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Engage Consumers July 11, 2017

Getting Digital: Three Ways Healthcare Organizations Can Develop Their Digital DNA

Partner, Health and Life Sciences, Oliver Wyman
Director, Marsh & McLennan Advantage, Healthcare
Key Takeaway
Failure to notice organizational adjustments needed for digital innovation will thwart advancement.

As healthcare continues its transition toward a more consumer-centric model, healthcare organizations are increasingly turning to digital solutions to engage customers and improve the delivery of care. These solutions range from consumer-facing apps to behind-the-scenes tools that allow payers and providers to analyze their populations and devise tailored care plans.

The rise of digital is as much a response to the demand for a simpler, more consumer-friendly healthcare experience as it is a reaction to increasing cost and quality pressures. Powerful data, analytics, and connectivity technologies can help healthcare companies change how care is delivered, all while delivering on the goals of affordability, efficiency, and outcomes.

For that reason, digital capabilities and initiatives should not be sequestered in consumer or IT divisions. Instead, “digital” should be viewed as an overall mindset, one that fosters a culture of experimentation and allows for continuous improvement. For most legacy healthcare organizations, this is not the current state of being. Failure to recognize the significant organizational adjustments required for digital innovation will thwart any organization’s attempt at advancement.

Shifting to a digital mindset is challenging, but not impossible. Here are three ways healthcare organizations can cultivate their digital DNA:

  • Foster failure
  • Think big, act small
  • Hire with intention

1. Foster failure

False starts and missteps are not usually markers of success in a field like healthcare. (There are no do-overs in the operating room.) But to remain competitive in today’s complex health market, healthcare organizations must learn to develop a culture of experimentation. Leaders can foster a fail-friendly environment by encouraging the use of new technologies and demonstrating a willingness to experiment—testing even those approaches that are likely to fail so that they can pinpoint the ones that drive transformation success.

The most innovative healthcare organizations—the ones that will likely own the future healthcare space—do this with consistency. Omada Health, although a start-up and not an incumbent, is an example of a company with a leader who has embraced the characteristics necessary for digital success. CEO Sean Duffy, an alumnus of Google and IDEO, is particularly committed to fostering a culture of experimentation. That’s how the company achieved a breakthrough approach to engaging with consumers and changing the health behaviors of people struggling with diabetes, a disease that takes up a significant portion of healthcare spend in the United States.

When the company, after experiencing initial success with its digital health coaching, knew it was time to scale, it decided to do so boldly—increasing its coach-to-client ratio from 1:20 to 1:200. Omada was able to achieve this by adopting chatbot technology. But the technology alone did not enable the successful scaling. Equally important was Duffy’s willingness to try new approaches. Drawing on the company’s culture of innovation, and using its design capability, analytics engine, and consumer-engagement capabilities, they were able to scale beyond what was before considered possible.

Castlight Health is another San Francisco-based healthcare information company that offers lessons in smart course correction. Castlight began in the personalized health shopping space, offering employers a suite of transparency tools that employees can use to save money on healthcare costs. But that space has become crowded and experienced slower growth than anticipated. And so in early 2017, Castlight announced it would be course correcting with a $135 million acquisition of Jiff. That digital health company provides a platform for connecting employees to different vendors for health and wellness programs. Rather than continuing to stubbornly push their existing model, Castlight leadership looked to where the market demand was going and course corrected to get ahead of it.  

2. Think big, act small

Over the last several years, U.S. health-insurance companies have had to massively develop their digital capabilities as they face a more consumer-oriented market and innovative start-up competitors with Silicon Valley-DNA. Humana, for example, has developed a range of digital and social-media offerings, from educational videos to personalized electronic health coaches, and access to online communities of individuals with similar conditions.

But large incumbents often end up with their best digital efforts siloed within small teams or departments. Rather than driving experimentation and innovation across the entire organization, these “other” teams operate outside the main organizational structure and culture, but still confined by legacy bureaucracy and constraints.

Instead, “digital” should be viewed as an overall mindset, one that fosters a culture of experimentation and allows for continuous improvement.

Integrating digital culture throughout an organization requires leaders to think big, but act small. Adopting the more nimble and rapid iteration process of a start-up can help incumbents foster digital DNA. That is, of course, easier said than done. The first step may be to screen the organization to identify obstacles that stand in the way of a more agile, digital-friendly culture. A test drive might identify things like an overly bureaucratic planning process or an organizational set-up that does not foster teaming and collaboration.

Incumbents that are trying to develop entirely new businesses may benefit from establishing an incubator to ensure these businesses are protected from the traditional processes of the incumbent. This is most effective when the new business model is very different from the legacy business model, or even in competition with the existing model (such as a pharmaceutical company investing in non-drug-based disease prevention.)

Meanwhile, organizations working to develop new but adjacent businesses should be sure to elevate and integrate those businesses at the highest organizational level. For example, the chief digital officer leading the new ventures could report directly to the CEO. Establishing regular lines of communication and direct accountability can engage leadership and speed the process of integrating digital innovation throughout the organization.

3. Hire with intention

Transforming organizational culture requires that leaders at every level demonstrate new behaviors and skills. It also requires a number of structural changes in areas like day-to-day processes and governance; and it necessitates new metrics to embed those behaviors.

The skills and capabilities required for this new culture may be different than what currently exists within an organization. Thus, talent management and recruiting will have to evolve as this agile culture develops. Companies must look to abolish old performance models and look to modernize their management principles. Continuous feedback loops, mutual exchanges, and employee empowerment are imperatives to promote a culture of improvement. These considerations, in addition to the revamp of rewards policies, and learning and working environments, should be  leadership concerns that are reflected by the organizational design.

A company that has established and fostered such a culture is the on-demand healthcare concierge company, Accolade. Its health assistants are recruited based on their empathy and desire to help patients solve their numerous hassles in dealing with the healthcare industry. In addition, Accolade’s talent and performance management is built around the closeness of the relationship between the health assistant and the patient (measured by whether the patient requests the specific health assistant).

This sort of empathy-based, relationship-driven culture may not seem digital, but it is at the heart of success for today’s consumer-centric and digitally driven companies. 

Leadership must look for transformation, not improvement

Healthcare organizations looking to capitalize on digital solutions must approach the effort as one of transformation, rather than improvement. Leaders must set a clear vision, embrace ambiguity—as the path forward may not be immediately clear—and immerse people in a culture of true customer centricity. Organizational leaders must also be honest and transparent about what drives culture today and what may stand in the way of the end goal. And they must be willing to clear those obstacles, and protect and nurture the digital innovations that will—piece by piece—lay the groundwork for complete transformation. 

To read more of Oliver Wyman’s digital ideas and points of view, visit our Digital Bytes library.

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