Capitalizing on Healthcare Disruption

One of the best books on business strategy is “The Art of War” by Sun Tzu even though it was written sometime around 512 BC … and is actually about military strategy. I have read it several times over the years and many of the lessons it contains apply directly to business today.

In thinking about the current healthcare transformation, I am reminded of my favorite quote from Tzu’s book:

“In the midst of chaos, there is also opportunity”

Healthcare organizations are dealing with a nearly impossible amount of change. Most of it is not optional and the amount of disruption is difficult to comprehend for outsiders. The future health (pardon the pun) of today’s healthcare businesses depend on the actions they take in the next few years. Some organizations will take steps to acquire or be acquired … some will implement other strategies to sustain themselves and grow … and some (unfortunately) will go out of business.

Standing still is not an option. Survival in the healthcare industry of tomorrow requires participants (payers and providers) to change their priorities, develop and implement new skills and leverage new technologies.

As the shift to value based business models becomes mainstream, successful organizations will have …

  • A priority and focus on their customer (patient) relationships
  • A clear and differentiating value proposition from their competitors
  • A technology enabled approach that monetizes and maximizes their value

Doing things the same old way won’t work in tomorrow’s healthcare value based economy. What are you going to do when you are not paid for volume any more?

In other industries, businesses have a core strategy and operating principles that drive their value … and are the basis for customer loyalty …

  • Lowest Cost – Walmart, McDonalds, Holiday Inn, Southwest Airlines, etc.
  • Most Innovative – Apple, Tesla, Under Armour, Amazon, etc.
  • Best Quality – Ritz Carlton, Mercedes Benz, Bose, Harley Davidson, etc.

What steps are you taking to quantify and monetize your value?

We are at a unique point in time. The amount of transformation combined with current technological change presents a once-in-a-lifetime set of circumstances.

Many organizations are simply dealing with their transformation requirements as they come up one by one … just checking the boxes. A smaller group is looking at transformation more opportunistically and not as set of items that must be “dealt” with.

If this wasn’t daunting enough, there are major technology shifts and breakthroughs happening simultaneously.

Major shifts include Cloud Computing, Internet of Things (IoT), Mobile (Smartphones), Big Data, Analytics and Population Health. These all represent new or improved ways of doing things.

Cognitive Computing is more fundamental. It is a new computing paradigm that is changing computing as we know it. Today, computers do what they have been programmed to do. The cognitive computing model is based on learning from outcomes. It does not depend on upfront programming.

I recently blogged about taking advantage of cognitive computing innovation in several recent posts:

Cognitive Computing: A Once in a Generation Race

Since standing still is not an option. What are you doing to create advantages?

Healthcare data will continue to explode … so why not harness it and use it for your business advantage?

Today

  • Data flows from every device – replacing guessing with precise data
  • 8000 research papers / new clinical trial information published every day1
  • 88% of healthcare data is unstructured (Dark Data) and of little use2
  • Key outcome data (social determinants, behavioral) often not available

By 2020 …

  • 7MB of new data will created every second, for every person on the planet2
  • Average person’s medical data – equivalent to 300 million books of information2
  • The total amount of stored medical data will double every 73 days2

Established companies are being disrupted faster than ever before. The average company lifespan on S&P 500 Index (top performer) has shrunk from over 60 years in 1961 to under 20 years in 2012.3

75% of current S&P 500 Index companies will be replaced by 2027.4

According to Accenture, 93% of executives believe their long-term success is dependent on their ability to innovate.

I blogged about the five areas of general business that Cognitive Computing will impact the most in Innovation in the Cognitive Era.

I also discussed some of detailed implications in a recent interview with Open Minds entitled The Future Of Care Coordination? It’s Elementary, Watson

We are at the beginning of a perfect storm of disruption that could catapult your organization forward if taken advantage of. Why not use Cognitive Computing to create, capture and monetize value as you transform? Sun Tzu certainly would.

I will be speaking about all of this as part of my keynote address at the upcoming Open Minds Technology and Informatics Institute in Washington DC on November 10-11th.  I hope to see you there.

As always, leave me your thoughts and ideas here.

 

Footnotes:

1 – CBS Sixty Minutes – October 2016

2 – IBM

3 – Innosight

4 – Academy for Corporate Entrepreneurship

Cognitive Computing: A Once in a Generation Race

I was a slow runner as a boy (jokes to a minimum please).  I hated playing those backyard games where I had to chase people around.  I was soooooo slow.  I found myself looking for ways to outthink the other kids I was chasing.  Eventually, I became proficient at cutting around bushes, hopping fences and avoiding backyard obstacles (like garden hoses and trash cans) so that I could easily catch other kids.

That’s where we are with cognitive computing.  This is a once in a generation innovation opportunity .. with an intra/entrepreneurship chaser.  Are you currently the chaser or the chasee?  If you are a slow runner like me, now is the time to start outthinking your competition.

