Today was the final day of the 2015 OPEN MINDS Strategy & Innovation Institute in New Orleans – and after three days with executives from across the country, I walked away with new market insights. I summarized some of these insights in my closing plenary session (see Taking Strategy & Innovation From Concept To Reality). My five big take-ways?
- Reimbursement for most provider organizations is going to shift to some risk-based model across all payers – commercial, Medicare, and Medicaid.
- The large retail chains – CVS, Walgreens, Wal-Mart, CostCo – have set their sights on Medicaid provider status.
- The new service lines that are emerging as market opportunities all involve some degree of longitudinal responsibility for consumers via “care management” – medical homes, crisis diversion, corrections reentry, etc.
- Whether for treatment services or care management services, organizations need to leverage technology to maintain a competitive “value equation” in terms of cost vs. quality.
- Health plans are using increasingly sophisticated evaluation and implementation methods for vetting proposed new programs and services.
None of these are surprising – but each is a development with big consequences across all stakeholders. And the issue for executives in health and human services is how they should operationalize the strategies that they develop from this market intelligence. This is where I think organizations not only need to update their business model, but also their leadership model as well. The traditional approaches to leadership in the field have been largely transactional and not designed to lead innovation. This is due to the seismic shift in the market environment – from highly regulated to highly competitive, in a short period of time.
To move their organizations forward, successful leadership models need to address the speed of change in terms of organizational positioning relative to the competition – and along with that, develop a model for rapid cycle innovation. We’ve written about the need for speed before (see From Innovation To Action: Why Structured & Rapid Service Line Development Is A Critical New Competency). And our team has developed models for speeding the vetting and implementation of new services (see Pruning The Idea Tree and Thinking New Service? You Need 2 Tools).
But one persistent question for health and human service organizations, particularly non-profit organizations, is how to structure new service line development and business development activities. And, how to fund, manage, and lead those functions. In the previous market environment, these weren’t typical organizational functions – but now they are essential.
To do this, leaders need to understand and address the process of monetizing core competencies as services in a new market. From idea to innovation to sustainable business, the process of developing sustainable new business entities needs to be at the core of both management structure and leadership models.