajit feels that this aspect is particularly important – to introduce some inefficiency in the system, or else people tend to get complacent. He shares an example in the case of hiring – “let them interview you, not the other round!” He feels that a lot about a person can be gleaned at the outset with this different approach to hiring. “First, it tells me about their thinking pattern. And secondly, about their curiosity.” A seemingly simple tactic according to him and yet it pinpoints the individuals’ ability to ask the right questions and engage in a meaningful dialogue. He adds “I believe this is the central pillar in creating an organization that promotes an organic, bottom-up approach to being innovative.”
He extends this principle to product planning as well. Typical to his contrarian way, Ajit likes the idea of going in a completely different direction and engaging the customer early in the product cycle or before the product has actually even been conceived! Forget the long, usual route to the customer focus group he says! He admits it can throw off the entire product planning curve but this is what introducing inefficiency in the system is all about. Ajit points out – “I have consciously allowed for a disruptive dialogue to happen early on.” He goes on to explain why this is so important – “If I have it at a stage where people are already entrenched in some positions, it becomes very hard to break their mentality and I cannot guarantee that they will be open-minded.”
Ajit lives by a simple analogy – “Say, I am driving and I am stuck in traffic. I wish my car could fly, but NO car flies yet. That’s the constraint imposed by the system…and you need to work within that.” He further illustrate this analogy by describing various ways to go around the constraint – “You can decide to take an exit or try a shortcut through side roads, or park your car and take an Uber instead, or even decide to walk it. The point is all of that is allowed, but the fact remains that you CANNOT fly!”
Which brings him to his main point – the medical profession is extremely sensitive given its direct impact on human lives. The bar is much higher here according to Ajit and it is particularly important to cope with the constraints imposed in this field – be it the FDA or the risk-reward ratio when it comes to medicine and diagnosis. He stands firm on his belief that disruptive thinking occurs in this field when we bring in more constraints right at the beginning in the design and concept phase. Other than including different kinds of people earlier on in any project, Ajit says that it’s important to keep in mind the three important thresholds to cross here. “The first one is the scientific and technological threshold – does it do what you want it to do? Second is the regulatory threshold – what does it take to clear regulations? And lastly, the moral threshold – will you subject your loved ones to this?!”
It was at Siemens where Ajit’s ideology on introducing inefficiency for innovative disruption was shaped. Contrary to popular thought, he feels the German culture is among the most egalitarian across the world. In fact according to Ajit, it comes with a twist. “There’s a full dialogue before a decision is made…and everyone, from the union to the janitor is allowed to weigh in!” It may be a longer, cumbersome process but as he sums it ”the input is from all levels, but once the leader has made the final decision, the implementation is 100% top down. Net net: full debate before the decision. No questions after the decision.” Ajit finds this open culture in stark contrast with the practice followed elsewhere, especially in the US where he feels decisions are often made quickly but with a lot of second guessing, which defeats its very purpose.
He is a strong believer in the power of introducing new people in the product design and early lifecyclestages when it comes to making key decisions. As he puts it – to perturb the system! “You allow a new dynamic to develop and these people come from a new way of thinking, which comes from an alternate discipline. Let inefficiency prevail for a while. Let the water find its level. Allow the dialogue!”
When Ajit Singh left Siemens, he ended up leaving a behemoth business with over 6000 employees to create a start-up that had a mere 10 employees! His tenure at Biolmagene was full of adventures and several “mis-starts” as Ajit likes to describe them rather call them failures. For him it’s not about failing at a new job but rather how quick the learning cycle is. He shares his father’s wisdom here – “It will be all ok at the end. And if it is not ok, it is not the end.”
He stayed true to his philosophy of bringing about disruption through inefficiency even at this small, upcoming company. In fact under him, a bold decision was made to pitch their digital pathology products to their customers’ customers directly – the oncologists. Biolmagene was so successful with this disruptive approach that eventually the entrenched leader, Swiss pharmaceutical giant Roche, acquired them for $100 million! When they sold the company, there were about 40 units in the field and today it has mushroomed to over 1000 units!
