19th century innovation classic: Medical Essays by Oliver Wendell Holmes, Sr.

"It is the province of knowledge to speak and it is the privilege of wisdom to listen."
-- Oliver Wendell Holmes, Sr., medical reformer and poet

Click here to download your free e-book edition of Medical Essays.

N-of-8 most integrated IHNs

SDI has released its 2011 Top 100 IHNs, a yearly assessment of the most integrated healthcare networks. The SDI report, regarded as the nation’s premier rating system, evaluates IHNs on their performance and degree of integration.

Sentara Healthcare (Norfolk, VA) finished No. 1 for the second year in a row, with a score of 93.17 out of a possible 100.  That is two points higher than last year. Sentara is the only IHN to rank in the top 10 of the SDI IHN 100 for all 14 years of the survey.

The chart shows the others in the top 8.

The ratings are based on SDI’s IHN Rating System, which evaluates each network’s ability to operate as a unified organization in eight categories: integration, integrated technology, contractual capabilities, outpatient utilization, financial stability, services and access, hospital utilization, and physicians.

What are you listening for?

“Of all the leadership skills, listening is the most valuable but probably the least understood,” says Suzanne Ross of the Aerie Company.  “Those who listen only sometimes remain ordinary leaders. The exceptional ones are those who never stop listening. They learn before others about unseen problems and opportunities and that helps them become true market leaders.”

I appreciate Suzanne’s ability to integrate new thoughts and make the strategy + communications + leadership link to elevate performance.

Recently, Suzanne’s newsletter featured an article on Health Literacy, and I asked her if I could share it with my friends, too.
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By listening, we help ourselves and our clients stay open to new ideas, often hear what isn’t being said and find ways to solve problems and capitalize on opportunities. Yet like any skill, it takes practice. Last month as we encouraged our network to refine their skills as part of the National Day of Listening, sponsored by oral history project, StoryCorps, we were struck by the feedback our readers had as they shared what they’d learned by being better listeners.

So as we wrap up 2010, there is no better time to consider accomplishments and commit to use those lessons learned to help clients and colleagues continue to demonstrate their value and expand their market presence and leadership.

Here are some of our key insights from this past year.

1. Have a clear purpose – Everyone has a story that reveals their value, but often companies and individuals struggle with how to weave it together. Simply stated, your purpose is solving a customer problem. Because you’ve been listening, you have a unique understanding of the problem and can show your value in how and why you solve it better than others. Changing the face of chronic disease with medical technologies may seem a grand purpose, but that’s exactly what Medtronic does. From communication with customers to strategic alliances to marketing campaigns to employee communication, it’s clear that the patient is at the center of everything they do. In fact, at employee meetings, people who have been helped by Medtronic devices are featured in video vignettes and live appearances to reinforce help ensure everyone understands how their functions advance the company's purpose.
2. Be patient – Business tycoon Donald Trump has always preached watch, listen and learn. He knows from experience that you can’t know it all yourself and anyone who thinks they do is destined for mediocrity. So while we are an impatient society, those with the measurable plan who continually listen to customers, colleagues and competitors will be the companies and executives that move forward with better solutions, make quick mid-course corrections and respond more rapidly to opportunities. Consider the uncertainty that still remains around the healthcare reform act. Thankfully for employers, the health, wellness and aging services industries understand how the secret of patience is doing something else in the meanwhile and they have been actively working on more engaging solutions to support millions of new consumers who will have access to the system.
3. Be persistent – Yes, you need to stay on the radar screen of your target audience, but remember that communication goes in two directions so you need to listen at least as much as you need to talk. Today life demands our participation so in this super connected world, companies and executives can ill afford to be introverts. Be open to how you keep the  lines open with all your various stakeholders from the ones who embrace technology and social media to those who need an integrated marketing campaign to reinforce your unique benefits to those who prefer face to face contact.

You’ve all heard the joke “how do you get to Carnegie Hall? Practice, practice, practice.” With a professional violinist and musician advocate sister, I know it takes more than patience and persistence. It requires a combination of talent, communication, focus and a damn good ear – parallel skills for market leaders. Few of us have realized the career visions we had as nine year olds like my sister, but what I know she and other leaders says is that it’s just as much about practicing as it is about listening. And yes, my sister has performed at Carnegie Hall. She’s got a return engagement with her Nashville Symphony in the next year and I’ll be one of her many fans listening closely for new ideas.

