Discovery’s Gidon Novick: Meet the Chief Digital Officer of SA’s most innovative big business

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Stand by for a fascinating discourse with Gidon Novick, chartered accountant, marketing genius, founder of discount airline Kulula.com, former head of Vitality SA and now Chief Digital Officer of the innovative R66bn Discovery Group. In the short video (click above) Gidon explains why Discovery is pouring resources into monitoring and engaging on social media – and how he thinks it is changing business. The in-depth Podcast (click below) follows Gidon’s career from joining what was the family business (Comair) to his departure 13 years later, joining Discovery and his new role at the rapidly expanding financial services group. The kind of interview I’ll return to many times. – AH    

ALEC HOGG:  With us in the studio is Gidon Novick, one of South Africa’s great marketers but now moving on to different challenges.  Gidon, just to go back in your career, you’re a Chartered Accountant.  You went, almost directly, into the family business, 13 years in the family business Comair and left.  Now, you’re with Discovery.  It’s a whole, new challenge and it’s very exciting – what you’re doing now.  Are there any regrets about the way you left Comair?

GIDON NOVICK:  Not really.  It happened quickly but it was a transition, which I wanted to make.  It was working in a family business, and at the time it was more than a family business, Comair and Kulula.  It had evolved into a listed entity and it became a corporate, a big business. But I wanted to be out of the airline business.  It was an amazing business to be in and it was exciting.  Launching Kulula was probably one of the highlights of my life but it was time to move on and to explore new things.

ALEC HOGG:  Kulula still has a sassy attitude….

GIDON NOVICK:  Yes.  I’ve always believed that people want to interact with brands, engage with brands, and see brands as something real and something that has a personality.  I think we were fortunate to build a very unique personality with Kulula.

ALEC HOGG:  You were always prepared to take SAA on, at a time when it wasn’t popular to attack state-owned enterprises because you were perceived to be attacking government.  Was it just a business imperative or did you feel deeply?

GIDON NOVICK:  No, I think there were real things to be challenged and I see they’re still challenging a state-owned player in the game, where the state is effectively setting the rules as well – controlling a lot of the infrastructure (like the airports, for example) – and it felt like something that public needed to be made aware of.  Obviously now, with what’s going on at SAA it’s a real, big issue.  In quite an incredibly move, it’s been moved to the Finance Ministry.  That’s a radical move and maybe it says a lot about the continued pressure over the years to actually, do something about it.

ALEC HOGG:  Perhaps also changing approach in a way, from this developmental state to doing something more sensible, but that’s a topic for a different day.  You had this boardroom battle.  You left in December 2011.  Your dad left shortly afterwards.  Related?

GIDON NOVICK: Yes.  I think that for him, it was harder.  I’d been there for 13 years.  He’d been there for 50 years – his entire career.  He’s 76 now.  He’s doing incredibly well.  He was ill for a while, but he’s recovered really well and he’s enjoying life.

ALEC HOGG:  And then you landed up at Discovery.  Now, at the time, given your high profile and your achievements to that point, you must have had a few options.

GIDON NOVICK:  Yes, there were a few.  I was looking at doing things on my own.  Discovery was a company that I had worked with before in my Kulula days.  We had set up the Kulula/Vitality partnership, which turned into a great partnership in every respect.  It was good for both businesses; great relationships were built, so I had a great affinity with the business.  I didn’t really understand the Discovery business.  Even today, I don’t fully understand it, but I was always fascinated by it so getting into that business was an unexpected opportunity, but something that was brilliant.

ALEC HOGG:  Clearly there are no resentments because the relationship between Comair and Discovery continues.

GIDON NOVICK:  Yes, it’s a great relationship.  It was interesting, sitting on the other side.  In fact, there was a contract that I had signed when I had left Comair and it was still unsigned from the Discovery side when I got there.  I was presented with this contract and I said ‘I can’t sign this contract.  I signed it for the other party’, so the relationships are really good.  It’s a strong relationship between the two.

ALEC HOGG:  They gave you the responsibility for Vitality in South Africa, which is kind of the core of the business and then in July last year, you moved into a whole, new area – a whole, new field.  What motivated that?

