Article in NHS In-View Magazine October '08

“ we need two joint problem solvers, not one.�

C K Prahalad Innovation through co-creation

The journal from the NHS Institute for senior leaders Issue 19, October 2008

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Issue 19, October 2008 Title

INSIDE LANE

6 COMMON VOICE

12 OUTSIDE VIEW

14 CLASSIC INSIGHT

Des Dearlove discusses co-creation with C K Prahalad and how it can work in the NHS.

Three professors look at the pros and cons of scenario planning.

Scott Cook examines the ways people outside a company can make a valuable contribution to it.

10 FOotprint The benefits of understanding management practices, explained

by Widget Finn.

32 A BOOK IN 10 MINUTES Steve Coomber reads and discusses The Innovator’s Prescription: A Disruptive Solution for Health Care by Clayton Christensen.

INSIDE KNOWLEDGE

2 FIRST WORD Paul Allen introduces this issue, outlining the main theme, innovating for the future.

3 YOUR SHOUT Jay Bevington, a Deloitte director, discusses the optimum ways for PCT boards to deliver world-class commissioning.

4 ONE MINUTE INTERVIEW Sir Bruce Keogh, the NHS’s first medical director, discusses work in hand.

5 PERSONAL EXPERIENCE Andrew Morris, cheif executive of Frimley Park NHS Foundation Trust brings back great ideas from an A&E Department in Boston, US.

In View The journal from the NHS Institute for senior leaders Issue 19, October 2008. Published by the NHS board level development team, part of the NHS Institute for Innovation and Improvement.

ISSN 1743-2340 Gateway ref 2698 Editor Paul Allen / paul.allen@institute.nhs.uk Managing editor Peter Mills / petermills@theteam.co.uk Contributing editors Stuart Crainer and Des Dearlove Editorial board Paul Allen, Prof Chris Beasley, Simon Bird, Prof Carol Black, John Burgess, Julie Burgess, Mary Coffey, Dr David Colin-Thome, Dr Clair Du Boulay, Niall Dickson, Prof Aidan Halligan, Prof Ed Hillhouse, Dr Mark Hunt, Peter Lees (chair), Karen Lynas, Prof Yi Mien Koh, Peter Mills, Dawn Wakeling and Mark Wilkinson.

25 focus on Dr Lynne Maher, Head of Innovation Practice at the NHS Institute explains the thinking behind co-design services.

27 HOW TO …

Engage patients in service design.

Ben Reason, a partner in live/work, considers the possibilities.

29 Benchmark Health is a major component in China’s 11th five-year plan, 2006–10.

Art director David Recchia / davidrecchia@theteam.co.uk Contributing writers Steve Coomber and Peter Davies Designer Nicola Gray / nicolagray@theteam.co.uk Production manager Audrey Ashun / audreyashun@theteam.co.uk Illustrator James Hague / jimhague31@hotmail.com Printer 354 Print Programmes and support team John Lewin

34 OVER THE FENCE Innovation labs – Steve Coomber describes how they work.

36 WHAT YOU CAN LEARN FROM...

Thomas Alva Edison. Find out more from this prodigious inventor.

A large text version of this publication is available by calling 0800 555 550.

Subscriptions In View is a free quarterly subscription journal from the NHS Institute for senior leaders. It is available by going to our website www.executive.modern.nhs.uk and looking for the Register link. You can also call 0800 555 550.

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Editorial office In View is produced for the NHS Institute by The Team Brand Communication Consultants Limited, London.

Comments and further information should be sent to the editor by email or to NHS Institute for Innovation and Improvement, University of Warwick Campus, Coventry CV4 7AL. Switchboard 0800 555 550.

Reproduction © Crown copyright, 2008. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording, or any information storage and retrieval system without written permission.

Further printed copies of the journal are available by contacting the editorial office. A version published in portable document format (PDF) is available online. Go to the Resources link at www.executive.modern.nhs.uk Disclaimer The views expressed in this journal are not necessarily those of the NHS Institute for Innovation and Improvement, the Department of Health, their employees or members of the editorial board.

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Innovate / Improve / In View Title First word

Welcome to the autumn edition of In View. ‘Innovating for the future’ is our theme throughout this issue. As public and private sector organisations up and down the country struggle to come to terms with a suddenly much harsher economic climate, many will no doubt realise that their ability to innovate may prove to be the key to their survival.

They would do well, therefore, to ponder closely the wisdom of C K Prahalad, author of The New Age of Innovation, in our cover feature. The “most influential living business thinker in the world”, according to The Times’ ranking of global business gurus, Professor Prahalad argues that the idea of ‘co-creation’ is crucial in an era of unprecedented consumer power.

For an NHS striving to personalise services and encourage a plurality of providers, his intriguing formulae, N=1 and R=G, could one day become a mantra.

Still stateside, Harvard’s Professor Clayton Christensen’s prescription for the US healthcare system is ‘disruptive innovation’. You can digest his tonic in ‘A book in 10 minutes’. Readers may feel that successive waves of reform have already brought their own brand of disruptive innovation to the NHS. But the US remains a source of inspiration for UK health policymakers and managers – not least through the NHS Institute’s own ‘Innovations in healthcare – US perspective’ programme. As one chief executive reveals in this issue’s ‘Personal experience’ column, a trip to Boston, as part of that programme, led directly to two impressive developments at his trust.

