Seeking innovation inspiration from Starbucks, online gaming

BOSTON—“I would assert that the single biggest change on our planet in our lifetime is interconnectedness. Seeing that as principle transformational element” will help us improve the healthcare system, said Larry Keeley, strategist with innovation firm Doblin, speaking at the National Healthcare Innovation Summit on May 15.

Change is happening faster than ever before, he said. However, “the rate of change in healthcare is a small fraction of the rate of change happening in the lives of the patients you’re trying to serve. This is a serious problem.”

Keeley cited the never-ending online game World of Warcraft. At any given moment, 6 to 11 million people are playing and there are 20,000 advances in the state of play every day. There have been 50 billion hours of collective play. “Very few activities in human history have occurred on such a level. This game taken over by its players might be pointing us in one of the most exciting, thrilling directions for healthcare management you can imagine.”

The actions taken by online gamers indicate the kind of involvement that could happen in healthcare, he said. “If we think we can’t engage patients in solutions, we’ve misunderstood and underestimated the power of users. We’ve underestimated what it means to make their active engagement interesting and compelling.”

In many cases innovation is counterintuitive, he said. “Everyone wants it to be simple” by using social media, crowdsourcing or installing Lean methodology but that’s “a silly way we try to get something systematic to happen.”

The accumulation of many little changes is an excellent innovation strategy, Keeley said. “The most important innovations are less and less about primary invention and much more about the elegant conglomeration of many well-known things that are some two to four decades old.”

Keeley led a team 19 years ago to analyze innovations and find commonalities. By reviewing 1,200 innovations over a 200-year period, they found 10 types that fall into three categories: configuration, offering and experience.

Product performance is the main thing people focus on when it’s time to innovate. “That’s normally where people start and stop.” However, the experience category includes service, brand and customer engagement. “The creation of a breakthrough experience is now a critical competence.”

Kelley also studied 138 companies that get the best return on their innovation to see what makes them different. The most successful work occurs more evenly across their business system, typically using twice as many of the 10 types of innovation “with a much richer mix. They are three times more innovative in partnerships and nine times more innovative in how they attract, inspire and reward talent. It makes a big difference.”

The biggest innovations happening today have a simple definition. Successful companies are taking something that used to be hard or costly and therefore was rare and make it so easy that it happens all the time, routinely and possibly even for free. “That’s the nature of modern innovation. A great platform makes it easy to do hard things,” he said.

Keeley cited Starbucks’ ability reinvented a category. By adding things like free Wifi to their outlets’ ambiance, they show a deep understanding of how people behave. Rather than a spiky pattern of sales, the ambiance can attract people all day long and for longer stays. The company also introduced a prepay app that 91 people are downloading every second. “Not only they are willing to overpay for their coffee but they’ll gladly pay in advance. A staggering number are putting a ridiculously high balance on their cards. As a result, Starbucks is now sitting on $3.2 billion worth of cash.”

There is a special role for leaders in this new environment, Keeley said. “They have to spot the moment when the straight line extrapolation of stuff we know how to do doesn’t deal with the problem. They have to be clearheaded about what they’re trying to achieve, not having an orgy of technologies and making ridiculous overinvestments compared with the things that actually matter, which are business models that pay off in behavior changes.”

The rate of change in healthcare being so much slower than that in people’s lives, “is a reason to embrace innovation,” Keeley said. “As long as we can see individual things with five or more types of innovation, we can derisk innovation in a powerful way.