I can’t help but write this after hearing about another round of RIF and the number of lives impacted when company stock is at an all-time high. I sit here grappling with why, why, and why is it different this time?
I was part of the McKesson family I’ve over a decade and decided to leave after realizing it is not the same McKesson that I joined post HBOC debacle. Back then, Leadership cared about employees, and employees cared about McKesson. I was impressed with McKesson treated retiring employee to preserve their life saving invested in McKesson’s stock post the SEC scandal resulting from the HBOC acquisition. As someone who still deeply cares about McKesson and truly believes in its mission to improve patient outcomes, passing a decade in McKesson IT has been like watching a slow train wreck.
A decade has passed, and there have been over dozens of rounds of RIF at McKesson Information technology. It seems to be a Groundhog Day each time; it seems to be the same formula. The new leadership regime takes charge: and starts to outsource IT and RIF staff to improve operating efficiency, reduce operating costs and improve margin.
I recall that the early days of outsourcing began at what was known as Cooperate IT (CIT) began outsourcing to TCS, Infosys, Wipro, and other common outsourcers.
Over the years, leadership has changed. Each time, it seems to be rinse and repeat formulas of picking the vendor of the day and outsourcing more and each time cutting more profound into the organization and thinning the technical expertise each time.
I recall when the SAP support, which is the bread and butter of McKesson revenue, was outsourced to T-systems, which turned into a disaster. The experiment lasted a few years, and leadership changed. Soon, the previous administration was blamed, and the outsourced vendor changed to Infosys.
A similar story with McKesson Connect, the customer-facing ordering portal that generates billions of dollars in revenue, was outsourced to IBM, and the same level was repeated. Eventually, it was brought back in-house.
On the infrastructure side, data center services were consolidated into McKesson IT from three different IT organizations (CIT, BTS, and MTS). Few years after the consolidation outsourcing formula was implemented, initially to IpSoft. After a few romantic years of relationship where IPSOFT could not deliver the promised value, they were kicked to the curve. You may have guessed that the new leadership came in and found ATOS. ATOS was sure to cure all the ills of McKesson IT, and this was 2019.
Each time the new vendor came, more and more of the Knowledge was walked out the door. After a few years of romance with ATOS, the new leadership of McKesson IT has embarked on time tried formula and is repeating insanity. Some of my old colleagues heard that the new administration has decided to walk a few hundred staff out the door.
Many former colleagues and teammates feel trapped and helpless due to lucrative bonus structures and above industry average pay. The culture has turned into a toxic cesspool where the trust in leadership seems nonexistent, and the board appears to be sleeping at the wheel as it did with the dr-g crisis, price-fixing dr-g scandal, and many others.
The sad irony is that if I had to guess, after a few years, the current McKesson IT current leadership would be gone, and a new regime would take hold. The current McKesson IT leadership will pat themselves on the back and claim the millions of saved operating expenses and jump to sexier roles. Still, the people left behind will continue to suffer. It is like the Dead tadpole story; the frog jumps to safety, but the tadpoles are left to die when the water starts boiling.
To the McKesson board, do your job and hold management accountable. Your technical debt is creeping up to your eyeballs, and your cyber security posture is getting worst day by day. Each time you bring in new IT Leadership, the rinse and repeat formula is not working, and it won’t save you when the entire ecosystem comes crashing. Soon after the proposed Cybersecurity Risk Management, Strategy, Governance, and Incident Disclosure by Public Companies, you will have to understand and answer it. I hope you don’t neglect to do your essential fiduciary duties to preserve long-term stockholder value.
CEO Brian, I do not expect you to read this, but I wanted to ensure you knew the history and how much McKesson IT people have suffered. The IT infrastructure is not healthy, and the cyber risk is compounding. Just check with your team how many outdated and unpatched systems you currently have.
McKesson HR, which seems non-existence at this point, does your job. Don’t let temporary IT leadership bring down the company culture. Preaching about diversity, equality, and inclusion when the culture of fear, discrimination, and retaliation is prevalent throughout the IT does not reflect highly on HR. Even after multiple employee relationship complaints, you have not taken any actions, and employees are watching.
To the new IT Leadership, you are not doing anything new or innovative. This has been tried time and again. Like many before you, you have an expiration date, don’t repeat the same mistakes. I am aware giving people six months to find a new job and a cushy severance may seem like you are fulfilling your obligations. Keep in mind their people have given their life to McKesson. I remember when a college jumped out of the fifth-floor atrium in the Windward location or when a teammate had to find a dead body of a college on the stairs of the same building or find the computer operator who was ki---d at the DDC location.
Keep true to your tagline; it is not a package; it is a patient: it is not just an employee; it is a human.
I wish McKesson nothing but success for many more years.