What’s your industry equivalent of getting heard at Carnegie Hall? If you need support to help identify, articulate and communicate your value in 2011 and beyond, The Aerie Company is listening. You can follow on Twitter @SuzanneJRoss

How does the urgency of overcoming obstacles to innovation apply to our work?

To be sure, decades of investment in pharmaceutical innovation have produced thousands of medicines that allow us to treat and prevent diseases better than ever before. Conditions that not so long ago were fatal can now be managed effectively and safely; epidemics that once devastated communities are becoming distant memories.

The positive impact of health, science, and technology innovation has been far-reaching. New medical treatments are helping people to lead healthier more productive lives, cutting costs in healthcare by replacing expensive medical procedures, and stimulating the economy with a healthier workforce.

Look at this list and recall the innovations we’ve seen – and picture the possibilities of advancements coming just over the horizon:

Taking all these factors into account, I believe that applying the N-of-8 tool can increase your brand innovation equity.

If the term “brand equity” refers to the awareness and preference that accrue to a product, then “brand innovation equity” might measure the impact of efforts to change customers’ behavior.

There could be many ways to measure this brand innovation equity, including some metrics that currently exist.

1. Brand innovation as a financial asset. This may be subjective, but it would reflect the risk profile, market leadership, stability and global reach of the brand’s innovation initiatives.
2. Brand innovation as a product differentiator. The classic product-level brand measurement example is to compare the price of a no-name product to an "equivalent" branded product. The difference in price, assuming all things equal, is due to the brand. The same kind of revenue premium approach could be applied to compare the before-and-after value of brand innovation application.
3. Brand innovation as an image accelerator. Positioning studies map the mind of the customer to chart what associations with the brand that the consumer has. This approach measures awareness (recall and recognition) and image (the overall associations that the brand has). Similarly then, free association tests and projective techniques could be used to uncover the tangible and intangible attributes, attitudes, and intentions about brand innovation.  Brands with higher levels of behavior change would be higher in brand innovation equity.

When you consider N-of-8 to leverage all your company’s and brand’s values, you can see the possibilities in creating, launching, and communicating through more compelling innovation.  And beyond simply gaining market position, it can result in a more emotional connection between the brand and the customer.

The impact of brand innovation can be to execute an authentic and true-to-life strategy that can be applied uniquely and creatively in all avenues of interaction between the company, employees, and customers.

Successful brand innovation creates a memorable experience for the customer, encourages repeat business, and boosts the company's economic health. It is a long-term brand solution that can be leveraged by your team to showcase your brand's unique potential.

Obstacle to Innovation #6: Void of expert leadership – “We can’t act on that until somebody big gives it the okay”

The road to a culture of greater innovation is a hazardous one.  This is because so many attempts at creativity and fresh thinking can fail. . .spectacularly.  Instead of creating new brand ideas, it creates a wake of frustrated employees and the perception of wasted time and resources.

It’s in this light that we look for a leader.

Leaders must, particularly in innovation, must provide their teams (along with their outside suppliers, vendors, and consultants) the space to allow people to unleash their creative potential.

There is a great saying that you don’t need a title to be a leader.  You can find expert leadership in some very unexpected places.

Take the case of Joan Samuelson. Ms. Samuelson was diagnosed with Parkinson's in 1987 and left the practice of law to found the Parkinson's Action Network in 1991.

She was co-chair of a regenerative medicine conference when she said:

“I think if we are committed to a plan that truly is going to achieve our vision – getting effective therapies and cures within a reasonable amount of time – and the public believes that there is a huge amount of time and talent and energy that people in the legislature, in the patient communities, in simply the voting public will be willing to invest...then they will see the vision [and support] a plan to achieve it.”

She was the right leader at the right time because the right people got the message.  PAN is credited with many successes in increasing federal research spending, including the 1997 Morris K. Udall Parkinson’s Research Act. Samuelson played an active role in the campaign resulting in the 2004 passage of California’s Proposition 71 Stem Cell Research and Cures Act. Since then, Ms. Samuelson has been appointed to a variety of advisory panels on biomedical research and health policy.

