Insight on Digital Transformation

Below is my monthly message for the April 2019 edition of the MHRI newsletter, Focus. You can view Focus online at MedStarResearch.org/FOCUS.

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Dear Friends and Colleagues,

Last week, I was at a very provocative, forward-looking meeting and wanted to share some of my insights that I found most striking. The purpose of the meeting was for different companies to get insight into what is going to be needed to be successful in the emerging “Digital Transformation.”

Nike Worldwide Headquarters at the Tiger Woods Learning Center hosted the conference.

The companies that took part in the conversation were very diverse: Nike, Microsoft, Shell, InterGlobe (IndiGo Air and several hotel chains), Lowe’s, Google, BASF (largest chemical company in the world), Cambia Health (insurance) and Deutsche Bank. Some companies, like BASF, have been around for over a hundred years and others, like InterGLobe’s IndiGo Air, is only 10 years old (and is already the largest airline in India and still expanding at a rate of one new airplane each week!).

Despite the diversity of the organizations’ business lines and the wide diversity of where they currently reside on their ‘digital journey’, similar themes began to emerge:

• The digital transformation has already started. Companies must deal with it or they will perish. In fact, most feel it is as big a change in business as the invention of mechanical tools or introduction of electricity into the workplace.
• Our current way of doing business, including its organizational structures and associated assumptions, are going to be our biggest impediments – new models of business will need to be created.
• As companies become more sophisticated in big data analytics they have learned that the organization’s capability to respond is lagging. This was true in even the most tech-savy organizations who became so large that they lost their nimbleness.
• There is an ongoing tension between standardization/efficiency and innovation; Nike tells its associates to have “freedom within a framework”.
• Its re-writing the laws of competition, often pushing the boundaries of accepted practices (e.g., Airbnb, Uber).
• Future companies that put the customer at the center will be more successful than those that build expertise in one area. For example, one company builds and sells cars while another drills for oil and sells gasoline and a third organization manages drivers licenses but all the consumer wants is to get from one place to another. Having three transactions is tolerated because there is no other choice!
• Organizations will no longer be working “to be built to last” but rather built “to continually evolve.”
• The work of tomorrow will be different from the work of today so we need to hire with that competency in mind. Google purposely hires people who want to change jobs every 2-3 years.
• Knowledge will no longer be equated to power since knowledge is only few clicks away for anyone who seeks it. Most people gain their professional success from their experience and accumulated knowledge (so speaks the guy who stayed up many long nights studying throughout medical school!); the new superpower will not be the knowledge itself, but the insights gained through the process.
• Ambidextrous organizations will figure out how to live in today and create for tomorrow with the goal that the tomorrow company eventually puts the today company out of business. Shell is heavily investing in renewable energy sources as a result of this.
• Someone must create the future so why not us? This will feel odd, it will challenge our comfort and it will force us to work on something we are not expert at. And since we were at Nike, they took the tagline “Just Do It” and changed it to “Just Deal with It!”

Yes, thought provoking! You may be asking why I was there. I was invited as a “free radical” to instill a perspective not represented in the room (healthcare). I was excited to share the concept of an Academic Health System that is constantly learning and that applies academic curiosity to improve our delivery of healthcare.

At MedStar Health, we have recently started our next strategic planning process. Approximately 500 clinical and administrative leaders from across the system gathered to learn about the rapid changes in healthcare, the potential role of technology, and the value of data. With the help of external experts, we are also learning from other industry successes. It’s going to be an exciting time for healthcare and I look forward to being at a place that will help create that future!

Thank you!
Neil

Read Focus at MedStarResearch.org/FOCUS.