Why We in Healthcare Need to Innovate

Innovation, according to Wikipedia.com is the application of new solutions that meet new requirements, inarticulate needs, or existing market needs. This is accomplished through more effective products, processes, services or technologies or business models.

In healthcare, we are often best at the introduction of innovative products (new drugs, adaptive devices) or technology (robotics, medication delivery systems, medical records). Healthcare is less prolific in the introduction of new services (adoption of evidenced based care, preventative services) and least attention is often paid to innovation in processes (improving billing, throughput in admissions, hiring) or business models (integrated cross continuum systems, different payment systems).

Innovation is closely linked to change. Many of us are adverse to change. We avoid change because we fear what is ahead, we avoid change because many feel it must mean they are doing something wrong, and some avoid change because they don't know which way to go. In healthcare, there is so much externally applied change it often feels best just to plow ahead reacting to the things imposed on us.

This leaves us on the treadmill always battling to stay ahead and looking to costs to save us. Employee morale, poor quality and low levels of engagement exist as the status quo in healthcare.

Those who embrace innovation often gain significant advantage in their fields. According to R.C. Cooper and S.J. Edgett, in Lean, Rapid and Profitable New Product Development, top innovators across industries produce 5 times greater output with same investment, 12 times greater productivity, and 30% of current sales come from new products released within the last 3 years. Industryweek.com did a study about the effects of innovation on a company and they found that, overall revenue growth (78%), customer satisfaction (76%), growth in revenue from new products or services (74%), increased productivity (71%), and earnings/profit margins (68%) – were a result of the impact of innovation efforts.

The challenge is to provide access, quality, security and equity to health and health care in a cost effective. All the data that leads us to understand that innovation is one path to long term company or organizational sustainability. Why don't more peruse it?

In our experience in healthcare, we know that it starts simply with a lack of knowledge of the value of health care innovation. Next there is poor understanding of the key components to innovation and finally the ability to implement and follow through with the innovation initiates as their time is taken up elsewhere.

The key components of innovation are setting the culture and having a structured process to identify the change and manage it.

Set a culture for innovation and do it consistently. Intentionally, develop this skill in all managers in the organization. Encourage "intelligent failure". Manage projects in a way that will allow your employees to grow from them. Plan them carefully, keep them modest, (or of short duration or intensity), review routinely, and define your assumptions. Failure is crucial to the process of organizational learning and a key to growth and innovation. Failures show you where your assumptions are wrong. Failures demonstrate where you should not go in the immediate future. Failures open the door to insights that lead to your innovation. Learn the characteristics of what did and did not work. Find new eyes to look at the same process, and "fail fast". Make sure you are not punishing those who try but fail IN ANY WAY. Even a disapproving glance will halt innovation in its tracks when it is first getting rolling.

Second, implement a process that manages innovation from the idea to launch. One we have seen work includes phases of idea generation, preliminary investigation, business case development, testing and validation. After each phase, filters are put in place to test strategic fit, product and competitive advantage, market attractiveness, technical feasibility, alignment with the core competencies, and financial reward versus risk. If it passes all filters, it moves on to the next phase. If it does not, it is killed. This process keeps things focused and allows only those ideas that are most closely aligned with the company's strategy to move forward to the later and more costly phases. The most successful organizations start with an area they have previously identified as one that has high potential value and employees that are excited about it.

To begin to make the changes that will support innovation in your healthcare organization, start with these steps:

1. If you have not already taken an assessment that will allow you to understand your behavior's impact on your company's success and innovation, we suggest you take one. Innovation must start at the top of organizations or divisions.


2. Assess the strengths of your leadership team and their willingness and ability to identify, and manage change, and set a culture for innovation.


3. Develop and train managers where needed.


4. Implement a system for managing innovation as outlined above.


5. Identify champions and high potential areas.


6. Mange and run the first innovation process.


7. Celebrate the teams success

There are a number of profiles on the market that will allow you to measure your capacities relative to setting a culture for innovation. We have used many of them and have identified and recommend one that is particularly relevant to organizations trying in increase their company's growth and sustainability through innovation.

If you are an organizational leader and you are interested in behaviors that will help support your company's success through innovation, click here to take a free copy of the profile that we most recommend.