Innovation Bringing Creative Ideas to Life Markus Fromherz, Chief Innovation Officer, Healthcare, Xerox June 2013
Innovation
Bringing Creative Ideas to Life
Markus Fromherz, Chief Innovation Officer, Healthcare, Xerox June 2013
Outline
Defining innovation
Roles and processes
Innovation challenges
Examples in healthcare
Conclusions
Q&A
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Innovation is …
Innovation is invention brought to commercial use.
Invention means new ideas. Commercial use means impact.
Innovation creates differentiation.
Innovation saves cost and generates new revenue.
Innovation keeps us in business.
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Innovation in healthcare saves lives.
Types of innovation: strategic intent
Spectrum
Sustaining: do things better
Transformational: do things differently
Disruptive: do different things
Ex. customer service
Call center agent augmentation
Interactive voice response
Mobile self-service app
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Types of innovation: strategic intent
Spectrum
Sustaining: do things better
Transformational: do things differently
Disruptive: do different things
Ex. infant airways
Process improvements
Vent-less airway opening
Premature birth prevention
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Disruptive innovation
Why sustaining innovation is not enough
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Pe
rfo
rma
nce
Time
most demanding
customers
least demanding
customers
Sustaining innovation (continuous product/service improvement)
Disruptive innovation: low-end disruption (compete for overserved customers with
lower-cost offering)
Disruptive innovation: new-market disruption (compete against nonconsumption)
Diffe
ren
t M
ea
su
re o
f P
erf
orm
an
ce
Time
nonconsumers
[Clayton Christensen:
Innovator’s Dilemma, Solution]
How about continuous improvement?
Continuous improvement is a form of sustaining innovation
Comparison teaches us what to look out for when pursuing both:
• distinct goals: optimizing the existing vs. creating the new
• risk tolerance: decreasing vs. increasing variation (and allowing failure)
• metric: driving for efficiency vs. looking for differentiation
• skills: process focus vs. entrepreneurial drive
Managing multiple types of innovation:
• requires different kinds of people
• should both report to the same executive team
• should be managed under a different set of rules
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(e.g., Six Sigma)
Improvement approaches
There are many methods to identify opportunities and get ideas
• Lean Six Sigma
• Root Cause Analysis
• Plan-Do-Study-Act
• Failure Modes and Effects Analysis
• Customer Led Innovation
• Customer-Inspired Quality
• …
Often a key requirement for success: making the case
• Business case analysis!
For examples, tools, and templates, see, for instance, Society of Hospital Medicine (http://www.hospitalmedicine.org/)
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Moving beyond sustaining innovation
From doing things better to doing things differently or doing different things.
Typical innovation focus: product/service improvements
• How can we make this better?
Expanded innovation focus: the job to be done by the offering
• What is the customer trying to achieve?
“People don’t want to buy a quarter-inch drill. They want a quarter-inch hole!” [Theodore Levitt]
Implications for strategy, idea search, patient interviews, etc.
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Types of innovation: business focus
What: offering innovation (technology, platform, solution)
Who: customer innovation (experience, value capture)
How: process innovation (operation, organization)
Where: presence innovation (supply chain, channels)
Robert Wolcott’s 12 dimensions of innovation
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Strategy development
Technically not part of innovation, but an essential prerequisite
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Current State strengths &
weaknesses,
internal
Strategic Goal desired state,
short and long-term
Strategic Plan actions to reach the strategic goal from the current
state in light of the trends, build/buy/partner
Trends opportunities
& threats,
external
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Corporation
Business Group Business Group Business Group Xerox Innovation
Group
Organizing for innovation
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External Innovation
Customers
Strategy Council
Development
Business Dev.
Marketing
Innovation Steering Committee
Customer Engagement
Sales
Strategy
Open Innovation
Explore Incubate Develop Commercialize
Partnerships
Delivery
Innovation steering committee
Purpose:
• Manage the process
• Ensure ideas are realized
• Foster visibility
Membership:
• President, Chief Innovation Officer
• Department directors
• Directors of strategy, business development, marketing, development, IT, sales
Prototypical monthly agenda:
• Previous action items, highlights
• Innovation pipeline and project progress
• 1-2 focus projects
• New ideas
• Customer engagements and partnerships
• Feedback and action items
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Idea challenge
Purpose
An idea challenge* is a concerted effort to collect, develop, and review a large number of ideas for a given theme in a bounded amount of time.
Initially, plan to conduct one idea challenge per quarter. Ideas can still be submitted at any time throughout the year, but plan to concentrate your efforts on the idea challenges.
Process
Idea challenges use the regular ideation process and resources, except that many ideas will be reviewed together.
