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Lessons Learned And MVPs

 I’m a big believer in trying to capture and learn from everything you do.  When you work in the start-up and turnaround space, not everything will be a clear success

After looking back on my time at my last turnaround, there are several clear takeaways:

  1. Demonstrate Incremental Benefits…All The Time.
    1. Taking on long-term projects is dangerous.  Sponsors change.  Markets change.  New technology comes out.  If you’re working on a multi-year transformation, you need to demonstrate incremental wins and have clear milestones.  You should assume you don’t have the next round of funding and build for success at each point.   I could say this is using an Agile approach, but it’s more than that. 
    1. This one probably seems so obvious from the outside looking in, but it’s easy to get carried away with trying to take on too much.  In this particular case, we thought we had a 3-year timeframe to build and deliver on the vision.  We created a vision of care coordination that was really innovative, but we knew that no one had pulled it off before.  We then tried to coordinate care coordination and cost management which also hadn’t been done.  It would have been better to deliver one thing at a time and make ourselves incredibly sticky in that area.
  3. Know Your Customer…Really Well.
    1. When coming into a business, it’s so important to know the customer base and what they feel about the business.  Do they love it?  Do they engage regularly?  Is it just a commodity?  And why.  In this case, clients seemed to love the business, but it was because it was a massively customized business doing all the wrong things.  As we brought the business into compliance and created re-usable processes, it changed the relationship with the customers.  The relationships weren’t sticky, and we didn’t have clear alignment of goals.
  4. Partner Well.
    1. When you’re in the early stages of growth, it’s tempting to try to partner with people bigger and leverage their brand.  While that can help, it’s often a big distraction.  Some times, you commit to something that you can’t achieve putting pressure on a key relationship.  And, other times, you put so much at risk tied to the big company that when you realize that you’re not important to them then you have real challenges.  This gets back to the traditional understanding of buy, build, or partner and understanding your core competencies.
  5. Have A Clear Value Proposition.
    1. You’ll always find early adopters especially when you have a compelling vision, good sales people, and good management.  But, they won’t make your business for you if you can’t clearly demonstrate value.  You have to have access to data.  You have to be able to report on what you do and demonstrate how you’re creating a ROI.  In today’s competitive market, companies without a clear value proposition don’t last long.
  6. Be Different.
    1. This is a tough one.  We all watch the competition and see a path towards success, but as a younger company, trying to compete on price is a sure path to disaster.  Like the Blue Ocean Strategy, you want to compete in a different area.  Find your niche and do it better than anyone else in a way that is really different.  Trying to build something to just catch up always puts you behind. 
  7. Hire Slow and Fire Fast.
    1. This is something many people say, but they don’t always do.  It’s important to get the right team.  It’s important to hire in a logical sequence.  For example, getting a great sales team before your solution is built is great for the pipeline but frustrating to everyone in between.  On the flipside, in a smaller company, a toxic personality or someone that doesn’t fit can kill you.  You need to realize that quickly and let them go.  No one likes to do it, but you do a disservice to everyone else if you keep them. 

The past few years have been really interesting as I learned more about case management, disease management, utilization management, oncology, kidney care, and many other parts of our healthcare system.  The key is leveraging all of this as I move forward in my new role

I think another related topic to think about here is some of the lessons around MVPs (minimum viable products)

I always use the Apple 1 as my case study for an MVP.  

Apple Minimum Viable Product

12 Innovation Lessons from 2014 (Fast Company)

Back in March 2014 (yes I’m behind), Fast Company put out a report on the World’s Most Innovative Companies.  I thought the list of 12 trends or lessons from their research was worth sharing.