GIDON NOVICK:  The area I’m in now, is digital and heading up digital for the group is a new role in business.  There are actually more and more Chief Digital Officers, (which is the role that I have) in companies around the world because I think the realisation is that there needs to be a very, very strong focus on digital and what it means for business, what it means for the way we deal with customers, and what it means for just about every aspect of our business.  We’re doing a hell of a lot but I think the role is to coordinate it, make sure that we’re on top of it, and that we really are aware of the disruptive forces out there, because I think what digital introduces is a disruptive force in many, many businesses.  In fact, I’d argue most businesses.

ALEC HOGG:  Including yours?

GIDON NOVICK:  For sure.  I think the Discovery business is based on…it’s an insurance business at heart, but it’s based on behaviour: tracing people’s behaviour and rewarding them for the right behaviours, which ultimately, are better for them.  It makes people healthier, makes people drive better, and it’s better for business because it makes them better risk/better clients from an insurance perspective.  Technology is playing a critical role in that space.  I think the best example that we’re deploying is in the insure business, which is the short-term insurance, which is primarily car insurance.  The mechanism to track driving behaviour now fully resides in a cellphone.  That wasn’t around six months ago.  It’s brand-new technology.  Up to now, for the last four years, it’s been an embedded device/tracking device in a vehicle. It’s now on a cellphone and so that kind of technology is the way of the future and has a very, very significant impact in the insurance world.

ALEC HOGG:  Something like a Jawbone, as well.  That is also technology, which tells you how much you slept last night and how many steps you’ve walked.  However, changing people and incentivising people, and then monitoring presumably through those kinds of devices.

GIDON NOVICK:  Absolutely, and there’s so much.  Those devices – I think the jury’s still out on how sustainable they are (certainly, the current ones).  There’s evidence that people are using them for a few weeks and then dropping them – losing interest – but the point is that things are being tracked.  Your behaviour’s being tracked.  Your health is being tracked.  The choices that you make are being tracked and those choices that people make are now going to have a meaningful impact not only on their health, but also on their financial position because companies like us are willing to invest in you making the right choices.

ALEC HOGG:  Lower premiums?.

GIDON NOVICK:  For sure.  Rewards, lower premiums…

ALEC HOGG:  I remember talking to your colleague Hylton Kallner about Big Data and it was fascinating.  This was over a year ago – what Discovery had done to that point.  As the Chief Digital Officer of the Group, presumably that falls very much into your remit.

GIDON NOVICK:  Sure, everybody’s talking about data.  I think it’s quite overwhelming when you look at the volume and quantity of data, certainly, that a company like ours has and many companies have – not only internal data, but also external data.  The sources of data that are available now, particular in your (the media) world are significant, so the question is what to do with it.  How do you break it down?  How do you make it meaningful?  Obviously, how do you make it work from a business point of view?  From our perspective, how do you use that data to help people make better decisions?  How do you use all this rich data that we have about you, Alec Hogg, to help you make better decisions?  What is the next, best thing for example that you could be doing to improve your health?  What we know with people’s behaviour is that it’s a long process.

People mostly don’t make decisions in their long-term best interests, so the challenge is really, to find those bite-size chunks – we call them nudges –, which we can help people undertake.

ALEC HOGG:  That’s why you learn from people like Dan Ariely.  He came to the Discovery Leadership Conference a couple of years ago.  I recall listening to him and thinking ‘crumbs, he must be in your strategy sessions’.

GIDON NOVICK:  He is.  In fact, one of the best EXCO meetings that I ever ran was with Dan sitting on my left-hand side.  Just bouncing things off him was amazing.  He really is one of the top brains but the field is growing.  The field of behavioural economics – I didn’t even know what it meant a few years ago – is growing and it’s been incredible to be at the core of it.  My main interest now is to figure out the role that technology is going to play and how we can make sure that we’re tapping into the latest technology to advance this.

ALEC HOGG:  Do you spend a lot of your time then, crunching the numbers?  When you say ‘the role technology will play’ you have all of this big data that’s flooding through to you.  Do you pore over your computer screen to see what trends are emerging?

GIDON NOVICK:  Well fortunately, we have many people in the business who do that.  We have incredible brains that are able to see things in data that certainly, I wouldn’t see.

ALEC HOGG:  Statisticians?

