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Maximize Value Infographics January 06, 2021

Healthcare Leaders Can Change the Course of Human Evolution

Let the Survival of the Fittest Begin

Principal, Health and Life Sciences, Oliver Wyman
Partner, Financial Services, Oliver Wyman
Key Takeaway
The ever-elusive goal of “continuous improvement” in operational processes is not achieved just by intelligent design, but rather by Darwinism or natural selection. #OWHealth

“The Agricultural Revolution was history’s biggest fraud.” So writes Yuval Noah Harari in Sapiens: A Brief History of Humankind. The Agricultural Revolution – the transition from hunter-and-gather to farming-based societies – is often heralded as a great step forward for humankind. But was it?

“As more effort was directed towards cereal cultivation, there was less time to gather and hunt wild species,” Harari explains. A new focus on cultivation left many individuals more vulnerable to drought and blight and with little free time to enjoy life.

The transition to agrarian societies was imperceptible to those experiencing it. Improvements in cultivation techniques took place over generations; no one had a view of their collective, broader implication – innovation was a one-way ticket to (a harder) agrarian life.

As Harari describes, “[These] ‘improvements’, each of which was meant to make life easier, added up to a millstone around the necks of these farmers. Why did people make such a fateful miscalculation? For the same reason that people throughout history have miscalculated. People were unable to fathom the full consequences of their decisions.” 

Lessons from the Agricultural Revolution for Healthcare

Harari’s book about the evolution of human society from the Stone Age to today perhaps doesn’t seem upon first glance like it would offer valuable lessons for healthcare businesses. But it does.

For many healthcare leaders, as an example, significant attention is spent on innovation (whether it be bringing innovation into their organizations or responding to innovations in their markets). The lesson to draw from the above is to spend time reflecting on downstream implications. In a vacuum, as an example, incorporating a new technology into a customer service workflow to improve efficiency may seem like a “no brainer.” But, are their unintended downstream consequences? Will the new technology make it harder to interface with other enterprise platforms in the future? While efficiency improvements increase productivity, do they also increase customer abrasion?

The importance of understanding downstream implications and unintended consequences is even more relevant today as healthcare businesses rapidly respond to COVID-19. Yes, it is critical to quickly stand-up telehealth capabilities. How can you do so in a way that doesn’t result in a one-way ticket to a harder (corporate) life?

In the following, we share reasons why healthcare leaders should step back to analyze the history of humankind to develop a deeper understanding of what makes their businesses tick amid factors they can’t control.

Lesson 1: Don’t Let Your Business be Defined by Compartmentalized Decisions

The transition of societies from small groups of foragers to larger, agrarian-based populations was not purposeful. Instead, it was the result of a collection of individual decisions that were made without weighing broader implications. For example, wheat grows better when its seeds are scattered in depressions of earth instead of left on the surface. Conclusion: hoeing the ground makes sense. But, hoeing the ground means both time and energy are needed to make the hoe (as well as to use the hoe). This means less time for foraging and a greater dependence on farming.

Hence, an unexpected outcome arises. Harari calls this “the trap.” Thousands of years (and many small decisions) later, humans largely live in agrarian societies where a hoe can be delivered to your door with a few taps of a finger on the very same day. But to what extent does this really improve our lives?

“We have invented countless time-saving machines that are supposed to make life more relaxed – washing machines, vacuum cleaners, dishwashers, telephones, mobile phones, computers, email,” Harari explains. “We thought we were saving time; instead we revved up the treadmill of life to ten times its former speed and made our days more anxious and agitated.”

The meaning of life and source of happiness is a topic for another time. The most salient point here for healthcare leaders is the implications of small decisions where the question is not: “Does the change improve our lives?” It’s “Does the change improve our business?”

Healthcare leaders, as an example, often fall into the trap of building large data science teams without first clearly defining the types of problems those teams will solve and they will integrate into the organization. The result? Lots of cost and little benefit.

