Designing Exponential Organizations in Health & Medicine
Advancements in technology and global connectivity are moving faster than ever, and few, if any, industries remain untouched by the rapid growth underway. While information sharing and resource acquisition, among other things, were once slow and tedious, globalization and innovation are shifting our landscape from one of scarcity to abundance: an abundance of knowledge, an abundance of communication options, and an abundance of easy-access resources.
Because of this shift, the pace of adaptation is accelerating, allowing new businesses to grow at exponentially higher rates over the years. Historical data indicates that while a typical Fortune 500 company established prior to 1998 took an average of 20 years to reach a billion dollar market capitalization, that timeline for new companies has shrunk by 90% to an average of just two years today. The question is, how? What factors allow these new companies to grow at such exponential rates, and how can existing companies, based on scarcity business models, keep up?
Salim Ismail, Yuri van Geest, and Michael Malone answered these questions in their book, Exponential Organizations. Working as a guide to navigating this rapidly changing business environment, the authors studied more than 60 fast-growing firms and isolated a number of factors and enablers that allow companies to scale their organizations through adjustments to strategy, structure, process, culture, key performance indicators, people and systems. While the ExO methods outlined in the book are most readily applicable to fast-paced industries like tech, traditionally slower-moving, regulatory-ridden industries can benefit as well.
My interest lies in how the historically restrictive world of healthcare, medicine, and scientific discovery can leverage the methods practiced by Exponential Organizations to drive exponential growth and transformation, beginning with some key enablers. While there are 10 granular attributes outlined by the ExO authors, Frank Diana maps these back to one of six enablers: extend the organization, descriptive to prescriptive shift, core-edge integration, simulation and rapid prototyping, structural change, and systems of engagement. According to Diana, “Although the labels are different, the intended outcomes are the same — that is, enabling a set of organization characteristics (Digital DNA) that allows an organization to survive the shift [toward exponential growth].”
In theory, any newly established company should employ all of the ExO attributes, but an existing organization can reap tremendous benefits by implementing even a handful. In this article, I’ve identified three enablers and associated attributes that healthcare organizations can leverage to grow rapidly and thrive within today’s technologically advanced landscape and shifting mindset.
Extending the Organization
The interconnectedness and accessibility of talent, knowledge, and resources today allows businesses to thrive on a leaner, more streamlined core staff than ever before. The concept of “extending the organization” is about leveraging on-demand, third-party assets to supplement skills and means that are not available internally.
This outsourcing begins first with the “own less, rent more” mentality behind leveraged assets. Whether outsourcing research to contractors, utilizing community prototyping labs or swapping a stationary private office for a remote, shared workspace, the goal is to minimize in-house expenditures to allow for agility when it comes to growth and expansion. Medical device companies, for example, historically required heavy capital investment for in-house prototyping and manufacturing. However, this creates limitations to advancement when those companies only have expensive, specialized equipment that can’t easily or affordably be replaced or supplemented as technology evolves.
Now, a number of machine shops and prototyping labs offer access to the community and third-party organizations for experimentation and manufacturing. One such example is Fab Labs, a global network of self-contained digital fabrication shops equipped with 3D printers, milling machines, laser cutters, and more. Access to this type of equipment would allow medical device companies to create functioning prototypes without the overhead of in-house, fully-equipped labs.
Beyond operational logistics, another element of “extending the organization” is leveraging community and crowd. While in many cases this relates to a community or tribe of supporters for a company’s massive transformative purpose (MTP), when considering the healthcare industry, the power of community can also be applied in the form of crowdsourcing data and knowledge. This can be especially beneficial when looking to solve complex medical challenges, as showcased by CrowdMed. CrowdMed is a global case-solving community aimed at connecting patients around the world with potentially life-changing diagnoses and treatment options. Similarly, organizations like Carrot Rewards, which offers incentives for individuals to complete healthy living surveys, and HealthMap, which uses informal online data to monitor real-time public health threats, are also leveraging the “wisdom of the crowd” to advance healthcare. While these three companies use this form of crowdsourcing as a part of their core business, other organizations turn to the crowd for back-end research to inform and support their business priorities instead. The American Heart Association, for example, turned to thousands of patients, caregivers, clinicians and researchers in an effort to identify the most pressing priorities for cardiovascular medicine. The initiative prompted a $2.75 million grant to the AHA from the Patient-Centered Outcomes Research Institute for work on the treatment of atrial fibrillation (AFib).
