A conversation with Prof Tolga Tezcan, Professor of Management Science and Operations, London Business School
Flexibility doesn’t come free, but now we see that the value of flexibility is a lot higher than what it used to be. The 2008 crash was unprecedented in the financial markets – it completely changed the way you look at risk in investing. Now, in this crisis, I think we’re going to see the same thing for businesses looking into the future.Prof Tolga Tezcan, London Business School
In continuation with our COVID series, in the third episode of Health Tech for Businesses, we share a conversation with Prof Tolga Tezcan, Professor of Management Science and Operations, London Business School. He has extensive experience working with hospitals and healthcare management systems to design and optimize solutions under severe uncertainty and his work on queuing systems and operations research has been published in leading management journals. Here he shares his thoughts on flexibility in business operations today and how companies need to adopt proactive measures to protect their workforce instead of relying solely on national healthcare systems/governmental support, with DocHQ’s Logistics Lead, Misha Arora.
An edited transcript of the podcast follows. For more such conversations, subscribe to the series on Apple Podcasts or Spotify.
Gopika Sampat: Hello to everyone from DocHQ. I am Gopika and welcome to our podcast, ‘Health Tech For Businesses’. Here, we will be talking to experts about several interesting topics from AI and data privacy, to health equity, and digital health solutions for businesses. Over the last couple of weeks, we have had two very insightful discussions with Professor Mike Rosenberg and Professor Magda Rosenmöller from IESE Business School, who spoke about various pressing issues on the COVID outbreak and it’s severe impact around the globe. In continuation with our COVID series, the episode today will be a conversation between Misha Arora from DocHQ and Professor Tolga Tezcan from the London Business School, where they will focus on how businesses should approach the next few months, that could be riddled with uncertainty and changing dynamics. They will also touch upon the role of national healthcare systems and the impending second wave that is already making headlines in many parts of Europe. So, over to Misha.
Misha Arora: Hello to everyone from DocHQ. I’m Misha and welcome to our podcast ‘Health Tech For Businesses’. Today, I’m thrilled to be joined by Senior London Business School Professor Tolga Tezcan. Professor Tolga teaches MBA courses on business analytics, data mining, and a PhD seminar on queuing theory. He is the academic director of the MBA, Masters in Management and Masters in Analytics programs at LBS. He has also taught at the University of Illinois and the University of Rochester. Professor Tolga has worked extensively with hospitals and healthcare management systems to design and optimize solutions under severe uncertainty. His work has been published in top management and operations journals, such as operations research, management science and queuing systems. So welcome to our podcast today Professor and thank you very much for joining us in this discussion.
Tolga Tezcan: Thank you, Misha. Thanks for having me.
Misha Arora: So, we will start with the questions. So the first one is, Professor, you’ve done a lot of research into how uncertainty impacts businesses and the decisions they take. It is probably difficult to imagine a time when uncertainty was a bigger issue for businesses than it is today. This situation is applicable to all industries and businesses in most industries are facing an existential threat. Is this something you could have foreseen as we were getting deeper in this pandemic?
Tolga Tezcan: So, looking at the pandemic, it is definitely not going to go away anytime soon. It’s very difficult to give an exact timeline, but to be honest, in my personal opinion, for the next two years, it’s going to have a significant impact on businesses and in our lives in general. And I don’t really know if we’re going to be ever able to go back to what is normal. Now in terms of businesses, I think we need to get ready for a new reality in the next few years.
Misha Arora: Right. As we discussed, we live in a world where businesses are not inhibited by borders. Supply chains are deeply intertwined and complex, firms in the UK are dependent on their low-cost suppliers in Europe and UK itself is an irreplaceable market for many companies worldwide. We also know that governments act independently in developing policies and protocols to fight COVID and this leads to an additional layer of complexity for such companies. They can suddenly lose access to their primary markets or have their supplies shut shop because of lockdowns. How should businesses approach a situation as undesirably complex and dynamic as this?
Tolga Tezcan: Thank you Misha, that is a great question. So what happens with this pandemic, which is obviously very much unprecedented and we don’t have anything like this to have happened in the last hundred years is, in terms of businesses, now they need to look at how they really run their operations and how they relook, I mean, reevaluate the value of flexibility. We actually already saw this happening. For example, the tsunami in Japan affected the supply chains in such unexpected ways. I don’t know if you remember from the news, even a small manufacturer that was making a pigment for car manufacturers, but they use it for dying cars, affected the whole factories and they got shut down. So now with the pandemic what we see is, a lot of these businesses have to reconsider what kind of flexibility they will have to build in their businesses. For example, again, that’s a trend we’ve been seeing in the past that we see some of the businesses, for example, in the retail industry, in North America, bringing their businesses, some of their manufacturing plants from China to Mexico, Canada, or other places that they can produce and closer to the market. I think we will see more of that trend happening in the future.