  1. Exceptional is the Expected…Google is the case study here, but they make a point that for most companies, the best businesses focus on less not more.
  2. Innovation is Episodic…Innovation ebbs and flows so people don’t stay on the list every year.  This is also known as regression to the mean or the Sports Illustrated curse (of being on the cover).
  3. Making Money Matters…This is very true for mHealth.  I’ve seen so many really cool ideas, but if they’re not self-sustaining, that’s a problem.
  4. Sustainability Has Found A New Gear…”Green” is no longer a gimmick.  Companies are innovating and using alternative fuels and recycling as part of that.
  5. Unlocking Global Talent Unlocks Possibility…I can’t believe companies still don’t get this.  To innovate, you need diversity and a culture which allows those different opinions and perspectives to hash it solutions.  (Just look at the graphic at the bottom of this post for Silicon Valley which makes that point.)
  6. Passion is Underrated…While crowdsourcing sounds like old news to many industries.  I think there’s still a huge patient empowerment push that will happen in healthcare.  (Just look at this article in the WSJ.)
  7. Conflict Isn’t Required…This is the perfect Blue Ocean example.  You don’t always have to try to change the establishment but sometimes you have to figure out a whole new way.
  8. Happy Customers Make You Happy…Not much to say here.  Healthcare is about to learn this lesson with exchanges, but we have a long way to go.
  9. Software Beats Hardware…YES!  A great computer with a horrible data entry process which messes up the physician workflow and consumer experience is bad.  We need outside-in design to develop user-friendly software that takes into account workflow and regulation but improves the overall experience and outcomes.
  10. “Made In China” Is A Compliment…I’d expand this point to say that while we’ve outsourced for years for cost that’s building up knowledge and a middle class abroad.  As their expectations and experience rise, we’re going to see more innovation and quality from abroad.
  11. The Biggest Winner In The App Economy Remains Apple…And, now, Apple is taking it’s “moral obligation” and bringing it to healthcare.
  12. Dreaming Big Isn’t Folly; It’s Required…Eliminating cancer.  Changing payment paradigms in healthcare.  Getting patients to take action.  Changing food at schools.  We have to have some BHAGs in healthcare and make them happen.  (Perhaps some of the HealthPeople 2020 initiatives will get us thinking.)

Silicon Valley Workers

Above: Tech Immigrants: A Map of Silicon Valley’s Imported Talent (from VentureBeat article)


Fail Fast To Succeed Sooner – The Big Company Challenge

I was reading an article this morning about asking the question “are you afraid to fail?”  It’s an article about innovation which reminded me of one of my favorite quotes from David Kelley at IDEO.

Fail Faster

It also reminded me of another article from 2006 in Business Week about How Failure Breeds Success which was when I left Express Scripts to pursue several entrepreneurial opportunities.

Stefan H. Thomke, a professor at Harvard Business School and author of Experimentation Matters, says that when he talks to business groups, “I try to be provocative and say: ‘Failure is not a bad thing.’ I always have lots of people staring at me, [thinking] ‘Have you lost your mind?’ That’s O.K. It gets their attention. [Failure] is so important to the experimental process.”

BW Failure Cover

It also got me thinking about success rates in companies.  We all hear so much about the success of entrepreneurs and these 20 year old billionaires.  Is that reality?  Here’s a few stats from an article in the WSJ and a study by the Census Bureau.

  • 80% of companies make it to year one
  • 60% of companies make it to year three
  • 50% of companies make it to year five
  • 35% of companies make it to year ten

Sounds pretty depressing.  What about the fact that according to the WSJ article, only 5% of them achieve the projected ROI and 30-40% of them liquidate all their assets returning nothing.

“People are embarrassed to talk about their failures, but the truth is that if you don’t have a lot of failures, then you’re just not doing it right, because that means that you’re not investing in risky ventures.  I believe failure is an option for entrepreneurs and if you don’t believe that, then you can bang your head against the wall trying to make it work.” (David Cowan – Bessemer Venture Partners in WSJ article)

Just watch the show Shark Tank sometime.  There are amazing entrepreneurs with interesting ideas who have sacrificed so much to try to make it work.  I always try to tell people that it’s not just about passion and hard work otherwise people would succeed all the time.  Some things you do learn from Shark Tank along with the book The Art of the Start is how to frame and present your ideas.

So, why is this so important?  We’re on the the verge of huge transformation in the healthcare industry.  I think Oliver Wyman did a good job of discussing this in a whitepaper last year.  You can read article after article about mHealth, telemedicine, and remote monitoring.  (I’ll point you to Rock Health or The Center For Connected Health as two starting points.)

Of course innovation has been the buzz for several years now.  I think Jim Collins does a good job of teeing up this issue in discussing churn in the Fortune 500 list.  With the technology and VC crowd, the more recent term for business model innovation is “pivot“.  I think you’ve seen a lot more Chief Innovation Officers and innovation labs in healthcare companies these days.

I came across an interesting blend of technology consulting, investing, and innovation last night in the BCG Digital Ventures group.  In watching part of a YouTube video by their CEO, I think he does a great job summarizing how consulting maps to the investment paradigm.

  • Innovation is like seed capital
  • Product development is like venture capital
  • Commercialization is like growth capital

Interestingly, I probably get 1-2 calls a week from people in big companies that really want to get out of the big company and come work in the exciting start-up space.  I always tell them that the grass always looks greener on the other side of the fence so be careful.  It can be great, but it can be really tough.  It’s just a different type of risk and not everyone can take the emotional and potentially financial risk.  On the flipside, I also get people that look at the different entrepreneurial things I’ve done and say “why?”  They want to know why I didn’t just stay in a F500 company.  Sometimes, I think of this 8 years as a boomerang where I’ll end up back in a F500 company, but I’ll be a much more valuable product development, strategy, and innovation executive.  [This idea of boomeranging was one that Gensler introduced me to years ago in architecture where they encouraged people to work at different companies and come back if relevant.]

