A Personal Perspective on Entrepreneurship and Intrapreneurship in Africa

The first time I heard of Africa was probably my mother saying “clean your plate, there are children starving in Ethiopia” … at the dinner time (when I wouldn’t eat my vegetables on numerous occasions). The infamous famine was over 30 years ago now (remember Bob Geldof and Live Aid).  I don’t remember us studying Africa in school but I suppose we did … and until recently; many of my personal perceptions of the continent were out-of-date – probably too similar to that of most insulated Americans, which were very different from today’s reality.

It turns out, that Africa is on the rise.  According to the McKinsey Global Institute, by 2020 Africa’s nominal GDP is expected to reach US $2.6 Trillion (eclipsing Canada $2.19 Trillion and close to India’s $2.9 Trillion). 54 cities in Africa (more than Europe) have over 1 million people each.  400 million Africans live in cities (India has 340M).  Smartphone users are expected to increase from 67 million to 360 million by 2025.

Growth prospects for Africa remain positive and the region’s GDP growth is projected to rise.  African households in the middle income group are projected to rise to 128 million in 10 years.  The continent has more than 500 million people of working age (15-64). By 2040, that number is projected to exceed 1.1 billion … or more than in China or India.

I met some remarkable people this week who happen to come from Africa.  About this time last year, I became aware of an organization called The Young African Leadership Initiative (YALI) through my employer (IBM) … who sponsors this organization in part.  IBM is one of a handful of companies who are actively involved with YALI.  The United States’ commitment to Africa is long-standing and deep.  The United States has invested in development partnerships with Africans to foster sustained economic growth as well as improved quality of life issues.

Selected from roughly 50,000 applications, the class of 2015 YALI Mandela Washington Fellows represents the promise of an emerging generation of entrepreneurs and intrapreneurs.  Mandela Washington Fellows have proven track records of leadership and demonstrate a strong commitment to contributing their skills and talents to strengthening and serving their communities.

The current class of Fellows represents all 49 countries in sub-Saharan Africa and included equal numbers of men and women.  Many of them operate their own businesses.  Nearly all Fellows were the first in their families to visit the United States.  They are in the US for six plus jam-packed weeks of education and experiences.

I was asked to teach an all day course on entrepreneurship at the University of Notre Dame – one of the hosting campuses.

Even with a lifetime of both entrepreneurial and intrapreneurial experiences to draw upon, I was a little uncertain how to approach the class.  As I read the biographies of the Fellows, it was obvious that many in this group of people had a very different lifetime of experiences than I did.  I could only imagine the motivation they had to draw upon.  I was actually a little concerned that I might not be able to relate to them and the class might not go well.

Once the class started, all of these fears were washed away.  It turns out that the language of entrepreneurship is universal.  Defining a market, creating competitive differentiation or figuring out a SWOT Analysis is universal … regardless of where you come from, what you have done in your past or whether you eat your vegetables.

Hopefully the information I presented will help them succeed with their various endeavors.  I felt as if I connected with many of the students and in some cases, created relationships that will stand the test of time.  One student even gave me a personal momento he brought from his country. This small gesture touched me.

I am proud to be associated with YALI. The prospects for companies who choose to do business in Africa looks bright.  Most importantly, the future for this group of people is brightest of all.

As a side note … President Obama is scheduled to speak the upcoming 6th Global Entrepreneurship Summit being held in Nairobi.  President Obama elevated entrepreneurship to the forefront of the United States’ engagement agenda during a historic speech in Cairo in 2009. The GES has expanded each year, subsequently hosted by the governments of Turkey, the United Arab Emirates, Malaysia, and Morocco.  This is the 6th annual gathering of entrepreneurs at all stages of business development, business leaders, mentors, and high-level government officials.

Leave me your thoughts and comments.

Have You Started Your Data Expedition Yet?

In 1803, Thomas Jefferson sent Meriwether Lewis and William Clark on their now famous expedition. The initial goal was to find a water-based route to the Pacific Ocean in addition to exploring the unmapped West. They imagined they’d find woolly mammoths, mountains of pure salt, lava-spewing volcanoes and never before seen creatures. What they found was quite different. Why did they even risk life and limb to do this in the first place?