Misha Arora: Right. So flexibility, as you say, is probably one of the most important factors that businesses have to consider going forward.
Tolga Tezcan: Precisely. I mean, flexibility doesn’t come free, but now we see that the value of flexibility is a lot higher than what it used to be. This is just like the 2008 crash. It was unprecedented in the financial markets, but it changed completely the way you look at risk in investing. Now, I think we’re going to see the same thing for businesses looking into the future.
Misha Arora: So quite a few firms we have spoken to say that they are quite reliant on the national healthcare systems to provide the necessary infrastructure and expertise to mitigate these circumstances. So this ranges from providing testing, advising on health, risk assessments and treatment of symptomatic employees. If there is a second wave in the coming few months, the evidence of which we already seeing in a few countries in Europe and in the UK, would the NHS’ around the world be able to deal with the situation – (especially considering that) we’re heading into winter, where there is minimal spare capacity, even under normal circumstances? So could we say that sole reliance on governmental support is a precarious path for these firms to adopt?
Tolga Tezcan: I think we need to be careful about what national healthcare systems, more specifically what NHS is capable of. Although most of these systems are built around taking care of the health needs of the whole population, unfortunately, the way they evolved, they do very minimal preventive care. Most of the time they work on the assumption that you get sick and then they take care of you and more so in the US where the system is so private, there’s really not much of a public health dimension. Although of course, I mean, there are some things they do. So in that sense, I mean, and they actually did a great job compared to let’s say, Italy or Spain, and you don’t really know what happened in China, unfortunately, we don’t have a lot of data about it, but they just did a great job of taking care of the first wave, you know, in a way increasing their capacity right away. And, you know, never running into issues, almost never run into issues with ICU beds. So in that regard, expecting NHS to take care of the way we deal with the pandemic in this society will be very naive, unfortunately. And, you know, as I said, they, unfortunately, don’t do a whole lot of public health care. So, in that sense, I think businesses have to be ready for the new reality where they need to operate under these new constraints.
Misha Arora: Yeah and I think you’ve mentioned some very interesting points there – that NHS is mainly responsible for reactive care, that if you fall sick if you have symptoms and you go to the NHS and they’ll treat you, but when it comes to this virus and the number of asymptomatic patients we are seeing, I think it might be more effective to have more proactive steps from the businesses on their own side. Right?
Tolga Tezcan: Precisely, I mean, this is such a weird virus. I mean, one of the reasons it spread so much is that there are a lot of people that are asymptomatic and they are carriers, and sometimes they are supercarriers where they infect dozens of people, if not hundreds. So if that happens, of course, in a business setting, that’s very risky and obviously, NHS does not have the capability at the moment to help businesses or society, in general, to do preventive care in that sense.
Misha Arora: So, if businesses were to act proactively to ensure the wellbeing of their workforce and minimize the risk of another forced shutdown due to an outbreak in their facilities, what kind of measures in your opinion, should they be adopting?
Tolga Tezcan: Yeah. I mean, that’s a million-dollar question, right? So, unfortunately, I don’t think there is the silver bullet, there’s a single answer that will work in every business setting. I mean, we see some general, let’s say bigger trends, such as letting people work from home in a lot of businesses where that’s feasible, but I can speak for LBS and things that we are taking into consideration. So first of all, we can’t have students. We decided not to force students to attend classes from home. We actually would like to have our students in campus because that’s the main way we do train our students, which requires, of course, our staff to come to school, both staff and the faculty. So when you start talking about the dynamics of this, how people get in and out of buildings, classrooms, offices, where do they sit down? So they’re very specific. So every business will have to produce their own solutions to prevent the spread in their business place. And as you said, they have to be reactive because as I said, I mean, the NHS doesn’t have the capability at the moment to do so. So in that regard, I mean, businesses have to be very careful about how to really plan for coming back, I mean, going back to business and there are a lot of opinions out there, but it has to be actually very detailed to ensure the safety of people, if nothing, to make people feel safe so that they can effectively work at their workplace.
