Category Archives: Agile

Companies in Healthcare: What Could Make You Disappear??

The healthcare industry is changing at an incredible pace. That means winners and losers. New companies emerging and existing companies going away. What could make your company disappear?

To be clear, by “make your company disappear” I don’t mean some super-powered ray gun or a natural disaster that would ‘poof!’ make your company suddenly vanish, dissolve, or fade away.  I’m asking seriously what could make your products, services, or company irrelevant, obsolete, or undesirable?

And I apologize. I know disappearing can be an unpleasant thing to think about. But it’s really important to think about, especially when you’re doing well. As you know, there is a plethora of products, services, and companies that were once great, and then succumbed to forces that made them disappear.

In today’s healthcare environment, just consider the impact of Meaningful Use or the MEDTECH Act; the shift toward value-based reimbursement or growing influence of GPOs; the proliferation of wearables and monitoring devices; and the health plays of leading tech companies like Apple and Google.

Any of these forces can position a few as market leaders, necessitate radical restructuring for many, make other companies disappear, and launch countless new startups to replace them. You want to stay strong. Be proactive. Don’t be one of the disappearing companies or a victim of circumstances.

First consider your company’s relationship with the market and healthcare business environment. Start with these five questions:

  1. What change in the market can make my products or services irrelevant, obsolete, or undesirable?
  2. What technological innovation can make my products or services irrelevant, obsolete, or undesirable?
  3. What shift in consumer behavior can make my products or services irrelevant, obsolete, or undesirable?
  4. What policy or regulation can make my products or services irrelevant, obsolete, or undesirable?
  5. What competitor can make my products or services irrelevant, obsolete, or undesirable?

Your answers should help you look beyond the present, see threats to your long-term viability, and proactively make plans to preserve your company’s existence and well-being. Think big picture, not just about what might replace your offerings, but what might integrate your technology into something bigger, like smartphones have integrated the functions of MP3 players. Consider too getting input from KOLs and customers to give you a more well-rounded perspective and greater certainty in your conclusions.

Now take a look at your own internal practices and beliefs, that if unchecked, can prevent you from being agile and responsive, and ultimately make you disappear. But don’t do this assessment unilaterally, get feedback from your team. Drawing on the innovation work of Dartmouth professor Vijay Govindarajan, think about these three traps that can make even highly successful companies flop. Do any apply to you?

  1. Major investments in systems or technologies can make it prohibitively expensive for you to move to newer and better tools. But the longer you stay with what you have, the harder it is to switch. Some call this the “sunk costs” fallacy.
  2. Fixation on what brought you success blinds you to new things that can threaten or displace you. You don’t see it until it’s too late. Then you respond with desperation. Sometimes “if it ain’t broken, don’t fix it” just does not apply.
  3. Hyperfocus on today’s marketplace can lead you to ignore new trends and market forces, and future opportunities and threats. You may be too wrapped up in the business to focus on the business. You’re all about today, and lose out on forward thinking.

Combine your answers to the first set of questions about your company’s relationship with the market and external environment, with your assessment of traps based on internal practices and beliefs. Be honest.

Stay strong. Don’t disappear!

The Critical Step Before Business Model Innovation…First Things First!

ambiguityOnce upon a time there was a little division in a big med device diagnostic company that wanted to extend into the unfamiliar territory of disease prevention.

The division was trying to win internal support and significant funding. They knew they needed a strong business case but had not yet figured out the specifics of their offering. There were a lot of unspoken assumptions and hypotheses. Moving forward by simply saying “we think we can, we think we can!” might work for little engines, but was not a good business practice for this group.

In short, the group was at a fork in the road. Going to the left they could travel on “Ambiguity Lane.” Staying to the right, they could move forward on “Clarity Way.”

Ambiguity Lane
In some ways, Ambiguity Lane seemed easier in the short-term because it postponed figuring out the foundational stuff that really needed to be figured out. Ambiguity Lane involves jumping ahead into business model development and skipping over the work of first gaining sufficient clarification on the offering or identifying and validating key assumptions. In this context, people travel Ambiguity Lane with a passive and often unspoken ambiguity that serves to postpone commitment.

On one hand, getting a business model in place sounds concrete and has an element of CYA, which can have a certain appeal. On the other hand, this sequencing also means living and speaking in ambiguities that avoids real commitment.

Even those team members that felt the seductive pull of Ambiguity Lane also saw its risks: 1) Internal leadership could more easily ignore the project or refuse to support it since it was lacking in substance and focus, and 2) The business model would be weak and not very actionable because it was built prematurely and based on too many hypotheticals.