It turns out that Thomas Jefferson was a visionary and a bit of an intrapreneur. When Jefferson took office in 1801, one of his top priorities was to gain control of the port of New Orleans. He saw this important water access point as an enabler of economic growth for farming. In one move, he more than doubled the size of the country for what turned out to be the real estate deal of all time … at the bargain price of less than three cents an acre. He paid $11.25 million in 1803 or roughly $234 billion in today’s dollars. That investment has paid for itself in incalculable terms in 1803. Of note, part or all of 15 states were created from this transaction. Ironically, Jefferson’s desire to control New Orleans what is the motive for the deal and the rest of the territory was pretty much a throw-in. This transaction is probably his greatest legacy and was arguably the most important step taken to build The USA into what it is today.

What would you do if you found yourself sitting on a massive untapped asset … and no one knew what it contained … or what to really do with it?

Jefferson decided to conduct an expedition of discovery by creating the Corps of Discovery in 1804 to explore his new acquisition.

Ironically, if you are a healthcare provider, have the same opportunity. Your big data is your untapped asset. What are you doing to explore, understand and leverage it? Leading providers are already conducting data expeditions of discovery. Most importantly, they are creating new streams of revenue from what they are learning.

Jefferson turned to trusted allies .. James Monroe to negotiate the Louisiana Purchase and Meriwether Lewis (who added William Clark) to lead the expedition of the acquired territory. Along the journey, other team members joined them (Sacagawea and Touissant Charbonneau).

You will need trusted allies and partner also for your expedition. You also need to think outside the box. In order to take advantage of new insights, it will require new thinking and new business models.

The Corps of Discovery faced nearly every obstacle and hardship imaginable on their trip. They braved dangerous waters and harsh weather and endured hunger, illness, injury, and fatigue. Along the way, Lewis kept a detailed journal and collected samples of plants and animals he encountered. It’s no wonder that it became known as the wild wild West.

You may not face hunger, illness and injury on your data expedition journey (insert IT joke here) but you will need the right kind of tools to prosper from it. Most importantly, navigating your way through big data will require advanced technologies … especially since more than 80% of it is unstructured in nature.

What the Corps of Discovery found was mind-boggling … some 300 species unknown to science, nearly 50 Indian tribes, and the Rockies (the mountains, not the baseball team).  They created the foundation and landscape for future governing states and grateful future generations and citizens.

You are almost certain to find many new ideas, insights that are really opportunities waiting for you to identify and exploit them.  Most amazingly, you have the same opportunity to impact the lives of generations of the yet unborn .. just in a different manner.

But unless you act now and start your own expedition … you are going to fall too far behind. Here’s why … new business models and new ways of delivering healthcare are already emerging.

Plus, you might swallowed up by big data bigfoot. A big data bigfoot … really!?!!(yes, I know this is a stretch)

By 2020, the footprint of medical data will double every 73 days according to the University of Iowa, Carver College of Medicine in 2014 (get it … bigfoot … as in footprint).

Seriously, This is going to change everything!

Data is going to become imaginably big. Get ready for a new term … Exogenous Data or data originating from outside (derived externally) … as in data from Apple Watch, Fitbit, medical devices, smartphones … you get the idea.

Exogenous Person The future of health is all about the individual and having a complete picture of the many factors that affect a person’s health. But we need better ways to tap into and analyze health information in real time to help doctors, researchers, insurers, case workers and other stakeholders determine the best approaches, and give the patient greater control over his or her own care. This is where you fit in. Bring your own data and take advantage of this now before others do. Start your data expedition here!

Like every other industry, healthcare is being disrupted and transformed by the exponential growth in data, such as medical records and clinical research, and these growing pools of information are difficult to share because they are fragmented. In addition, they do not readily incorporate critical information about individuals’ non-clinical conditions, which may have a strong bearing on health.