Depending on the day, I also think about what I’ve learned since I’ve never had one of those huge exits that everyone talks about.  I’m not cashing in on all my options to make money.  I’ve summarized many of those learnings on the blog, but here’s a few that I’ll call out.

  1. Firepond was my first venture into this space.  It was a 20-year company that General Atlantic had invested in to turn around as a product configurator in the CRM space.
    • Learned about CRM (customer relationship management) technology.
    • Learned about how to develop, structure, and manage alliances.
    • Learned the importance and how to structure offshore deals.
    • Learned about global sales and embedding technology into different solutions.
    • Learned about evaluating and buying companies.
  2. CentralScript was my second venture I started it from an idea I tried to sell at Express Scripts (and later was suggested to them by Clayton Christensen).
    • Learned about writing a business plan and financial modeling and projections.
    • Learned about the legal structure of businesses.
    • Learned about raising money and how to work with and evaluate angels and VCs.
    • Learned about building a team and structuring contracts with them.
    • Learned about selling and evaluating partners.
  3. Talisen Technologies was my third venture which was another turnaround where I worked with a friend of mine who had raise some private equity to do a technology services consulting roll-up.
    • Learned about Business Process Management technology.
    • Learned about how to build support companies around a technology platform.  (The opposite of Firepond where I was the technology company.)
    • Learned about the difficulties of transforming an existing company and evaluating new companies.
    • Learned about how to use blogging and create exposure using social media.
  4. Silverlink was my fourth venture (and most successful experience) and first real start-up where it wasn’t trying to turnaround an existing asset but building off what the founders had built.
    • Learned about how to present to and work with the Board of Directors.
    • Learned about managing a sales force.
    • Learned about product development, training, documentation, and product lifecycle.
    • Learned about sales and marketing and being responsible for growth and a team.
    • Learned about account management.
    • Learned the value of using thought leadership, social media, and the press to drive awareness and pipeline.
    • Learned how to develop competitive analysis and differentiation.
    • Leraned about pricing and analytics.
  5. inVentiv Medical Management is my current venture which is part of a broader entity, but it’s still the same concept which is a 20-year old company that we’re transforming into a new platform and new business model.
    • Still in-progress so more to come…

So, I wrote all this to make the point that innovation is difficult.  You have to take some risks.  Like the article said upfront, you have to believe you can fail.  You have to have a plan for what to do if you do fail.  Big companies should provide a safety net to people to fail fast.  I think I’ve learned a ton that I wouldn’t have learned staying in the big company.  At the right time, that will be a huge asset as I look to help drive the transformation and pivoting of a larger entity!

Who Is The NetFlix Of Healthcare HR?

I was sent this deck a few weeks ago.  It’s been out there for a few years.  It’s the HR / Human Capital strategy for Netflix.  Netflix has been known for things like no vacation policy (i.e., take what you need).  This gives much more insight.

It’s not really an industry that I’m focused on, but I’d love to find a healthcare company with this approach to human capital.  That would be a company worth following and working with.

Finally…A Use For Klout Scores?

Klout Score

Do you know your Klout score?  I know mine – 51.  Is that good or bad?  I guess it’s all relative.  Mine is only based on Twitter and LinkedIn.

The bigger question is should I care.  I’ve struggled with why to care, but it finally hit me the other day.  There are a few circumstances where I might care:

  • If my purpose was to get a job as a social media consultant.
  • If I was trying to be a community manager.
  • If I was trying to get a job in PR or as a reporter…or maybe if I tried to monetize my blog.
  • If I was trying to get some role driving awareness of a product or topic.
  • Maybe as an individual consultant.

As an average person working for a company, I’m not sure it matters.  Of course, you can argue with the “scoring” process, but the reality is that people do want some benchmark to compare themselves to for what they do online.  The interesting question is whether companies will care.  And, is there a minimum that you should have just to be able to say you understand and use social media?

Here’s a few recent articles discussing the topic of Klout.

It’s competitors are Kred and PeerIndex which I only went to because of this post.  But, I signed up for them to see what my scores where there.

Screen Shot 2012-12-26 at 2.29.09 PM PeerIndex Score

My question would be how do you adjust this for people (like me) who don’t use Facebook or should that fact alone exclude me from certain things like being a community manager for a product that needs a Facebook presence?  Perhaps.

