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:
- What change in the market can make my products or services irrelevant, obsolete, or undesirable?
- What technological innovation can make my products or services irrelevant, obsolete, or undesirable?
- What shift in consumer behavior can make my products or services irrelevant, obsolete, or undesirable?
- What policy or regulation can make my products or services irrelevant, obsolete, or undesirable?
- 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?
- 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.
- 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.
- 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!