As a result, patients and their healthcare providers are forced to make decisions that are not based on all the evidence. And the problem is expected to get worse: between electronic medical records, digitized diagnostics and wearable medical devices, the average person will likely leave a trail of more than 1 million gigabytes of health-related data in his or her lifetime … the equivalent of about 300 million books. Those on data expeditions today will be at the forefront of capitalizing on new business opportunities that come out of all of this transformation.

Advances in data availability, analytics and connectivity are giving doctors, researchers and other health professionals the tools they need to make better, faster and more cost-effective decisions and individuals the insights they need to understand more about their health and receive personalized care. There is a vast amount of meaningful data that can help tell the whole story about an individual’s health and needs. We plan to help stakeholders in the care ecosystem use that foundation to improve the quality, effectiveness and cost of their care.

Have you started your data expedition yet?  If not, what’s holding you back?  Take advantage of your untapped assets before the opportunity disappears.  After all, there are going to be any other Louisiana purchases … cheap land is pretty much gone.

Land is purchased at a premium these days and that model is to your business advantage now. Don’t be one of those laggards who will end up looking for wooly mammoths or mountains of salt when there is so much more out there. Put your data to work for you!

In simple terms — do three things:

  1. Start by taking inventory of the various types of data you have – pay close attention to the unstructured data.
  2. Take another step by forming a team to study how to benefit internally from re-use of that data (better reporting, process improvements, etc.).
  3. Also assemble a group of intrapreneurs to figure our out to leverage that data into new business areas (licensing of data, partnering on IP, etc.).

“I like the dreams of the future better than the history of the past.”   I have to agree with Thomas Jefferson on that.

I will be speaking at a couple of upcoming conferences on these topics and more as I share details from IBM’s data expeditions:

Watson Health builds on IBM’s unique strengths to create the ecosystem needed to transform the global healthcare system, as well as to provide the open, secure and scalable platform of data, insights and solutions needed to make it all possible. Information on IBM Watson Heath can be found here. My recent posts …

As always, please comment below … or feel free to reach out to me directly.

This is a Revolution (not a Transformation) – Five Key Areas for Disruptive Innovation in Healthcare

If you are like me, when you hear the word innovation you imagine big things … putting a man on the moon … flying cars … low cost renewable energy … even a cure for cancer.  I can hear The Jetsons music playing in my head as I write this.

We are only limited by our imaginations.  I bet you have never considered how postal workers might participate in delivering healthcare?  In fact, you could make the case that postal carriers are contributing some of the most innovative ideas to transforming healthcare.  YES… Postal workers.  NO… I am not kidding.  Keep reading.

We are on the precipice of a new age in healthcare.  Like the industrial revolution that shaped America in the 1800s … the healthcare industry is entering that same type of business revolution.  Are you frenzied by this yet?  You should be.  The most aggressive and innovative organizations will win … and reap the benefits.

Clayton Christensen defined innovation in specific terms when he wrote the The Innovator’s Dilemma in 1997. Christensen’s book suggests that successful organizations put too much emphasis on current needs, and fail to adopt new technology or business models that will meet unstated or future needs. He argues that such organizations will eventually fall behind. Christensen calls the anticipation of future needs “disruptive innovation”. The concept of disruptive innovation is contrasted in the book with smaller, more obvious, incremental or “sustained innovation”.

Look around and count how many healthcare companies are making this exact mistake. Too many organizations are focused on current needs only. Both types of innovation are needed for ongoing growth and a healthy organization (pun intended).

Why is this relevant?  The fact is … healthcare organizations will have to compete, based on the value they deliver, in the not too distant future.  We haven’t seen this type of transformational business opportunity since the industrial revolution days of Cornelius Vanderbilt, Nelson Rockefeller, Henry Ford, Andrew Carnegie and J.P. Morgan.  These men all understood what was happening and then transformed their industries through innovative business techniques and approaches.  Most just watched them do it.  In healthcare, the organizations innovating now will lead this revolution and reap the spoils.  This is a completely different way of thinking about healthcare.  New markets and segments will seem to appear out of thin air.  It will be fueled by innovation … disruptive innovation.

