RamaOnHealthcare July 26, 2021

We are not sponsored to interview leading thought and action leaders in our industry. The purpose of these written format interviews is to bring action-oriented ideas and inspiration to an industry that is attempting to meet the needs of its customers.

The Truth about Corporate Entrepreneurship and Innovation Theater

Innovation Leader is an unbiased, independent media and events company focused on helping change-makers in large organizations deliver real impact.

Why Scott Kirsner? Scott has been supporting and documenting corporate innovators for more years than some have engaged in innovation. I wanted to gather his honest impression of how healthcare innovators differ or can learn from others outside of the field.

Mohan Nair, CEO of Emerge Inc.

Mohan Nair, CEO of Emerge Inc.

Scott Kirsner, CEO and Co-Founder of Innovation Leader

Scott Kirsner, CEO and Co-Founder of Innovation Leader

Mohan: Welcome to RamaOnHealthcare, Scott. Let’s get right to the deeper issues of innovation within healthcare. I’m very aware that your client list of engaged innovators is wide and rather strong. But what I want to know is, are there differences between healthcare innovators and the rest of the leaders?

Scott: Healthcare is such a broad term, as you know. Are we talking about hospitals, where you’ve got lots of smart and highly-trained people, but often a culture focused on safety, no mistakes, and avoiding lawsuits? Or a digital healthcare startup bringing a first product to market, where they won’t survive if it’s not differentiated and useful?

I guess what I’d say is that healthcare leaders are different in that they tend to be extremely well-educated, aware of the regulatory constraints, and driven by a mission to help people live better and longer. But the contexts and corporate cultures in which they work can sometimes stifle innovation. Sometimes, the more highly-educated people you have in a room, they just have more elaborate and well-footnoted reasons for not trying new things.

Sometimes, the more highly-educated people you have in a room, they just have more elaborate and well-footnoted reasons for not trying new things.

Mohan: In the years that you have documented and engaged innovators, you are one yourself, what are the common refrains with corporate innovation endeavors?

Scott: The biggest problem with corporate innovation endeavors is that they’re new, and they’re often seen as the flavor-of-the-month. C-level executives say they’re important, but people aren’t incentivized to participate, there aren’t significant rewards, and it’s hard to get people’s attention. Attention is just one of the scarcest things in a big organization with lots of emails and meetings and busy people — you have to be creative about getting it.

Mohan: What are the solutions?

Scott: It’s kind of a paradox, but for corporate innovation endeavors to be effective, and deliver real results across lots of departments, they need to grow old. People need to assume they’re not going away. This is a powerful muscle, an important capability we’ve built in our organization, and we’re not going to kill it tomorrow.

It’s kind of a paradox, but for corporate innovation endeavors to be effective, and deliver real results across lots of departments, they need to grow old. People need to assume they’re not going away.

Mohan: Frankly, I wonder why corporations want innovation, but they sometimes are unclear of what they want and almost set things up for failure with “I will know it when I see it” approach. Do you see this often?

Scott: Absolutely. If you define innovation as “something new that creates tangible value,” that could be anything. Do you want programs that make employees happier, and less likely to leave? New medical devices? Ways to save costs in your supply chain? You can’t wave a wand and say that you want innovation to happen everywhere. It’s usually better to start with a focused set of experiments, which need to have defined supporters in your organization who are committed to funding them and rolling them out if they provide that tangible value.

I think that’s where healthcare innovators have a real advantage: they understand the scientific method, running trials with control groups. That can definitely apply to more business-oriented innovation efforts.

Mohan: We live in Healthcare protecting risks more than taking risks. Founded on protecting health we have found ourselves in a risk-averse approach asking the unanswerable questions early enough to destroy innovative risk taking. With your observance of other industries, guide us to reconsider or reinforce this.

Scott: I think obviously the core part of healthcare is working to improve the patient’s health. And you could certainly focus just on innovations that demonstrably deliver better health outcomes. But you probably need senior leaders advocating for other outcomes: how do you make the digital experience simpler and more pleasant, if you’re a patient changing an appointment time? How do you make the in-person experience of healthcare delivery calmer and less stressful? How do you create new incentives for participating in clinical trials? I don’t think all those things can be front-line efforts, where you have some innovation commando in the organization trying to hack their way through the jungle and make something happen. Organizations that can move past the paralysis of risk-aversion have senior leaders who consistently are watching for those outcomes, supporting people pursuing them, mentoring those people, monitoring their results with quantitative and qualitative measures — and giving them more resources when it makes sense. Most importantly, they celebrate them when successful ideas make it “to market,” or to broader deployment.