The last factor to consider when it comes to extending an organization is staff. By supplementing core HR with outsourced specialized work to freelancers or per diem employees, companies open the door to a much wider array of specialized services without maintaining an increasingly large team. Not only does this create a leaner business model, but it accommodates a growing portion of today’s workforce. In 2017, a national survey found that 36% of the US workforce were freelancers, and it’s predicted that in 10 years, approximately 50% of the US population will be freelancing. In fact, Millennials, which are now the largest generation in the US labor force at 35%, happily embrace the flexibility of freelance work. While many healthcare organizations already utilize staffing firms and per diem employee rosters for clinical roles, we will see a shift which expands that mentality to include specialized, non-clinical roles as well.
Descriptive to Prescriptive Shift
Instead of always looking backward to assess performance, exponential organizations benefit from a forward-looking, proactive approach to business management. The “descriptive to prescriptive shift” is about turning insight into action. With descriptive analytics, organizations analyze data and describe what has happened or is happening, and why. A predictive and prescriptive approach, on the other hand, enables organizations to not only identify cause and effect, but to identify patterns and trends to predict what will happen next, and provide actionable recommendations on how to influence outcomes.
The two ExO attributes that enable this shift are algorithms and dashboards. Advanced algorithms and artificial intelligence enable quick and efficient analysis of large datasets, and as I outlined in a recent article, this can have a tremendous impact on the healthcare industry. Machine learning and predictive analytics can help healthcare professionals quickly, accurately, and affordably discover signatures of disease, identify promising plans for treatment and even generate new drugs. Dashboards, on the other hand, complement these advanced analytics by creating transparency and fostering a proactive mentality among staff. By establishing transparent OKRs (objectives and key results), a goal-setting process made popular by Google, companies can zero-in on metrics that impact the bottom line, and keep employees energized and motivated to meet those goals by showing individual and team alignment towards big company initiatives. This transparency often comes in the form of company-wide dashboards displaying real-time metrics for all to see and creates peer-to-peer rather than top-down accountability.
Simulation and Rapid Prototyping
In many ways, the existence of open-door fabrication labs and machine shops makes experimentation and rapid prototyping much more accessible. For the healthcare industry, however, things are a bit trickier. Regulatory roadblocks can slow the pace of experimentation, subsequently hindering the development of potentially life-altering innovations. And so, leveraging ExO’s “simulation and rapid prototyping” enabler in the healthcare space is a bit more difficult, but not impossible.
While exponential organizations often reach outside of their business to leverage valuable resources, some healthcare companies may choose to take this concept a bit further by reaching outside of their home country. Some geographies prioritize research for certain health concerns that may be uniquely pressing for their region, or for society as a whole. Finland and Estonia, for example, will soon be the first countries in the EU to exchange healthcare data for the benefit of society. Different countries have different priorities, and there is often less friction from governing bodies to execute safe testing that meets regulatory standards if it aligns with those priorities. Taking advantage of those regulatory differences can accelerate the pace of development for research that may be more restricted in the US. If a new product or service has the potential to impact a Global Health Initiative, it may be worthwhile to establish a team or branch of business in a geography that encourages relevant research to shorten timelines and maximize the opportunity for success.
A Deeper Dive
While some attributes and enablers may be more easily leveraged than others when it comes to the healthcare industry, there is no question that healthcare organizations should be optimizing operations and positioning themselves for exponential growth in today’s ever-changing landscape. While I’ve covered only a fraction of example applications, there are many branches of healthcare, from pharmaceutical companies to medical device manufacturers and more, that can benefit from each of the ExO methods in unique and innovative ways. Of course, the larger and more established a company is, the more challenging it will be to enable experiment-based growth. Challenging, but not impossible. In their latest book, Exponential Transformations, the ExO founders tackle this challenge by outlining a 12-week sprint methodology to facilitate change.
Some questions I’m thinking about are:
- What are some other technology-enabled organizational waves sweeping across the globe, breaking down geographical barriers, that we [in health & medicine] can catch and ride?
- We didn’t cover: systems of engagement, structural change, and core-edge integration — can these be made even more powerful in combination with an organizational paradigm shift?
- Soon, market cap to $1T will be the new metric — what ExO attributes are these organizations doubling down on?