Cleveland Clinic CEO Dr. Delos Cosgrove gets this.  98% of the people that request a same day appointment at the Cleveland Clinic get one, and there were over one million such appointments last year.  Focusing on costs doesn’t have to come at the expense of the patient.  Do you get that level of service from your local provider?  Why not?

Led by Joe Dickinson, postal workers on the small island of Jersey (off the coast of France) get this too. The island of Jersey has the same aging population issues as the rest of the world but the postal workers in Jersey have come up with an incredibly innovative way to extend their role and value through a new “Call & Check” service.  This is easily the coolest thing I’ve seen in quite some time.

By using postal delivery people in a community care model, any citizen can request a “Call & Check” at their home … and the postal delivery person whose has that route will stop at the home of the frail elderly person and do a “call and check”.  Here is a person who’s job it is to visit every house everyday any way, why not leverage that?

In other words, a friendly face comes by when needed to help, provide company or just look in.  The check can be — do you have the medications you need, is there a rug you could trip over, can you reach the top shelf without failing. Is there a nick in the skin of the lower extremity, can someone take you to see the doctor for your appointment scheduled this week. These “call and checks” are many of the things that make it possible for us to keep seniors in their homes longer.  It’s well-documented that “in-home” senior care is the optimal model and this type of service seems like a sensible and needed component.

Check out the video on how the “Call & Check” service works.

I am a big fan of Dr. Atul Gawande. In 2009, he published the breakthrough book: The Checklist Manifesto: How to Get Things Right. This book was a bestseller and lauded as an effective way to innovate and improve things.  Since then, Dr. Gawande has gone on to write several other books and is clearly an expert in his field.

However, at the time I read his book I did not have the same reaction as the rest of the industry. I was actually quite shocked that key healthcare processes like pre- and post-surgical processes weren’t already rigorously managed by checklists (or other proven methods) to ensure that surgical sponges, or instruments, weren’t going to be forgotten about and left in patients.  After all, there are published references to the use of checklists dating back to the 1800s and quite possibly earlier than that.  Quality approaches to processes (such as ISO 9001, Six Sigma, etc.) have existed for decades.  It’s a sad state of affairs, that nearly two centuries later, the adoption of checklists in healthcare is seen as innovative.  Maybe this isn’t a fair example, but it’s hard to see the industry as being innovative when so many people got that excited over checklists.

Score one for the postal workers!

The reality is that those who invest in and embrace technology today will be the leaders of tomorrow.  Many physicians are embracing new technologies like IBM Watson Oncology Advisor … but sadly, some are still resisting using checklists.

When you look around the healthcare industry today, there is not enough disruptive innovation. There are examples of sustained innovation but very little is going on that would qualify as disruptive.  Most of the efforts that get labeled as innovative in healthcare are in support of the “triple aim”.

If you are not familiar with this term, the IHI Triple Aim is a framework developed by the Institute for Healthcare Improvement that describes an approach to optimizing health system performance (simultaneously) in three dimensions:

  • Improving the patient experience of care (including quality and satisfaction).
  • Improving the health of populations.
  • Reducing the per capita cost of healthcare.

The IHI website highlights that The US healthcare system is the most costly in the world, accounting for 17% of the gross domestic product with estimates that percentage will grow to nearly 20% by 2020.  At the same time, countries with health systems that out-perform the US are also under pressure to derive greater value for the resources devoted to their health care systems.  Aging populations and increased longevity, coupled with chronic health problems, have become a global challenge, putting new demands on medical and social services.  Only technology-enabled innovation can enable this fundamental and simultaneous degree of change.

Of course, there are numerous barriers making this incredibly difficult to achieve … not the least of which is the continued widespread use of fee-for-service-based payment models.   This is a core business model, process and foundational problem. The wrong incentives cause the wrong behavior and actions that lead to poor (and costly) outcomes.

