We had such a strong positive reaction to our previously published research applying ROAR analyses of speed, predictability, flexibility, and leverage to business performance. We decided to dig deeper within the healthcare industry to examine the choices and behaviors that are driving current performance in the sector. Enjoyr our healthcare market research.
During our healthcare market research, we spoke to 18 participants comprised of CEOs, CMOs, VPs and other executives from health plan, provider, pharmacy benefit manager (PBM), pharmaceutical and healthcare service organizations. The companies ranged in annual revenue from less than $100 million to greater than $100 billion. In short, this was a varied group.
- The healthcare industry considers themselves certain, not dynamic.
When we asked these healthcare executives questions about predictability and performance, nearly all believed their organization focuses on precise, consistent output. In fact, nearly all identified predictability as the most important focus for their organizations. It makes a degree of sense – particularly when discussing medical procedures – but is it ideal across the industry? Given all of the change currently surrounding healthcare, should the industry allow themselves to be more dynamic?
- Healthcare leaders are focused more than other industries on leveraging every possible resource.
Is this a bad thing? Relative to industries more classically associated with leverage (i.e. financial, technology and manufacturing), the healthcare industry leaned to the extreme. While we don’t believe leveraging assets (whether those resources are money, people or technology) is inherently bad, we do question whether or not pushing resources to the limit is the right decision for the healthcare industry at the moment. Does this amount of leverage allow for any flexibility? Does it allow the industry to adjust strategy as new legislation is passed, for example?
- There is a distinct lack of customer focus.
Simply put, from a customer experience perspective the healthcare industry is lagging.
The idea of aligning what the healthcare industry does to what customers (or patients) truly value is foreign. This is a procedure- and provider-driven industry, not a customer-driven business. Insurance providers and PBMs in particular are wrestling with this issue as individual exchanges shift their focus from B2B relationships to interactions with individual consumers.
- By our measures, the healthcare industry is struggling.
Through our research, we evaluated organizations on three primary criteria:
Of the 18 healthcare organizations, only one qualified as a top performer. Even more glaring: half of the healthcare organizations we spoke to didn’t meet any of the criteria.
- Top performing organizations operate differently.
When comparing the healthcare industry to the top performing organizations across all industries, there are noticeable differences between how the two operate. Top performers focus on being more swift and nimble than they do certain, and identify flexibility as the most important focus for their organizations. In stark contrast to the healthcare industry overall, these organizations were highly aligned to what their customers value.
What was the top performer in healthcare doing differently? Much like other top performers, they were aligning their decisions to what customers truly valued – taking a true “outside in” view. Secondly, they were one of very few healthcare organizations to focus on speed – and they hit their goals.
If your organization is in the healthcare industry, what drives your decision-making? Looking at the Venn diagram above, how many of the criteria are you currently meeting? If you were to align your operating goals to what your customers value, would it change the way you think about Speed? Predictability? Flexibility? Leverage?