8 recent market trends – are they the “new market reality”?

Over the years, I’ve been involved with clients on many aspects of licensing, funding, and other aspects of commercializing new health science and technology. We learn from every new encounter with these deals. And we enjoy connecting with other business consultants who bring a unique perspective to the planning.

One such collaborator is Technology Commercialization Group (TCG).  TCG works with senior executives worldwide to help them launch and develop markets and business operations in the medical device, pharmaceutical, biotechnology, veterinary and related healthcare industries.

TCG recently shared this article with us.
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As we seek to create measurable value for the companies we work with, we take this opportunity to focus on the trends that will affect you and your business in 2011- 2012.  As we do that, one overall theme we are compelled to note is an even sharper focus on de-risking the business enterprise. In fact, one could argue that this attitude represents a shift in thinking that will persevere for some time to come, given the uncertainty that remains in the global economy, and with health care and regulatory reforms.

In today’s changing global medical market, the key questions have become “what’s the opportunity?” and “How can we reduce our risk as we increase the value of our assets and grow our revenues and profits?”

As opposed to the past decade, when companies in our industry literally expected that customers would adopt virtually all new products, if enough money was thrown into marketing, the reality now is very different.   For proof, we only need to look at the data:

1. Currency fluctuations for the dollar and Euro are affecting the debt status of nations.  As a result medical companies view multiple revenue sources from international markets as a proven way of de-risking the business.  Even small to medium size companies in Europe are looking to US revenue sources, and vice versa.
2. Good economic policies implemented by the more stable European countries are driving expansion into overseas markets. As an example, Germany’s medtech exports grew by 5.5% last year and now represent 40% of total turnover.  To de-risk their business, German manufacturers are developing US markets by picking and choosing selected customers and markets that generate attractive profits in the fastest way possible. 
3. Government budget reductions in Europe and the US are favoring cost effective innovation and new products that offset medical care costs. Before product development is complete, smart companies know which innovations will help them meet these goals, and then complete the product, marketing, and financing plans. 
4. To increase flexibility and operations efficiency, medical firms are down-sizing and out-sourcing manufacturing, R&D, and sales forces.  In this environment, companies are doing more partnering deals and acquisitions of advanced and more proven products. 
5. Emerging firms, including US startup subsidiaries of established European companies, have increasingly moved to the virtual model to be more flexible and less capital intensive while launching products. While technical expertise is still a core competency, these virtual teams often include customer focused market and product development experts charged with ensuring the products will meet the market’s true needs before major marketing dollars are committed. 
6. Venture capital remains scarce and the firms still investing are interested primarily in reducing risk, while the number of IPO’s remains relatively low as well.  This means that investors will be primarily focused on exits via acquisition, but this option won’t exist unless the products or technologies are targeting a true, proven, customer need. 
7. The EU Medical Device Directive is increasing global harmonization and reducing regulatory risk even though it will increase the cost of regulatory approval for certain products. US companies launching first in Europe will increase in number, but the more informed executives have learned that Europe is not a unified market because of different reimbursement schemes in each country.  They develop very specific, yet fully comprehensive European launch plans. 
8. FDA changes in the 510K approval process, along with proposed user fees, are galvanizing increased interest in launching first in Europe.  This is also driving small to medium European medical companies to develop more thoughtful US market entry plans and commercial strategies. No longer do they view signing up with a distributor as some sort of guarantee of success.

The bottom line is that companies of all sizes are learning how to de-risk their business because of the world’s economic conditions and because customers, patients, regulatory agencies and payors are demanding it.

Companies can’t assume that just because they have regulatory approval, and money for marketing, or have signed up a distributor in a new market they will be successful.  Innovative companies have found that it is possible to increase both focus and flexibility -- two key risk reducers -- by leveraging outside experts to help commercialize their truly innovative products with proven cost effective marketing and sales plans.

Celebrate Valentine's Day with free "Chocolate" ebook

Here's my Valentine's Day gift to you -- a free e-book edition of the classic 17th century book Chocolate: or, An Indian Drinke by author and physician Antonio Colmenero de Ledesma.