The Center for Medicare & Medicaid Innovation (The Innovation Center) is helping by supporting the development and testing of innovative health care payment and service delivery models. These are important incremental steps, to transforming the industry … but we have to go faster in five key innovation areas.  The current rate of innovation is being measured with calendars when it should be measured with a stopwatch.

  • Business and payment model innovation such as shared risk, capitation, bundled payments, self insuring and more is starting to happen but taking too long.  Every payer and provider should have multiple experiments going in these areas now.  Acquiring this experience now is essential so that when the big money is at stake you’re not starting from scratch.  Continued industry consolidation will eventually help enable new forms of business model innovation but only after these acquisitions get integrated and are made to work functionally.  Too much consolidation could actually slow down business model innovation.  Net-net … We need to be much more aggressive in moving away from fee-for-service. Ultimately, it will be innovative technology solutions like practice management analytics and care (case) management that factor in process level care delivery costs that enable this to happen.
  • Business process innovation is not getting very much attention anywhere in healthcare.  When Lou Gerstner turned around IBM in the 1990s, one of his top initiatives was to blow-up and re-engineer the core business processes.  Hanging onto the fee-for-service business model is a slow lethal poison.  It’s toxic.  A fee-for-service business culture breeds ignorance of how to control costs effectively (and still deliver quality care).  In other industries, key organizational processes are measured by using techniques like time and motion studies to understand costs at a very granular level.  Not in healthcare.  Many core processes aren’t well understood at all.  This disables any chance to innovate through processes, which can reduce operating costs significantly.
  • Care delivery model innovation is also taking far too long to reach the mainstream.  Community care models and telehealth are examples of things that should be much farther along then they are.  The notable exception to this is the adoption of Patient Centered Medical Home as driven by organizations like the Patient-Centered Primary Care Collaborative.  Every payer and provider should have a population health management solution deployed today.  The ability to organize and manage based on population health … and to use that information to personalize care delivery is a major enabling piece of innovation.  The value of these solutions are well proven and anyone who is not using one of these is already well behind.  Phytel even offers a guaranteed Return on Investment of at least 3x.  That’s pretty innovative all by itself.  What have you got to lose?
  • Organization innovation is laughable.  The United States is the only major economy where healthcare and social programs are two separate things.  The connection between the social determinants of health and delivering good patient outcomes is undeniable … yet politics, system silos, and other overcome-able obstacles prevent our caregivers from using this critical information to deliver low cost care and better outcomes.  By some estimates, over 60% of the best healthcare outcomes are derived by using social determinants.  What are you doing to integrate social determinates into your systems, processes and decision making?
  • New technological innovation is perhaps the most obvious way to think about innovation.  If you have not already invested in cognitive computing, analytics, mobile, cloud, population health and care management solutions then you are in the stone ages and well behind … because your competition has.  George Jetson didn’t have Watson at Spacely Sprokets, but he did have R.U.D.I. (Referential Universal Differential Indexer). R.U.D.I. was George’s work computer and one of his best friends (next to his dog, Astro).

This is a revolution .. not an evolution !! 

Vanderbilt, Rockefeller, Ford, Carnegie and Morgan didn’t wait for the next round of incentives .. they SEIZED on their opportunities .. you should too.  It will be the pioneers of today who are the winners in tomorrow’s competitive healthcare industry

Spacely Sprockets may have had R.U.D.I. but we (at IBM) are taking disruptive innovation seriously with our growing family of Watson Healthcare solutions, innovation in population health analytics, IBM Smarter Care solutions (including care management) and new joint mobile healthcare solutions from our strategic alliance with Apple.

NOW is when is the disruptive innovation needs to happen … what will yours be?

I will be at HIMSS in Chicago on April 12-16th. (IBM Booth 1425).  Stop by and say hello.

Healthcare Delivery Innovation Needs to Happen Faster

I was recently asked to chair a panel and moderate a roundtable at the upcoming 2015 State Healthcare IT Connect Summit in Baltimore, MD on March 23th and 24th.

