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Perspectives

Innovation Lessons for Post-Pandemic Business Leaders

September 11, 2020

Business leaders generally stay current on industry trends. What happens when a pandemic disrupts those trends and makes prediction more uncertain than ever? We can study history or engage in wild speculation. Let us stick with history and focus on an area that seems ripe for speculation. The pandemic has led to an immersion in many forms of digital healthcare.

The question is not so much if digital healthcare services will expand, but rather which ones will succeed and by how much. Digital products have been gaining ground for a decade, but each is not equally valuable in a complex industry with disparate needs. Understanding how to evaluate innovation will be important. It may be time to review some lessons from recent history.

The Apple iPod wins the mp3 contest

Consumers may emerge from the pandemic with demands for all things digital, or they may rebel against anything that reminds them of their quarantine days. Nothing really changes for business leaders. They must meet their business needs with new or old products. How do you evaluate new products? Let us first study one of the masters of innovation and then identify some basic principles.

I have studied the history of an innovation battle that I recall fondly, the rise of the iPod. It teaches many lessons. A forgotten fact is that Apple was not first to this competition. The mp3 technology was established with the first product on the market in 1998. The iPod did not launch until three years later in 2001. Other details are worth noting, but it is critical to first understand Steve Jobs:

As we’ll see again in the case of the iPhone, Jobs tended to be late for everything because he wanted everything to be ready for him. Reflecting on catching technology waves in 2008, he said, “Things happen fairly slowly, you know. They do. These waves of technology, you can see them way before they happen, and you just have to choose wisely which ones you’re going to surf. If you choose unwisely, then you can waste a lot of energy, but if you choose wisely, it actually unfolds fairly slowly. It takes years.” Jobs’s discipline paid off.

The mp3 was a portable digital audio player. Why did Apple wait three years to release its version? While design of the device was critical, it was less important than the development of broadband technology and the ability of users to easily download music onto the device. Apple released the iPod when broadband was widely available and iTunes software was ready for transferring music files.

The iPod grew to dominate the market in lockstep with the growth of the iTunes library. Apple products have provided lessons on innovation that are still relevant. A critical lesson is to start with the consumer experience and work backwards to the product. In terms of the iPod, Apple could have designed a fine device in 1998, but the company waited until it could deliver an utterly unique consumer experience.

It is worth noting a few other factors that drove the iPod’s success before turning to healthcare innovation. Apple designed a product that was incredibly simple to use, even if it sounds uninspiring when you lay it out on paper. A click wheel, five buttons, and a sparse hierarchical menu system to navigate your music library? This simplicity was combined with a new, powerful experience.

The scope of the iPod’s success required that the device be available for PCs. This meant that it not only had to run on a PC, but it had to be as easy to use as it was on the Mac. This would be a first for Apple. The iTunes Music Store was another first that transformed this space. We need not always wait for such transformational products. Yet we should try to understand where products sit on that spectrum.

The evolution of digital healthcare

The digital world changes quickly. Experts used to advise against Skype for therapy sessions based on insufficient security features. Many therapists today sustain their clinical practices over Skype. Necessity intervened. New products are rapidly outdated. Online programs were unveiled a few years ago for managing depression. Consumers now tackle multiple disorders via web and mobile devices.

The problem for the buyer is always two-fold. What product is best today and what improvements are coming soon? Related questions are which improvements are most needed and most wanted. Assertive salespeople will assure you their product is best for the foreseeable future. Yet they can neither foresee product evolution nor your company’s future needs. You need to research both.

The best answers are not gained by comparing features for existing products. It is better to start by projecting what capabilities you believe you will need in three years. Do you anticipate demand for digital content, voice communication, or video connection? Are you focused only on professionals or is peer counseling a priority? Discuss questions like these with company leaders to sort needs from wants.

There is also a cheap, easy way to preview innovations on the horizon. Companies share their pipeline for upcoming product enhancements with potential customers. This is often given inadequate attention, but it deserves careful analysis. Look for big and small changes. Companies respond to customer demands. Pipelines are a free look at their market research. Use them to see into the future.

The iPod case study highlights the importance of not being seduced by a single advancement. The mp3 technology replaced tapes and CDs. Yet Apple waited to exploit a new world in which computers and devices could be connected by software. We often see advancements without good products. Artificial intelligence (AI) seems like an example today. We still await good healthcare products built on AI.

Waiting for sensational products is also a poor strategy. You can miss other fine products. The iPhone destroyed competition like the iPod did in its day. Yet many of us remember the wonder of answering emails with a Blackberry phone. The “Crackberry” was addictive, and it dominated for years. Dominance is ephemeral in consumer technology, making three years a good horizon for planning.

Consumer-directed technology has many goals, but in healthcare the north star for innovation should be engagement. Clinical and cost outcomes are important, but utilization is the primary goal that should orient any decision. Request every conceivable way to analyze a company’s engagement numbers before reviewing other metrics. Innovation without engagement is a grand party without guests.

Ed Jones, PhD, is senior vice president for the Institute for Health and Productivity Management.

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