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Kay Plantes is an MIT-trained economist, business strategy consultant, columnist and author. Business model innovation, strategic leadership and smart economic policies are her professional passions. A former Madison, WI resident, Kay now resides in San Diego, CA. The views on her blog are not those of her employer, IBM.

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April 30th, 2012

Can you shape your industry to better support your business model’s success?

Is your industry working to advance your business model's success? (Photo thanks to Brian Norcross)

Leaders make a mistake when they assume industry dynamics are unchangeable in their model innovation work. Industry collaborations that change dynamics can be very smart strategy in both mature and emerging markets.

Industry cooperative marketing efforts can advance an industry’s products. Remember the successful “Got Milk?” campaign creatively placing milk mustaches on famous faces? Cranberries would merely remain a Thanksgiving staple without farm cooperative Ocean Spray’s efforts that landed cranberries in juice, cereals, salads toppings and snack foods.

Setting standards also shapes industry dynamics. During my tenure at Datex-Ohmeda, global leader in anesthesia systems that’s now owned by GE, we worked closely with competitors and the American Society for Testing and Measuring to establish basic monitoring standards for anesthesia equipment.  Yes, the standards advanced patient safety, but they also blocked low-cost competitors from entering the market, accelerated machine replacements and reduced our product liability costs.

Setting standards can also create entirely new product categories. Car companies, system manufacturers and the US government have been working together for years to develop communication standards for “Smart Cars” and traffic-management software products. Future cars will help us avoid sudden stops and potential rear-end collisions by alerting us to road hazards before we see them while software APPS will help us avoid traffic jams. Governments will better control traffic flows and screen commercial vehicles more efficiently.

Creating an intelligent traffic system is a Herculean challenge involving thousands of vehicles sending and receiving data records every millisecond. Legal questions and funding issues also exist.  But, according to John Kenney, Senior Research Manager for Toyota InfoTechnology Center, considerable current progress suggests that competitors, working side by side in a collaborative setting with other stakeholders, will help eliminate 80% of collisions where the driver is not impaired.

Another vital place for industry collaboration is “wireless health,” also called “connected health.” But if CEO of San Diego-based Wireless-Life Sciences Alliance (WLSA), Rob McCray, has his way, emerging applications will soon be the standard and called just plain “health and healthcare.”

WLSA was founded in 2005 as a nonprofit member association to bring innovators, globally relevant companies, scientists, physicians, associations and policy makers together to advance health as wireless technology, life sciences and consumer empowerment opportunities converged. McCray believes the solution to our high health care costs and health issues is not in continuing to “deploy the current anti-competitive, labor-intensive, inconvenient, obscenely expensive and non-transparent model for health care services and delivery” but, for the benefit of all citizens, to “migrate to a connected, affordable, personalized and accountable 21st century model of healthcare.” That new model, according to McCray, is wirelessly enabled health, a technology with tools already in place and only needing “will and commitment” to become the standard of care.

Members of the WLSA derive value through conferences in which information is shared that advances the capabilities and adoption of wireless healthcare solutions. WLSA’s fall meeting brings premiere international researchers in wireless health technology, health and medical research, clinical practice, device manufacturing, product and health services and government together to both communicate the latest developments in the field and nurture collaborations. WLSA’s upcoming Spring meeting is the premiere event for investors, healthcare companies and entrepreneurs to learn about key issues and opportunities in wireless healthcare applications.

But more is needed, according to McCray. “Why is it,” he asks, “that consumer electronics regularly increase benefits while lowering costs while our healthcare system grows in costs without significant improvements in health year after year?”  The answer rests in complex state-by-state clinical licensing regulations, institutional and clinician rigidities, FDA requirements and reimbursement issues. They not only create a costly healthcare system focused on doing procedures, but also pose barriers to rapid adoption of connected healthcare solutions that could positively revolutionize care.

A basic principle of systems thinking is that the containing system – the external forces surrounding a system – can have as much impact on a system’s success as how the system itself is designed. Children with parents involved in their education for example do better in school, all else equal. With innovative connected health solutions rapidly emerging, we must reshape the containing system to enable the best innovations to come to scale. Otherwise cost-saving, quality-improving wireless healthcare solutions will languish because they are not reimbursable by insurance payers or require costly and unnecessary regulatory approvals.

The “shape the containing system” challenge facing connected health stakeholders is as complex as that facing the coalition advancing smarter cars. But the advent of smarter health will better advance our nation’s fiscal health and free up federal funds for a Smart Car highway grid.

 


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