I am hosting a roundtable entitled Turning Insight into Action with Patient-Centered Care Management on Monday the 23rd at 1:00pm … and the panel is entitled Community Analytics, Care Coordination and Managing Complex Conditions takes place on Tuesday the 24th at 10:10am. I will be joined by an impressive list of State IT Executives for the panel and we will all be sharing our respective points of view. Judging from the attendee list, this is shaping up to be a terrific conference.

As I started to prepare for these sessions it started to bother me that this transformation (using analytics to enable better care delivery) is taking too long. Not enough organizations are aggressively embracing this model despite the types of outcomes that are now within our reach.

It’s been over four years since Doctor Atul Gawande opened everyone’s eyes to the power of combining community (social) data with clinical data to identify which patients are the most in need of care.   In case you were lost in Antartica, that New Yorker Article The Hot Spotters was groundbreaking. It opened our eyes to the value of non-clinical sources and types of information. As an example, if you are trying to reduce infant mortality, it would certainly be handy to analyze which infants live in buildings that still have lead paint.

It goes without saying … that the sooner you figure out who is in the most need, you can intervene to get the best possible outcome. This might seem simple but the real magic comes from combining different types (structured, unstructured) and sources of data (clinical, social programs, environmental) that can unlock new and powerful insights.

In her recent book The American Health Care Paradox: Why Spending More is Getting Us Less, Dr. Elizabeth H. Bradley from Yale University asserts that when you combine social services spending with healthcare spending you can achieve more. Unlike the rest of the world, the United States archaic division of health and social services is hurting our outcomes. The book offers a unique and fresh perspective on the problems the Affordable Care Act won’t solve. She also asserts that 60% of outcomes can be attributed to social, environmental and behavioral.

At IBM, we have seen similar eye-popping results when combining different types and sources information. I have blogged about some of these examples:

I plan to talk about these examples, and more, at the conference. As we talk to State healthcare officials, it seems while almost everyone is embracing some flavor of analytics and care management … many seem to assume they only have limited access to data though, usually claims data.

It’s time to start thinking outside of the box. State governments are in a unique position. Tthey have access to unique sets of data (social programs, environmental, safety, crime, others), that when combined, can deliver the kind of outcomes that Dr. Gawande was talking about over four years ago. The extra effort required to collaborate and share data is well worth the opportunity to achieve these types of outcomes.

I hope to see you at the upcoming 2015 State Healthcare IT Connect Summit in Baltimore, MD on March 23th and 24th.

Trick or Treating for State Healthcare Innovation Treats

When I was a wee lad, I loved to go trick or treating each Halloween. Nothing was better then dressing up in a great costume and walking door-to-door to get my plastic orange pumpkin filled up with candy. My favorite was those little root beer barrel hard candies … YUMMY!

I think my best costume was the year I went out dressed as Elvis. Imagine a 12 year old dressed as Vegas Elvis, with the white jumpsuit, big lapels and the mutton chop sideburns. I got alot of root beer barrels that year. This year I went to the 27th Annual NASHP Conference in Atlanta dressed as a confused IBM Executive.

As part of my role in IBM Smarter Care, I have recently been focused on understanding the government healthcare transformation strategies of the US States in the wake of the Affordable Care Act.

What a better place to get the goodies then the NASHP Conference. The event attracts a “who’s who” of state healthcare policy people who also drive the content and focus of the conference. I may have gone confused but came back armed with answers (my treats).

My plastic pumpkin was filled with goodies by the end of the pre-conference on the first day. The best treat (for me) was the keynote delivered by Dr. Elizabeth H. Bradley from Yale University. Her keynote was based on her new book The American Health Care Paradox: Why Spending More is Getting Us Less. Her point of view asserts that when you combine social services spending with healthcare spending you can achieve more. Our archaic division of health and social services, and our allergy to government programs, is hurting us. The book offers a unique and fresh perspective on the problems the Affordable Care Act won’t solve.

There were other treats as well. The pre-conference on care coordination was led by NASHP Program Manager, Dr. Barbara Wirth. It featured an all-star line-up of state executives sharing how they were using CMS Innovation Funding to improve state healthcare outcomes on behavioral health, infant mortality, long-term care and supporting services using care models such as Patient Centered Medical Homes, Health Homes and more.

