Innovation in the Cognitive Era

Throughout the industrial age there has been breakthrough innovation that has changed everything.

Way back when … most manufactured products were made by hand. A craftsman, or team of craftsmen, would create products by hand. They would use their skills, and hand tools, to create the individual parts before assembling them into the final product. The process was very labor intensive.   The assembly line, institutionalized by Henry Ford, changed everything. It also catapulted Ford to market leadership with The Model T and re-shaped the automobile industry … as well as the way all products are manufactured.

American railroads were originally planned to serve cities and their surrounding areas. It didn’t initially occur to city planners, or the railroad builders, that these networks might eventually need to connect with one another. This led to a mish mash of track and rail sizes (or gauges in railroad speak) … none of which were compatible. While some standardization was inevitable, by the 1870s, there were still over twenty different gauges in use in America. This stalled growth and hurt the industries ability to expand. Railroad standardization did eventually change everything and traveling by train became the de facto way people traveled long distances … at least until other travel innovations disrupted the railroad industry. Many supplemental innovation opportunities were created (such as luxury Pullman rail cars) as the transportation industry innovated its way forward, eventually adding new ways to travel (airplanes and automobiles).

Before the telephone and wireless radio (yes this was also before fax machines), the only way to send messages was by telegraph. The telegraph was a hard wired connection of send/receive points. I guess the use of smoke signals and homing pigeons had other imitations … like being too messy. Ever clean-up after a bunch of pigeons?

The telegraph was the primary form of long distance communication for the better part of a century … and Morse code was the language of the telegraph. Morse code was a system of dots (shown as asterisk below) and dashes, that when combined, formed words, letters and sentences. As you can imagine, it was highly inefficient. One of the last messages sent from The Titanic was:

*** ** * *

*** **** ** **,

*** ** * *

***- — -*– *- –* *.

Translated to English … it says, “FINE SHIP, FINE VOYAGE.”

I wonder when the ship started sinking how many messages didn’t get sent because the Morse coding and reassembly process was so cumbersome, time-consuming and error prone.

When Alexander Graham Bell invented the telephone … you guessed it … it changed everything. Many supplemental innovation opportunities were also created including wireless radio, broadcast television and every facet of communications.

These kinds of “change everything” opportunies don’t happen that often. So recognizing one as an innovation and business opportunity … may be more important then the innovation itself. After all, Ford, Bell and the Railroads only reaped a small fraction of the spoils. Entire massive industries in the transportation and communications were created. The savvy innovators and intrapreneurs understood the follow-on opportunities being created and capitalized on them.

Well .. most did. William Orten was not among them. He was the CEO of Western Union Telegraph Company in 1876. Western Union had a monopoly on the most advanced communications technology available (the telegraph) in 1876. Western Union was offered the patent on a Bell’s invention (the telephone), for $100,000 (or about $2M in 2014 dollars). The CEO (William Orten) considered the whole idea ridiculous and wrote directly to Alexander Graham Bell:

”After careful consideration of your invention, while it is a very interesting novelty, we have come to the conclusion that it has no commercial possibilities … What use could this company make of an electrical toy?”

Two years later, after the telephone began to take off, Orten realized the magnitude of his mistake, and spent years (unsuccessfully) challenging Bell’s patents. Ooops!!!

The computing industry is about to undergo a once on in a generation innovation opportunity. We are entering The Cognitve Era of computing.

The current computing model has reached it’s limits. The next level of value can’t be unlocked by current approaches. Data already flows from every device, replacing guessing and approximations with precise information … yet 80% of this data is unstructured … and therefore, invisible to computers and of limited use to business. There is simply too much information and most of it is noise. We need the ability to know what is relevant and useful.

More importantly, why don’t computers learn, adapt, reason and apply information the way I do?

We got here by first building computers that solved basic problems and/or enabled us to new things … before moving onto solving more advanced problems and/or raising the bar on our own ambition. It all got started in the late 19th century.

1890s – 1950s: The Tabulating Systems Era

  • Massive growth in people and things demanded single purpose systems that could count.
  • For the first time, a program like the US Social Security system was possible.

1950s – Today: The Programmable Systems Era

  • The increasing complexity of business and society demanded multipurpose systems that can apply logic to perform pre-programmed tasks.
  • For the first time, landing on the moon was possible.

Today: The Cognitive Systems Era

  • Continually changing scale and complexity now require real-time judgment from systems that can sense, learn and understand to help humans make decision and take action.
  • With technology augmenting and extending human intelligence, it’s difficult to imagine what is not possible.

Welcome to the The Cognitve Era … where cognitive systems can understand the world through sensing and interaction, reason using hypotheses and arguments and learn from experts and through data:

  • Understand unstructured data, through sensing and interaction.
  • Reason about it by generating hypotheses, considering, arguments, and recommendations.
  • Learn from training by experts, from every interaction, and from continually ingesting data. In fact, they never stop learning.

This changes everything!

