Two recent articles show that even the most intractable problems can be overcome when organizations find ways to align their goals. Sometimes collaboration makes for strange bedfellows—like the military and environmentalists—but opportunity is often highest when when “mashing up” groups that are not used to working together. Innovation can produce surprising value when leaders open their minds, challenge conventional wisdom and make unthinkable changes—like paying a hospital more for treating patients less.
These stories are as inspiring as they are instructive because the people involved questioned assumptions, and I hope you enjoy them.
Healthcare Costs Hit in Solar Plexus
Virginia Mason Medical Center is Seattle’s third largest health care provider, and it began innovating in several areas after receiving a wake-up call from Aetna, one of the area’s largest insurers. In 2004, Aetna shared the results of a study that compared treatment costs of Seattle area hospitals. Several of Virginia Mason’s specialty practices were significantly more costly than alternatives, and Aetna was considering excluding those areas from coverage. In the ensuing two years, Virginia Mason innovated by using new workflow strategies in targeted treatment areas. For example:
In the spine clinic, […]
Chinese Prescription for Healthcare Providers predicts that China is showing itself to be very innovative in health care by implementing market-based offerings. The TEDA International Cardiovascular Hospital, just outside Beijing, offers six levels of service, ranging from $6.70 to $3,200 per night, as reported in “Hospital Caters to China’s Wealthy and Poor” in The Wall Street Journal or the hospital website. The lowest class of service has patients sharing a small room with other patients while “first class” includes a suite with a private gym, a garden, massage chair and other amenities.
As mobile phones and smartphones become increasingly commonplace in mature and emerging markets, pundits increasingly predict that Apple will apply its design and experience expertise to field a mobile phone. Renowned for the elegance and simplicity of its devices and services, Apple provides unparalleled experience through world-class design of hardware, software and services. It delights and inspires customers by making the complex simple and beautiful.
Plus ça change* was the theme of The Executives’ Club of Chicago High Technology Conference December eighth, where an esteemed panel gave varying perspectives on Chicago’s importance as a technology center. William Avery of Brunswick Corporation, James O’Connor, Jr. of Motorola, Inc. and Ira H. Cohen of Goldman, Sachs & Co. spoke about technology from enterprise IT, mobile technology and investment points of view respectively. Prior to their prepared remarks, John Gentry of CSC Consulting outlined key results of the forthcoming Chicago Technology Outlook Survey, in which corporate technology leaders commented on IT trends for 2007 as well as Chicago’s role as a technology center. He moderated the panel during a Q&A session.
In the past 15 years, “enterprise IT” has been transformed from an accounting support function to the driver-enabler for innovation and value creation. By no means has this been a smooth transformation, as businesses in all industries are besieged by globalization, new competitors and rampant commoditization. At many companies, executives around the boardroom table have had mixed feelings about IT in the face of huge expenditures and uncertain ROIs.
“The impact of consumerization is the most important trend impacting IT in the next 10 years,” Sondergaard remarked. “There will be a shift in culture reflecting the dominance of the ‘digital natives.’ Consumer technology will be integrated into (the) home, home office, in transit or recreational areas, and users will initiate interactions from all of these settings.”
Web 2.0 is a new phenomenon that is beginning to realign the balance of power between producers/providers of products/services and customers because it enables customers to self-organize and wield unprecedented influence in the market. “Web 2.0” refers to a group of (usually) free user-friendly Web applications like blogs, wikis, integrated video/phone services and social networking sites (more below) that enable individuals to connect, collaborate and concatenate with unprecedented ease. E-Commerce (doesn’t it sound quaint now?) first enabled consumers to gain a new level of information about products and services and, as adoption proceeded, to buy over the Web. That was “Web 1.0” and it was still largely one-way communication because information flowed from the Web to customers. “Web 2.0” is focused on letting individuals self-organize, interact, collaborate and be equal players in what aficionados call “the conversation” of the Web.
IDC analysts Brian Bingham and Barry Rubenstein cited extensive IDC research to describe how outsourcing is developing as a business practice. Although they didn’t explicitly delve into adoption itself, their treatment of ITO (IT outsourcing) and BPO (business process outsourcing) provided significant insight into how outsourcing is being adopted by global enterprises. ITO is several years ahead of BPO for several reasons, namely that IT has traditionally been managed as a support function and cost center in most enterprises and, as such, it has been a textbook candidate for outsourcing. BPO is often more intertwined with the business’s core competencies; in addition, it almost always requires sophisticated IT support. Clearly, ITO had well publicized failures in the early 2000s, but this proved to be part of the normal learning curve, and ITO successes have emboldened buyers and providers to push further into the business. This contrast between ITO and BPO patterns is particularly instructive.