The one treat that I really wanted … I didn’t get (and it wasn’t root beer barrels).  It was an understanding of the technology being used to help achieve the outcomes being cited in the sessions. Software is essential to enabling care models where patients are crossing care settlings, caregivers, locations and even care programs. There is no way this can be done economically using the good old fashioned way of paper, folders, faxes and phone calls.

Realistically, it’s too early for many of these new programs to expect a lot of detail on this. On the other hand, the omission(s) makes me scared (get the pun) that this may not be on the radar screen of those making policy decisions … and those responsible for rolling out these innovative programs.

Healthcare reform is not just about innovative payment models, policy design and care delivery models. It must also include innovative technology to deliver on the promise of consistent quality, scalable delivery and affordable care. The use of big data (not just EMRs), analytics and care coordination software all help enable the benefits Dr. Bradley spoke about where social programs and healthcare come together to enable better outcomes at lower costs. Dynamically linking these technologies to health policy is where innovation can and will happen. Not linking them may cause your programs end-up like an old Haunted House where dust and cobwebs cover up ghoulish and ghastly looking programs (ok, really sorry for the pun).

Maybe next year I’ll pull out my Elvis costume when I go to NASHP in Dallas (October 19-21, 2015) even though I know it’s far too small for me.

In the mean time, I’ll urge NASHP to push this technology agenda, along with all of those implementing reform through government healthcare transformation. Start thinking and planning for the technology that will power your initiative now.

For me, Halloween comes twice this year. The IBM Health and Social Programs Summit is being held October 20-21st in Washington, DC. This event convenes a global network of thought leaders, industry experts and practitioners to discuss industry trends and directions, and compare best practices and leading technology innovations in the fields of Health and Social Programs. I will be speaking, as will Dr. Barbara Wirth from NASHP, along with The Honorable Patrick J. Kennedy, Dr. Paul Grundy, Dr. Stephen Morgan and many more. I hope to see you there … and bring some root beer barrels!  There will be plenty of treats for you too.

How To Quickly Tell If You Have An Innovation Problem

At a recent speaking engagement, I was asked if there was a quick way to tell if an organization has an innovation problem.  The organization in question has a long and proud innovation track record … and has been meeting its revenue and cost objectives. On the surface, all seemed to be in order … but that was not the case.

As I pondered the question my brain quickly rifled through various best practices for analyzing product lines and portfolios including the Boston Consulting Group Growth Share Matrix first published in 1970 by BCG founder Bruce Henderson.  The matrix is based on the clever use of question marks, cash cows, dogs and stars as way to stratify a given portfolio … and to help allocate resources based on two factors (company competitiveness and market attractiveness).  While over 40, the model and methodology remain viable and are still widely used.

There are other approaches such as the Deloitte Consulting Growth Framework … but my preference is the McKinsey 3 Horizons of Growth.

The McKinsey model has also stood the test of time and is more intuitive (at least to me). It addresses a fuller spectrum of portfolio analysis issues and breaks down as follows:

  • Horizon 1 – Extend and defend core businesses.
  • Horizon 2 – Build emerging businesses.
  • Horizon 3 – Create viable options.

It is based on the traditional “S” curve adoption and growth principle but asserts that at a key point on the adoption curve, new innovation (and investment) is needed to enable future horizons of growth as indicated above.  Each horizon ensures future waves of new revenue growth and continued innovation.  In all, 3 horizons are needed.  Each horizon requires a different approach, people, skills and management method.  As you might suspect, each horizon level is also increasingly intrapreneurial. Most importantly, you need to manage all three horizons concurrently … even though based on different principles:

  • Horizon 1 – This is typically a fully capable or mature offering / platform that is being managed by “business maintainers” using traditional performance, operational and profit metrics such as return on invested capital (ROIC).
  • Horizon 2 – This is typically new capabilities that are being built-out or acquired in emerging business scenarios by “business builders” based on growth aspirations using metrics such as net present value (NPV).  This stage is well past the experimentation phase, has early adopters and expected to show scalable grow in the near future … followed by profit soon thereafter.  The Crossing The Chasm model by Geoffrey Moore comes to mind for me.
  • Horizon 3 – This is the experimentation phase where requirements may be unclear.  It needs to be led by “evangelists or visionaries” and governed by validation or iteration metrics such as number of interviews, feedback sessions, number of iterations or other early stage progress metrics. It is typified by prototypes, market validation, agile development and directional pivots.  The Lean Startup concept by Eric Ries comes to mind.