And like those other once in a generation innovation opportunities, now is the time to get involved. Start by educating yourself and begin experimenting. Look for cognitive innovation in these five areas:

  1. Deeper Human Engagement: Cognitive businesses create more fully human interactions with people—based on the mode, form and quality each person prefers. They take advantage of what is available today to create a fine-grained picture of individuals—geo-location data, web interactions, transaction history, loyalty program patterns, EMRs, data from wearables—and add to that picture details that have been hard or impossible to detect: tone, sentiment, emotional state, environmental conditions, strength and nature of a person’s relationships. They reason through the sum total of all this structured and unstructured data to find what really matters in engaging a person. By continuously learning, these engagements deliver greater and greater value, and become more natural, anticipatory and emotionally meaningful.
  2. Elevated Expertise: Every industry and profession’s knowledge is expanding at a rate faster than any professional can keep up with—journals, new protocols, new legislation, new practices, and entire new fields.
  3. Cognitive Products and Services: Cognition enables new classes of products and services to sense, reason and learn about their users and the world around them. This allows for continuous improvement and adaptation, and augments their ability to deliver on products and services not previously imagined.
  4. Cognitive Processes and Operations: Cognition also transforms how a company operates and functions. Business processes infused with cognitive capabilities capitalize on the phenomenon of data, from internal and external sources. This gives them heightened awareness of workflows, context and environment—leading to continuous learning, better forecasting and operational effectiveness—along with decision-making at the speed of today’s data.
  5. Intelligent Exploration and Discovery: Ultimately, the most powerful tool that cognitive businesses will possess is far better “headlights” into an increasingly volatile and complex future. Such headlights are becoming more important, as leaders in all industries are compelled to place big bets—on drug development, on complex financial modeling, on materials science innovation, and on launching a startup. By applying cognitive technologies to vast amounts of data, leaders can uncover patterns, opportunities and actionable hypotheses that would be virtually impossible to discover using traditional research or programmable systems alone.

Innovators, entrepreneurs and intrapreneurs should all be licking their chops at the numerous ways to capitalize on this.

This does change everything! … hopefully you agree.  More from IBM on The Cognitive Era … check out the short video.

As always, leave me your thoughts and ideas here.

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.

Best Business Decision Making Tool Ever?

Those of you who know me, know that I have spent my career as both an Entrepreneur and more recently … an Intrapreneur.   I have also been on a slightly quirky quest to find useful tools and models that will enable me to make better, more objective decisions that increase the chance of success and minimize risks.

Whether you call yourself an Intrapreneur or not, you probably have a need to make decisions about your own projects. Which brings me to today’s posting. I have come to rely on a handful of basic but indispensible tools and am curious about whether these are same tools and methods that everyone else relies on.

My favorite tool by far is the SWOT Analysis. I have used it hundreds of times over the years for everything from personal career planning to many different business situational assessments. I even used it to start the project that eventually became IBM’s Patient Care and Insights solution. At the time, we were trying to decide how to approach bringing a major breakthrough in healthcare analytics innovation to market that has been invented by IBM Research named Patient Similarity Analytics … and it all started with a SWOT Analysis.

A SWOT Analysis is an easy to understand and versatile way to assess your position at any point in time. Think of it a tool to assess any situation from 4 different positions or perspectives (Strengths, Weaknesses, Opportunities, Threats).  It can be as simple as making a list for each of the SWOT categories. There are many different ways to apply and use SWOT Analysis. It’s power is in it’s versatility.  Once the items are listed, decision making becomes easier bordering on obvious. The listed items can also be scored or weighted with other relevant information such as likelihood, impact, etc.

Strengths

  • List strength 1
  • List strength 2
  • List strength 3

Weaknesses

  • List weakness 1
  • List weakness 2
  • List weakness 3 
Opportunities

  • List opportunity 1
  • List opportunity 2
  • List opportunity 3
Threats

  • List threat 1
  • List threat 2
  • List threat 3

Catherine Kaputa has a wonderful way to use SWOT as a career / personal brand assessment in her book on personal branding titled “You Are A Brand”

Eisenhower Analysis

Credited to Dwight D. Eisenhower, an Eisenhower Analysis (also known as the Eisenhower Box, or Decision Matrix) is a time management or prioritization tool. It is best used when trying prioritize, organize or otherwise get control of a situation or workload. The goal is to easily recognize the highest priority items from the noise. As an example, many people confuse “urgent” work with “important” work and this helps bring clarity to those kinds of issues. Once the items are listed, prioritizing is clear. Like SWOT, the listed items can also be scored or weighted with other relevant information such as likelihood, impact, etc.

Urgent and Important (1)

  • List urgent important item 1
  • List urgent important item 2
  • List urgent important item 3
Important (2)

  • List important item 1
  • List important item 2
  • List important item 3
Urgent (3)

  • List urgent item 1
  • List urgent item 2
  • List urgent item 3
Neither Urgent nor Important (4)

  • List non-urgent non-important item 1
  • List non-urgent non-important item 2
  • List non-urgent non-important item 3

Franklin Analysis (Pros / Cons)

Credited to Benjamin Franklin, the Franklin Analysis (also known as the pros and cons analysis) is a comparison tool for decision making … typically in a list format. It is used when comparing the pros (positives, pluses or benefits) to the cons (negatives, minuses or costs). This tool is most effective when there are many items to consider and the decision is not obvious. Many people bring emotion into decision making and this approach helps keep an objective perspective. Like the SWOT and Eisenhower approaches, the listed items can also be scored or weighted with other relevant information such as degree of importance, etc.   Totals can even be calculated from the weighted scores.

Pros

  • List positive item 1
  • List positive item 2
  • List positive item 3
  • List positive item 4
  • List positive item 5
Cons

  • List negative item 1
  • List negative item 2
  • List negative item 3
  • List negative item 4
  • List negative item 5

There are literally hundreds of decision making models and approaches but I kept this list to the most well known. What is your favorite tool? As always, leave me your thoughts and ideas here.