Companies in the healthcare industry should regularly ask themselves the question, “Should we spend time and resources improving existing products and services or innovating new ones?” The answer to that question depends on several factors.
Traditional Quality Programs Aim to Improve Existing Products
Traditional quality programs, such as Lean and Six Sigma, focus efforts on improving existing products and services. For instance, the established process improvement approach for Six Sigma is called DMAIC (Define, Measure, Analyze, Improve and Control). After project sponsors define an improvement opportunity, a project improvement team measures the current state, analyzes for root cause, improves the existing process by eliminating the root cause and then controls the improvement by ensuring old ways do not creep back into the improved process, product or service.
Since the late 1980s, when Motorola developed the methodology, this traditional approach has been successful for many companies. The same can be said for Lean after Toyota developed the Toyota Production System.
However, even with the plethora of success stories, traditional quality programs can sometimes come at a devastating price, because improving an existing product or service assumes the status quo will continue. As a result, although it is in a “new and improved” state, it is still the same product or service. What happens when the market shifts and no longer desires that particular product or service?
Improve or Innovate Your Healthcare Product or Service?
Investing resources on improving a product or service that is at the end of its life is akin to improving mechanical typewriters when the market was demanding word processors. This mindset can be even more damaging because it draws attention away from an imminent external paradigm shift and focuses on an internal self-fulfilling optimism for the dying product, which results in missed opportunities and eventual demise.
In the healthcare industry, where the speed of change is equal to, if not greater than many technology hypergrowth markets, organizations must constantly review their products and services before spending time or resources on improvement.
There are certain situations in which continuous improvement can further enhance customer satisfaction and loyalty, resulting in even higher demand. But for most organizations, a different approach is needed; one that is geared toward innovation.
Phytel’s Approach to Innovation
Fortunately, an approach to innovation does exist, referred to as Design for Six Sigma. There are several different Six Sigma designs a company could use, but the method depends on the type of product of service provided. Here at Phytel we use an innovative methodology termed DMADV, an approach especially useful for innovating software and service processes.
5 Steps to Innovate Healthcare Products and Services
Define and Measure
After the need for innovation is identified (Define), the project team begins collecting the Voice of the Customer (Measure). During this phase, several concepts are deployed, including industry-standard tool called a QFD (Quality Functional Deployment), which prioritizes and maps our customers desires to delivery options.
These customer desires are referred to as CTQs (Critical-to-Quality features or services). CTQs in the healthcare industry could come from clients, patients, quality organizations (such as the NCQA) or regulatory agencies. In the QFD, the relationship between each CTQ and how to deliver is measured, allowing subject matter experts to determine which features to develop in the new product or service.
Analyze
Once the CTQs and the approach to deliver them are defined, the project team outlines, at a very high level, alternative solutions (Analyze). Additional tools, such as a Pugh Matrix are used to compare the various alternative designs, often resulting in what is referred to as a Frankenstein model. The Frankenstein model takes the best of all the alternative solutions and combines them into one best approach.
Design
The design with the highest score, typically the Frankenstein design, would then transition into the detailed design phase (Design). During this stage, the high-level design is analyzed and broken down into a task-level structure than can be performed at an individual contributor level.
At this point, the design on paper is then translated into what is referred to as a Transfer Function. This is a mathematical representation of the design so that the performance of the design can be measured against the CTQs. Usually tweaks to the design occur to improve the likelihood of achieving the desired results. Once the design is structured, the team then determines what type of changes is needed to support the new product or service. Many times, technology changes, process changes and training are required to prepare the organization.
Verify
Finally, the product or service is piloted on a small scale in a beta environment to check for final tweaks and to gather measurement data on the results (Verify). During this final phase, the project team collects data from the pilot and ensures that the process to produce the new product or services is stabilized. Control Charts are often used to determine process stability, followed by a capability analysis to determine the probability of delivering against each CTQ. The new product or service is monitored throughout its lifecycle for continuous improvement. That is, until it is no longer in demand.
Conclusion
When should a company operating in the healthcare industry innovate rather than spend time and resources on improving existing products and services? Well, the answer to that question depends on the life stage of each product or service offered.