I’m sad to say it’s our last day in New Orleans (one of my four favorite cities in the world) and we just wrapped our 2013 OPEN MINDS Planning and Innovation Institute. I learned a lot and walked away with three big takeaways:
I don’t think that the integrated service delivery models that many behavioral health organizations are creating can succeed with the current “adaptive” approach to development.
For the greatest likelihood of success in this very disruptive market, autonomous service line development models (rather than adaptive development) is likely the best choice.
Constant concurrent service line development is likely the “new normal” for the health and human service field.
Sound like Greek? Let me explain.
The first point was a big “aha” moment for me – a result of the great opening keynote presentation by Dr. Dennis Freeman of Cherokee Health System, From Concept To Sustainability – Making Integration Work . The big takeaway – the mental health organizations that want to become integrated primary care/behavioral health programs can’t just “append” primary care to their operations. Rather, they need a transformation in both focus and model to become behaviorally-focused primary care operations.
Which leads to my second point – autonomous innovation versus adaptive service line development. Is it a better choice to “adapt” your current services to the new market – by adding new technologies or capabilities? Or is it better to start the innovation process from scratch – with that blank slate – and develop a new service? The findings in the business literature are weighted heavily toward a separate innovation process being the best bet – based on the assumption that the management of a “going concern can’t let go of their existing model enough to succeed.
Think of it as making a sandwich versus baking a cake. A sandwich starts with the basics – but can be greatly changed by making a few additions. The ingredients remain separate, but the total experience can be different. Baking a cake is a different process – the ingredients that go into the cake are transformed by the development process into something completely united and no longer separate. (Many thanks to Dr. Bern Health, the Chief Executive Officer of Axis Health System for this great analogy.)
Finally, constant concurrent service line development? What gives? I think what we can all agree on is the landscape has big changes on the way – and that this period of churn will last at least four or five years. The effects of Medicaid expansion, the managed care programs that pick up the most market share, the introduction of health insurance exchanges, the ACOs that make it and those that don’t…not to mention the avalanche of new technologies. In this turbulent market, your “competitive advantage” (see ‘By The Numbers’ Competitive Advantage all members and The Performance Measures That Matter: Keys To Competitive Advantage In A Market Focused On A Cost Curve) will change with the market and change frequently. This phenomenon, referred to as transient competitive advantage by Rita Gunther McGrath in her great article in the Harvard Business Review, Transient Advantage, is characterized by short service life cycles – with an advantage going to organizations that can design, launch, and terminate services in short order.
In this new normal, here are a few keys to success:
1. Fall in love with the problem you are trying to solve, not your solution. Too many health and human service organizations are invested in their specific program – which limits their creativity in designing new solutions that meet the needs of consumers better and for less.
2. Get better with metrics and use them faster to make decisions. If you haven’t got your systems set up to provide you with meaningful management data, you are already a decade behind. In a market with short product lifecycles and continuous development, the metrics are like breathing. All the time, every day.
3. Learn healthy disengagement. Plan, now, for the end of your programs. Nothing lasts forever in health and human services – tuberculosis sanitariums, bloodletting, lobotomies, and trepanation all came to end. What are the factors – profitability, quality, etc. – that would lead to the decision to discontinue that service? Plan accordingly and have a graceful exit.
4. Get systematic about innovation and new service development. There really are “best practices” for this – and it’s important to have a system in place (see A Structured Process for New Service Line Development and Adding A New Service Line: A Disciplined Planning Process Is Key To Success).
5. Embrace the need for speed. Speed in decision making and speed in execution. Speed is a competitive advantage in a market with a shifting landscape and short product life cycles.
Along with strategies to link to payers, decisions about new service line development are the most fundamental in your organization’s strategic plan. What new services and how to develop new services are the tough but crucial positioning and investment decisions. For more on these issues, check out my closing presentation, Adapt & Innovate To Succeed —Strategy Considerations For Success In Turbulent Market . And, don’t forget the advice of Michael Porter – “The essence of strategy is choosing what not to do.”
For another free resource, see: The Tricky Path From Strategy To New Service all members