The Fundamental Purpose of Technology | Peter Adams

About Peter Adams

Peter Adams is Founder & CEO of Lighthouse, having launched the firm 33 years ago while working as a deployment specialist in the health care information systems arena. In a moment of epiphany, he realized that the primary goals of his complex projects were not to make some new IT technology work, but rather to make the client’s business wildly successful. It was then he conceived the Lighthouse approach to consulting – an approach that, while it maintains a strong component of IT, is dedicated to the primacy of achieving the client’s ultimate business objectives.

Peter is a graduate of UC Santa Cruz in Bio-Chemistry and of Oxford University’s Advanced Management Program (AMP). He is a sailor, a Coxswain in the Coast Guard Auxiliary and a Black Belt martial arts instructor.

You may contact Peter directly at PAdams@Lighthouseis.com or by phone at 831.818.5100.

Interview Transcript of: The Fundamental Purpose of Technology | Peter Adams

Alan
I’m here today with Peter Adams. He is the CEO and founder of lighthouse. So Peter on American Dreams are always interested in, in, in learning about the entrepreneur, what drove him to do what they did and, and so I’d like for the sake of the listeners you spend a few minutes talking about your background. And you know starting from your your schooling and what led you up to where you are today.

Peter
Well, I grew up in Kansas, Topeka, Kansas, actually. So I spent my early childhood years there. And one of the big seminal moments for me was when I was 16, was the first time I’d ever seen the ocean down in Mexico. And once I saw that, I was kind of never going back to the wheat fields, not that I didn’t like the wheat fields, but the ocean was really special. And so that’s always been a big part of my life. When I applied to go to college, I applied all around the periphery of the United States and eventually accepted at UC Santa Cruz to where I did my undergraduate studies, got degrees, both in biology and chemistry there and really learned to have a much broader appreciation for the Arts. I really enjoyed my art history classes and some psychology classes and linguistics and stuff. So I got kind of interesting science and Renaissance type background. Being a lifelong learner, I ended up with a degree, Maitreya, went to Oxford’s Advanced Management Program, which is kind of their Executive MBA Program. And England did that which I really enjoyed and got a much very good international experience on that level just been part of kind of a non traditional community of learners, since then, the heck and associates and the school for generative leadership and management. So just all these different things really brought up about kind of an interesting background, interesting perspective. Back in the early days, I started out working in the science labs at UC Santa Cruz in the graduate science labs, and I was doing some primary research, and really thought I was going to be a biochemist. And that was really kind of where my passion laid. In doing a lot of the work there. I was also automating some of the lab equipment with computer systems. The early days, this goes way back in the late 70s, early 80s. A lot of the lab equipment stuff was all manual that had data ports on it, that generating the reports the output, a lot of it was graphing by hand and stuff. And I thought that was really tedious. So my college roommate happened to be in that computer science program. And he helped me we work together and we automated, some of that equipment really made it much easier. And I really learned to look at the computer system as a tool for improving productivity, because I liked what I could do with it. I was not so much enamored with the tool itself, but the application was really special.

Alan
I want to step back. So you your major was not in the field of computer science. Not at all. So you’re a self taught programmer that

Peter
Well, yeah, so we I did obviously had some, some schooling and that I did take some computer science courses, but really was so I could learn how to apply the tool because I was much more interested in the outcome than the tool itself. And it led me in kind of a circuitous path to get where I am now.

Alan
So in your in your, in your business, you putting your stake in the ground, what point in time did you say, I’m gonna start this company lighthouse?

Peter
Well, that’s really interesting story, I think. I’ve been working for a company called Shared medical systems and two things happen at the same time. I’ve had a really good manager for about six months. And then she left. And I’ve seen good management, and then I’ve seen some not so good management, and I really missed the good management in the leadership and the mentorship that she’d been able to provide us. That happened the same time. This is back about 1983 insurance companies came out with ICD nine codes, which is our first attempt at cost containment. And I had a number of hospitals that were losing money. And I had we had one hospital it was making money. Now this is at this time, step back a little bit. says we’re gonna we shared medical systems, it was a common back end platform to all the hospitals. So basically, there’s the same system everywhere. Why was one hospital making money? Why are all the other hospitals losing money? I this was a question I had to find out because there was an anomaly here. So I ended up spending a good portion of my summers in Arizona working down there to understand what this hospital was doing. I figured they must have been doing something illegal because they’re making too much money. They were taking cash discounts on purpose on purchases, they were giving huge bonuses to all the employees. They set up charitable contributions to try and get rid of some of the cash. And this is the hospital this is really unheard of. So I talked with the CFO United becoming reasonably good friends. And he said he’d taken our standard system and implemented it with a cost control, direct cost type of mentality and approach. So he knew what it costs him to deliver every procedure in his hospital. I thought that was really fascinating. What made it even really cooler was when he took that put his procedures into two piles when we made money when we lost money. Here Then went across town in a competing hospital and said, I’m gonna give you this body of work and resources to help you get good at it in exchange, you give me some of the procedures where I make more money. So in essence, he made both hospitals money, not to me that application of systems and data and thinking about the business and understanding what mattered, that really is at the core of what information technology should enable. So

