The Language of Healthcare Transformation
There are countless posts and discussions among providers and clinicians expressing hope and concerns about innovative technologies like artificial intelligence. The disruption of healthcare, digital transformation, and innovation programs speak to hope and fear for the future of their professions and industry. Unfortunately, these terms are loosely applied and undermine our shared understanding of their implications. This post hopes to clarify their meaning and implications in healthcare contexts.
Disruptions and disruptive technologies are often framed as characteristics of innovative technologies. In practice, technological innovations possess recognized and unrecognized disruptive potential, but only become disruptive when they disrupt something, i.e., industry, markets, consumer cultures, etc. This is more difficult and rarer than most people realize because to be disruptive innovative technologies must first succeed (most of them don’t) and then change, to borrow from Clayton Christensen, the trajectories of performance and competition in affected markets.
New technologies deliver and drive innovation when they are deployed within innovative business models that translate innovative potential into compelling value. In this context, business models can be innovative without innovative technologies, while innovative technologies require enabling business models to create and deliver compelling value. By themselves, technological innovations often devolve into high-tech gadgetry with limited returns on investment.
Digital transformation is a continuing process, not a fixed-term program or event. It builds on new thinking, strategies, and innovations that improve and redefine performance to deliver sustainable compelling value. I had the privilege of participating in cohorts from two leading transformation scholars–Columbia’s David Rogers, who mapped the transformation journey in the Digital Transformation Roadmap, and MIT’s George Westerman who described how forward-thinking companies became Digital Masters in Leading Digital: Turning technology into business transformation. Their research compellingly shows that innovative technologies are indispensable but insufficient to effect transformation.
Are efforts to innovate and transform the enterprise worth the time and investment? Westerman and his colleagues researched hundreds of global companies and correlated performance to their degree of digital mastery. They concluded that on average Digital Masters were more than twenty percent more profitable and generated nearly ten percent higher revenue from their physical assets. These findings are important for healthcare providers with expensive infrastructures anchored to large physical assets including hospitals.
Technological innovations, digital transformation, and disruptions are integral components of operating and competing in our digital age. Coping and exploiting their challenges and opportunities requires a clear understanding of their characteristics, impacts, and implications. This is a continuing evolutionary process.
Please reach out if you have questions and would like to find out more about OPRHealth’s innovation and transformation practices.