And why a heretofore taboo approach to organizational problem solving — vendors — may now be part and parcel to the solution
Every day, almost every employee in your organization is saying no to innovation. They don’t mean to, of course. But it’s happening. And the thing of it is: you are absolutely encouraging it.
That’s because your organization’s structures and systems have been optimized to be profitable and efficient and reliable at carrying out the day-to-day operations of delivering healthcare services.
That’s unquestionably good.
It’s also bad.
Those same structures and systems the organization relies on for normal day-to-day operation are also very much preventing innovation. On purpose.
An organization’s structures and systems can be thought of as an immune system, a defense mechanism against variation — the scourge of profitability, efficiency, and reliability.
That has produced a crushing paradox: at a time when innovation is needed most, most organizations don’t have the capability to innovate.
This paradox is called Innovation Autoimmune Disorder and it’s killing your innovation strategy.
Diagnosing Innovation Autoimmune Disorder
There’s a notion in technology circles that a company produces products in the image of how the work gets done in that organization.
In other words, a company’s products or services come with similar properties and capabilities as the organization’s structures and systems.
The phenomenon even has a name: Conway’s law. The adage goes, “Organizations which design systems…are constrained to produce designs which are copies of the communication structures of these organizations.”
It makes sense: organizational structures and systems necessarily influence the way the work is delivered because structures and systems are what an organization uses to communicate.
This idea, however, isn’t only present in technology companies. All companies design systems. So all companies are constrained by the structures and systems of their organizations, including healthcare delivery organizations.
How does a healthcare delivery organization launch a new service? By designing a system.
The process of launching, creating, starting, building, embarking, initiating, and any other effort of commencement in a healthcare delivery organization follows a similar path: an approach almost always governed by time-tested methods of planning, direction, and control. That’s because accepted methods of planning, direction, and control have consistently produced profitability, efficiency, and reliability.
A business plan is created. Funding is approved. Space is acquired, built out, and outfitted. Staff is hired and trained. Technology is installed and connected. Marketing and internal communication plans are created. All stakeholders are given the opportunity to provide input, concerns are stated and addressed, the project is scoped, a project schedule and budget are established, and the service opens for business according to plan.
Innovation is designing new systems too, of course, and healthcare delivery organizations that attempt to apply traditional planning, direction, and control methods to make it happen often find it doesn’t.
That’s Innovation Autoimmune Disorder: the implicit and explicit rejection of potential innovation caused by an organization’s structures and systems. It is the ultimate statement of “that’s not the way we do it around here.”
Support departments say no to — or fail to make exceptions for — a new idea, a new approach, a new vendor partnership, or some other request because of traditional planning, direction, and control reasons.
IT, HR, vendor management, project management, and every other centralized function are all governed by previously established processes. Policies and procedures have been honed over the course of decades. Management practices — for all things: employees, interdepartmental relations, budgeting, performance management, etc. — have been optimized to serve large bureaucracies.
Innovation fails to materialize as a result.
New ideas go unpursued because project charter, scoping, and committee-approval requirements are burdensome. Procurement procedures prevent the purchase of anything outside what the bureaucracy deems acceptable. Administrators concentrate on budgets and efficiency because performance management focuses on short-term deliverables.
So while C-suite survey results continue to indicate that innovation remains an important strategic priority for healthcare providers, desiring innovation is rarely enough to make it so. Organizations that rely on the same structures and systems to innovate that they do for planned, directed, and controlled change are systematically rejecting innovation every day.
Treating Innovation Autoimmune Disorder
The healthcare delivery organization is organized and operated purposely so that each day is unremarkable from any other.
The problem for organizations is that the industry in the midst of remarkable days. The operating environment is changing faster than any organization’s current ability to respond. The challenges are arriving on multiple fronts — regulatory, operational, reimbursement, consumerism, workforce.
Industry norms are shifting. Tactical paths forward are relatively unclear. A dramatic technology conversion beyond the electronic health record is underway.
These are the reasons innovation is so urgently desired in healthcare provider organizations. But Innovation Autoimmune Disorder too often gets in the way. Shifting an organization’s structures and systems to incorporate innovation as an accepted exception is the required long-term approach.
