Innovation: From Start to Sustainability Presented to Michigan Society for Healthcare Planning & Marketing Spring Conference May 4, 2017
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Innovation:From Start to Sustainability
Presented to
Michigan Society for Healthcare Planning & Marketing
Spring Conference
May 4, 2017
Introduction
Speaker
• Jeff Schilling
• Independent Consultant 20+ Years
– Information and Analysis
– Strategic Planning
– Performance Improvement
• Prior positions in Strategic Planning, Quality Improvement, and Business Development in Healthcare
• MS in Health Care Administration from the University of Alabama in Birmingham
Topic: Innovation
• Learning Objectives Deeper understanding of Innovation
as a process and strategy
How to foster more Innovation
How to leverage Innovation
• Agenda1. Why healthcare? Why now?
2. Defining Innovation
3. The Innovation Process
4. Increasing Innovation
5. Leveraging Innovation
6. Questions, Comments, Ideas
2
WHY HEALTHCARE? WHY NOW?Innovation: From Start to Sustainability
3
Innovation: the Strategy du jour of health care?Why is innovation such a popular subject?
How Three of Hospital's Biggest Names Are Tapping Outsiders Like Amazon to Foster InnovationCEOs of Advocate, Providence and Northwell detail their thoughts on collaboration at the 17th Not-for-Profit Health Care Investor ConferenceMarty Stempniak, May 19, 2016, H&HN
Building a Sustainable Culture of InnovationProMedica Health System President and CEO Randy Oostra discusses how his health system is addressing the social determinants of health care.Laurie Larson, August 24, 2016, H&HN
Investing in Innovation to Disrupt Health Care's Status QuoHealth systems are putting money behind start-up companies to solve some of health care's biggest problemsLola Butcher, Cover Story, September 15, 2015, H&HN
4
Innovation: the Strategy du jour of health care?Why is innovation such a popular subject?
Lewin’s1 Model of Change
Unfreezing Change Freezing
1 Lewin, Kurt (June 1947). "Frontiers in Group Dynamics: Concept, Method and Reality in Social
Science; Social Equilibria and Social Change" (PDF). Human Relations. 1: 5–41.
5
Innovation: the Strategy du jour of health care?Why is innovation such a popular subject?
Increasing pressure to improve...
Better
Health
Better Care
Lower Cost
6
DEFINING INNOVATIONInnovation: From Start to Sustainability
7
Merriam-Webster
Innovation (n):
1: The introduction of something new
2: A new idea, method, or device
Business Dictionary
The process of translating an idea or invention into a good or service that
creates value or for which customers will pay.
Wikipedia
However, innovation is often also viewed as the application of better solutions
that meet new requirements, unarticulated needs, or existing market needs.
This is accomplished through more-effective products, processes, services,
technologies, or business models that are readily available to markets,
governments and society.
What is innovation?Do you think of
innovation as
including all of these?
8
THE INNOVATION PROCESSInnovation: From Start to Sustainability
9
The origin of an Idea
All innovations start with an idea.
How do people get that initial idea?
Is it a gift or a talent?
A moment of insight?
Some kind of mysterious black box?
One attempt to describe the beginning of an idea
can be found in TRIZ
10
The origin of an Idea
TRIZ
(theory of the resolution of invention-related tasks)
Developed by Soviet inventor and science fiction writer Genrich Altshuller and his associates beginning in 1946.
Contradictions at the heart of most problems
Review of 40,000 patent applications
Evolved into a general model for problem-solving and invention with tools and techniques and basic knowledge, including 40 Inventive Principles
Learn more about TRIZ by following this link.
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TRIZ – 40 Inventive Principles
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1. Segmentation 11. Beforehand cushioning 21. Skipping 31. Porous materials
2. Taking out 12. Equipotentiality22. “Blessing in disguise” or “Turn lemons into lemonade”
32. Color changes
3. Local quality 13. The other way round 23. Feedback 33. Homogeneity
4. Asymmetry 14. Spheroidality - Curvature 24. Intermediary34. Discarding and recovering
5. Merging 15. Dynamics 25. Self-service 35. Parameter changes
6. Universality16. Partial or excessive actions
26. Copying 36. Phase transitions
7. Nested doll 17. Another dimension27. Cheap short-living objects
37. Thermal expansion
8. Anti-weight 18. Mechanical vibration 28. Mechanics substitution 38. Strong oxidants
9. Preliminary anti-action 19. Periodic action29. Pneumatics and hydraulics
39. Inert atmosphere
10. Preliminary action20. Continuity of useful action
30. Flexible shells and thin films
40. Composite materials
Idea Maturation Stages
Inspiration
Creation
Conception, Imagine
Unpolished
Recognize an opportunity
Identify a potential solution to problem or answer to question
Illumination
Testing & refinement
Feasibility
Assessment against criteria
Early business analysis
Early market research
Non-vested review
Refinement
Research
Selectively seek help
Modifications
Identify critical success factors
Concept development
Identify “whole” and “parts”
Development
Pilots
FMEA*
Marketing Research & Plan
Business Plan
Beta Testing
Implementation Plan
* Failure Modes & Effects Analysis
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Idea “Incubation”
Most new ideas are “fragile”.
