RamaOnHealthcare July 8, 2019

RamaOnHealthcare provides rich, curated content on emerging areas of transformation across the healthcare industry. To complement these “need to know” reports, Inside Innovation brings you the essential insights behind these developments from those driving change within the industry. Through these focused exchanges with proven thought leaders, gain practical insights and models to drive your organization’s path forward.

We start this series with an interview with Mohan Nair, SVP and Chief Innovation Officer at Cambia Health Solutions. Mohan has served in this role for more than eight years- twice the average tenure for the position reported by Innovation Leader. During this time, Mohan and his innovation team have designed and built five companies inspired by employee ideas and established a cutting-edge culture where 85% of employees believe that Cambia encourages innovation. Mohan speaks of values-based innovation, his philosophy that has transformed the way corporate innovation is enabled above the benchmark.

Q: For leaders beginning their innovation journey, conversations often quickly turn to demonstrating ROI. What advice would you have for leaders facing these pressures?

Innovation activities have a series of near term and end outcomes. In the short term, you may have some runway to show how you are changing people’s hearts and minds, engaging them, and inspiring them to be innovative. But it is a rare organization that is not expecting you ultimately to impact revenue or cost savings.

If your innovation team is a revenue-generator or a cost-saver, rather than a cost center, you face an easier road ahead. When we began, we didn’t look for disruptive solutions to implement. Instead, we found a few multi-million dollar incremental improvements that gave us credibility for bigger projects.

Usually you will need to spend a year or more to develop the innovation engines necessary to generate the insights, products, and technology necessary for truly transformative solutions. In the meantime, it’s important to have significant, albeit smaller, successes to which you can point. Consider tools to accelerate your sales team, for example, where you could generate substantial revenue. These business champions and partners will also help you uncover opportunities where you can rapidly succeed. And when you succeed, highlight those business partners so that others engage with you.

The orientation towards ROI also suggests innovation is being managed using the systems of the traditional business. Most innovation efforts are objective- and revenue-based. This is reasonable, but limiting. Our approach is different. We aim for greater impact by starting with a cause – a purpose larger than the organization’s objectives. Our values reflect this cause. Hence, innovation is a value. Innovation as a value strikes deep chords for our employees and for my team. Striving to achieve a cause greater than ourselves creates passion for change that is unparalleled in the corporate world. We can help employees with the mechanics of developing and pitching their ideas, but our true goal is to gain their commitment in helping our customers reach their best self.

If we cannot invoke that passion with a purpose within our own walls, we cannot hope to activate this within individuals and families in the communities we serve. Passion with a purpose is really the key to our program. Once that passion is awakened, we have created readiness to truly evaluate and explore opportunities and to take time to find ways to address them. Healthy minded employees enable healthy communities.

Q: What lessons have you gained through driving innovation at Cambia?

Conventional wisdom has always been to put a spotlight on your entrepreneurs as icons of innovation. As you shine a light on employees driving transformative solutions, you can eliminate barriers and normalize innovation activity for the rest.

But more than the greed of recognition, we acknowledge their contribution to an idea(s). Many judge us on how we implement ideas. That is important. But more is the validation employees get by being heard when they have an idea. This launches a culture of innovation.

We use a number of formats to exercise this principle – from Pitch Days to incubating leaders within our team. We seek to highlight at every turn the narrative arc of employees who came to us with an idea that turned into a disruptive company or product as the hero’s journey.

But in promoting exclusively a single leader’s efforts to create something transformational, we miss opportunities to amplify those pursuing and acting on innovation opportunities within their everyday jobs – arguably a more attainable goal for the majority of employees. By focusing on single entrepreneurs, we actually miss some opportunities to democratize innovation. This is one of many paradoxes in formulating an innovation culture. How will you balance star making with culture enablement? Startups that power innovation from the outside versus employees that power from the inside? Is the approach to innovation “wrong until right” or “right the first time”? Does the culture favor consistency and optimization or chaos and redundancy? Is your bias towards discovering and dominating new markets or feeding existing markets? These are all principles that inform innovation.

Q: Prior to starting your role as Chief Innovation Officer, you spent a lot of research and consulting on business transformation. How can individuals in highly regulated industries such as healthcare approach transforming their businesses?

A: My research and experience suggest that the idea of transformation is slightly different than the idea of disruption. Disruptive innovation is an extension of Clayton Christenson’s model where you introduce a lower cost, minimally featured solution that has enough value to attract an audience, then raise the price and value as you begin to capture market share. In healthcare, people want more for less -but we don’t see early adopters for these solutions. My model is transformation – observing customers as their values drive their value proposition to change.

The healthcare system has not yet met the values of consumers, let alone the value propositions of consumers. Perhaps in the early years it did, but as the industry has evolved people’s values are not being aligned with the health care systems approach.

Understanding what values-based innovation is and what value-based propositions mean are essentials for bringing humanity back to healthcare. As these values are recognized and evolve, being able to migrate with the consumer transformation is what transformative innovation is – not necessarily what disruptive innovation is.

The companies we’ve created are based on this model, such as MedSavvy. Consumers are inundated with advertising from drug manufactures on how their lifestyle will be transformed. But what does the academic research show about the drug’s efficacy? What are consumers experiences with side effects? So we created a company that came from an idea from an employee to grade drugs with an A, B, C and D to show the level of efficacy based on scientific research. There has been so much focus on disease management – MedSavvy provides choice management for the consumer.

Q: Can innovation take the current health care system to the desired outcome?

A: No. Innovation is not the end and not even the mean to an end. Innovation is an instrument of transformation. It must have an edge and it must challenge yet allow for the consumers to see themselves in the solution.

We are too often paternalistic in our designs to either do it to consumers or hiding the complexity from consumers. Both do not allow for consumers to find their signature identity within the healthcare system.

Anyone who calls themselves experts or has a desired design for our healthcare system is blessed with ignorance or delusion. The other of us are building a new ecosystem and offering it to consumer to co-create their desired state about trying to make the system economically sustainable and person/family forward.

Mohan Nair is senior vice president and chief innovation officer of Cambia Health Solutions. He has been in this role for nine years with prior experience as executive vice president, chief marketing executive for Regence BlueCross BlueSheild. His most recent of three books is Strategic Business Transformation: The 7 Deadly Sins to Avoid (Wiley & Sons). Cambia’s philosophy of innovation is expressed here.

Topics: Health System / Hospital, Healthcare System, Insurance, Interview / Q&A, Investments, Payer, Provider, Technology, Trends
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