The healthcare industry is experiencing a sea change – the Affordable Care Act has meant increased regulatory pressure for almost all aspects of the industry, while new payment models, changing consumer preferences and evolving technology has tested the industry’s capacity for change. It’s a new era for an industry that has prospered until now by a strategy of risk aversion and caution, and I know for many of the industry’s leaders, it is a demanding time. But I’ve learned through my career that history repeats itself.
In the late 1980s and early 1990s, the telecom industry went through a period of transformation. As a result of the groundbreaking Greene antitrust case, the industry that had been divided into local and long-distance providers was broken up further, opening up the door for more competition in all markets. And, the evolving data market and the increase of mobile meant that both businesses and consumers were beginning to communicate quite differently.
The good news is that there are lessons that we can take from one era to the next. So what can the healthcare industry learn from telecom?
Get the talent mix right. It’s important to match the requirements of the changing market, but remember current core capabilities will still be needed.
First, identify new capabilities that don’t exist in the current organization—likely to include marketing, consumer behavior and engagement, channel management, customer experience, and even finance—and recruit from outside the industry. Then, recognize existing capabilities that will remain essential—regulatory, customer service and operations—and identify what strategies are needed to build and retain those capabilities. Be sure to cross pollinate new and existing capabilities among teams. When telecom cross pollinated initially, the two camps were at odds, creating quite a lot of unnecessary turnover and internal strife. So, probably most importantly, ensure there is a deep appreciation on both sides for the skills and knowledge all bring to the table.
Build to deliver a new level of “nimble.” In the new healthcare economy, speed needs to be measured in new terms.
Like healthcare organizations today, telecom traditionally moved very slowly because of organizational structure and culture. But, the market was predictable and therefore the pace was acceptable. Once significant deregulation and intense new competition came into the picture, the industry was forced to shift, like the healthcare industry today. This is not a simple quest, however. For organizations that have valued deliberation and caution, speeding up the process for decision making is a major shift. Both individual and organizational comfort with risk needs to change, dramatically.
Recognize that power is increasingly shifting to customers. In a changing market landscape, if traditional competitors can’t meet their requirements new ones will emerge.
Many business processes must change to reflect this new reality. Take the company’s current investment decisions and models, customer acquisition and retention assumptions, competitive analysis and strategic planning models and reconsider them all – these old models will deliver the wrong answer in today’s world. In telecom during the 1980s and 1990s, customers, particularly in the U.S. market, were demanding higher bandwidth solutions deployed in weeks, not months. Traditional financial tools failed to show the risk of not making these investments because they never anticipated major customer exodus; they were built to measure new revenue growth. This was also true in the long distance market, where pricing models never anticipated the loss of business and consumer customers to free solutions such as Skype. The healthcare industry needs to act now to stay ahead of their customer.
What other connections do you see between telecom and healthcare?
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photo credit: kenteegardin