So, if you’re hiring a mHealth or social media team, you might want to know their Klout (or Kred or PeerIndex) scores (on average for the team).  I’d say it’s like gamification.  I wouldn’t want someone just using that buzzword with me.  I’d want to know the last game they got sucked in to.  Why it kept their attention?  And, then I’d ask them things like why they think Steam is gathering gaming apps in their and whether it’s critical path for them in gamifying their app.

Can Sushi Be Delivered As A Custom Food Chain? – How Do You Roll


Until a few months ago, I would eat sushi once a month (at the most).  Now, I’ve been lucky that our Charlotte office is right across the street from How Do You Roll which allows you to come in a build your own sushi roll (ala Subway).  This is a franchise model which has been around for a few years. 

My quick summary is:

  • Good choices of fresh meat
  • Good fresh vegetables
  • Lots of options for creating unique sushi rolls
  • Quick
  • Good service
  • Reasonably priced (e.g., combo of roll with edamame and drink for <$10)

Cartoon: Gap Btwn Customer Needs And Product Features

We’ve all seen these types of cartoons at one-time or another, but I liked this one (c/o Guy Kawasaki).

Book Review: Drive by Daniel Pink

I just finished the book Drive by Daniel Pink. It’s a great book. I’d recommend it from both a personal and professional perspective because it challenges so much of what we normally think. But, it’s both logical and based on tons of research.

He lays out three reasons why people act:

  1. Food, water, or sexual gratification (Motivation 1.0)
  2. Rewards and punishment (Motivation 2.0)
  3. Intrinsic reward (Motivation 3.0)

The concept of intrinsic reward was new to people. The concept of having this drive challenges all which we believe around incentives. And, his examples reinforce this point. People performed worse on certain tasks when a clear reward was identified.

“When money is used as an external reward for some activity, the subjects lose intrinsic interest for the activity.” Edward Deci

He uses open source collaboration as a great example of this. His example is whether you would have expected Encarta , an encyclopedia by Microsoft, or Wikipedia to succeed. Why wouldn’t a big company with unlimited resources beat out a collection of volunteers?

Business today is based on the whole concept of Motivation 2.0 (i.e., carrots and sticks). He talks about the historical presumption that absent some reward or punishment that people are inert.

“Enjoyment-based intrinsic motivation, namely how creative a person feels when working on the project, is the strongest and most pervasive driver” Lakhani and Wolf

He goes on to explain the difference between algorithmic and heuristic problems. Algorithmic problems can be solved based on a single path while heuristic problems have different options. [It’s like when I went to business school and architecture school.]  He quotes a McKinsey study which says that 70% of job growth in the US is around heuristic work. Therefore, applying a traditional model of motivation to creative work creates a major issue. It turns creative work which we feel passionate about into a disutility (something we won’t do without payment).

Now of course, creative “work” isn’t “play” if the basics aren’t addressed – i.e., fair pay. This has application in lots of areas including how we get kids to learn. Paying kids for specific activities pushes them to focus on completing those but not necessarily learning how to apply the knowledge. I think it’s a key issue which should be getting debated in when, if, or how to use incentives in health care. This is why you may see a short-term improvement that falls off over time.

This will be very relevant as P4P becomes more important. If rewards narrow the focus of solutions and limit creativity, will that be good in that it focuses people on specific processes? Or will it be a problem because in complex cases or cases where there are alternatives, the creativity of solutions and consideration of options will be limited?

But, he’s careful to make sure you don’t think that rewards are always bad. They have to be used appropriately and for the right tasks.

“If we watch how people’s brains respond, promising them monetary rewards and giving them cocaine, nicotine, or amphetamines look disturbingly similar.” Brian Knutson

He lays out “The Seven Deadly Flaws” of using carrots and sticks:

  1. They can extinguish intrinsic motivation.
  2. They can diminish performance.
  3. They can crush creativity.
  4. They can crowd out good behavior.
  5. They can encourage cheating, shortcuts, and unethical behavior.
  6. They can become addictive.
  7. They can foster short-term thinking.

He suggests that for tasks that don’t inspire passion nor requires deep thinking that there are three things that are important:

  1. Offer a rationale for why the task is necessary.
  2. Acknowledge that the task is boring.
  3. Allow people to complete the task their own way.

He talks about how using bonuses can work even for creative tasks when it’s not an “if-then” reward, but it’s a “surprise”. (Which is hard to repeat multiple times.)