Ajit finds strong parallels when it comes to hiring CEOS for start-ups, be it as a President/CEO of one himself and as Partner at Artiman where there’s always a need for a start-up CEO to handle the portfolio companies. He acknowledges the challenges that come with looking for the right person. “My CEO is going to determine the life, quality, leadership style, hiring practices and company processes. At this point of the company, it is the single most important decision.” Which is why he finds it ridiculous to see companies, especially start-ups in their early stage, compromising on important aspects in their rush to hire a CEO. “There will be more important decisions to make later. Just to rush for the sale of checking a box is silly!” He falls back on his favourite mantra – “introduce inefficiency in the system!” Companies can manage to raise funds without CEOs or even the founder can step in, in the interim! It’s all about the learning process he says. In fact that’s what he appreciates about the unique and very hands on approach at Artiman, where many a times the team members have actually stepped in to serve as an acting CEO, without compromising the founder and stepped back as well when the time was right.
Ajit emphasizes the importance of the dialogue when it comes to creating chemistry with a founding team. “The dialogue is central to creating trust” he says. However it can be a bit of a catch-22 situation as you have to first build the relationship and then build trust, not the other way around!
A major pain point for Ajit Singh is that the medical industry is rife with inefficiencies. For example, he points out how diagnosing infectious diseases is done exactly the same way as 100 years ago – through a routine blood culture. “Why is that only 5% of these diseases are being identified using molecular diagnostics?” he questions and then adds that the technology itself is a restraint here considering its high costs.
While technology barriers are prominent, there are other cases where adoption barriers stand in the way. For example, there’s no reason for using paper in hospitals with electronic medicals records available he says and yet he feels the system hasn’t adopted the technology as it should rightly be – doctors instead prefer to scribble notes and get them entered in the records later by the nurse or scribe. This very action defeats the entire purpose of “guiding patients in real-time” as there is a wealth of information at hand – be it previous lab results or diagnosis or even trigger risk alerts to unsuitable medicines prescribed. Ajit ruefully reflects on this inefficient use of an otherwise amazing technology – “The whole point is lost!”
Ajit seeks to explain the reasons behind the slow adoption of innovation and he believes this is largely due the sheer level of fragmentation in the medical and healthcare industry.
The only way to move forward according to Ajit is to hand over the reins to the next generation. His pragmatic view is that “the present generation has to get out of the way and the new generation that has grown up on these technologies need to come in their stead.” He expands on this – “It’s not that the older generation cannot adopt these new systems but there is also no denying that adoption will be faster and a lot easier with the younger generation.”
Ajit is a strong believer of the India story and its burgeoning entrepreneurial talent and business innovation despite China being ahead of the game. “What will happen in India is far more sustainable and organic.” he says. However he feels there’s a long way to go for Indian entrepreneurs. A major roadblock according to him is that capital is not easily accessible, but things are changing now. Another common mistake he says is that we tend to take a “jugaadu” approach to marketing, despite having a great product on hand! Marketing needs to be taken seriously and it is a crucial step; as he says – “You have to get yourself known. It takes money and people need to hear about you. They aren’t going to seek you out by themselves!”
His logic is irrefutable – “You have to accept the fact that there are entrenched players in the enterprise business and there are slow decision cycles. You cannot complain that hospitals don’t decide fast – you knew that from day one!” He feels the onus should be on doing all the preliminary work before launching a product, factoring in the various constraints and of course as his motto goes – involve the user groups early on the cycle!
When on the matter of how trust is central to getting the dialogue to innovation started, Ajit shared an interesting Greek equation which he goes by – “Trust = credibility + reliability + intimacy divided by self-interest.” As long as the numerator remains much higher than the self-interest denominator, he says, it will be the epitome of a successful relationship where it often takes two to tango, and innovate. Ultimately, the road less travelled is always going to be fraught with risks, but with a combination of right ideas and right timing, right luck and above all, a meaningful dialogue, it WILL deliver!
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