Too much criticism (even constructive) too soon can sink the idea. Remember, the idea owner usually has not had the time or expertise to fully develop the idea.
The organization should offer help with developing the when the idea owner is ready. Market research
Design refinement
Cost analysis
Strategic alignment
It is essential to keep the idea owner leading the development.
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Moving from Idea to “Market Ready”
Traditional Business Development
I
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A. Feasibility Study
B. Impact Assessment &
Prioritization
C. Pilot
D. Beta Testing
E. Business Plan
F. Approval
G. Implementation
Idea Phases
1. Inspiration
2. Refinement
3. Illumination
4. Developmental
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The Innovation “Funnel”
Idea
Idea
Idea
Idea
Idea
IdeaIdea
IdeaIdea
Idea
Idea
IdeaIdea
Idea
NewProductor Service
Feasibility
Study
Business
Plan
Pilot
Impact
Assessment
&
Prioritization
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INCREASING INNOVATIONInnovation: From Start to Sustainability
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Increasing Innovation
The Right Motive
Why would an organization want to become more
innovative?
• Attract Customers...Increase Volume / Sales / Revenue
• Lower Cost
• Increase Profit Margin
• Increase Market Share
• Diversify
• Shift Portfolio to New / Emerging Opportunities
• Other?
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Increasing Innovation
The Right Motive
What is it really like to be an innovative organization?
• Always the biggest companies?
• Always the market leader?
• Always the most profitable?
Innovative companies usually are:
• Sustainable (longevity)
• Valued (sometimes for acquisition)
• Competitive
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Increasing Innovation
The Right Motive
What is your strategic rationale for innovation?• Avoid innovating for the sake of innovating.
• How will your Vision / Goals be more easily achieved through innovation?
– Innovation in what strategic growth / investment areas?
– Innovation to solve what problems or address what barrier that is inhibiting progress toward the Vision / Goals?
– Innovation to enable which strategy or tactic to be implemented?
Recommended reading: You Need an Innovation Strategy, by Gary P. Pisano, Harvard Business Review, June, 2015.
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Increasing Innovation
The Right Organization
Idea Inventory and Management
Incubator
Initial Evaluation & Support Team
Criteria & Rank Opportunities for Development
Budget expense for evaluation
Budget Pool for Capitalization
Criteria for Final Approval
21
Increasing Innovation
The Right Organization
Business Development Capability (In-house or outsourced)
Evaluation & Research
Feasibility Studies and Business Plans
Implementation Planning
Service Implementation
Initial constructs & promotions
Development to Operations “hand-off”
22
Increasing Innovation
The Right Organization
Polices & Procedures
“Idea to Market” Process Flow
Designation of Initial Evaluation & Support Team
Idea Owner Compensation and Work Reassignment during Development
Workload Evaluation and Integration with Departments (Marketing, Planning, Business Development, Information Services, etc.)
Integration with Performance Review and Incentive Compensation
23
Over time, seek to increase the ideas coming in...
Idea
Idea
Idea
Idea
Idea
IdeaIdea
IdeaIdea
Idea
Idea
IdeaIdea
Idea
NewProductor Service
Feasibility
Study
Business
Plan
Pilot
Impact
Assessment
&
PrioritizationIdea
IdeaIdea
Idea
Idea Idea
Idea
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Idea
Idea
Idea
Idea
Idea
IdeaIdea
IdeaIdea
Idea
Idea
IdeaIdea
Idea
NewProductor Service
Feasibility
Study
Business
Plan
Pilot
Impact
Assessment
&
Prioritization
NewProductor Service
NewProductor Service
...and/or improve the “conversion” rate.
25
Increasing Innovation
The Right Organization
Cultural Evolution
Leadership Attention and Emphasis
Organizational Performance Metrics
Internal Communication
Rewards & Recognition
Inspiring New Ideas
26
Types of Benchmarking1. Internal: Compare to similar
processes elsewhere in your
own organization.
2. Competitive: Compare to the
processes of other
organizations in your own
industry.
3. Non-Competitor: Compare
organizations outside your
industry, but with function
similar to what you are trying
to improve (e.g. hospital
admitting and hotel
registration).
4. Generic Process: Compare
isolated business processes
across otherwise dissimilar
industries.
• The biggest “gains”, the most
transformational changes
• Most counter-intuitive to
some people; team member
participation is very important
– What could health care learn
from Community Action
Agencies (and visa-versa)?
– What can primary care learn
from retail?
