Happy Thursday. Chip Bergh, the CEO of Levi Strauss & Co. came by this morning for a visit. We had a good sprawling conversation that covered everything from blue jeans to Coachella to department stores to gun violence to Brainstorm Health. Guess which part I’m going to talk about here.
|Clifton Leaf, Editor in Chief, FORTUNE|
That’s right. At last year’s Brainstorm Health conference in San Diego, Bergh found himself sitting at dinner with Othman Laraki, the cofounder and CEO of Color Genomics—a company that extracts the DNA from a customer’s submitted saliva sample and then looks for a set number of gene mutations known to be associated with increased risk for developing certain hereditary cancers or heart conditions (depending on the test).
“I was asking him about his business,” Bergh relates, “and he was telling me his back story, because cancer has affected his family life directly.” And that’s when the proverbial light bulb went off for the inveterately affable denim king: “I thought: Wouldn’t it be great to offer genetic testing as an optional program, free of charge, to our employees?”
The idea that people could take a simple, noninvasive test and have a better, if still imperfect, sense of their long-term risk for developing certain disorders had a natural appeal to Bergh. Yes, he’d understood the science of DNA testing was incomplete, and that there was vigorous debate over the efficacy (and even potential downside) of population screening, and that it still wasn’t clear if the process had reached the point where two different testing companies would even arrive at the same results. (See Sy’s great analysis here; Natasha Singer, likewise, had a good discussion on such issues in the New York Times last week—and, of course, we at Brainstorm Health Daily have written about them many, many times.) But, says Bergh, “I’m a big believer in people taking responsibility for their own health and well-being. And this just gives them more tools to do that.”
The privately held Levi Strauss is also, importantly, self-insured—and has a fairly significant share of employees who stay at the company past a decade, including many who’ve been there 20 years or more. Which means it has a strong financial incentive to reduce long-term health costs (which it will likely inherit as well), even at the cost of laying out more money for screening and prevention up front. “If we can identify much earlier people who are at risk of developing cancer, then go into hyper care for them to make sure that, if they do get the disease, you catch it at stage zero or stage 1—where the cost of care is much, much less than it is at stage 3 or 4—it’s much better for everyone,” he says. “Because the cost goes up geometrically depending on how far along the cancer is.” (And, naturally, survival rates go in the opposite direction.)
So Levi Strauss offered a Color Genomics test to all 1,100 or so of its employees at the company’s San Francisco headquarters—“where more than 50 percent of people took it up,” he says. “I only have the data at a very high level, but we did detect a small number of people who tested positively in their DNA for being at risk for cancer. And they now have the option, in terms of self-managing their care with their own primary care physician, to be more on the lookout for any other symptoms of cancer, so we can catch it early.” (As for that upfront cost, the CEO says he can’t disclose exactly what he spent per test, due to a non-disclosure agreement with Color, but that it was “negligible.”)
To hear Bergh tell it, though, this isn’t just about improving his employee health or even improving his own company’s bottom line. It’s about worker retention and engagement. Says Bergh: “You have to remember we sit in San Francisco—I used to say in the northern end of Silicon Valley—but really now in the heart of Silicon Valley, right? And even though we’re an apparel company, we have a lot of functions where those skills are very fungible and people could leave for Facebook or Twitter or any of the other tech companies that are in the city now. If you’re in H.R. or marketing or finance or corporate communications, that skill set is very, very fungible, so the more we can do to keep our employees engaged and give them benefits that are meaningful for them, the better it is for us.”
Indeed, that may be the biggest reason why, according to the Times, General Electric Appliances, Instacart, Nvidia, OpenTable, Salesforce, SAP, Slack, Stripe, Snap, and Visa have all done the same as Levi’s. So much for free massages and nap pods: The new “it” perk in Silicon Valley is knowing your personal risk.
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THE BIG PICTURE
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