GUEST POST from Arlen Meyers

If you work for a big, established company, you’ve probably been noticing the sudden rise of a new trend: the innovation lab. Companies as diverse as Delta Air Lines, Target, Google, Pfizer, Marriott, Autodesk, Fidelity Investments, Ford, Verizon, and Stanley Black & Decker are jumping on the bandwagon.

As discussed on this site recently, open innovation labs like this bring The Garage Experience inside the four walls of the corporate business environment – freely available for everyone to use and experience.

The new thing in sick care administration is to create healthcare innovation centers, modeled somewhat after other industry R/D and skunk works. Their goal, ostensibly, is to innovate our way out of the sick care mess. They focus mostly on quality, cost, process improvement, patient experience, sometimes doctor experience and access to care and range in size, scope and vision. A recent review identified 50 hospital innovation centers. Steve Blank calls it innovation theater.

Now,even the AMA is in the game and has anted-up $15M.

As you would expect, there are now conferences, webinars and white papers about health innovation centers, best practices and their impact to date. Accelerators are changing to accommodate the realities of the sickcare industry.

Sick care (over 90% of the US “healthcare” spend is for taking care of sick people) innovation center leaders and participants will need to address some issues to be effective and deliver impact:

1. The last mile. All the systems engineering in the world won’t make a difference until we crack the code on how to change human behavior.

2. The rules. Most will have relatively limited impact until and unless the reimbursement rules substantially change. Rules drive ecosystems that create business models that deploy and scale innovation. Right now innovation centers are trying to use new tactics but can only deploy limited innovation strategies without a new playing field. They are living in the no man’s land between the now and the new.

3. Systems thinking overcoming silos. Healthcare is notoriously siloed at almost every level, from department to department to one sick care system to the next.

4. Patient willingness and ability to engage. The assumption is that more patient “engagement” will be mean better outcomes. That needs to be validated and we need to do a better job of targeted patient segments who want to take responsibility for their care and assume the consequences for the results.

5. Shifting value factors. Medical care is becoming commoditized. Patients can’t judge quality and cost since they are so opaque so they use service, speed, convenience and experience as proxies. There is relatively little correlation between satisfied patients and the quality of care they receive.

6. Data integration and interoperability. Resolving the protect but share dictum will be challenging.

7. Measuring and defining innovation. Big orbit change is necessary, not incrementalism. Innovation is a measure of the multiple of user defined value that results when compared to the existing competitive offering.

8. Lead innovators, don’t manage innovation. We need leaderpreneurs and followers with an entrepreneurial mindset willing to fail at low cost.

9. Innovation management systems. There are many ways to foster, package, test, validate, prioritize and deploy components of an R/D portfolio. The process needs to efficient, effective and transparent to the users .

10. Execution. Inspiration and perspiration. In the end, no idea, invention, discovery, or process is worth much without a team who can execute or deploy it.

11. Long sales cycles prolonged processes of decision making.

12. Different business models to develop digital health and process improvement products

13.Overcoming the main barriers to physician adoption: a)evidence based safety and effectiveness, b) concerns about liability, c)getting paid to do whatever you propose that d) will not interfere with workflow, take more time and further abbreviate face time with patients.

Healthcare innovation centers seem to have a different focus than community based entrepreneurship centers. Yet, they should both be focused on the same thing: transfering value to patients. Physician centered value centers should have the following features:

1. Focus on creating value transfer to patients, not startups

2. Create a separate value proposition for the different kinds of physician entrepreneurs: private practitioners, technopreneurs, intrapreneurs, investors, consultants.

3 Include rapid prototyping facilities

4. Integrate non-MDs from other industries to create a larger, more eclectic community of interest

5. Include patients and others who might help with the customer discovery and development process

6. Include human subjects trial support

7. Accomodate the schedules of practicing clinicians

8. Use state of the art teaching technologies

9. Have an active and effective mentoring process

10. Create a business model that doctors will buy

A recent study (https://drive.google.com/file/d/0B-8B3esUO0PBZklabGhoUl9BaFE/view) provides details for the 10 top success factors for hospital innovation:

1.      Use a clear step-by-step innovation method

2.      Establish an Advisory Group to guide innovation concepts and proposals

3.      Focus on consumer needs, rather than technologies to direct the innovation

4.      Generate Big ideas by focusing on core outcomes, not the symptoms

5.      Minimize early funding by focusing on a minimal viable product

6.      Support projects with innovation experts (design, engineering, business)

7.      Utilize an iterative prototyping to quickly build and test the best product

8.      Nurture publicity and storytelling to raise visibility, excitement and funding

9.      Include industry experts/ vendors/ investors to support commercialization

10.  Develop power users to give hands-on training and coaching for innovations to build key behaviors and practical experience

“What is the source of this hostility to innovation?”, “Is the under-performance in innovation episodic or systemic?” and, “What is causing this value-destroying gap between stated intent and actual reality?” Reasons include a relentless focus on the now, instead of the next and the new, cultural resistance to change, failure to embrace open innovation and rules and regulations that make if hard to kill fee for service medicine.

In fact, like many industry innovation centers, my observation is that few sickcare innovation centers are creating much high value impact and should be closed, particularly if they are just high priced, high tech suggestion boxes.

In addition, the establishment of university-affiliated incubators is often followed by a reduction in the quality of university innovations.

Like most corporate behemoths, BIG MEDICINE has a hard time innovating and it can’t be done from inside. That’s part of the reason doctors have been disintermediated and marginalized from the value creation process.

