Innovation isn’t a new concept to healthcare, but today is taking center-stage, as a core tactic to make meaningful improvements across all dimensions of the quadruple aim (i.e., quality improvement, cost reduction, patient experience, and provider experience). Whether innovation takes the form of new technology, processes, business models, or other areas, industry players are in agreement that we need to approach our challenges and shifting market dynamics through a more creative lens.
Innovation as an imperative in healthcare inspired me to join Healthbox in 2011, where today I lead partnerships with organizations across the country that are committed to investing in innovation–digital innovation specifically–to address their strategic priorities. As a starting point, we encourage our partners to assess (and ultimately structure) their innovation tactics along a continuum of innovation consumption and innovation production:
- Organizations that consume innovation seek out existing solutions on the market that address critical pain points and align with other factors for implementation and scale.
- Organizations that produce innovation are “builders” of their own solutions to address critical pain points. Producers leverage employee ingenuity and internal resources to not only embed their home-grown ideas across the institution but may also seek to commercialize those ideas for broader impact and additional revenue streams.
For the purposes of this post, I’d like to dive deeper into the latter concept of innovation production. It is a more recent tactic in the realm of digital health (as compared to the more ubiquitous research and tech-transfer focused innovation production strategies at academic medical centers) and can enable a strong competitive advantage, but can also present unique challenges to get it right. For example, organizational pursuits to build digital technologies from the ground up and position them for scale typically require longer time horizons, willingness to take on risk, and fortitude to not see budget easily cut if they fall on hard times.
When working with organizations aiming to produce innovation, my team and I relentlessly advise our partners to “build as a last resort.” At face value, this advice may seem counterintuitive; however, we aren’t saying organizations shouldn’t build products to take to market. Rather, before setting out on the path to do so, they should think long and hard about how their internal solutions will compete in “the wild” with existing products. The route to successful commercialization requires this shift in mindset, and when diffused across the organization and built into the culture, has tremendous opportunity to be a force multiplier.
Below is our thought-process explained and how we drive decisions to build.
Advantages for Building Employee-Led Solutions
Without a doubt, healthcare employees are incredibly skilled at diagnosing organizational problems and understanding nuance around implementation of solutions into workflows. In addition, employee-led solutions often have a leg up on competing market solutions through their:
- Access to key end users and data/analytics
- Test environment to deploy solutions and rapidly iterate
- Key insights for validation, such as the ability to conduct efficacy studies and access to peer networks to validate the market and willingness to pay
The aforementioned elements are what many early stage healthcare companies vie for. In fact, that’s a large reason why hundreds of startups have joined our Studio and Accelerator Programs since 2010, and why countless others have fought for limited spots in additional programs across the world.
Considerations for Building the Right “It”
While compelling, we also know that these elements alone don’t ensure successful, differentiated solutions to what already exists. Why?
For one, solutions in the market often partner with their first customer to co-develop their product, giving them access to a lot of these same assets. Second, and perhaps most importantly, organizations often falter in creating the right process and overarching culture to decide how and when to execute on internal ideas.
Alberto Savoia, an Innovation leader at Google, emphasizes to “make sure you are building the right it before you build it right.” Too often, healthcare organizations have the knowledge and capabilities to build it right, but ultimately don’t build the right “it” –or something that represents a true market need–due to a narrowly focused vision.
My colleagues and I support organizations to lay the groundwork to build the right “it” by teaching a process that embodies the entrepreneurial mindset:
Step 1- Define and fall in love with the problem: Before we even discuss specific solutions with organizations, we first fall in love with the problem. We focus on understanding the problem deeply by asking: Is the problem urgent? How often does the problem occur? Is the problem unique to the organization or does it occur throughout the healthcare industry (and/or throughout other industries)?
Step 2- Conduct a competitive analysis: Once we ensure the problem is important, we support employees to scour the market. We question: Do similar solutions exist? If so, what are they? How is the internal solution different or better than current options “in the wild” and/or the status quo?
Step 3- Assess the market opportunity: Next, we stack up the organization’s idea against existing solutions to find others who solve the same problem or are adjacent to it and wiling to partner. We are also careful if there are no companies trying to solve the same problem. This may mean there is no market, or the problem is too specific. If an organization ultimately decides to build, we want to make sure there is sufficient white space in order to compete.
Step 4- Execute on the strategy: Finally, if steps 1-3 are all strong, we build a plan, backed by appropriate resources and leadership buy-in, to go after it! The focus of the plan is on how to most efficiently and effectively execute on the idea. Feature-based differentiation doesn’t last—solutions shouldn’t be different, just to be different; they need to be distinctly better.
Healthcare organizations possess a number of valuable assets for producing digital health solutions, often that other companies do not. That is without question. However, considering those alone in a vacuum, will not produce sustainable innovation. The true driving force behind a successful innovation strategy in healthcare is a culture that mimics the startup environment, or one that is relentlessly focused on solving problems and that is willing to fail and fall quickly, all the while learning along the way. Employees soaking in this type of culture to “build as a last resort” will feel empowered with the skills to drive forward the best ideas and will pay dividends for the organization as a competitive advantage to address the quadruple aim.
Learn more about Healthbox here. In addition, be sure to check out their recent report, “Producing a Successful Internal Innovation Program for Your Organization.”