Mohan: I bet when you observe innovation programs you wonder why it’s a program and not a culture transformation? How do you know the difference?

Scott: I think it’s the number of people who are involved and rooting for a win. If you have two people, it’s a program. If you have 200 people, it’s on the way to being a culture transformation.

Mohan: Have you witnessed Innovation theater where it seems show more than know? Does it work? Is it necessary?

Scott: I think if you’re going to do innovation theater — create events and happenings that get people excited about innovation — make sure it’s “Hamilton” and not “Carrie” (a musical based on the Stephen King horror novel that closed in less than a week). Do something really high-profile and good, and make sure you’ve set up a pathway for what happens after that. I don’t think you can do a big event once a year and expect that’s going to change the culture. How are you building a network of people internally who talk and ideate and collaborate between your “Innovation Festival” that happens once a year? What kind of resources and executive mentorship do you give them? I’m not anti-innovation theater, because as we’ve said, you need to get people’s attention sometimes, and take them out of the daily routine. It can be an opportunity to bring in outside experts, or respected industry leaders, to look at ideas your people have been cultivating. But theater can’t be the only thing, and sometimes putting on a great show consumes a lot of time and money.

I think if you’re going to do innovation theater — create events and happenings that get people excited about innovation — make sure it’s “Hamilton” and not “Carrie” (a musical based on the Stephen King horror novel that closed in less than a week).

Mohan: When innovation experts gather, what are 5 concerns they express and what solutions have been offered?

Scott:

1. Have senior leaders defined what they mean when they say “innovation”?
2. Do employees and managers understand how they can be involved, and what the incentives are for helping?
3. Is there a way to get input from customers/users early in the process?
4. Are there mechanisms for rolling out or scaling what works — rather than having it languish in “project-land”?
5. Are there metrics to know if you’re succeeding, and ways to communicate the wins broadly in the organization?

Most of those have clear solutions. Try to draft a definition of what innovation is supposed to deliver that sounds specific, not like a vague mission statement. Explain to people how they can get involved. Bring customers in, or go to them to understand how they respond or would use your idea.

Mohan: Have you classified the different corporate innovation approaches or have you found a form of maturity model where corporations that begin have deployed?

Scott: I like to over-simplify things, and so I think you could say there are two approaches: there’s process-oriented innovation, which looks for ways to save money and make things more efficient, often by bringing in new technology, and that is sometimes called “transformation”; and then there’s the development of new products, services, experiences, and business models. Those approaches can be driven from two directions: top down, from the C-suite, or bottom-up, from the grassroots. (For some reason, they don’t often seem to be led by middle management.) I think if you can get some drive and power from both of those directions, you’ve increased your odds of success.

We’ve done some work around maturity models. We created a map of five stages of innovation maturity with the visualization firm XPLANE (free for anyone), which was really designed to foster discussion about how far along you are, and also a short assessment of maturity level (for Innovation Leader members).

Mohan: You have documented a substantial set of industries that have taken the innovation agenda. What are the 5 considerations you insist should be in their list to begin?

Scott: Who in the C-suite owns this and is committed to making it successful? Have we gotten our board to agree that this is an important commitment, and worth investing in? Is this a one-year project, three-year, five-year, or forever (i.e., how long are you willing to give this new initiative before it needs to start showing ROI?) How are we going to communicate this in a way that generates support rather than skepticism or negativism? How will we reward people who deliver wins?

I think there are a lot of others, like defining what kind of innovation you are looking for — but we touched on that earlier.

Mohan: What is your view of healthcare corporate innovation agendas so far. Some are investing; others forming accelerators and incubators; some create their own IP and startups; others innovate in the core business via R&D?