Alan
Peter, I need to take a quick break. But when we get back, I want to jump more back into this helping to reinvent and defined companies and also the birth of your company lighthouse. We’ll be right back after this message is for visiting today with Peter Adams, the CEO and founder of lighthouse.

Alan
Welcome back and visit here today with Peter Adams. He’s the CEO and founder of lighthouse and Peter. In the first segment, we were talking about your relationship with shared medical systems. And in you were trying to understand how one out of the three hospitals that use you saw were making money, the other two losing and as you began to set this system and process, it also goes give you some inspiration for stepping out and setting up a new company.

Peter
Right? You got the fundamental purpose of technology, any technology, even a pencil piece of paper, whatever it is, is to make people more productive, to enable new capabilities or to mitigate risk. And ideally, it should be a combination of all those things. So when you look at how technology is applied today, most of the times when it’s applied, it’s just applied at a bare minimum level without the understanding of what can be produced because people lack the understanding of what they’re trying to accomplish in business, in large part. And so really, with lighthouse, I’m trying to bridge that gap, I want to be on the business side of the equation, leveraging the body of technology that’s available to produce business outcomes for people. So let’s

Alan
I must I must medical systems on the same platform to software platform, are they is there an industry standard is it vary from.

Peter
Oh, there’s a whole bunch of different software platforms on medical, this is one of the problems that we’re facing in the medical space right now is the plethora of systems, particularly in the smaller facilities. You know, a number of years ago, Obama and before that even the clinic had come out with some some directives to basically put these systems like medical record systems EMRs, you typically hear them called put these systems in place to try and get some sort of consolidation, that space so that we can share data back and forth securely and more easily. That’s been a very big challenge. Because the medical space in particular, most physicians, and smaller medical groups don’t have the resources to do that.

Alan
So when you when you begin working on this project with shared medical systems first, were you out of Will you out of the company that time coming back as an intern? No,

Peter
I was still still an employee. And that’s what actually that was really the impetus for me starting lighthouse was I saw that, really the light bulb went off. And I saw that the application of data application of systems, what you were trying to accomplish with it in the business space was where I wanted to play. Not on the technology side.

Alan
Yeah, it’s interesting because so often yet people go into work every day. And and they may see a change in management of something maybe happen within the organization. So they go from loving their job to hating their job. And, and you have that courage to step out and say, Yeah, I’m gonna put my own shingle up. But were you afraid of what if it doesn’t work out?

Peter
No, I probably should have been. I figured I was unemployed. When I got my first job and I can be unemployed again, I wasn’t really that worried about it. I wanted to make a difference in the world. And I wanted to really shift the narratives around information technology to really being a tool for business. You know, there’s that Nirvana promise of what information technology can do for you, which is you know, you bring it in, you get much more efficiency gains, you spend less money, all this incredible capabilities now comes in life gets great. Except the standard out there, that doesn’t happen. All you’ve done is shift the costs around it becomes a big expense and a burden to the enterprise, not necessarily a net contributor to the bottom line. I think the whole new way of people think about information technology is is off. So I want to bring back the business focus, along with enough technology understanding to be able to drive the outcomes and business needs.

Alan
A constant river of change some 1983. It was the mainframe computers a personal feces. And we scaled up to where we are today, we’re actually what seems like a went full circle. And we’re going back to the cloud there. So Peter, I need to take another break. But when we get back, I want to, I want to come back and discuss how do you stay constantly updated with your business model in this sea of change we have going on right now. And visiting with Peter Adams, he’s the CEO and founder of lighthouse. We’ll be right back after these messages.

Alan
Welcome back and visit here to Peter Adams. He’s the CEO and founder of lighthouse. And Peter, you’re in the early days, we’re talking about how you got started with lighthouse. It was an IT strategy systems integration, but but the venture capital community caught wind of your unique gifts and, and started to engage you in some of their roll ups and m&a activities. And I want to spend a few minutes visiting because it’s a challenge. This is the whole industry out there with the startups seems to be in flux right now. And in you, you’ve been able to step in and with the ability, unique ability you have with systems integration, really come and help take a fledgling startup and in drive some success. And let’s talk a little bit on this point about what approach do you use?