– What did a Surgical Services
improvement team learn from
a Formula 1 Pit Crew? 2
Innovation: Sources of Inspiration
Out-of-Industry Benchmarking
Out of Industry
Benchmarking
27
2 Ferrari’s Formula One Handovers and
Handovers from Surgery to Intensive Care,
American Society for Quality Case Study.
https://www.youtube.com/watch?v=qerlfnvNn2o
Innovation: Sources of Inspiration
Value Curve Analysis
0
2
4
6
8
10
ConvenientLocations
EasyProcess
NewerModel Cars
ModelSelection
CarCleanliness
CarReliability
Example Value Curve - Car Rental Agencies
ABC Car Rental Industry
Recommended reading: Blue Ocean Strategy, by W. Chan Kim and Renée Mauborgne,
Harvard Business Review Press, January 20, 2015 (expanded edition).
28
Increasing Innovation
The Right Resources
Leadership Commitment Innovation eventually means change
Long term strategy
Bench Strength As idea owners, and others, work on ideas, their “other work”
has to continue
Time and Cash If everyone in your organization has no time...
Business development requires investment. Not all ideas will become innovations. Not all innovations have high ROI.
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Critical for becoming more innovative...
Strategic Rationale
Leadership commitment
Idea “incubation”
Sound Business Development practices– Customer knowledge and market research
The right culture– Tolerance of failure
– “Lessons Learned” obsession; ability to learn and adapt
– Organizational Knowledge Base
– Innovation has “mainstream” legitimacy
Adequate capitalization ($ and People/Time)
Commitment
Process
Culture
30
LEVERAGING INNOVATIONInnovation: From Start to Sustainability
31
The Diffusion of Innovation(Rapid Replication)
For more information:
D'Anne Carpenter
P: (734) 343-1507
Knowledge is not the same as Action
Scurvy, Vitamin C,
and the “Diffusion of Innovation”
1497: Vasco de Gama sails around the Cape of Good Hope; Starts with 160 sailors--ends with 60.
1601: James Lancaster sails 3 ships to India; 3 Tbs. of lemon juice given to those on ship #1. Losses on the other two ships so severe that they must populate them with sailors from ship #1.
1747: James Lind conducts a randomized trial on the USS Saulisbury.
1795: The British Navy reacts.
1865: The British Merchant Marine reacts.
From research and presentation materials developed by Trinity Health and based on the work of Everet Rogers and others.
33
There is nothing more difficult to plan,
more doubtful of success,
nor more dangerous to manage than
the creation of a new order of things...
Machiavelli
The Prince
The Diffusion of Innovation
From research and presentation materials developed by Trinity Health and based on the work of Everet Rogers and others.
34
Rapid Replication:
The Diffusion of Innovations
The process by which an innovation is
Communicated through certain channels,
over time, among members of a social system.
(E. Rogers)
The Diffusion of Innovation
From research and presentation materials developed by Trinity Health and based on the work of Everet Rogers and others.
35
Innovation Decision Process - the process
through which an individual passes…
1. From first knowledge of an innovation...
2. …to forming an attitude toward the
innovation...
3. …to a decision to adopt or reject...
4. …to implementation of the new idea, and...
5. …to confirmation of this decision.
The Diffusion of Innovation
From research and presentation materials developed by Trinity Health and based on the work of Everet Rogers and others.
36
Factors in the Rate of Spread:
Selection Criteria
Relative advantage
Compatibility
Observability
Complexity
Trial ability
The Diffusion of Innovation
From research and presentation materials developed by Trinity Health and based on the work of Everet Rogers and others.
37
Communication Channels
Mass media, or
Interpersonal
The Diffusion of Innovation
From research and presentation materials developed by Trinity Health and based on the work of Everet Rogers and others.
38
The Diffusion of Innovation
Adopter Categorization
Innovators - venturesome; more cosmopolite
social relationship (2.5%)
Early Adopters - respected; opinion leaders
(13.5%)
Early Majority - deliberate (34%)
Late Majority - skeptical (34%)
Laggards - traditional (15%)
From research and presentation materials developed by Trinity Health and based on the work of Everet Rogers and others.
39
“The part of the diffusion curve from about 10
percent to 20 percent adoption is the heart of
the diffusion process. After that point, it is often
impossible to stop the further diffusion of a new
idea, even if one wished to do so.”
(E. Rogers, 1995)
The Diffusion of Innovation
From research and presentation materials developed by Trinity Health and based on the work of Everet Rogers and others.
40
The Diffusion of Innovation
Questions...
Comments...
Ideas...
©2017 Trinity Health 41
For more information:
D'Anne Carpenter
P: (734) 343-1507
Learning Objectives
Deeper understanding of Innovationas a process and strategy
How to foster more Innovation
How to leverage Innovation
How well were these objectives met?
What did you like?
What could have been better?
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• Questions
• Comments
• Ideas
43
Jeff SchillingSchilling Consulting Services, Inc.
email: [email protected]: 616.951.7277
cell: 616.822.14918 East Bridge Street, suite A-2
Rockford, MI 49341www.schilling-consulting.com
https://www.linkedin.com/in/jeffreyschilling/
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