It’s simple.  We are entering a new era of computing called cognitive computing. It signifies a fundamental shift in how machines interact with us, other machines and the environment. It will provide much value, but it will be highly disruptive.

The Cognitive Era will result in entirely new model of computing that includes a range of technology innovations in analytics, natural language processing and machine learning.

“Over time, it will be possible to build cognitive technologies into many of the IT solutions and human-designed systems on earth, imbuing them with a kind of “thinking” ability. These new capabilities will enable people and organizations to accomplish things they couldn’t before–understanding more deeply how the world works, predicting the consequences of actions, and making better decisions.” Source: IBM.

A Cognitive Computing Consortium has been formed.  The Consortium is focused on advancing innovation in cognitive computing.  It develops cognitive computing definitions, conducts research, and participates in the development of industry definitions and standards. It brings together leading industry and academic thinkers to advance the understanding of the nature, importance, and potential impact of cognitive computing.  Sue Feldman, author of The Answer Machine, is the visionary behind this initiative.

The analysts also agree …

  • “The numbers in the new AI field are staggering: more than 2,300 startups (a comprehensive list can be found here) have been founded; venture capitalists are investing billions of dollars.” Source: Forrester Research.
  • “IDC expects the overall market to grow significantly in the 2015–2019 forecast period, at a CAGR of approaching 35%.” Source: IDC.
  • “Smart machines are not future fantasy; they are commercially available. According to Gartner’s analysis of external sources, more than $10 billion have already been purchased through more than 2,500 technology companies.”  Source: Gartner.

These kinds of shifts just don’t happen that often.  The last one started before I was born.

Starting in the 1890s .. we were introduced to Tabulating Systems.  Massive growth in people and things demanded single-purpose systems that could count.  For the first time, a program like US Social Security was possible.  Counting machines (remember punch cards) were the norm during the Tabulating Systems era.

In the 1950s .. Programmable Systems innovation disrupted the Tabulating Systems Era.  Increasing complexity of business and society demanded multi-purpose systems that could apply logic to perform pre-programmed tasks.  Integrated circuits and stored memory enabled a new computing model.  For the first time, a feat like landing a man on the moon was possible through Programmable Systems.

We are at the dawn of a new era … the Cognitive Systems era.  Exploding data, connected devices and industry transformation needs require real-time judgment from systems that sense, learn and understand to help humans make better decisions for better outcomes.  With technology augmenting and extending human knowledge, it is difficult to imagine what’s not possible.  Get ready … Cognitive Systems are already here.

We can now confer on every digitized object, product, process and service a kind of thinking ability.  Cognitive systems eliminate many existing barriers preventing access to the world’s knowledge … from the world’s experts.

The fact is .. humans are pretty good at common sense, dilemmas, morals, compassion, imagination, dreaming, abstraction and generalization.  But we get tired, get distracted, make errors, need sleep and occasionally want to go on vacation.

Cognitive systems are powerful too.  Better and more scalable at natural language, pattern identification, locating knowledge, machine learning, eliminating bias with endless capacity.

IBM Watson is a cognitive system.  Watson is a cloud-based, open platform of expanding cognitive capabilities. With Watson, you can build cognition into digital applications, products and operations.  Watson is creating a new partnership between people and computers that enhances, scales and accelerates human expertise.

The race is on .. the Cognitive Era is here.  Educate yourself and start experimenting with cognitive computing now.  The opportunities to innovate with cognitive capabilities border on endless.  Build a new solution … or extend an existing solution with cognitive capabilities … or embed a cognitive function into a process.   In short, don’t be the slow kid in the neighborhood.

As always, lead me your comments and questions below.

Why Bigger Should Always Be Faster … and Better

Let me say upfront that I was rooting for Golaith, not David.

I was recently asked to speak about some of IBM’s intrapreneurship initiatives at the upcoming Intrapreneurship Conference in New York during October 21-23. I have been conducting my own research on corporate entrepreneurship and have gotten to know the folks behind this organization .. it should be a good event. I will be speaking on the first day and shared some thoughts on this in a recent interview.

As I reflected on the interview .. it occurred to me how tired I am of all of the rhetoric in business publications these days about it being easy and commonplace for small innovative companies to disrupt large established ones. Some articles and books even pretend there’s a formula for doing this. It’s as if these much larger and proven companies are incompetent, have lost their way and are filled with unmotivated, slow witted human zombie idiot robots. To think that David always slays Goliath is too idealistic. It might help sell books or increase readership … but it’s not a predictor of business success or outcomes. It’s also foolish to underestimate any competitor by reducing them to a cliché … especially the ones who can squash you.  Has anyone noticed that Gillette didn’t lay down and die when Dollar Shave Club and Harry’s started a subscription service to try to disrupt Gillette’s core profit source of razor blades.

