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Trilogy Tidings
July 2014
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in this issue
Does your new-product idea have a chance?
Is healthcare really headed for disruption?
Is the disruptive innovation model valid and useful at all?
What does Trilogy do?
Resources from our Archives
     Must you creatively disrupt a market in order to exploit an opportunity?  Maybe so.  But maybe not.  In either case it makes sense to first examine that opportunity beyond the view of your customer.  Read on to know what I mean.

Regards,
Joe
  
Does your new-product idea have a chance?    
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     One of the latest tidbits of management consulting "wisdom" is: Fail early and fail often.  The notion is that one should be adventurous and try many new things but kill the bad ideas quickly so as to minimize the damage to the corporate reputation and purse.  I do believe this notion makes sense, but I would modify it a bit.

 

     I believe in trying many new things beyond the view of your customers.  Don't let them actually experience your failures, as that would tarnish your reputation.  Furthermore, protect your purse by not actually commercializing those new things until you have a reasonable expectation of success.

 

     Easier said than done?  Of course.   You can never be certain of the outcome until you place new things in customer hands.  But you can avoid acting stupid by engaging some early analysis and diligence to weed out the ideas that have no chance of success.  Will such a toe-in-the-water approach yield the truth 100 percent of the time?  No.  Will it protect you from ridicule 90 percent of the time?  You bet.

 

     I've made a living and thoroughly enjoyed conducting opportunity assessments for our clients over many years.  The approaches taken are rigorous, the findings are usually definitive, the investments are always modest, and - best of all - the work is undertaken beyond the view of customers.  I have written extensively about the techniques that are used in conducting this research.  You will find a list of those writings here.  But ignore all that for now.

 

     The very first step you should take in assessing the chances of a new-product opportunity's success in the healthcare arena is to answer three basic questions for yourself:

  • Will you be helping patients?
  • Will you be making the lives of healthcare workers better?
  • Will you be allowing payers to pay less?

     I suggest that, if your answers to at least two of these three questions are yes, your new-product idea does indeed have a chance.  (If you'd like some top-of-mind help in honestly answering these questions, just let me know; I'll try to provide some guidance.)


     If your idea survives this first hurdle, it's time for some serious research, perhaps starting with this handy checklist
  

 

Is healthcare really headed for disruption?    
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     I'm not a great fan of McKinsey writings.  Often too generalized and preachy for my taste.  But there are surely some smart people there, so occasionally their published insights are worthy.  A good example is this recent piece on healthcare disruption.

  

     The McKinsey article deals primarily with the disruption of healthcare practice from a payer prospective. From that perspective I agree that many payers will be disrupted by changes afoot in the US healthcare system.  From the supplier perspective - the view I care most about as a consultant - perhaps not so much.  After all, healthcare is more like ordering your personalized Starbucks specialty and less like buying paper goods at Costco.

 
     To understand the argument I'm having with myself, consider the following three legs of the healthcare stool:
 3Ps  
     Now think about suppliers of products and services, how they interact with these three elements today, and how those interactions might change in the future.

 

     I believe the provider interaction is likely to change the least.  Providers are, first and foremost, customers.  Surely they will continue to be customers.  Nevertheless, we are beginning to see a few cases in which larger suppliers are toying with providing healthcare services on their own.

 

     Patient interactions with suppliers are a mixed bag today.  In the case of certain drugs those interactions are pervasive, some would say offensive and counterproductive.  And, of course one can buy all manner of useless medical miracles on the Web.  But I think the profiles of even device and diagnostics suppliers will be increasing among patients as consumers discuss the available alternatives with their providers.

 

     I think the payer/supplier interaction will be subject to the most disruption.  Suppliers will be forced to cement stronger relationships with payers in order to win contractual business.  This seems likely to me since payers and providers are themselves forging stronger relationships with each other.

 
     I suppose today's supplier had better monitor what's happening and be prepared for anything.
         

  

Is the disruptive innovation model valid and useful at all?    
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     Disruptive innovation is all the rage among "thought leaders" in business and academics who aspire to tenure and speaking fees.  The notion seems to be that if you don't disrupt a market you will fail.  The father of disruptive innovation is Clay Christensen of Harvard Business School, circa 1997.

   

     I was entertained by a recent New Yorker article by Jill Lepore entitled "The Disruption Machine".   I'll be kind: She doesn't think much of Christensen's theory and its practical business application in explaining or predicting events.  The following excerpt nicely summarizes her views in this 13-page piece: "Disruptive innovation is a theory about why businesses fail.  It's not more than that.  It doesn't explain change.  It's not a law of nature.  It's an artifact of history, an idea, forged in time; it's the manufacture of a moment of upsetting and edgy uncertainty.  Transfixed by change, it's blind to continuity.  It makes a very poor prophet."  [Emphasis mine.]

 

     For me the major weakness of the model is its under-appreciation of incremental improvement and execution excellence.  Maybe you don't have to disrupt to succeed.  But you should decide for yourself if the model is valid and useful in your own business.

 
     To repeat, I suppose today's supplier had better monitor what's happening and be prepared for anything.
 

 

What does Trilogy do? 
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     Trilogy Associates facilitates business growth and renewal through commercialization of new products, providing the following services:
  • Opportunity assessment
  • Business planning and enterprise growth strategies
  • New-product conceptualization, commercialization and marketing
  • Market research and competitive assessment
  • Business development and partnering
  • Market and technological due diligence
  • Assessment of the therapeutic and diagnostic potential of novel technologies
  • Design of efficient and effective development strategies for early-stage biomedical products
  • Business and technical writing/publishing

     Inquiries to establish whether and how we might support your business initiatives are always welcome.  Contact us.

Resources from our Archives 
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     Check out our Reading Room to view my published articles, presentations and white papers on a variety of topics.
  
     And, you can examine an archive of my prior newsletters (since February 2007).
Contact Information
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Joseph J. Kalinowski, Principal
919.533.6285
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