Sure, innovation can be fun and interesting and energizing. But how do you move from innovation as a sport to innovation as a true growth strategy, especially in a conservative business like healthcare? New research by consulting firm PwC might offer some answers.
To conduct its study, P2C surveyed more than 1,200 executives in 44 countries, conducting in-depth interviews with leaders responsible for managing innovation initiatives.
The research, which cut across multiple industries, found that firms that applied customer-engagement strategies leveraging design thinking and user-driven requirements — from idea generation to a product or service launch — saw better results. In fact, they were twice as likely to expect growth of 15% or more over the next five years, PwC found.
In conducting the research, PwC researchers identified five strategies which contribute to effective innovation efforts. They include:
- Use smart metrics to measure innovation success: Whatever you invest, if you track the benefits of innovation by how it boosts revenue and contains cost – along with building sales – you’ve likely got a sustainable model. Sixty-nine percent of respondents named sales growth as the most important way to measure innovation success.
- Don’t make “blind bets” — build viable business initiatives: Make sure you find a way to square your innovation strategy with your business strategy. And be aware that doing so may be challenging. The PwC report notes that 65% of companies investing 15% or more of their revenue in innovation saw connecting innovation with business goals was their top strategic challenge.
- Create silo-busting innovation models: To succeed at innovation, break down traditional organization barriers within and outside of your organization, which helps you leverage a wider pool of ideas, insights, talents and technology. Consider more-inclusive operating models like open innovation, design thinking and co-creation with partners, customers and supplies rather than traditional R&D. Thirty-five percent of PwC respondents reported that customers were their most important innovation partners.
- Leverage a broad base of human experience: See to it that your innovation teams seek input from across a variety of disciplines, rather than letting technology drive your process. For example, while big data may help you know how customers behave, data alone won’t explain why they behave that way. It’s better to bring the right human judgment and intuition to bear on the data rather than sticking strictly with IT experts. Sixty percent of companies surveyed said that internal employees help to drive innovation within their organization.
- Support technical innovation: While technology is far from the only tool you can use to innovate, it remains a compelling option. Many companies looking to technology to create markets for novel products and services that don’t yet exist, and to meet needs that customers may not even know they have. Half of PwC’s respondents rated technology partners as their most important innovation collaborators.
So, what can the healthcare industry learn from this study? A few things come to mind.
For one thing, I believe that healthcare leaders could do far more to turn silo-busting activities into group innovation projects. In other words, don’t just merge data from different departments into a common database, involve the people in those departments with the process, and ask them how breaking down barriers could change the organization in a positive way.
Another thing that comes to mind that healthcare technology leaders could stand to integrate non-technical opinions into innovation efforts. Right now, health IT organizations are remarkably siloed themselves, and while they may involve clinicians in their process at times, it’s rare for them to take in the opinions of non-medical employees who don’t use advanced IT functions very often. (Yes, a janitorial services worker may have something to offer.)
And what about picking the right metrics to measure innovation success? Of course, existing models emphasizing clinical improvement aren’t misguided, nor are measures of IT performance, but there’s more to consider. Particularly within the ecosystem of a large hospital, as many departments outside IT care delivery which contribute to the organization’s overall health.
Ultimately, what makes innovation valuable is the extent to which it draws upon an organization’s unique strengths. But it never hurts to take broad principles like these into account, as they may help you extract the full benefits of the innovation process.