Upon some investigation, the balance of investment (for the company in question) was far too heavy on near-term (or proven) revenue performance offerings (Horizon 1) and not enough on longer-term growth options (Horizons 2 and 3).  In light of conservative spending by most companies coming out of the recession, this was not an unexpected finding.  The tendency in business for the past few years has been to focus on short-term initiatives … sometimes at the expense of ensuring future growth options.

A simple mapping of your own portfolio of offerings to the three horizons may be just as revealing as it was in this case.

Most organizations should strive for roughly 70% investment on Horizon 1 offerings, 20% investment on Horizon 2 and potentially as much as 10% on Horizon 3 offerings.  These percentages may vary from company to company … and industry to industry … but represent a reasonable breakdown for any organization to evaluate itself.

When was the last time you evaluated your offerings using some method like this? If you don’t know the answer, or if it has been longer then 12 months, then invest the time do this.  Your future could literally depend on it.

I feel good that I was able to steer them in the right direction using such a proven method to manage innovation.  My innovation initiatives are progressing.  The Intrapreneurship: Tackling The Challenges of Bringing New Innovation to Market AIPMM webinar replay is available in case you missed the live event and The First Annual Intrapreneurship Benchmark Survey on Commercializing Innovation survey remains open through June 30, 2014.  I plan to compile, analyze and publish the survey findings in Q3.

As always, leave me your thoughts and opinions here.

Help Stop the Senseless Killing of Important Innovation

The great business management philosopher Yogi Berra once said, “If you don’t know where you are going, you’ll end up someplace else.”  This is how I feel about the current state of business innovation.  New innovation usually starts out on the right path but often ends up in the ditch.

Innovation is clearly a key driver of organic growth for all companies.  67% of the most innovative companies say innovation is a competitive necessity regardless of sector or geography.  Leading innovators have grown 16% higher then that of the least innovative companies(1).  It’s no wonder that 91% of companies believe innovation is a top strategic priority(2).

It turns out that many organizations actually struggle to bring organic innovation to market.  Even though 84% of executives say innovation is extremely or very important to their companies’ growth strategy, only 39% say their companies are good at commercializing new products or services (3).

Connecting innovation programs (and resulting new inventions) to what happens later with market adoption (and revenue growth) isn’t possible without what happens in between.  My theory is that there is a critical gap … one that is unnecessarily killing many promising innovations.

Not enough is known about the reasons why so many organizations struggle to bring their own organic innovation to market.

With that in mind, I have decided to create  The First Annual Intrapreneurship Benchmark Survey on Commercializing Innovation.  The survey is available immediately and can be accessed at https://www.surveymonkey.com/s/intrapreneurshipbenchmark.  It will collect data to establish new benchmarks.  Once collected, the data will be analyzed and included in a written report.  The full report will be made available to survey respondents.   Highlights will also published later in 2014 in selected business publications as well as on this website.

You can help stop the senseless killing of important innovation too.  After all, “When you come to a fork in the road take it” – also Yogi Berra.

 Take this fork with me.  Seriously, please help me by taking a few minutes of your time to share your experiences in this area by taking the survey.

As always, leave me you thoughts and comments below.

Footnotes:

(1) PWC Report “Breakthrough Innovation and Growth” – September 2013

(2) GE Report “Global Information Barometer” – January 2013

(3) McKinsey & Company Report “Innovation and Commercialization” – 2010

(4) Ernst & Young Report “Igniting Innovation: How Hot Companies Fuel Growth from Within” – 2010