He goes on to talk about Type A personalities. Theory X and Theory Y. Type I and Type X. It makes some key points about how we perceive people. Do we believe in the “mediocrity of the masses” or do we believe in people’s interest in succeeding? This is where Motivation 3.0 begins to come in and there is a focus on people’s desire to success or to master something.

He makes a lot of points that remind me of Malcolm Gladwell’s book Outliers.  Mastery is hard work.

“The most successful people, the evidence shows, often aren’t directly pursuing conventional notions of success. They’re working hard and persisting through difficulties because of their internal desire to control their lives, learn about their world, and accomplish something that endures.” (pg. 79)

He talks about how these frameworks can be applied at an organizational level and cites a Cornell University study of 320 small businesses. Those that offered autonomy grew at four times the rate of control-oriented firms and had one-third the turnover. He talks about ROWE (Results Oriented Work Environment) and gives examples of companies that really give their employees freedom. It’s a radical change for many people…imagine a work environment where you set your own hours.

He introduces the concept of “flow” from work by Csikszentmihalyi which was new to me. It describes this state where people are challenged but have an opportunity to stretch to get there.

He talks about mastery as a mindset and how what people believe shapes what people achieve. This belief is critical especially in addressing things like obesity (my opinion) and plays into a lot of what you see on The Biggest Loser. Losing weight (mastering being in shape) is a lot of work, and you have to believe you can do it. You also have have to have some motivation other than financial goals.

There is an interesting discussion of “entity theory” versus “incremental theory” which talks about whether you believe you have a finite intelligence or an opportunity to expand your intelligence. There is lots of talk about education in the book which I think is really important. Are we creating kids that want to “prove their smart” by getting A’s or who are really trying to learn?

“West Point grit researchers found that grittiness – rather than IQ or standardized test scores – is the most accurate predictor of college grades.”

He has a whole chapter on purpose. I think this is key to healthcare. He talks about autonomy and mastery, but without purpose, we don’t have balance. Think about someone who is obese. They want to be autonomous and master being in shape, but when you listen to them talk, it is typically a focus on being there for their family that motivates them to actually take action.

He made me wonder about linking health outcomes to lower costs (i.e., value based). If I know that my healthcare premiums go down if I manage my BMI or cholesterol or get certain tests done, am I just checking a box or am I really changing my lifestyle in a sustainable way?

What Happens When You Get A New Home Phone

We just added another phone line (land line) to our home.  (Bucking the trend of only using mobile phones, we now have 4 home phone lines plus our mobile phones.)  I’ve been intrigued to see what happens.  I haven’t given the number to anyone nor have I had the time to put it on the DNC list.  (I’m not even sure what the number is.)

But, in the week since I’ve plugged in a phone, I’ve gotten a bunch of calls:

  • 918-442-0768 (looks like spam based on the site)
  • 918-442-0926 Home Security (selling security systems from site)
  • 636-925-1746 PISA Group (this was someone selling me the local paper)
  • 800-238-3770 (looks like telemarketing from DirectTV based on site)

They have each called me an average of 4 times in one week.  I think the phone companies should default you into the DNC list and force you to opt-out.  But, they must make money by doing it the way it is today.

Fastest Growing Healthcare Companies

Fortune just published their 100 Fastest-Growing Companies (must be public with market cap of greater than $250M).  Here are the healthcare companies from that list:

World’s Most Admired Companies

Fortune published their annual list of most admired companies.  Only one of the top 50 is a healthcare company – Johnson & Johnson. 

The top 10…

  1. Apple
  2. Google
  3. Berkshire Hathaway
  4. Johnson & Johnson
  6. Procter & Gamble [some healthcare business but still primarily consumer products]
  7. Toyota Motor [survey was before all the recent issues]
  8. Goldman Sachs Group
  9. Wal-Mart Stores [some healthcare business]
  10. Coca-Cola

But, let’s look at some of the subgroups.

Insurance and Managed Care:

  1. Aetna
  2. United Health Group
  3. Wellpoint
  4. Humana
  5. Amerigroup

Pharmacy and Other Services:

  1. Medco Health Services
  2. US Oncology Holdings
  3. Quest Diagnostics
  4. Catalyst Health Solutions
  5. IMS Health


  1. Abbott Laboratories
  2. Johnson & Johnson
  3. Novartis
  4. Roche Group
  5. GlaxoSmithKline
  6. AstraZeneca
  7. Amgen

Food & Drug Stores:

  1. CVS Caremark
  2. Publix Super Markets
  3. Tesco
  4. Kroger
  5. Safeway
  6. Walgreen
  7. J. Sainsbury
  8. Carrefour


  1. McKesson
  2. Owens & Minor
  3. Cardinal Health
  4. Henry Schein

The Value of a Stamp

A seemingly random thing we observed years ago when we were doing some direct marketing was that we got a better response when we used a stamp placed at a slight angle.  We believed that stamps seemed to make the letters less “mass mailing”, but we also found that having the stamp not perfectly placed helped.  It looked like people had manually applied them.