From Valentine's Day to Halloween through to Christmas, chocolate is always there to celebrate a holiday. Back in the 1630s, Ledesma explained chocolate's role in health and wellness, as well as its history, culture and sensory pleasures. While we know now that overindulging leads to calorie concerns, the right amounts of the right kinds of chocolate can actually make one feel and even look better. Further, clinical research shows that eating chocolate and natural cocoa may improve vascular health, blood pressure, cognitive health, blood flow and skin health.

In this book, you will come to appreciate chocolate well beyond the health and nutrition aspects. You will understand the early fascination with chocolate that is now such a part of people's lifestyles, holding a special place in holidays and celebrations.

Giving the gift of chocolate has been associated with Valentine's Day for generations. During Valentine's week, consumers will buy more than 58 million pounds of chocolate candy, which equates to approximately $345 million in sales, according to Nielsen data.

This e-book is one in a series entitled Innovation Classics dedicated to collecting and publishing the best – or perhaps the underappreciated – innovation writing of the past.

Click here to download my Chocolate gift to you.

Obstacle to Innovation #5: Lack of a back-up plan – “If we do that and it doesn’t work, then what?”

A main reason people are skeptical toward innovation is insecurity.  “How is this going to affect me PERSONALLY?” is really the question. Perhaps this is a normal reaction, based on a personal experience with innovation turning bad.  I am not sure of the cause, but let me tell you, if you are insecure, you’ll have rough time with innovation.

I have worked with many people who fought against “that new idea that will make miracles” but who took their share of credit when it was implemented and proved successful.

For brand innovation leaders to overcome this obstacle, start by explaining the entire project plan.  Be patient, as it may require time for people to understand.  Stay open to refining the innovation considering team feedback.  And instill confidence, by reassuring people that they can indeed manage to deploy innovation faster and they build an innovation track record.

Particularly with N-of-8 methods, you can create a set of contigency plans as you proceed through the innovation process. That way your team can face the insecurity knowing there are alternatives.

Obstacle to Innovation #4 Personal conflicts – “We aren’t going to do that just because she wants to”

The factions of personalities have never been more pervasive than today. In fact, these ideological clashes have become part of our cultural texture, from politics to talk shows, and from sports stadiums to boardrooms.

Often companies try to overcome the innovation obstacle of conflict with two approaches:

• Bringing in a iconic leader
• Promoting a symbolic declaration

Unfortunately, neither may do anything to address the underlying personal conflict.  Let’s look at the reasons why.

Iconic leadership in business and politics seems to be an attractive option these days. Superstar executives now occupy the corner suites of major banks, automakers, computer manufacturers, internet powerhouses, and even the White House and some Governor’s mansions.

When we want something great to happen, we look for the genius who has an idea. And this appeals to innovators themselves. Who wouldn’t want to be declared a genius -- with all that means in recognition, salary, advancement, and a dramatically heightened ego.

But what about the companies full of wanna-be stars running with their own ideas while ignoring or actively fighting the ideas of others.

Frankly, it is a myth to suggest that big ideas spring from one virtuoso. Innovation necessitates getting things done in a real world of dozens, if not hundreds of people, all aimed at bringing an idea to reality.

This without doubt means collaboration, which is the opposite of the conflict often created if the team thinks all the rewards and the glory will only go to the individual with the original idea.  They will refuse to improve on it, develop it, make it, package it, and bring it to market.

Symbolic declarations are another approach.

Once managers feel the urgency for brand innovation, they often turn to a fun tactic: internal communication. “Our people are not innovative,” they think, “because they haven’t really understood how important innovation is for our business.” This is when we’re asked to design a logo, a banner, a screensaver, or PowerPoint presentation saying “Innovate or die!”

The trouble is we’ve have heard it all before. So, employees at all levels are cynical because company leaders fail to follow through on their pronouncements. No one really “dies” or if the project fails, they blame the leaders. Teams understand that innovation is important, but their behavior won’t be expected to change until managers have changed behavior first (and not just your words).

Obstacle to Innovation #3: Information deficit – “We haven’t really done our homework on that”

How often have you seen two camps of people form during creative team meetings?

