The science of healthcare innovation: Interview with Dr. George Day, part 1

"A consistent theme in the organizational change literature is the power of celebrating quick wins."
By W. Roy Smythe, MD
11:05 AM

Healthcare leaders are fully familiar with the need to embrace science – in a number of areas ranging from economics and finance to biology and pharmacology. However, despite the word “innovation” being among the most uttered by healthcare leaders today, many promoting its increasing importance do not actually understand its technical and scientific aspects. Innovation has a scientific basis with a great deal of insight gleaned from recent experimentation and thoughtful analysis – insight that could be applying to advance the new model of healthcare.

A world class thought leader speaking at the Executive Program of HX360 during HIMSS16, Dr. George Day, is the Geoffrey T. Boisi Professor Emeritus and co-Director of the Mack Institute for Innovation Management at the Wharton School of the University of Pennsylvania. He is one of the leading global experts on the management of innovation.

Dr. Day has studied many aspects of change and competitive advantage in businesses, including such topics as understanding how to leverage emerging technology, the importance of utilizing partners to anticipate market needs, and most recently what differentiates non-healthcare corporate innovation leaders from “laggards”, in his most recent book, “Innovation Prowess”.

I recently had the chance to interview Dr. Day to drill down into the science of innovation and give readers some flavor of the need to understand innovation at this level. Part 1 focuses on organizational structure around innovation. Part 2 will center on innovation execution.

(This interview was edited for clarity, readability or length.)

Interview, Part 1

Question [Smythe]: Dr. Day, thank you for taking the time to talk. You have written about how Gore has developed a management philosophy that encourages innovation by elimination of hierarchical structures – using instead a “lattice” approach where multifunctional teams are favored over traditional management. How do you take an incredibly complex healthcare infrastructure and begin to develop some lattices?

Answer [Dr. Day]: The lattice structure is something that you almost have to live with. Essentially, there are only two job categories in Gore: leaders or associates. You get to be a leader by having people who want to follow you – when you have credibility and a great idea, you can amass the resources to make things happen. This is a really hard model to emulate. However, what you can take away from this model is the idea of self-forming teams. Create and nurture a culture within your organization to encourage people to come forward with ideas and resources. Make it rewarding, indicate that failing is ok - as long as patient welfare is not at risk – and celebrate successes. A consistent theme in the organizational change literature is the power of celebrating quick wins. Bringing success stories forward to the organization helps increase confidence and people finally get it.

Question: Incremental process improvement (e.g. Lean, Six Sigma) is frequently confused with transformation. How important is it to separate process improvement from potentially transformational innovation initiatives?

Dr. Day:  Crucial. There is a fundamental tension between operational excellence – keeping the current operations running at a high rate of efficiency and effectiveness – and creating real change. The two do not mix well. Combining them is a recipe for clogged systems and lots of failures. It is almost like an immune system, it will eject change. Remember the old saying, “having lost sight of our objectives we re-double our effort.” (ROY- it is actually possible to operate yourself into oblivion).

Question: How important is it for healthcare operating organizations to provide dedicated resources for experimentation – rather than attempting to leverage resources that are busy “operating” the company and its components?

Dr. Day: This is crucial as well. The big issue is not dedicating the resources, but protecting those resources. So many companies have put aside an innovation budget, but then don’t protect it. That turns out to be devastating because the organization will divert those resources into fixing short-term operating emergencies (e.g. you need to fix this, the IT program in trouble). You end up pulling money out of your innovation budget to deal with immediate problems and that really sinks the ship.

Question:  How important is developing interdisciplinary partners from whom healthcare leaders could learn and gain useful ideas and insights from outside of healthcare?

Dr. Day: Let me take a little detour for a moment to tell you about a project I worked on a couple years ago called, Strategic Radar. In effect, hospitals being operating systems are living in an environment of uncertainty and those that can detect and understand weak signals of threats and opportunities sooner than others generally do better. We developed this capability into the concept of Peripheral Vision. We found that the companies that really did this well not only had their own internal capabilities, but also reached out to their partners to be part of the sensing mechanism to get early warnings.

A practical example would be the case where your staff or service is being raided. If you have partners in the community providing services as well, they may give you a heads up that you have a potential problem – giving you time to act on it quicker.

You can also tap into a partner’s own experiences and gain insight into best practices. One of the fascinating things about experimentation within health systems is that oftentimes you are not in direct competition with one another. This enables you to tap into the broader experience base of your health system partners and learn from each other.

Discover more of Dr. Day’s critical healthcare innovation insights and applications at HX360’s Executive Program during HIMSS16, February 29 – March 3, 2016 in Las Vegas, Nevada.