Peter
Thank you. So basically, we have having done a lot of work with venture backed startups, all of whom really are playing a big game, they think they’re gonna IPO, most actually don’t IPO, they end up being acquired. And so we’ve done we’ve done since hell huge body of work doing that and seeing what works and what doesn’t work. Real really what matters, I think, is the human factor. And this often gets overlooked in acquisitions, and certainly by technology, technologically oriented people. Businesses are communities of people that have some sort of leadership and guidance in a certain particular direction. It’s not about the facts and the data and all the gathering all kinds of stacks of documents to mitigate liability. That’s that’s not what I’m after, what I’m after is the human being factor. Bain and McKinsey and a number of other groups say to mergers and acquisitions are only 25% successful. The biggest reason for failure is cultural mismatch and people misalignment. And that really means that to do an effective job in an m&a transaction, where you’re taking two cultures and combining them together, you have to start by talking to people. And so that’s our approach, we sit down, we actually just talk to people. This is the process we’ve developed, we find it’s kind of it’s kind of like that old joke, they talk about consultants who come in and tell you what you already knew. And then they charge you a lot for it. So there’s a lot of truth to that. And so we come in, we talk to the people to say, you know, what’s working, what’s not working? Where do you think the problems are? How do you think they should be fixed? What’s the future of the company? How do you see the vision, right. And we do that throughout all levels of the company, that gives us a really great dashboard for what needs to be worked on. We also use self assessments, which are very easy and not threatening, we give those regularly throughout the process, it really allows us to stay very honed in and focus on the people and the culture, which what a lot of people don’t understand is the connection between culture and it. Culture is largely a manifestation of the tools that we use as human beings. The single biggest tool in business today is it and so by shifting it, I can shift the culture of a company. And again, this is the primary cause of failures and misalignment culture. So let’s start out and address that right off the get go. And so whether we’re combining companies that are on the east coast of the West Coast, or Canada and the US or internationally, or whatever it might be doesn’t matter. It’s still just people. So we just talked to him, we understand what works on both sides. And then we figure out the combined entity which is neither one nor the other, but now it’s a new entity. And we’ll we’ll build effective process effective systems and create the tools that promote that new culture that the company wants to have.

Alan
Would you say that most mergers that happen or are in context of involuntary they need to do because something really is not working or, or how you know what percentage of the company would you say, need to do because of a system failure.

Peter
Companies buy other companies for all kinds of reasons. Sometimes they just want the intellectual capital, like the IP, for example. Sometimes they want the research labs, sometimes they want the people sometimes want a distribution or supply chain, sometimes they want the whole company in the brand, it really depends on why they’re making the acquisition. But on the company being acquired, having a failure. Certainly, I’ve seen plenty of companies in the Bay Area that are that are planning a certain runway and they need to exit before the runway ends. And sometimes they make that and sometimes they actually just after the runway ends, and they don’t get the valuations they were looking for.

Alan
So So when when you’re working with the cultures, obviously, if it’s a larger company acquiring the smaller one, I imagine that there is probably the biggest challenge is integration of technology and systems how, how difficult is it to get everybody on that same page? Oh,

Peter
It’s actually fairly difficult, because there’s always people that want to be acquired, you know, who want to play in the new game company, and there are people who don’t. And so the quick, the more quickly, we can come in and make those assessments and sort out who’s who, and who has the skills, then one of the secret ingredients, I think, when you’re putting teams together is to have a team that comprises both the acquirer and the acquiree. And so you make that joint team, and you have to take some people on the acquired company and really give them some real authority in terms of what’s going to happen in the future, assuming they have the raw competence for that. You know, one of the things that really shows up to us is what I call the supremacy of the acquirer, which is where the acquiring company is always bigger, faster, smarter, stronger, better looking, whatever your metrics are. And when they when they buy a smaller company, one of the first things that the executives want is they want an effective integration that achieves the outcomes they were after. When that filters down to the ranks the rank and file here that is integrated all costs. And because we’re the bigger company, we must be doing things right. So we have to make them do what we do. That actually usually kills the goose that’s laying the golden egg. And so we don’t recommend that approach. Typically, we think there are things that the acquired company is doing quite well, which made them attractive in the first place. Let’s figure out what those kernels are. Let’s preserve those and integrate those into the new hole. When you have a huge disparity in size. Sometimes you don’t get that vote. But when the companies are closer in size, you can really make a new combined entity that’s much more interesting.

Alan
We just have a few a few minutes here. Ideal company for individual wanting to that that you’d like to work with how large should they be?