Sick care innovation centers might be a fad or an important tool for fixing what’s broken. We’ll have to see. In the meantime, enjoy yourself at all those conferences.

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GUEST POST from Arlen Meyers

My back of the envelope observation is that about 1% of doctors, engineers and scientists have an entrepreneurial mindset and the 6 habits that define it, as described by Narang and Devaiah, in their book, “Orbit Shifting Innovation”:

1. Personal growth relates to the size of the challenge, not the size of the kingdom. What motivates real innovators is the more exciting challenge, not the number of people reporting to them. The “size of the difference” they will make is more inspiring than the “size of the business.” They relish getting out of their comfort zone, and into the unknown.

2. The new direction is the challenge, not the destination. The challenge is the transformation vehicle for true innovators, and not a performance goal. They focus on legacy creation, not legacy protection. They ignore failures and are constantly looking at the progress made. They treat innovations reviews like performance reviews.

3. Be an attacker of forces holding people back, not a defender. Real innovators start by questioning the world order rather than conforming to it. They begin by confronting the forces holding everyone back, rather than living with it. The forces include mindset gravity, organization gravity, industry gravity, country gravity, and cultural gravity. You need to be able to turn no to yes.

4. New insights come from a quest for questions, not a quest for answers. This discovery mindset searching for new questions drives real innovators away from more of the same. They fundamentally become value seekers; they look for value in every experience, in every conversation. They don’t seek prescriptions, they seek possibilities.

5. Stakeholders must be connected into the new reality, not convinced. True innovators tip stakeholders into adopting and even co-owning the orbit-shifting idea. They go about tipping the heart first, assuming the mind will follow. They seek smart people, who openly express their doubts, and then collaborate to overcome them.

6. Work from the challenge backward, rather than capability forward. Overcoming execution obstacles is combating dilution, not compromising, for these innovators. Their mindset is not “if-then” but “how and how else?” They convert problems to opportunities, and often the original idea grows far bigger than the starting promise

An idea is not an invention or an innovation. An idea is a thought that never sees the light of day. An invention is an idea reduced to practice. An innovation is something new or something old done in a new way that adds a substantial user defined multiple of value, at least 10x,  when compared to existing offerings or the status quo. Less than that is just an improvement. Disruptive innovation is something that makes an existing product more accessible and affordable, like sick care services.

What is a “mindset”? Experts vary, but, fundamentally, is it how and why we think about things the way we do and how we interpret the world. We use mental models, that, unlike most personality traits, are malleable, not fixed, and that drive our emotions and behavior.

Mental models are created by the internal conversations we have with ourselves and, those conversations, psychologists claim, create feelings that drive behavior. Negative thoughts drive negative behavior and vice versa. In other works, you will be become what you think.

Stanford Educational Psychologist Carol Dweck defines mindset as “implicit theories.” That is to say that it is the collection of assumptions and beliefs we use to represent how the world works. These theories are implicit because they are generally unexamined and frequently subconscious.

The biomedical entrepreneurial mindset describes a state of mind or mental model that is characterized by the pursuit of opportunity with scarce resources. The goal is to create stakeholder/customer/user-defined value through the deployment of biomedical or clinical innovation.When you examine the 4 components of the definition, it might give you some insight about the 1% question.

The pursuit of opportunity: Doctors see the opportunity to make patients better. Ideas become inventions and innovations when technopreneurs and market perceivers collide. There needs to be the right combination of problem seekers and problem solvers.

Using scarce resources: Doctors have all the resources they need at the click of a mouse. If anything, they have too many resources, which leads to waste and inappropriate treatments and tests.

Create user value: While consumerization of healthcare is gradually changing the calculus, doctors, for the most part, still call the shots. Patients are left with “my way or the highway.”

Deploying innovation: Most doctors don’t understand the difference between an idea, an invention, or an innovation or the difference between tinkering, a solution looking for a problem, incrementalism, or truly disruptive change. They think it’s a big deal when they tweak a model to get improvement instead of making the model obsolete.

Health professionals, scientists and engineers are not admitted to professional schools because they are imaginative or creatives. They are chosen because they conform to rigid standards. Consequently, the outcome is no surprise.

Rewiring your brain to see the world differently takes internal motivation, tools, triggers, coaching, rewards and practice. Here are 10 ways to get you started:

1. Connect  Expand your internal and external networks

2. Experiment. Try things that don’t cost much and measure what you learned

3. Observe. Innovators watch what everyone else watches, but they see different things

4. Question. Why not? Suppose we did it differently? What if?

5. Associate. As Jobs said, innovation is about connecting dots. Most of us just see dots.Innovators see patterns and opportunities.

6. Practice entrepreneurial habits.

7. Get inside Understand and adapt to how your attachment style determines your work style

8. Learn the basic science first. Organizational entrepreneurial mindsets are a lot like personal ones.

9. Acceptance. Most people do not have an entrepreneurial mindset. The percentage of adults involved in startups in 2012 hit 13%–a record high since Babson began tracking entrepreneurship rates in 1999. Unfortunately, of those that do, most will fail. When you realize you don’t have what it takes, cut your losses early and put yourself and a whole bunch of other people out of their misery and find something else to do.

10. Hang around the right people Find a mentor. Purge the doubting Thomases and negative Nancies from your Facebook page, since their half-empty mindsets are contagious.Network relelentlessly.

However, for intrapreneurs to thrive, there needs to be not just an intrapreneurial innovation mindset, but an organizational mindset as well. In other words, you must have a mindset match.

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