Ep. 126: Bob Kolodgy - Building Organizations Ready for the Future

Contact Bob Kolodgy:
https://www.linkedin.com/in/bob-kolodgy-a5849214/
About Bob Kolodgy:
https://www.bcbs.com/about-us/leadership/robert-kolodgy


Bob's Interview for Forbes CFO Network with IMA's Jeff
Thomson:
https://www.forbes.com/sites/jeffthomson/2020/02/07/the-finance-leader-in-health-care-an-interview-with-the-cfo-of-blue-cross-blue-shield-association/?sh=418e829169ac


BCBS: https://www.bcbs.com/


FULL EPISODE TRANSCRIPTAdam: (00:00)
 Welcome to episode 126 of Count Me In. Thanks for coming
back and listening to IMA's podcast. I'm your host, Adam Larson
and today's expert guest is Bob Kolodgy. Bob is Executive Vice
President and Chief Financial Officer for Blue Cross Blue Shield
Association, a national Federation of 35 independent
community-based and locally operated Blue Cross Blue Shield
companies. In his role, he is responsible for the blue's federal
employee program, oversees the national employee benefits
administration, and has overall accountability for Blue Cross
Blue Shield brand management, and the associations finance,
licenser, enterprise information technology, and information
security areas. During his conversation with my co-host Mitch,
Bob discusses the role of the CFO in building organizations ready
for the future. Keep listening to hear his perspective on
innovation, data, and value.

Mitch: (01:02)
So for our conversation today, we really want to emphasize the
role of the CFO and making sure that they are capable of building
organizations ready for the future. Now, innovation certainly is
a term we use often in accounting and finance as organizations
seek to create and increase value. So to start off, I would
really like to know what innovation means to you.

Bob: (01:31)
Yeah, thanks Mitch and thanks for the opportunity to address IMA
today, it's a great group and I love to be part of your events,
so thank you for that. You know, with respect to innovation and
accounting, let's put it in perspective and I've always said this
at the beginning of innovation conversations with finance people.
It's like, well, we don't want you all to be all that innovative,
I mean, your accountants after all. And you need to be careful,
right? So there's all kinds of, accounting principles and things
like that. And we don't want you to be creative with that now,
maybe be creative about how you do what you do, right? And so how
can you as an accountant, or a finance person in an organization,
actually innovate in a way that creates value. And so, when we
try to take that apart, I look at value as the sum of three
things, cost or efficiency, quality, and service. And so anyone
can apply those principles to what they do I think, and add
value. And so for me, innovation, particularly in accounting and
finance in those disciplines really is focused more on those
things and keeping them in balance, right? So innovation can
accelerate any one of those things and as long as it does that
without detracting from the other two, it's adding value. So for
me, it's kind of that simple. And, when you look at what we've
been in for the last, 14 or 15 months with the pandemic, it
really sort of dots the eye on the need for innovation, right? We
had to pivot in so many ways that we never would have expected so
quickly and, you know, true innovations have come out of that in
many forms and now its a matter of advancing those and in some
cases bringing them to scale. There were certain things that came
out of the pandemic that were really innovative and they're going
to stick whether we expected that to happen or not. The time
after the pandemic will be, not like anything we expected or
planned on our prior trajectory.

Mitch: (03:37)
Yeah, I completely agree, among these different conversations
that I have, I've certainly seen many organizations who have
explained that they will be adapting some of these ongoing
principles moving forward and making it part of their business,
because of how they had to pivot and adapt in the last year plus.
My next question, continuing on this topic, as far as innovation
goes and the different components that you spoke about, what is
specifically the CFO's role when it comes to initiating this
change, enabling innovation and driving the anticipated results,
evaluating those results, where does the CFO really make an
impact?

Bob: (04:16)
Yeah, I think innovation and enabling new thinking and so forth
is really an area where the modern CFO can differentiate
themselves from the more traditional financially focused leader,
and if it's done well, the CFO can become the corporation's
architect for business value. I saw an article recently from
Accenture on this, and I found it very, very interesting and
poignant. CFOs are uniquely positioned if they apply certain
levers that they have access to, to be able to create this
differentiation and be the architect of business value. And just
to list off the levers quickly, visibility of the whole
enterprise, the CFO typically because they deal with all parts of
the company has a view into what is going on in all those parts
and the ability to see where synergies exist across those
verticals, the ability to do analytics and have access to data
across the enterprise is really critical. CFOs, not only have
access to financial data, but now more and more operational and
market data and, a variety of things that they can bring together
to bring insights that are actionable to the organization.
Understanding enterprise risk is a critical role that the CFO or
critical conversation, or are part of the conversation the CFO
can bring, because they can measure risk and they know that you
may be able to take risks in one area of the company and balance
that off with some protection and hedge and the other areas of
the company. The CFO can and should have a strong relationship
with all the C-level executives in the company, right? So there
should be good working relationships there and the CFO's ability
to mentor and discuss things with his or her peers in a way that
brings to life this greater business value. And finally the
financial authorities, I mean the CFO obviously has a financial
authority within the organization and can reinforce the economic
basis for investment decisions, right? So the CFO can bring voice
to somebody else's idea, in a way that that person may or may not
be able to do. And so, these things can really be exploited by
better collaboration with C-level peers, by leading in with
unique insights, whether it's based on data, unique analytics,
perspective on risk, or what have you, and then taking ownership
for ensuring that value is extracted from all of the new
technology and data platforms. These things are proliferating
coming up all over the place. And I think it's the CFO's
responsibility to make sure there's a value equation attached to
each of those, or if not, make sure everybody else understands
that and make sure that expectations are aligned along those
vectors and CFO needs to be able to cultivate a good commercial
awareness and stay ahead of the curve of the industry, right? So
whether it's regulatory change, federal policy changes, the
business environment, changing the competitive landscape,
changing or just trends and particularly important, I think is
understanding what the potential disruptors are. You know, I'm in
healthcare, there are disruptors all around our industry, whether
you're talking about health plans, providers, pharmaceut...