As another example, consider a health system “optimizing” its information technology infrastructure and processes – fundamentally, a set of individual decisions. When this “optimization” is made exclusively within an information technology department, it often leads to technical debt (the “trap!”) that takes years to untangle. Imagine installing a new contracting system optimized for fee-for-service contracting when the other side of the organization is working toward building more value-based relationships. In an ideal world, a business’s operations will support an organization’s well-defined, thoughtful strategy. Too often, the direction of a company is held hostage by the myriad small decisions made across an organization, effectively locking an organization in a cost and market position – not by design, but by happenstance.

COVID-19 has made the likelihood of falling into a trap only more likely. There is (understandably) more attention on the here and now. With that focus, however, comes the risk of making near-term decisions that have long-term consequences. In the rush to expand telehealth capabilities, as an example, we are seeing many organizations make what will be seen in retrospect as band-aid solutions that didn’t take the long view (specifically, solutions are being stood up as stand-alone offerings that create a more fragmented patient experience and don’t integrate well with existing care management platforms).

What should healthcare leaders do? Without the right conditions in place to help an organization diagnose, understand, and course correct, individual decisions continue to be made in a reactionary (and siloed) manner, which over time only compound complexity and inefficiency. Operational processes evolve into ghastly quagmires from which organizations struggle to extricate themselves from. We frequently see chief operating officers and business leaders cringe and avert their eyes from “what’s under the hood” or see them shaking their heads, muttering, “I don’t how this got to where it is today.” Confronted with the grim reality, the question is – is it possible to intervene and change the course of evolution? Harder to answer for the broader plight of us Sapiens, but certainly possible when thinking about operational processes.

Lesson 2: Let Darwinism Shine Through to Avoid Being Trapped and Ensure the Future-Proofing of Your Business

Design-led thinking is all the rage. And for good reason. The idea of throwing a multi-disciplinary team together and forcing them on a journey of end-to-end problem solving is powerful. In many cases for process engineering, this approach by intelligent design allows businesses to hit the reset button on a process, and reshape it using new tools, capabilities, and hopefully, learnings from past lessons. We see this all the time – tearing apart existing infrastructure, digitizing manual processes, installing new operating platforms. This leads to a step-change improvement, and the immediate outcomes are usually positive.

But given time, the conditions and behaviors of the organization begin to shape its evolutionary trajectory once again. Costs creep back. Errors slip through. Executives are confronted with the different flavors of the same frustrations: “There’s no end-to-end accountability! We are reactive, not preventive! We are not making decisions based on insights!”

This is because the ever-elusive goal of “continuous improvement” in operational processes is not achieved just by intelligent design, but rather by Darwinism or natural selection. The fact of life is that the environment is always changing. While high-level guidance or “guardrails” must be given (such as “be a forager”), we often do best as a collection of autonomous individuals – let Darwinism shine through!

It’s About Survival of the Fittest (and the Future-Proof)

Staying ahead (or in some cases, merely surviving) means constantly keeping up with changes. Relying on the reset button every two to five years does not accomplish this goal. A process can only be “future-proof” (and “trap-proof”) if the conditions are in place which encourage it to optimize, not regress.

In our experience, these conditions fall into three categories:

In practice, the successful execution of these three strategies means teams are embedded within end-to-end process areas that deliver immediate business value by solving critical challenges while developing new capabilities rapidly in response to an ever-changing environment. Putting these conditions in place means going beyond shiny new tools and dealing with deeper issues which cause the pull towards devolution back to chaos such as siloed ways of working, decision paralysis, outdated improvement techniques, and failure to think in terms of behavioral outcomes in addition to performance metrics.

What Darwin Teaches Us About Innovation

Think Darwinism doesn’t apply to your business? Think again. Perhaps the next best focus for the industry is summed up best by Sapiens author, Yuval Noah Harari, who said “It is an iron rule of history that what looks inevitable in hindsight was far from obvious at the time.” Here’s to more 2020 vision in 2020 and beyond. One critical question Oliver Wyman Health asked a couple of years back that remains just as true today: When the time comes to adapt or close your doors, which do you want your company to do?

Just as Harari wrote about how societal change is often noticed only imperceivably until many generations have passed, it’s feasible to perhaps say the same about the current state of healthcare. Even with of the recent innovations swirling about throughout 2020 thus far, what remains as lasting and impactful is perhaps yet to be seen. Until then, we’ll keep plowing away at change. 

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