Clarity Way

Going down Clarity Way was a happy choice to some; and initially felt risky to others. Clarity Way requires an honest assessment of what the team knows (and doesn’t know) about their offer and how desirable it is to customers, how feasible it is technically, and how viable it is financially. This road exposes critical business assumptions and opens them up to verification or correction. Clarity Way gets key questions on the table and solved in order to move into business model innovation with a solid foundation and in the right sequence.

The team members that wanted to travel on Clarity Way felt it would be premature and risky to jump into business model innovation without conducting some due diligence first. They did not want to pretend they knew more then they actually knew or use ambiguity as a cover for not having worked things through. They felt that the other road, Ambiguity Lane, was actually the greater risk.

 

Making the Choice

Turns out that Clarity Way has lots of blue sky and sunshine. Its travelers believe that transparency gets the best results, in line with the famous statement by Louis Brandeis: “Sunlight is said to be the best of disinfectants.”

Ambiguity Lane is grey and misty. It’s easy to get lost or misled when it’s hard to see clearly. As common sense philosopher Thomas Reid said, “There is no greater impediment to the advancement of knowledge than the ambiguity of words.”

After some soul searching, the little division in the big med device diagnostic company choose Clarity Way. They knew how much was at stake for the company by extending into the unfamiliar territory of disease prevention.

The Clarity Way travelers also saw the value of first getting everyone’s ideas, concerns, and questions on the table, identifying which hypotheses needed to be tested, and getting initial input from customers. By doing so, they felt they’d be able to make informed decisions, understand and avoid internal roadblocks, and solidly move forward into developing their business model and business case to unlock investment.

Happy Ending!

Once the team came together on Clarity Way and shared what they knew and what they assumed, they immediately recognized that the appeal of their offering was predicated on three major hypotheses. They did a fast round of customer research and validated two of those mission-critical assumptions. One assumption however, related to how desirable their offer would be to customers, was way off. With egos aside and a quick pivot, they corrected their thinking and modified their offering substantially. Doing so called for a totally different business model than would have been developed had they not made the commitment to do first things first. The team got the investment they sought and solid support from the CEO.

Life and business requires enough ambiguity, and we definitely need skills to navigate through it. But don’t let passive ambiguity be an excuse for not diving in and doing what needs to be done. Please get clear on your offering and why customers want it and will pay for it. Then and only then should you work on your business model so you can really get it right.

First things first!

 

The Better MVP: Why “Minimum Viable Products” Are Dead

The basic idea of a “minimum viable product” – popularized by Eric Ries and the Lean Startup movement – is good: Create just enough to validate that what you’re making meets a customer need. And it’s led to many hugely successful companies, like Dropbox and Zappos (more here by Vladimir Blagojevic).
mvp_2
The problem we’ve seen is that “minimum viable product” can also lead to a product-centric mindset in which value to the customer takes a back seat to minimizing features. The dominant thinking is how little can we put in this product to be viable.

What’s the alternative? The intersection of “minimum viable product” and a different MVP we call “maximum value product” (others call it that too, like in this solid prezo by from Liquid Reality’s CEO Adam Smith).

“Maximum valuable product” is not about how many features you can pack into a new product. It is about how well can you solve whatever problem you’re addressing. That’s how you maximize value. The dominant thinking is not about how little, but how much; specifically how much of that particular problem you can solve for the customer.

The order and integration of the MVPs is critical. Here’s the 5 step sequence we recommend:

1) Maximum value: Start with the “maximum value product” perspective. Identify how much you value you can provide customers on a particular problem. Specify in details what aspects of the problem you’re solving, what benefit is created, and how important each is to customers.

2) Value validation: Validate with customers the meaningfulness of the problem you’re solving and have them rank order the importance of the benefits your product can provide.

3) Features: Make a list of what technology or features are needed for customers to experience each benefit and its value. Be sure to include low tech and high tech possibilities. Align features with the ranked benefits.

4) Minimum viability: Now bring in the Minimum Viable Product approach to decide what it will take to provide the required  features. Start with the features needed to deliver the most highly ranked benefit, then continue down the list. Think about trade-offs like this:

Option A: Do a good job at providing for the most important benefit, so that you’ll have enough resources to also provide for the second most important benefit.

Option B: Do a great job at providing for the most important benefit. Pour all your resources into that, and come back to the second most important benefit later.

5) Viability validation: Use lean and agile research techniques to get customer feedback on option A vs. Option B. Now you’re ready to take something to early adopters that has the optimal balance of providing value to customers and being viable to make.

Please share your experience with MVP vs. MVP!