Week 5: Tactical Management
What is innovation?
The theory of disruptive innovation helps explain how complicated, expensive products and services
are eventually converted into simpler, affordable ones
-
- Solid lines
o Sustaining innovations: continual improvement of a product or service
For old customers
o Disruptive innovations: new product that is usually simpler, more convenient, and
more affordable than sustaining innovations
For new customers
- Dotted lines: customers’ demand for and usage of ever improving products and services
Business model
- Components
o
- In health care, most technological enablers have failed to bring about lower costs, higher
quality, and greater accessibility due to a lack of business model innovation
- Types
o Solution shops (= institutions built to diagnose and solve unstructured problems)
Deliver value primarily through the people they employ, and successful firms
are those that can attract the best talent
Example in health care: general hospitals and physician practices
o Value-adding process businesses (= transform inputs of resources into outputs of
greater value)
Focus on process excellence that can deliver high-quality services and
products consistently at a lower cost, and they are less affected than other
types of businesses are by the variability that occurs when outcomes depend
on people’s intuition
o Facilitated user networks (= enterprises in which the same people buy and sell and
deliver and receive things to and from each other)
The companies that deliver value and make money are those that facilitate
the effective operation of the network and its user transactions
The right business models for health care
, - The legacy institutions of health care delivery are jumpled mixtures of multiple business
models struggling to delivery value out of chaos, incorporating indecipherable systems of
cost accounting, excessive overhead, pervasive cross-subsidization, and an unacceptable
amount of variability and medical error
- Facilitated user networks remain underdeveloped and underused in health care, but they are
an ideal business model for the care of many chronic diseases will help shift much of the
care of chronic diseases out of the intuitive-based practice of hospitals and physician
practices, and will improve the quality and reduce the cost of care for many behavior-
dependent chronic diseases
Challenges to new business models in health care
- Fragmentation of care
- Lack of a retail market
- Regulatory barriers
- Reimbursement
The appropriate solution is to encourage the development of disruptive business models that can
assume a greater share of the workload – not to force the old models of solution-shop medicine,
successful in their own right, to twist and conform. By coupling technological advances with
appropriately matched business models, disruptive innovation has brought affordability and
accessibility to industries, and it is the right prescription for the ailing US health care system – a
treatment that is desperately needed and long overdue
Hwang & Christensen. (2008). Disruptive innovation in health care delivery: a framework for business-model innovation.
What is organizational change? (inclusive culture related to week 2)
Change
- External
o Changing consumer needs and wants
o New governmental laws
o Changing technology
o Economic changes
- Internal
o New organizational strategy
o Change in composition of workforce
o New equipment
o Changing employee attitudes
Change process
- Unfreezing the status quo (= preparing for the needed change)
o Increasing the driving forces (= forces pushing for change)
o Decreasing the restraining forces (= forces that resist change)
o Combining the two approaches
- Changing to a new state
o Refrozen so that it can be sustained over time
- Refreezing to make the change permanent (= to stabilize the new situation by reinforcing the
new behaviors)
Organizational change (= any alteration of people, structure, or technology in an organization)
- Change agent (= someone who acts as a catalyst and assumes the responsibility for managing
the change process)
- Types of change
What is innovation?
The theory of disruptive innovation helps explain how complicated, expensive products and services
are eventually converted into simpler, affordable ones
-
- Solid lines
o Sustaining innovations: continual improvement of a product or service
For old customers
o Disruptive innovations: new product that is usually simpler, more convenient, and
more affordable than sustaining innovations
For new customers
- Dotted lines: customers’ demand for and usage of ever improving products and services
Business model
- Components
o
- In health care, most technological enablers have failed to bring about lower costs, higher
quality, and greater accessibility due to a lack of business model innovation
- Types
o Solution shops (= institutions built to diagnose and solve unstructured problems)
Deliver value primarily through the people they employ, and successful firms
are those that can attract the best talent
Example in health care: general hospitals and physician practices
o Value-adding process businesses (= transform inputs of resources into outputs of
greater value)
Focus on process excellence that can deliver high-quality services and
products consistently at a lower cost, and they are less affected than other
types of businesses are by the variability that occurs when outcomes depend
on people’s intuition
o Facilitated user networks (= enterprises in which the same people buy and sell and
deliver and receive things to and from each other)
The companies that deliver value and make money are those that facilitate
the effective operation of the network and its user transactions
The right business models for health care
, - The legacy institutions of health care delivery are jumpled mixtures of multiple business
models struggling to delivery value out of chaos, incorporating indecipherable systems of
cost accounting, excessive overhead, pervasive cross-subsidization, and an unacceptable
amount of variability and medical error
- Facilitated user networks remain underdeveloped and underused in health care, but they are
an ideal business model for the care of many chronic diseases will help shift much of the
care of chronic diseases out of the intuitive-based practice of hospitals and physician
practices, and will improve the quality and reduce the cost of care for many behavior-
dependent chronic diseases
Challenges to new business models in health care
- Fragmentation of care
- Lack of a retail market
- Regulatory barriers
- Reimbursement
The appropriate solution is to encourage the development of disruptive business models that can
assume a greater share of the workload – not to force the old models of solution-shop medicine,
successful in their own right, to twist and conform. By coupling technological advances with
appropriately matched business models, disruptive innovation has brought affordability and
accessibility to industries, and it is the right prescription for the ailing US health care system – a
treatment that is desperately needed and long overdue
Hwang & Christensen. (2008). Disruptive innovation in health care delivery: a framework for business-model innovation.
What is organizational change? (inclusive culture related to week 2)
Change
- External
o Changing consumer needs and wants
o New governmental laws
o Changing technology
o Economic changes
- Internal
o New organizational strategy
o Change in composition of workforce
o New equipment
o Changing employee attitudes
Change process
- Unfreezing the status quo (= preparing for the needed change)
o Increasing the driving forces (= forces pushing for change)
o Decreasing the restraining forces (= forces that resist change)
o Combining the two approaches
- Changing to a new state
o Refrozen so that it can be sustained over time
- Refreezing to make the change permanent (= to stabilize the new situation by reinforcing the
new behaviors)
Organizational change (= any alteration of people, structure, or technology in an organization)
- Change agent (= someone who acts as a catalyst and assumes the responsibility for managing
the change process)
- Types of change
