Nuance Communications, Inc. [Nasdaq: NUAN] is a provider of communications and AI-driven solutions with a market cap of nearly $10 billion. Since 2018, when its current CEO, Mark Benjamin, took the reins, Massachusetts-based Nuance has slimmed itself down, spun off non-core assets, and expanded its growth in its remaining areas of focus.
I took the opportunity recently to interview Benjamin about the challenges and opportunities Nuance has faced since he came aboard, as well as on the company’s vision for the future. [Disclosure: I was an early investor in MacSpeech, which was absorbed by Nuance a decade ago. I have not held Nuance shares, other than potentially within diversified mutual funds, since that time.]
Micah Solomon, Forbes Senior Contributor, Customer Experience Consultant: Nuance appears to be quite a different company than it was just a few years ago when you came aboard.
Mark Benjamin, CEO, Nuance: In 2018 [when I came aboard], we had five distinct and diversified businesses built through a series of more than 70 acquisitions. We operate in highly competitive markets, and it was clear that our operating model wasn’t sustainable from an organic growth perspective.
To succeed in the long term, we needed to focus on those businesses with the best competitive position and value creation potential. The critical question was, “Is this business more valuable to someone else than it is to us?” After many long and careful discussions, we decided to sell our document imaging business to Kofax, whose portfolio was complemented by our suite of solutions.
We knew our automotive business required very different development cycles to meet customer demands, and so we spun it into a new and separate public company named Cerence so that it could continue to make the investments necessary to stay ahead of the market. As a result of these actions, we now have a much more refined portfolio that we can invest heavily from an R&D standpoint, and we’ve aligned our resources to further fuel our key growth opportunities: a more simplified portfolio focused on serving the healthcare, financial services, telecommunications, and retail industries.
Solomon: What have been some of Nuance’s tougher transitions that have happened so far on your watch?
Benjamin: Undergoing a massive corporate transformation effort is challenging on many levels [including the need to] scale our company. We did not take these decisions lightly, and we engaged key stakeholders, including our employees and investors, to help us think through each step carefully. Our transformation required some difficult decisions, yet it has dramatically strengthened our financial profile, expanding our addressable market from $8 billion to $13 billion, increasing our stock price, and delivering a 140% return to investors in the twelve months following the completion of the spinoff of the auto division.
Solomon: How has Nuance responded to the realities of the COVID-19 landscape?
Benjamin: At the onset of the pandemic, our team evaluated the direct impact across our customer base to determine the best ways to alleviate the challenges our customers faced [and] created a series of no-cost solutions including free software licenses that would enable physicians and nurses to easily and securely capture patient documentation from anywhere using just their voices – not their hands. We also created free consulting and crisis advisory services for organizations that faced spikes in customer call center demand and were in need of technology and expertise that could help their newly remote agents with the influx of customer questions.
As health systems moved quickly to go remote and protect their clinical teams and patients, we adapted our Dragon Ambient eXperience (DAX) technology to securely integrate into Microsoft Teams to support telehealth and virtual visits. Additionally, we created special free Dragon Medical One COVID-19 content packs to help hundreds of thousands of doctors accurately document cases and symptoms – information that is critical to tracking and understanding the virus.
To assist radiologists assessing CT scans for lung abnormalities in COVID-19 patients, we partnered with VIDA, which released an FDA-cleared AI app called “LungPrint” on our Nuance AI Marketplace. The app helps radiologists quantify and visualize airway and lung tissue abnormalities, which has proven helpful when treating patients diagnosed with COVID-19.
Solomon: Looking forward, what areas are you most excited about pursuing as a company?
Benjamin: What I am most excited about is our ability to create the world’s most innovative technologies that amplify people’s ability to help others. We don’t build technology for technology’s sake – we are creating solutions that make a real difference for real people. [For example,] our healthcare AI solutions capture more than 300 million patient stories each year, driving meaningful improvements in patient documentation and clinical and financial outcomes. Moreover, our enterprise intelligent engagement solutions reinvent the relationship between brands and consumers, enabling more effective, personalized, and seamless experiences across every channel from chat to phone.