GIDON NOVICK:  Yes, statisticians, actuaries, and even engineers.  These are people whom we’re investing more and more in, who can really help us unpack the data.  For the most part, the data is there.  The other interesting thing I’m finding with data is that people are starting to realise that it’s their data.  There’s incredible data about individuals and companies – even us, and companies such as the Googles of this world – are trying to figure out how to make businesses out of this data and make it good for business.  I think people are realising that they have this wealth of data.  What does it mean for them?  How is it going to benefit them – this wealth of data?

ALEC HOGG:  You mentioned Google.  They have been the leaders in this field.  Have you learned from them?  Have you studied what they’ve done?  Have you visited them?

GIDON NOVICK:  We’ve certainly spent a lot of time with them.  We obviously take part in their Google Ad Words, which as you know, is the primary method of advertising these days.  I think the best discussions we’ve had with them are exactly, what we’re talking about now – how to use data and how you think about data. We’re learning.  We’ve been very good at crunching data, understanding data, and understanding what it means for business.  I think the next phase is ‘how do we use data to create the impact on people’s lives that we want to make’ and data’s and technology will help us do that.

ALEC HOGG:  How big a change?  Can you give us some examples of trends or ideas that have come to you from analysing the data?

GIDON NOVICK:  There are so many.  We track so much.  We track people’s gym activities.  We track the correlation between people going to gym and the frequency at which they go to gym with the likelihood that they are to be admitted to hospital.  Once they’re in hospital, we track the length of time they’re likely to spend in hospital.  These are the kinds of correlations we can draw.  What are those correlations?  What are those connections between the choices that we make as human beings in terms of the way we conduct our life and the ultimate effect on our life?

ALEC HOGG:  But then surely, you should be making decisions on individuals, for example a bad risk, saying ‘we’re not interested in you anymore’ or a good risk, saying ‘hey, here’s a discount’.  Can you get to that?

GIDON NOVICK:  Bear in mind that in the world of health insurance, you can’t do that.  From a regulatory point of view, there’s open access.  We can’t price-discriminate.  Those are the regulations of health insurance in South Africa.  Certainly, in other areas of insurance such as car insurance, we can discriminate and we do in terms of saying ‘if you’re a good driver and you drive less at night, you don’t speed, don’t have frequent incidents of harsh acceleration and braking, you will get a bigger fuel discount.  It’s as simple as that, so we’ll give you money back, effectively’.  That’s the way it works.

ALEC HOGG:  The same with Vitality as well which, as we mentioned before, you have moved away from.  Gidon, what about things like social media?  Does that also fall within the Chief Digital Officer’s portfolio?

GIDON NOVICK: Yes, the challenge we, and certain other companies that we’ve spoken to, have is ‘how do you move from being reactive’ and I think everybody has to respond to what’s going on in social media.  If you’re not watching what’s being said about your company and the issues in our space and around health, wellness and insurance… If we were not alert to the conversations that are going on and taking part in them, we’d be missing out substantially.

ALEC HOGG:  So how big a team do you have, to monitor this?

GIDON NOVICK:  On social media, we have a few people in each business – mostly in the health business, because that’s where we obviously do the bulk of service.  That’s where people have issues, claims, hospital admissions, and they want to understand their health plan better.  There’s a lot of complexity in our world.

ALEC HOGG:  But would they now go to Twitter rather than say, Hellopeter, in the past?

GIDON NOVICK:  Definitely.  Twitter seems to be the first point of call for somebody who has a serious gripe.

ALEC HOGG:  And you follow Twitter carefully…  Facebook – same thing?

GIDON NOVICK:  Yes.  I think the next phase is ‘how can we do more proactive stuff’.  We do stuff, but how can we really be much more engaged in the conversations and how can we lead more of the conversations that are happening?

ALEC HOGG:  How do you do that?

GIDON NOVICK:  I think, by being on top of the debates.  The nutrition debate has been…

ALEC HOGG:  Have you guys jettisoned Tim Noakes?