It seems silly, but I bring it up to make the point that small things matter and in communications, you should be focused on the outcomes and ROI not simply on the cost.  I see so many times when people get so obsessed with saving pennies that they ignore the fact that a slightly higher cost service/solution/product has a better value.

I’ve observed that in things I buy also.  I might pay 2x what a normal pair of shoes cost, but my shoes last 3x as long as the cheaper shoes (so in the end they cost less).  This is true with furniture.  My question is why don’t people always apply that same logic when making other decisions.

I always try to help clients think about the result they are looking for and the cost per success not the cost per transaction.  For example:

Situation A:

  • 1,000 interventions
  • $0.60 per intervention
  • 4% success

Situation B:

  • 1,000 interventions
  • $0.75 per intervention
  • 7% success

Which would you buy?  The $0.60 service or the $0.75 service.  At first glance, you would gravitate toward the less expensive service, but if you don’t do the math, you’re making the wrong decision.

In Situation B, you have 70 successes at a cost of $750 (or $10.71 per success).  In Situation A, you have 40 successes at a cost of $600 (or $15.00 per success).

How Many Top Companies To Work For Are In Healthcare?

I always find the list of the top 100 companies to work for interesting.  It’s interesting to see who makes the list and what they do for their employees.  And, it always make me think back to 2004/2005 when Express Scripts set a goal of being on the list.  We took our initial internal survey and identified what we needed to do to improve.  And, part of our incentive compensation the next year became an improvement in our scores.

Now as I look at the 2010 list that just came out, I’m always interested to see what healthcare companies make the list.  This year there are 17.

# 17 – Methodist Hospital System

#19 – Genentech

#25 – Novo Nordisk

#26 – CHG Healthcare Services

#32 – Baptist Health South Florida

#40 – Scripps Health

#46 – Ohio Health

#50 – King’s Daughters Medical Center

#55 – Mayo Clinic

#60 – Indiana Regional Medical Center

#63 – Southern Ohio Medical Center

#74 – Children’s Healthcare of Atlanta

#79 – Meridian Health

#81 – Atlantic Health

#85 – Arkansas Children’s Hospital

#96 – LifeBridge Health

#99 – Winchester Hospital

Who’s Killing Independent Pharmacy?

This is a great question.

  1. Has it been the big mail order pharmacies?
  2. Has it been the PBM’s and their negotiating leverage?
  3. Was the final straw Medicare Part D and the loss of the cash patient?
  4. Is it other retail chains and their operating efficiencies?
  5. Was it just a natural evolution?
  6. Is it the fact that money isn’t made on the Rx anymore but on the candy bars and soda?
  7. Is it technology and the capital investments required?

Here is a quote from Jennifer Luddy, spokeswoman for Medco Health Solutions, (from AIS Drug Benefit News):

“The facts show that it is not mail-order [pharmacy], but rather chain pharmacies that are presenting a threat to independent pharmacies. According to national data from the pharmacy industry itself, for every independent pharmacy that closes, 25 chain and big-box retail pharmacies open.”

The Connected Consumer – Razorfish

This was also an interesting look at online consumers and their influence versus brands.

Process…The Key to Success

“We get brilliant results from average people managing brilliant processes. We observe that our competitors often get average (or worse) results from brilliant people managing broken processes.”

Sources: “Decoding the DNA of the Toyota Production System,” Steven Spear and Kent Bowen, Harvard Business Review, September-October 1999

I think this is so important especially in times like this when we are all focused on doing more with less. It is critical to understand how your process works; how to apply automation; and how to learn and improve it over time.

I came across a presentation from a webinar I gave back in 2007 on Business Process Management (BPM) which made me think about this. (Some of the vendors in this space include Pega Systems, Lombardi, and Appian.)  It’s also very relevant given Gartner‘s recent report on Business Process Outsourcing (BPO) in the payor space.

“Healthcare insurers should view business process outsourcing as a means to achieve business transformation while minimizing risk. Therefore, using BPO for nondifferentiating business processes is an essential step toward achieving competitive success and business growth.” Joanne Galimi in Healthcare Insurers Business Process Outsourcing Trends (January 23, 2009).

