When I ask the question, “Is your organization innovative?” it is rare for an executive to answer “no.” But all of my strategy work with executive teams of health and human service organizations provides a different perspective.
I like to start by using the practical definition of innovation — “Executing an idea which addresses a specific challenge and achieves value for both the organization and customer” — as the litmus test for determining just how innovative an organization actually is (see What is innovation? 15 experts share their innovation definition, by Nick Skillicorn). In his research, Mr. Skillicorn found that meaningful business innovation involves:
- Having an idea: Clearly, the place to start is with the concept. Where is there a need within your market, and what can your organization do to address that need? Then, think outside of your usual business model – consider new populations, new services, new geographic areas to serve, the needs of new payers that you haven’t worked with before. Your executive team should foster a culture of innovation at all levels of the organization – you never know where the next great idea can come from.
- Executing the idea: Going from idea to concept is where the real challenge lies. From all the ideas for new programs and expanded services, your executive team should be able to decide which ideas are best and then develop a plan for implementation. This means considering which plans align with your mission and strategic goals, building a comprehensive budget and operations plan, and developing a realistic timeline for implementation with a designated team to executive the plan.
- Addressing a real challenge: Innovation can’t exist in a vacuum. You need to have a clear understanding of the market trends that are influencing your organization, an understanding of what your payers and consumers need, and what your internal operational issues are. Innovation for the sake of innovation itself isn’t useful – your goal should be to make innovation part of your strategy for sustainability and market success.
- Adding value to the organization: Innovation is, by definition, developing something with commercial value – and that is exactly what many organizations need in order to keep their current customers and gain market share. There is no point to implementing a new idea if it doesn’t improve your organization’s strategic position and long-term sustainability in the market.
- Adding value to the customer: Customers mean both your payers and your consumers. Your plans for strategic growth need to align with what they value in the market. You may have a brilliant idea that would improve the prestige of your organization, but if payers are looking for a different arrangement, your idea won’t be successful in the long-term.
This operational definition provides context for evaluating the ability of your organization to innovate. As we’ve been preparing for The 2016 OPEN MINDS Strategy & Innovation Institute, I have been having many discussions about the challenges of innovation with my colleague, Joseph Naughton-Travers, senior associate at OPEN MINDS and the chair of the institute. He noted that one of the challenges to successful innovation is differentiating between “macro” level national trends and the opportunities specific to local market environments:
The health and human service market is being driven by a lot of national trends that we’re all familiar with in concept – new technologies, from electronic health records (EHRs) to online treatment; the move to serve more complex, high-cost consumers through different comprehensive care management models; integration with primary care; and the move to value-based contracting and away from fee-for-service. But in individual states and sometimes, even in individual counties, there are other things going on – sometimes moving faster or slower in terms of the national trends. One of the challenges for provider organizations is to figure out where their organization fits in the big picture to make sure they don’t get left behind, while also keeping an eye on their local market and positioning themselves against the local competition.
But even if an executive team successfully identifies the right new innovation to take to market — one that addresses a challenge and adds value to both their organization and to their customers — the process of executing that idea can be problematic. Taking the innovation from concept to sustainable service line requires a culture of innovation within their own organization. He noted:
Many organizations are risk-adverse, but being open to the concept of innovation requires that we spend time and money trying new ideas. The reality is that not all of the ideas are going to work out, not everything is going to be successful or accepted in the marketplace as we were hoping. In a turbulent marketplace where things are changing so much, provider organizations need to build innovation into their budgets – not just their monetary budget, but also their management energy budget.
To talk more about innovation, join us in New Orleans June 8-9, 2016 for The 2016 OPEN MINDS Strategy & Innovation Institute, where Joe will lead the plenary session, What Are The Challenges To Innovation In Serving Complex Consumers? A Town Hall Discussion On Overcoming The Barriers To Change. This discussion session will feature Kenneth R. Weingardt, Ph.D., Scientific Director, Center for Behavioral Intervention Technologies & Professor, Northwestern University; Peter O’Neill, Associate Director of Reimbursement and Health Policy, Neuronetics, Inc.; and Bruce C. Nisbet, LMSW, DFNAP, President & CEO, Spectrum Human Services & Health Home Partners of WNY, LLC.