Quest Diagnostics 2013 Annual Report Download - page 6

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OUR STRATEGY AND STRENGTHS
In 2012, Quest Diagnostics launched a new vision and strategy. Our vision is: empowering better health with
diagnostic insights. We have three aspirational goals: a healthier world; build a valuable company; and create an inspiring
workplace. Our values were unchanged: quality, integrity, accountability, innovation and leadership.
Our Strategy
In 2012, we introduced a five-point business strategy to help us achieve our vision and our goals. In 2013, we
executed against our five-point strategy, and as the year concluded, revised the priority of the five points in the strategy. The
discussion below reflects the current priorities.
1. Restore growth. In 2013, we launched a multi-year initiative, Project Restore, to identify, prioritize, resource and
implement a wide range of activities designed to create consistent, profitable growth. For example, the program leverages
centralized analytics and best practice teams to improve sales and marketing effectiveness, reduce attrition and bring to local
teams lessons learned across the enterprise. Our goal is to achieve and ultimately exceed market growth rates over the course
of the program.
We are pursuing seven tactical approaches to restore growth. Three of these approaches have a near-term focus: sales
and marketing excellence; grow esoteric testing through a disease focus; and provide professional lab services to hospitals and
IDNs. The remaining four growth approaches have a long-term focus: succeed internationally; create value from information
assets; lead in companion diagnostics; and extend in adjacent markets.
In 2013, we made progress on our goal to be the preferred partner for diagnostic information services through sales
and marketing excellence. We created one commercial organization in our Diagnostic Information Services business, centrally
led and focused on local customer needs. We are implementing world-class management discipline around processes, tools and
measurement. We are building a virtuous circle of talent acquisition and retention, and have instilled a customer-focused,
winning culture. Our expectation is that the combination of these elements will result in physicians, hospitals, health plans,
IDNs and employers being eager to partner with Quest Diagnostics.
We plan to grow esoteric testing revenues by creating value through scientific and product innovation for major
clinical opportunities. Further, we are pursuing opportunities to create value from the integration of lab testing and clinical
information. We also plan to provide holistic solutions centered on evidence-supported standards of care, and to combine
routine, guideline mandated testing with esoteric solutions. In 2013, we put in place clinical franchise organizations to focus
on these opportunities, working with our science and innovation team. The clinical franchise organizations focus on cancer,
cardiovascular, infectious disease and immunology, neurology, prescription drug monitoring and toxicology, sports diagnostics,
wellness, and women's and reproductive health. The October 2013 launch of our BRCAvantageTM solution, only a few months
after the decision of the United States Supreme Court in the Myriad patent case, is an example of the power of our new clinical
franchises. Our franchises are designed to enable us to act like a focused boutique service provider while maintaining the
advantages of our scale.
In addition, we plan to grow by pursuing strategic partnerships with hospitals and IDNs. We believe that continued
price and utilization pressure, as well as evolving payment models in healthcare, will drive demand for our expertise in a range
of strategic partnerships, including lab management outsourcing, outreach acquisition and joint ventures. We can partner with
hospitals to drive the success of accountable care organizations, including by consolidating data and delivering insights,
delivering test management solutions to improve care and help control cost and by providing patient-focused programs to
enable effective management of care. Our 2013 agreements with UMass Memorial Medical Center and Dignity Health are
examples of the kinds of opportunities we see. Our laboratory professional services team continues to expand its pipeline of
hospitals and IDNs interested in working with us to improve outcomes and reduce costs.
2. Drive operational excellence. Improving our operations will yield many benefits, including: enhancing customer
satisfaction, employee engagement and shareholder value; improving our competitiveness; and strengthening our foundation
for growth. To drive operational excellence, we are focusing on four strategic imperatives: to deliver a superior customer
experience; to enhance our end-to-end customer value chain with enterprise architecture; to develop best-in-class business
performance tools; and to elevate our cost excellence. In 2013, we made strong progress driving operational excellence, and
improving our quality and efficiency. We believe that this will enable us to improve our overall customer experience.
Our cost excellence program, Invigorate, consists of seven flagship programs, with structured plans in each, to drive
savings and improve performance across the customer value chain: organization excellence; information technology