Peter
Are we really I use headcount because the disparity here in the Bay Area, but really between 50 and about 500 employees in the Bay Area is a really great sized company for us. And at its price get a hold of you, Peter. Oh, they can reach me at my email address Peter at Lighthouse i s.com or they can call my cell phone 831-818-5100 Pretty easy to get hold of.

Alan
That busy here today with Peter Adams. He’s the CEO and founder of lighthouse, a company that focuses on assisting companies in m&a activity and also rolling, rolling up and just general advisory and how to improve performance. Peter, thanks for being on today’s show. We’ll be right back after these messages.

Alan
Welcome back over the break I was using with Peter Adams in and there was a part of the topic that we didn’t touch on. And, and I feel it’s so important, especially here in Silicon Valley when we’re trying to find people, you know, and talent acquisition and a talked about a growing trend of that is through partnerships. And so let’s maybe visit as it How should a company be approaching talent acquisition through partnerships.

Peter
Leveraging on some of Jeffrey Morris concepts of core versus context, were core things that affect shareholder value in context doesn’t, things that are contextual, your business typically on the administrative side of the house, you can certainly you can outsource those kinds of functions if it’s appropriate, where you need core talent that should be developed either internally, or you can leverage very tight strategic partnerships for that, when you’re looking for a very particular narrow set of expertise. And you can encapsulate that, and with a good statement of work or description of the outcome you’re after, I think, then partnerships play a particularly strong point in business today.

Alan
That you run the risk of partnership. So if you’re on one system in technology, and you’re bringing in a partnership, how important is it that they be on the same page and not printing with the same technology your company has.

Peter
Actually blew it off, that’s actually not as important today, pretty much any of the standard technologies that business use are pretty much compatible, and we can move back and forth. So whether you’re developing in a Microsoft environment, or Linux environment, or a Mac environment doesn’t really matter anymore, we can bring that into the fold, and share that with other applications. You know, there are courses you can do are some limitations, but it’s not not as much as it used to be, what has to really happen, I think is really more of a cultural alignment of the outcomes you’re after. And then the tools become fairly self evident. And really, again, I go back to it’s not the, you know, the company, the parent company is not necessarily the smarter one. Sometimes the expertise they’re bringing in really has certain reasons for certain tools they use, and you want to make sure you capture that and bring that together in a way that really produces the outcome you’re looking for.

Alan
And how would you help a company guide them on setting partner at what what stage would you come in?

Peter
I’d like to be there just before they’re thinking the partnership deal to really help them understand what is the technological requirements for this, and then the cultural requirements? Number one is, what’s the outcome we’re after? This is one of the first questions I always have to ask what are we trying to produce? Then I can look at the sets of tools that we do it with in one company and the other company, we can figure out what’s the best way to merge these tools together to get an effective outcome.

Alan
And when typically, when you’re working with companies, what’s it, what’s the time of engagement that you feel is needed, really to make sure that things get smoothed over and helping to get things set.

Peter
In a partnership type conversation, usually, it’s four to six months, to really come in and get things working really well. For both of them, we often are then asked to stick around for a pentacle years longer even. But really, I want to get them off the ground. And at that point in time, if I’m looking to shift the culture of companies either for to prepare for acquisition, or IPO, I’d like about 18 months to two years in advance to really embed the like all the controls and the processes in place, and shift the culture of the company to get a higher valuation and be more attractive.

Alan
Okay, just say that and I want to touch on what’s what’s happening in Silicon Valley, in your perspective with with the baby boomer transition and the change in technology, what’s your take on with the direction we’re gonna go in three to five years?

Peter
Well, we’ve seen a continuum from mainframes, to minis to PCs, to mobile devices, to cloud applications. And I think that trend will continue. The more connected we are, the more enabled the mobile devices are. And I think when we look particularly at the millennials are the newest segment of the workforce, their orientation around mobile devices is really phenomenal. And their ability to use them effectively is great, but it flies kind of in the face of more traditional IT thinking. So there’s definitely some maturation that has to happen at that level. There’s also then how do you work with millennials and basically have them be an effective part of the team? Because they think differently. They’re really after more about building an identity for themselves that unique and producing an outcome over long term for the entire company, which is a little bit different than we’ve had password Generation X and Y So your baby boomers and whatnot. So it’s, it’s a little different. So working on that edge is really challenging.

Alan
Once again for the listeners, how do they reach? Oh,

Peter
you can reach me by email, Peter A at Lighthouse i s.com or they can call me on my cell phone 831-818-5100

Alan
We’ve been busy here today Peter Adams. He’s the founder and the CEO of lighthouse.