Finding a business partner that can work with you to understand your processes, understand what measures matter, help you improve your approach, and that is willing to take risk based on your success is important.   I always encourage people to not think of companies as vendors but as partners that bring them innovative ideas and help them iterate to improve.  I don’t believe in the big bang theory that I can do it right the first time and never need to change.  That flies in the face of everything that has been observed in different industries.


You can find more out on the website, but I liked a few of their predictions for 2009+.

Explaining WOM and BUZZ

These are two marketing tactics that are related.  WOM = Word of Mouth.  Buzz should be fairly straightforward.

Coupoing Back in Vogue

I don’t know what the statistics were before, but these statistics published this morning in the USA Today seem high.

    65% of people 18-39 examined mail more carefully for coupons versus six months earlier

    73% of people 40-49

    And, 57% of people 50+.


With unemployment expected to come out today at 7.5% (the highest in 17 years), we shouldn’t be expected, but it certainly puts new focus on using incentives to drive healthy behaviors.

Presentation Zen

Have you read the book – Presentation Zen? If not, you can visit the blog to start to understand what Garr Reynolds talks about in his book. In general, one of the key points that I always try to relay to people is that slides are not your leave behind. Don’t put too much content on them. Don’t talk to them. Think about how to engage your audience in your story.

Take a look at a few of the slides he shares here. How does his presentation compare to your last presentations?

Gartner’s Predictions

Gartner put out there top 10 predictions.  Three of them stood out to me as relevant for what I like to discuss.

By 2012, successful enterprises will actively encourage and reward more failures in order to find the optimal approach they want more quickly.

By year end 2013, 40 percent of enterprise knowledge workers will have abandoned or removed their desk phone.

By the end of next year 2010, wireless operators will cease to offer unlimited (flat-rate) mobile data plans.

Rewarding failure…finally.  This is how healthcare will learn and improve.  As consumerism continues to dominate, it is going to be more and more important to test new ideas quickly realizing that many will fail before we “solve” the problem.  Everyone is always looking for the silver bullet which usually doesn’t exist.  AND, if it does, it’s often temporary as things change both with the patient’s condition and/or with the treatment options that they have.

The death of the desk phone is rapidly happening today.  I like to have one when I am in the office, but if I make 30 calls a month from my desk phone, I would be amazed.  I don’t even have voicemail set-up.  Any calls just get forwarded to my mobile phone.

No more unlimited plans…That would be unfortunate.  Talk about driving adoption and then taking away the incentive.  The convenience of the mobile devices blended with the low cost has created an “addicted” culture that loves their phones.  As the economy lags, I would see this trend having a negative impact or being completely met with negative reaction creating opportunity for new players.

Tough Times To Start A Company

After trying my own venture a few years ago, I have greater empathy for this challenge. I have watched a few friends and neighbors doing this. I have the ultimate respect for them.

Even so, most business experts conform to a theory of “thirds”: Of all the new business startups, 1/3 eventually turn a profit, 1/3 break even, and 1/3 never leave a negative earnings scenario. According to a study by the U.S. Small Business Association, only 2/3 of all small business startups survive the first two years and less than half make it to four years.  (source)

A few comments I have heard from friends:

  • A physician who wanted to go out on his own to open his practice (a time honored tradition) could not get a loan and even putting up his house didn’t work since the house was worth less than he owed.
  • A friend who does small business loans told me that the criteria to approve loans made it difficult for her to give small companies money.
  • I talked to a VC on my plane this morning who said they can’t raise funds in this economy and that valuations are down since there is less money chasing deals.

Then in USA Today, they had an article about venture capitalists losing their nerve.

  • US venture capital for the 3rd quarter dropped to $7.4B (down 7% from last year).
  • There were only 270 information technology deals done in the 3rd quarter which is the lowest quarterly amount since 1st quarter of 1996.
  • The Silicon Valley venture capitalist confidence index hit 2.9 (lowest in 5-year history of the index).
  • Tesla Motors, Redfin, Zillow, and AdBrite (promising start-ups) have all announced layoffs.
  • People are looking to sell their holdings in venture funds to companies like Industry Ventures that buys holdings at a discount.
  • The exceptions are biotech and clean tech which continue to grow funds.

International Opportunities

The other day, Medco announced that they were going to work with Apoteket to develop a drug safety system for Sweden.  Apoteket currently manages all the pharmacies there, but they are going to be deregulated in 2009.

It’s not likely to make a financial difference for Medco, but I think it’s an interesting step.  US healthcare is often looking for ways to grow in a fairly mature US market.  Going abroad has always been attractive, but a challenge given the different models.  It made me think of some of the other moves over the past few years.

I am sure there are a lot more, but those are the ones that I am familiar with.