Overcoming Innovation Autoimmune Disorder will require healthcare delivery organizations to craft structures and systems that explicitly support innovation.
While those structures and systems will be unique to each organization’s specific objectives and distinct characteristics, there are three essential objectives every organization must pursue to explicitly support innovation.
Make it okay to try new ideas. Innovation requires trying ideas. Innovation activities will produce unsuccessful outputs, but many can’t be labeled failures until experimentation has occurred. Choosing the right idea to develop further is surprisingly difficult in a planning-oriented environment. It can be made easier by testing in real-world environments. That requires experimenting with ideas which will occasionally lead nowhere but may serve as a building block to something better. It’s impossible to know the extent to which a new idea will improve value, increase revenue, and grow market share until it is tried.
Incentivize working together in new ways. Innovation requires business units, departments, and service lines to collaborate in new ways and be open to the possibility that a predefined outcome may not always be a basis for participation. Traditional interaction patterns should be set aside to explore something different. Take support departments and the operation, for example — instead of being perceived as gatekeepers of resources, departments like IT, HR, and project management can become partners in solving business problems with no predetermined approaches.
Make technology available to support new ideas. Innovation requires making technology available and accessible. While technology is only part of a solution — every innovation project utilizes a combination of people, process, and technology resources to create an output — even prototypes increasingly rely on technology for initial demonstration. Traditionally, administrators have had decision-making authority over elements of people and process decisions, but technology choices have remained the domain of IT. A budget is vital, but to innovate administrators must have access to all resources and, more importantly, agency in using them.
Finding Support Along the Way
Of course innovation-focused structures and systems are a long-term shift — and potentially longer than what organizations may be comfortable with given the pace of industry transformation. That reality is giving way to the realization that a heretofore sacred belief may be open to reexamination.
“More than 75% of leader respondents,” to a recent innovation survey from the American Hospital Association and AVIA, “believe that innovation must include partnering with other innovative organizations.”
The previously taboo approach to organizational problem solving — vendors — may now be part and parcel to the solution. Outside help may not only be needed, but required.
Healthcare delivery organizations have traditionally addressed strategic challenges with a mix of internal subject matter knowledge, technical proficiency, and industry best practice. The limits of that approach are evidenced by the survey results above. This version of healthcare transformation requires organizational capabilities not currently found in most contemporary provider organizations.
The shifting operating environment requires new organizational expertise in digital technology, emerging operating domains, and efficient implementation methods. Vendors, or in this new paradigm, partners — with their products, services, subject matter expertise, industry expertise, technical skill, and ability to execute with urgency — are the most reliable method to immediately leverage required know-how that doesn’t exist in most organizations.
There is no quicker way to overcome Innovation Autoimmune Disorder than to involve partners. Partners offer a plethora of opportunities to operationalize innovation across the organization.
Some organizations are starting to realize a partner approach may prove strategically beneficial for these reasons. GE Healthcare has launched partnerships with several organizations including Jefferson Health in Philadelphia and Partners Healthcare in Boston, AVIA’s innovation network business model is built on the idea, and industry integrator Catalyst HTI is opening a building in Denver explicitly for this purpose.
These partnerships are a good start at the executive level. But the strategy must diffuse deep into the organization if it is to find its full potential. Perhaps partners — of all types and sizes — can help the middle of the organization innovate right now if they were made available.
Industry partners will play an increasingly larger role in the transformation of healthcare delivery given the dramatic shifts on all fronts. To that end, organizations must become comfortable with new people, new concepts, and new ideas coming into the organization.
An organization’s structures and systems will adjust in time. Because just as structures and systems ensure profitable, efficient, and reliable operation, they also adjust as organizations realize the necessity of adapting and evolving.
And until then, partners can help.
As they always have, the competitive, regulatory, and operating environments are shifting. This time, however, the traditional model of adapting and evolving is preventing healthcare delivery organizations from doing just that.
Innovation Autoimmune Disorder is killing your organization’s innovation strategy. Do something about it now that you know: call a partner.