GIDON NOVICK:  We haven’t – not at all.  In fact, the approach we’ve taken is there’s a lot of uncertainty around nutrition.  In fact, the science of nutrition is an evolving science.  Nobody really knows exactly what you should and shouldn’t be eating, but there’s a lot of science that has been developed.  If you take the current debate around carbs, parts of it are indisputable.  For example, the consumption of sugar.  That is scientifically proven – indisputable – that you should cut down on sugar and your consumption of sugar.  It’s one of the easiest, best ways to improve your health and manage your weight, so there are elements – scientifically proven – , and we support those fully.  When things are taken beyond that – and it may be working for many people, which is fantastic (in the short term) –, that’s when we have to take a different view.

We have to say ‘listen, we have a science-based program.  We follow the science.  The science doesn’t happen quickly.  There are tests that have to be done over many years’ and that’s the route we have to go but having said that, people do have different needs and so we have to have an open mind around it.

ALEC HOGG:  Gidon, just looking into the digital future, the Bitcoin story has really taken fire around the world.  We’ve noticed that the most obvious step for Discovery would have been to have its own bank, now that you broke away from FirstRand and yet, you haven’t done that.  You have a credit card, but you’ve stopped there.  Is financial services an area that you’d play in digitally?

GIDON NOVICK:  I think that certainly, it’s a possibility for the future and the digital world of financial services and banking in particular, changes the rules of the game and even the barriers to entry.  I think we have so much on our plate now, particularly with trying to internationalise the Vitality program, with which we’ve had great success in some markets already, particularly the U.K. where the program works incredibly well.  In fact, our health and life insurance in the U.K. is now called Vitality Health and Vitality Life.

ALEC HOGG:  That’s the brand….

GIDON NOVICK:  That just shows you the strength of Vitality, so there’s a lot of focus on internationalising Vitality and in a sense, franchising Vitality to outside insurers because there’ll be markets where we won’t have an insurance entity, but where we certainly see the potential and the power of Vitality.

ALEC HOGG:  Moving from Vitality, did you feel that this was a bigger challenge for you?

GIDON NOVICK:  Definitely.  I think Vitality is a brilliant program in South Africa.  It’s a pretty mature program.  I think the partnerships that have been developed over time with some of the best brands and some of the best businesses in South Africa (the likes of Woolworths, Pick n Pay, Virgin Active, and Kulula) are strong partnerships that are really, at the core of the program.  To me, it felt like time to take on something new.

ALEC HOGG:  Is there anyone that you’ve modelled your role on?  I’m sure that in the Discovery sense, ‘we know we need to do this.  Let’s get the right brands behind it.  Let’s develop it’ but I suppose that in a way, you do write your own job description.

GIDON NOVICK:  Yes, and that’s an interesting one because in a way, there’s a technology piece and I’m not a technology expert by any means.  I work very, very closely with our CIO’s in the business.  They are the guys who really understand how things are built and how we evolve the program over time.  Then obviously, the marketing side – the guys that are really thinking about the customer and how we want to engage differently with customers – so in a way, it feels like a hybrid between a technology role and a marketing role but with a very strong, strategic focus.

ALEC HOGG:  But is there anyone in the world that does this particularly well – any company that does it well?

GIDON NOVICK:  It’s so new that many of the media companies actually have these Chief Digital Officer summits.  I haven’t attended them, but I’ve just looked at the guest list and many of them are in media companies where they’ve seen an absolute imperative to have a digitally focused individual.  As far as companies generally go, it’s a new role and it’s too early to even think of somebody who’s a role model in terms of fulfilling it.

ALEC HOGG:  So what have you learned in the last seven months?

GIDON NOVICK:  I think I have a better understanding of the forces in technology – just externally.  I also have a sense that young people and the people that we are targeting as clients (certainly, in the future) – we’re targeting them now, but we will be in the future – they don’t know a world without technology.  They don’t know the world that I came from, which was a non-tech world, into a tech world.  I’m trying to understand the mindset of these people and trying to get into their heads a lot more because that’s the only world that they know.  I’ve learned a lot but the most significant thing is ‘how do you think digital first’…whatever you’re doing, just think about it from a digital starting point.  That’s probably my biggest learning.

ALEC HOGG:  More than just a slogan – digital first – and we are talking to one of the first Chief Digital Officers of a major corporation – the R66bn market cap Discovery – Gidon, ex-CEO of Comair and until July last year, the head of Discovery’s Vitality program…now, driving the digital environment.

 

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