Scott: In some sectors of healthcare, like big pharma companies, I think you see some pretty sophisticated agendas, where they are good at tracking startups that are relevant to their strategies and therapeutic areas of interest. They may make an investment through their corporate venture capital arm to get a bit of upside, or they may partner on research programs in return for some eventual distribution rights. In other areas, like payors, you see a lot of innovation teams that don’t seem to have yet had that much impact on the standard operating procedures — there is still lots of duplicative paperwork, inadequate digital access to records, wait time on the phone. I wonder what the expectation is there — maybe, we’ll find ways to innovate around that stuff because it’s way too complicated to change? There are disruptive startups that want to figure out how to do things better, within the existing regulatory infrastructure, and they have a very different sense of pace. They want change to happen in a couple years, not a couple decades.

Like most industries, innovation in healthcare, even if the agenda makes sense, tends to be under-staffed. When we did a survey with KPMG in 2019, we found that 54 percent of healthcare respondents had a team of fewer than 10 people working on innovation full-time. It’s a little better in pharmaceuticals, where about 36 percent had a team of fewer than 10, but 27 percent had 100 or more people.

Like most industries, innovation in healthcare, even if the agenda makes sense, tends to be under-staffed.

Mohan: What have you yet to see and document in the innovation space that you think is needed?

Scott: If you want true intrapreneurship and risk-taking, you need to think about giving some significant financial upside to people who deliver big results. That happens in the startup world, but I think most companies want the results without giving people major upside potential. I think if you develop a project that delivers the company $10 million in savings, giving that person a $1 million bonus or stock grant sends a pretty big message that you value what they did, and want others to do something similar. But I think most companies give that person a pat on the head, and a lucite desk sculpture, and they say, “What’s your next great idea?”

Mohan: Healthcare is complex but many use that as an excuse to justify inertia. Who do you think or what ideas do you think Healthcare can learn from, in terms of corporate innovation endeavors? What are the learnings?

Scott: I think it’s important to have role models you look at in other industries, and that help you get people aligned around the idea that expectations are changing, even in healthcare. Looking at how Tesla sells a car or how Apple creates a sign-up experience online can be really instructive – should we rethink our tech stack if it prevents us from doing something remotely similar? Who has created useful Amazon Alexa skills in healthcare that might help our senior leadership understand the value of doing something similar? If we took a Starbucks drive-through approach to healthcare delivery — what might that look like? It sounds like a joke, but when I got a COVID test last year in a hospital parking lot, I started thinking, “I bet there are at least 10 services other than COVID testing that they could deliver through my driver’s side window.” Now, is a hospital going to pursue that idea? A startup? CVS or Walgreens?

Mohan: Not every company has the talent and the will to make innovation their prime transformation catalyst. But many have made that choice. What separates the winners from the non-winners?

Scott: Commitment over time. Patience. This is building organizational muscle over the long-term, not showing up at the gym for the first week in January with your new gym clothes, and then giving up when you don’t look like Arnold Schwarzenegger on Day 8.

Commitment over time. Patience. This is building organizational muscle over the long-term, not showing up at the gym for the first week in January with your new gym clothes, and then giving up when you don’t look like Arnold Schwarzenegger on Day 8.

Mohan: Scott, I knew that your impressions are grounded in the distance you have travelled in understanding the field of corporate innovation beyond many others. I hope that these questions help you frame your views as well but most, I hope the readers can gather a perspective that is not found in the common literature. Further, many CEOs are attempting to define their voice in corporate innovation and transformation and there is much noise and less signal in the stuff we all read. Hopefully this is more signal than noise for them. Thank you for being an advocate for innovation.

About Scott Kirsner

Scott Kirsner, who serves as CEO and Editor-in-Chief of Innovation Leader, spent nearly two decades as a business journalist and contributing editor at the Boston Globe, Wired Magazine, Fast Company, Variety, The Hollywood Reporter, The New York Times, BusinessWeek, and other mainstream media outlets. He was also an early team member at the Boston Globe’s digital publishing division, helping to launch Boston.com. His focus on how innovations that matter get introduced to the world has taken him to the White House, the Sundance Film Festival, the United Nations, and the innovation labs of Google, Walt Disney, General Motors, and many other companies.

Kirsner is the author of several books on innovation and technology, including a highly-acclaimed collaboration with George Lucas, “Inventing the Movies,” which explored the challenge of bringing new ideas to a century-old, change-resistant industry: Hollywood.

About Mohan Nair

Mohan is CEO of Emerge Inc, about all things business transformation. He is a 3-time corporate executive, 3-time emerging business executive, 10-year Innovation Officer and 3-time author.

 
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