Future of Marketing and Advertising

Here is an interesting presentation on a view of marketing from outside healthcare.  I think it is a healthy way of thinking of the challenge.

Mistake or Deliberate?

I must admit that I tend to be pretty compulsive about spelling and other mistakes.  I can’t read a book without circling errors or correcting grammar.

So, I found it intriguing when visiting a company’s website that they talked first about the confidentiality of their clients, but all the links have the clients names in the URL.  It made me wonder if this was an innocent mistake or someone finding a deliberate workaround.  People clearly see that Healthways and Medco are their accounts without getting corporate approval to use their names.  [BTW – I whited out the company name since who it is isn’t the point.]  


Data Power

Communications and data provide us with a valuable tool.  How to leverage facts and put them forward in a way that drives a response.  For some that is getting people to buy a magazine (e.g., 82% of Americans do X…read the article on pg X to learn more).  For others, it is to drive them to buy a product or to prove a claim. The power of statistics is magnified when you have someone who understands how to present information.

I have talked about some aspects of this before around Dark Data, Understanding Healthcare by Wurman, and a little in my entry around COB.

That being said, I found it interesting to read a blog post on Bad Science about “How To Lie With Statistics” which is apparently the best sold statistics book ever (and not even written by a statistician).   Here are a few examples.  Again, it just makes the point that you need to ask questions and understand how a metric is defined, who the survey population was, whether there was a bias, etc.  The data may still be very useful, but you need to understand it before you use it.

Healthcare Decisions

I will get this roughly right, but I was talking with a non-healthcare person a few days ago.  He has built several successful companies and was studying the healthcare industry.  He described healthcare decision making as “passively aggressive, supposedly consensus driven”. 

istock_decision-cube.jpgAs anyone in the industry knows, it is not always a logical process given all the different constituents, the embedded processes, the historical momentum, the confusing data, and many different frameworks (e.g., clinical versus financial).

It made me think of a quote by  who wrote several books on great companies.

“No major decision that we’ve studied was ever taken at a point of unanimous agreement.”

I agree.  Companies can’t focus on consensus.  They need to focus on open debate and then come to a decision which the company rallies around.

Making Good Decisions

This is a classic article that I have reused several times.  The article “Great Escapes” by Michael Useem and Jerry Useem appeared in Fortune (6/27/05) on pg. 97.  It is about thing to use to avoid typical decision making problems.

These are all relevant for anyone in business or healthcare, but with the massive amount of change required in healthcare, it seems like these will be relevant at the macro level.

  1. Problem: Analysis paralysis
    Solution: 70% solution
    “A less than ideal action, swiftly executed, stands a chance of success, whereas no action stands no chance.”
  2. Problem: Sunk-cost syndrome
    Solution: Burn the boat
    “There is no such thing as timeless perfection, only obsolescence.”
  3. Problem: Yes-man echoes
    Solution: Voice question not opinions
    This one is pretty obvious, but if you have a strong personality or executive in the room, once they state their opinion you will get a much different level of interaction.
  4. Problem: Anxiety overload
    Solution: Look at the clock
    “A panicked mind stops processing new information, reverts to tried-and-true responses, and is prone to snap decisions that make things worse.”
    It talks about fighter pilots looking at the calm clock while things are spinning on their gauges.  The idea of finding a calming point to focus on.
  5. Problem: Warring camps
    Solution: Let the battle rage
    “Political infighting can be destructive, but battles over substance, managed well, can be constructive.”
    This reminds me of a boss who taught me that it was critical to have a close team where people could share opinions openly to drive value.
  6. Problem: A wily adversary
    Solution: Clone your opponent
    “Assigning a person (or a group) to think like your competitor can expose flaws that, identified early, are less likely to be fatal.”
  7. Problem: To be?  Or not to be?
    Solution: Go with the omen
    I am not so sure about this, but the point is that sometimes your mind is made up and allowing an event to trigger a decision may make sense.
  8. Problem: Inexperience
    Solution: Educate your instincts
    “Blind instincts cannot be trusted, but they can be educated.”  (Think flight simulator as preparing you for different situations.)
  9. Problem: Self-interested thinking
    Solution: What would Sara Lee do?
    Harder to use advice, but they suggest imagining that the company is a person with rational desires – security, growth, good relationships, respect, and a sense of purpose.  Then thinking about how they would react.  (Or our test at Express Scripts was what would Barbara Martinez say.  She is a journalist on the topic for the WSJ.)

Henry Ford said, “My advice to young men is to be ready to revise any system, scrap any methods, abandon any theory if the success of the job demands it.”

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