Schedule
• Week 1: announce challenge and theme
• Week 2: submit and comment on ideas, using the IMS
• Week 3: sort ideas into local, organizational, and shelve (Monday); fill out IRF for non-shelved ideas (Tuesday-Thursday); review and decide (Friday)
* or idea jam, idea campaign
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Innovation process
It’s not just about creativity and ideas …
“Genius is 1 percent inspiration and 99 percent perspiration.” [Thomas Edison]
“The best way to have a good idea is to have a lot of ideas, and throw away the bad ones.” [Linus Pauling]
Ideate Explore Incubate Develop Commercialize
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Strategic intent portfolio view
Innovation project portfolio reflects mix of ROI horizons
Market Newness
Te
ch
nic
al N
ew
ne
ss
Enhancements Scouting Options
Positioning Options Stepping Stone Options
Next-gen Platforms
Market Newness
1 Well-established market for Xerox
with significant share.
2 Established market for Xerox, but not
a market leader.
3 Existing market that Xerox has
recently entered.
4 Existing market, but new to Xerox.
5 Market new to the world; may be
defined but not yet established.
Technical Newness
1 Commoditized technology, widely
available, no competitive advantage.
2 Technology productized by Xerox,
also exists elsewhere, still
competitive advantage.
3 Technology exists within Xerox and a
few other labs, recently productized
but not by Xerox.
4 Technology is new to Xerox but not
elsewhere; not yet productized
anywhere.
5 Technology is new to the world; does
not exist elsewhere.
Continuous
Improvement
Central Innovation
Department Innovation
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Roadmap to innovation competency
Start
• Assemble an Innovation Steering Committee
• Define strategic priorities for your organization
• Manage existing innovation projects
Accelerate
• Develop new ideas
• Prioritize ideas
• Explore and incubate ideas
Transform
• Enroll everyone in innovation
• Train, support, make room for innovation
• Develop and explore transformational and disruptive ideas
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Mindsets to be aware of
Do • Be externally focused
• Recognize that your first idea is wrong
• Treat innovation as a marathon
• Fight the sucking sound of the core
Don’t • Force your view onto the market
• Plan too long before acting
• Throw too many resources at a problem
• Get seduced by too many opportunities
• Create a separation between innovation and operation
• Punish risk takers
• Be impatient for growth
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[Scott Anthony,
“The Little Black Book of Innovation”]
Examples of disruptive innovation
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futureofhospitals.org
Catholic Health Initiatives
Challenge
• Focus on hospital and medical needs, ignoring issues such as access (transportation, ability to pay)
Solution
• New infrastructure for the delivery of healthcare that shifts the central focus from the acute-care hospital to outpatient facilities and the home
• Expanded its relationships with physicians and has acquired other ambulatory organizations, including a home care services organization, to offer more outpatient care
Impact
• Shift to preventing sickness and maintaining people’s health in addition to treating sick patients
• View patient care as customer relationship management
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“We’re organizing our physicians, hospitals and ambulatory
healthcare delivery network providers into a more rational system.”
Juan Serrano, SVP, Payer Strategy and Operations, CHI
Hackensack University Health Network
Challenge
• Better serve the community and patients while maintaining a stable financial position
Solution
• Focus on other areas of business growth to compensate for reduced admissions
• Formed joint venture partnership with community physicians and United Surgical Partners International in the acquisition and operation of two ambulatory surgery centers, established a clinical affiliation with MinuteClinic
Impact
• Helped lead the way toward opening areas of opportunity for other aspects of care
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“Hospitals and health systems across the country are facing a
state of ‘controlled schizophrenia’.”
Robert C. Garrett, President and CEO, Hackensack (N.J.) UHN
Intermountain Healthcare
Challenge
• Population health management, identifying health trends in the community
Solution
• Process to identify such trends and implement improvements
• Use data as a driver for disruptive innovation, e.g., “hot spotting”, patient activation
Impact
• Potential to dramatically improve quality and reduce cost
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“It’s really thinking about healthcare differently. We’re not just
thinking about healthcare; we’re thinking about wellness. We’re
not just thinking about patients; we’re thinking about people.”
Lucy Savitz, Director of Research and Education, Institute for
Health Care Delivery Research, Intermountain Healthcare
Advocate Illinois Masonic Medical Center
Challenge
• Disruptive technologies and patient actions and demands such as home medical testing and “Google self-diagnosis” can’t be ignored
Solution
• High-tech development creates an echoed demand to re-infuse medicine with a high-touch, integrated and compassionate approach
Impact
• Each patient is best served by coordinated, patient-centered care
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“In my experience, disruptive innovation is a reminder of what we
can’t afford to leave behind. Listening to patients is critical – not
just to what they say, but to what their actions tell us.”
Susan Nordstrom Lopez, President, Advocate Illinois Masonic
Medical Center
Future of the hospital
“For over 100 years, the hospital has been the core of our healthcare system, and a pillar of every community – the central hub where people enter and leave this world, and where scientific discoveries become life saving procedures.
“But in the last couple decades, technological, social and economic forces have chipped away at this model. As these trends continue – making traditional clinical environ-ments punishingly expensive to run, and increasingly less necessary for many healthcare needs – the future of the community hospital is uncertain.”
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http://futureofhospitals.org/, 2013
Future of the hospital
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Conclusions
Support your innovation with structure and processes
Consider a portfolio of innovation pursuits
Inform your innovation with data, then ideate and prototype
Look for opportunities (and threats) from disruptive innovation
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