In one group are managers that demand a penchant for action. If in doubt, they say, fire first then aim.  They represent a whole cohort of managers who were raised, trained, mentored, and rewarded because they focus on action and execution above all else.

The other group claims to be more sensible.  They are the voices of reason.  They resist relying on trial and error. They must first take the time to answer a plethora of questions, consider a cornucopia of options, and gather a ream of data. In fact, this group criticizes the first group as people who “jump into action before they understand what the real problem is.”  To fact-checkers, the action group may be just concocting a solution – probably the first idea they came across – and executing it without even knowing if it actually addresses the underlying problem.

As you can guess, this conflict is happening in far too many health, science, and technology organizations.

The N-of-8 process helps address the needs of both groups.

Without the right preparation and planning, a brand team can waste an incredible amount of resources driving down the wrong path. Yet, you can lose valuable time and market position if you allow this obstacle to innovation to avoid the risk and responsibility of innovation.

Like a doctor who must diagnosis before prescribing, treating, or operating, an N-of-8 effort must first define the key questions – then move forward-fast to create the solutions.

Obstacle to Innovation #2: Practical limitations – “We don’t have the time, staff, budget, etc. to do that”

This is especially true in our industry. Overworked people at health, science, and technology companies of all sizes often push back against suggestions of ideas they might take to improve their brand’s chances of success.

They protest, “I’d really like to do that and I know I should, but I don’t have time.” But what’s the real message? Let’s see what the refrain of “But I don’t have time!” might really mean.

Here are some comments you might hear from the R&D and Brand Managers.

“But I don’t have time to hold a retrospective,” declared the manager of a recently failed product launch when we suggested an N-of-8 to address what went wrong before they launched a follow-on campaign. You could realistically interpret this message as, “We must get started on the next project immediately because it will take us so long to recover from those previous mistakes.”

I know a very successful executive who built his entire career by studying the “lessons learned” repository when taking on a new position, then he charted a course based on the missteps of those who went before. A brand manager who doesn’t have time to peruse the lessons learned has opted instead to suffer with some of the same problems that previous managers have experienced – and risk the same failure.

You might have heard a manager say, “We don’t have time to write a project brief.” This person is relying on a mind meld to substitute for oral and written communication. The translation might be, “We need to start creative development immediately so we have time later to change it.” This never seemed efficient to me.

Now, what about objections you hear from Product and Brand Designers.

“I don’t have time to do a performance feasibility evaluation,” argued the harried industrial designer. What he meant was that he would find plenty of time to re-architect the design later when he couldn’t satisfy the performance requirements. I get nervous when I hear an art director say, “I don’t have time to do a bunch of design concepts. I need to get something out right away!” Amazingly, she’ll always have to make time to reverse-engineer the design and requirements when the clients require a change.

What shall we think when we hear a medical writer say, “But I don’t have time to put this through q.c. right now”? Does the writer believe that he’ll need the time he saves by skipping the proofreading to fix the errors that the editors will ultimately find in his copy? Odds are he’ll need many more hours for re-writing than if he had subjected his copy to the scrutiny of some colleagues before unleashing the clients’ reviewers on it.

And there are more objections you could hear from anyone on the Brand Team.

They may not think you have time to spend on creative process improvement, but everyone wants the benefits of improved innovation that can come from changing the ways we work.

In one seminar I spoke at recently, the audience complained that they were being asked to do more work with fewer people. When I asked what the organization was doing to enable this outcome, the reply was “Nothing.” There’s never a convenient time to take the actions that we believe will pay big dividends. But the inconvenience of later fixes generally comes back with a vengeance. All you’re doing is passing the inconvenience along to the customer, and then back to your organization when the complaints roll in.

To save time and money, you can beef up your creative development practices with N-of-8.  You will be investing in more thorough upfront research, you will be iterating faster on your product and brand designs, and you will be accelerating the review of your ideas.

In essence, you will be doing all those things that people erroneously argue take too much time.

And if someone debates the importance of these N-of-8 activities, you can respond, “But we don’t have time to cut corners.”

Obstacle to Innovation #1 Process & procedures – “This is the way it’s always been done”

When you say “we want to be innovative,” it’s like declaring “I want to be successful.” It may be a good beginning, but it doesn’t really help in deciding what to do.