In an entrepreneurial and intrapreneurial career has spanned both start-ups and large corporations … I have been in key roles in both types of companies, and can tell you that there are advantages and disadvantages to each type.

Being fast, nimble and adaptable are essential traits when starting a new business or bringing a new innovative offering to market. These are even definitional attributes of start-ups. But no matter how nimble you are, you can’t birth of baby in one month if you put nine pregnant women on the job.

Large companies have significant and undeniable advantages over smaller (and allegedly more nimble) companies … notably resources and customers. The larger, the better. When mobilized properly, these advantages can be leveraged and rapidly applied in ways not possible by smaller, less resourced would-be competitors. Sure … large companies can be complex and have too much politics and red tape … but bring it on.  I’ll take money and customers every time.

That fact is, nothing can be as productive as working on an important initiative with a highly motivated and excited team of the most talented people you can imagine.

BOOM .. and there it is.   An Intrapreneurial Business Team. Done right, it’s like being on an all-star team … even exhilarating. You get to work with the best people or have access to subject matter expertise that start-ups can only dream of.

Where do you find Intrapreneurial Business Teams? In large companies, of course. It’s really the only way that a large matrixed organization can operate in a “start-up” like mode.

A small empowered team(s) approach is essential when siloed reporting, resource allocation and decision making model(s) are the norm. The typical large company model fundamentally disables a single person’s ability to lead all aspects of a innovation commercialization project.

Even though the fundamental goals and skills are the same for both types/sizes of companies … but the execution model and processes needed are completely different.


Here is an overview to the similarities and differences of the two approaches:

Intrapreneurs – Similarities

•   Requires vision and strategy.

•   Needs leadership and strong execution to succeed.

•   Needs internal funding.

•   Similar “learning” process of validate, plan, build, launch and grow.

•   Opportunity driven.

Entrepreneurs – Similarities

•   Requires vision and strategy.

•   Needs leadership and strong execution to succeed.

•   Needs external funding.

•   Similar “learning” process of validate, plan, build, launch and grow.

•   Opportunity driven.


Intrapreneurs – Differences

•   Mostly fearful including fear of failure, peer perception, embarrassment and confrontation.

•   Stakeholders motives are not just financial and include NIH syndrome, lack of alignment, skills, priorities or reward system.

•   Has to navigate existing culture and processes … and may have little or no influence over this.

•   Has advantages/starting points – ability to leverage customers, assets, brand and track record.

•   Funding is NOT guaranteed once secured.

•   Depends on Team Based Leadership


Entrepreneurs – Differences

•   Mostly fearless who are more likely to take risks, start over or have a pivot mentality

•   Stakeholder motives are almost exclusively financial or performance related (keeping investors happy is a top priority).

•   Has to create a new culture and must build teams, culture and more.

•   Starting from a blank page without track record – must secure customers and build trust

•   Funding is guaranteed once obtained.

•   Depends on a Strong Individual Leader


By embracing on these similarities and differences, large organizations can move as fast or faster than start-ups. Importantly, start-ups should study large companies they are taking aim at … before taking them on. Avoid the ones who are operating Intrapreneurially as shown above.

Lastly, if you are a publicly traded company … your organization must be committed to these principles (from the top down). Public companies have a fundamental conflict of interest in that innovation projects are usually longer term investments with unclear ROI in many cases. There is a natural tension between organic innovation investment and fiduciary shareholder budget responsibility … where innovation projects almost always lose out. Quarter to quarter financial decisions (cutbacks) have unintended downstream innovation consequences. Projects without a clear ROI, or without committed revenue, are usually the first place that cuts get made when the belt needs to be tightened. The larger the company, the more acute the problem. Watch out for this dynamic. It’s difficult to overcome without a top down commitment to change and innovation commercialization. Shareholders are always sitting in the first chair. These are the people paying for Goliath’s projects and they expect a return (and soon).

I am definitely looking forward to speaking at the Intrapreneurship Conference. I’ll talk more about Intrapreneurial Business Teams and will feature the Intrapreneurship@IBM program … a program designed to foster corporate entrepreneurship and help bring IBM’s innovation to market.

I founded the Intrapreneurship@IBM program and community as well as the associated 8 Minute Pitch program. I will cover some successes, challenges and failures as well as our future plans for these programs. I will also cover a deeper set of findings from a benchmark survey I recently conducted with over 500 innovation professionals (both non-IBM and IBM respondents).

Lastly, IBM has set out on a “moonshot” attempt at transforming healthcare. Bringing our innovation to market to part of that strategy and Intrapreneurship is a key success factor of this initiative. I plan to cover some of our innovation in healthcare including the innovative and world-renowned IBM Watson family of healthcare solutions.

I hope to see you in New York at the conference … and as always leave your thoughts and comments below.

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.

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.