Misha Arora: Yeah, exactly. And what’s your opinion around testing? So we’ve seen a lot of information coming out from the government about (the fact) that they are getting multiple tests from different countries and using them in care homes and other businesses as well. How important do you think testing will be going forward, be it reactive or proactive for companies?
Tolga Tezcan: I mean, that is both reactively and proactively, not only for businesses but for the whole society. I think we’re still at the point where we don’t have enough supplies. I mean, I’m in Turkey right now and I’m flying back to UK in a couple of weeks and I was planning to take a test before I fly or after I fly, just to make sure, you know, I’m not a carrier or I’m not infected. It turns out in the UK, it’s quite difficult to get it. I mean, first, they require you to have symptoms to order it from NHS or you go private and probably it will cost you more than 200 pounds. So unfortunately again, for various reasons it’s difficult to get tested, which has again, helped the spread of the virus simply because there are so many carriers. I mean, you know, in summer people travel a lot more and for some businesses, I mean they just travel for business. So in that regard, I believe testing is supercritical to make sure they’re not spreading. And if you detect it, you can immediately isolate those people to protect the others.
Misha Arora: Makes sense. So without a doubt, as you said, all businesses want to minimize the risks and ensure their employees are given the best benefits. However, given what we’ve seen over the last few months in terms of their depleted cashflow statements, these firms can be pardoned for desperately wanting to balance the cost of these mitigating measures with the intended benefits. Reflecting upon your experience with analytics and artificial intelligence, what role do you think these technologies can play in deploying these effective mitigation strategies, but also potentially giving businesses a competitive advantage?
Tolga Tezcan: I mean, obviously you are facing something completely new. And unfortunately, we have very limited data, which is changing every day. However, as more data becomes available, we’ll see actually how this disease is spreading, how we can prevent it, which people are actually on the risk and so on and so forth. And as you said, for that to happen, we need very effective testing policies. And obviously, we can’t test everybody every day. So in that sense, I mean, there’s a lot of work based on analytics that looks at the population dynamics or in a more confined environment, a business environment, where you can come up with smart ways to test, instead of testing everybody every hour, every day. In terms of AI, I think as we get more and more data, that’s also going to help us to understand how this disease or how this virus is evolving. One of the problems we’re seeing right now is although people have a lot of analytical models, there’s not enough data to feed that in right now. And what happens is everybody’s model gives a different answer. Some people say it’s going to peak in six months. Some people say it’s going to peak in a year, one month, two months, we’re going to have a second wave in three months in September, in January. So all the models give you a different answer. As this data becomes more available, I think at a population level, you’ll have a much better idea, but in the meantime, as I said, I mean for testing strategies, I think analytics will play a very important role based on new work and the work that’s been done prior to the COVID situation.
Misha Arora: And could you potentially give us sort of an example from your past where you have seen analytics and AI be deployed in a situation like this and have some very good results?
Tolga Tezcan: As I said, pandemics are so rare, I’m not sure if I can think about an example, but it’s extensively applied in healthcare where for example, in cancer treatment, where first of all, I mean, every cancer is somewhat different and somewhat similar. So some drugs work for certain cancers, but we’re not sure if they can work for other cancers as well. It has to go through medical trials, but we have all this data from medical trials for the specific cancer it was designed for. Nowadays, people are trying to use this data and analytics to figure out what other cancers can this drug help in. So for that, as I said, if we have data, usually the analytics can guide us to get better answers.
Misha Arora: So, data, as you say is absolutely key in deciding what the strategy should be for each company.
Tolga Tezcan: Absolutely. I mean, that’s the missing part right now. I think a lot of people are very keen on using analytics and artificial intelligence. First of all, I mean, that’s not straight forward, but what I’m saying is, although we can come up with those modelling tools that can help us, we need to collect the right data to make better decisions.
Misha Arora: Perfect. Professor, these were some incredible insights. And this sadly brings us to the end of this episode. It was an absolute privilege to host your professor. Thank you enough for your time. And more importantly for your observations that you shared over the past 20 minutes. I’m sure that everyone who listens to this will be much more informed and hopefully can take the appropriate decisions for their businesses, their companies. So thank you again Professor and I wish you all the best for your upcoming academic year at LBS as well. T.
Tolga Tezcan: Thank you, Misha. It’s going to be a challenging year for us here at LBS, figuring out all the measures we need but thank you for giving me this time and letting me share my opinions.
Misha Arora: Thank you, Professor.