Nevertheless, when we’ve talked with some senior managers in healthcare, they often express their visions in this kind of high-level dreaminess. Then, they tell their teams that they want more innovative ideas – “Think differently! Be the change! Go outside the box!”

But, in the end, we are unclear what this means. And finally, we drift back to the familiar and the tried-and-true.

Dr. Paddy Miller and his colleague Thomas Wedell-Wedellsborg at the IESE Business School in Barcelona, Spain have written about this obstacle.  They say, “Asking for innovation is not enough because ‘innovation’ is not just one thing. There is radical and incremental innovation. There is innovation in marketing, finance, product development, branding, process, services, experiences, and even in the way we lead our businesses. There is innovation aimed at becoming market leaders, and innovation aimed at just keeping up with the Joneses. There is innovation for the sake of improving efficiency, increasing satisfaction, reducing costs, retaining employees, attracting talent, becoming ecological or improving images. Innovation comes in so many guises, and can be pursued in so many ways, that it is easy to get lost if you don’t have a proper idea of where you want to go. For this reason, it is the first task of an Innovation Architect to craft an innovation strategy that dovetails with the company’s strategic playbook, and that is specific enough to help people make operational decisions about how to pursue innovation.”

So, processes and procedures must be addressed to overcome the obstacle.

Here’s an example from Chicago public schools.  Officials could not say how much the system spent on computers because of the chaotic state of – you guessed it – their computer accounting. Computer purchases were listed under various categories in different funds and labeled in different ways.  For example, computer giant IBM was listed five ways in the computer, as IBM, IBM Corp., IBM Corporation, International Business and International Business Machine.  Because it was the way it was always done, each entry was under a different vendor number.

Then, there’s another story that’s now become a legend on the need to challenge the conventional wisdom.

The US standard railroad gauge (distance between the rails) is 4 feet, 8.5 inches. That is an exceedingly odd number. Why was that gauge used? Because that is the way they built them in England, and English expatriates built the US railroads. Why did the English build them like that?  Because the same people who built the pre-railroad tramways built the first rail lines, and that is the gauge they used. Why did "they" use that gauge then? Because the people who built the tramways used the same jigs and tools that they used for building wagons, which used the same wheel spacing.

Now...

Why did the wagons have that particular odd wheel spacing? Well, if they tried to use any other spacing, the wagon wheels would break on some of the old, long distance roads in England, because that's the spacing of the wheel ruts. So who built those old rutted roads? Imperial Rome built the first long distance roads in Europe (and England) for their legions. The roads have been used ever since.

And the ruts in the roads? Roman war chariots formed the initial ruts, which everyone else had to match for fear of destroying their wagon wheels. Since the chariots were made for (or by) Imperial Rome, they all had the same wheel spacing. The United States standard railroad gauge of 4 feet, 8.5 inches is derived from the original specification for an Imperial Roman war chariot.

Now, the twist to the story...there is an interesting extension to the story about railroad gauges and horses' behinds.

When we see a Space Shuttle sitting on its launch pad, there are two big booster rockets attached to the sides of the main tank. These are solid rocket boosters, or SRBs. Thiokol makes the SRBs at their factory at Utah. The engineers who designed the SRBs might have preferred to make them a bit fatter, but the SRBs had to be shipped by train from the factory to the launch site. The railroad line from the factory happens to run through a tunnel in the mountains. The SRBs had to fit through that tunnel. The tunnel is slightly wider than the railroad track, and the railroad track is about as wide as two horses' behinds.

So, a major design feature of what is arguably one of the world's most advanced transportation system was determined over two thousand years ago by the width of a horse's behind.

We aim to break this obstacle with N-of-8, and create fundamental shifts to the way we do things in technology, science, and healthcare. The new technological breakthroughs that result could be as game-changing as the Internet, the PC, digital camera, ATM, email, voice mail, or flash memory to name a few.  Consider the product revolutions like Apple’s iPod, iTunes, and iPhone.  What about the Toyota Prius and Honda Insight?  Imagine the societal impact of the “Pill” in the ‘60s and Viagra in the ‘90s.