One of those developments is based on information technology, which Professor Christensen identifies as having a pivotal role in the emergence of new business models. Meanwhile, the NHS’s medical director, Professor Sir Bruce Keogh, reveals in his one minute interview that informatics goes ‘hand in glove’ with the innovations he wants to see.

Innovating would be much easier, of course, if we could predict the future. That clearly is impossible, as our report on scenario planning is at pains to point out. But thinking about multiple possible futures is a healthy way for organisations to avoid inertia and ensure they are agile and supple enough to cope with the unexpected.

Alternatively you could try setting up an innovation laboratory, complete with floor-to-ceiling whiteboards, toys, gadgets and brightly coloured furniture. It works for some, apparently.

Should that not stir you, you could do worse than spend the odd half-hour contemplating the example of Thomas Alva Edison, possibly the world’s greatest innovator. He seems only ever to have spent three months at school, yet virtually any room you enter will contain something based on one of his inventions, if only the electric light bulb. What could he have done for the NHS? On a different tack, we are keen to ensure that In View remains fresh, informative and relevant to our readers. Subscribers will shortly receive a survey to complete and we would welcome your responses which will help us to shape the future content and direction of In View.

Paul Allen editor

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Issue 19, October 2008 Your shout

JaY Bevington

PCT boards must take urgent action if they are to stand a chance of implementing world-class commissioning, says Jay Bevington, a director in Deloitte’s public sector assurance and advisory practice.

How well prepared are the boards of primary care trusts to fulfil the aspirations of world-class commissioning?

Like PCT boards around the country, most of our nine were focused on splitting their commissioning and providing functions, creating arm’s-length arrangements between the two and searching for an appropriate governance model. They were asking themselves what impact this would have on their forward plans, what new issues they would need to consider and at what point.

“Nine PCTs agreed to help the NHS Institute review its online Board Development Tool against world-class commissioning standards.

In the process, many of the current concerns that threaten to deflect them off course became apparent.“

IN ADDITION Jay Bevington can be contacted on 07968 778 436. jbevington@deloitte.co.uk

They were also concerned about their capacity and capability as commissioning organisations. While they might command a major slice of the NHS’s resources as commissioners, often they did so with a disproportionately slender number of staff.

A particular shortage exists among financial professionals who can create sophisticated models to predict the financial impact of demand for health services. There is a similar scarcity of contract managers able to set up and monitor agreements with providers.

PCTs are striving to genuinely understand the needs of their local populations and anxious to examine what services are available to address those needs. Where they discover gaps, they are asking what they must do to stimulate the market in order to encourage new entrants into it.

Clinical engagement is another preoccupation.

PCTs are asking how they can secure real clinical engagement – through practicebased commissioning or other means – in an environment where GPs tend to dominate clinical representation. How representative are GPs of the rest of the clinical community?

Halfway through the financial year, many PCTs are finding that pressure is building on their budgets and they are beginning to worry about sliding into deficit. In most cases this is being driven by their main acute providers over-performing against budget.

The suspicion is that this may be the case

especially where an acute trust is seeking foundation status. PCTs want to know how they can better control demand for secondary care services – for example, by working with GPs on referrals – as well as putting in place much sharper and more robust contractual arrangements with their major providers.

What can PCTs do to address these issues and ensure they are fit for the purpose of implementing world-class commissioning?

Most PCTs currently have too much on their agenda and do not have the management capacity to deliver everything that is expected of them. This results in ‘headless chicken’ syndrome: overwhelmed with busyness, they fail to prioritise and do not always have the time (or energy) to drive delivery of their plans, and so the benefits they are trying to achieve are not always realised.

As an initial step, boards and their executive teams need to hold the difficult conversations about what they are no longer prepared to devote scarce management resources to tackling. That is, of course, a hundred times more easily said than done, and the NHS is notoriously bad at doing precisely this. But PCTs are so overworked they must face up to it. Only then can they be confident of getting real closure on the key aspects of their strategic and organisation development plans.

Once that is accomplished, they should carry out some sophisticated root-cause analysis of their supply chain to ask why demand for secondary care is increasing and what they can do about it. Many PCTs are investing significantly in market analysis, but that is an expensive luxury when your acute trust is over-performing by 10 per cent – an urgent problem that must be sorted out first.

If PCTs fail to do that, they will find their funds for investment in new services rapidly disappear in acute sector overspends.

Jay Bevington was talking to Peter Davies.

Above: Jay Bevington

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Innovate / Improve / In View One minute interview

Sir Bruce Keogh

Professor Sir Bruce Keogh became the NHS’s first medical director in November 2007. A consultant cardiothoracic surgeon, he was also acting director general for informatics between April and September of this year.

How have you managed to combine your roles of medical director, informatics director and surgeon?

I’ve been able to spend the bulk of my time as medical director, since there’d already been an informatics review which had set the direction of travel. I no longer practise as a surgeon. Many complications in heart surgery occur on the third or fourth day after an operation, and I figured it would pose too big a risk to a patient if I was, say, in a meeting at the Department of Health.

Is informatics integral to what you want to achieve as medical director?

They’re hand in glove. A large part of the clinical quality agenda is intimately related to the ability to develop a coherent informatics infrastructure. Our ability to really know how well we’re doing depends on being able to collate information and use it appropriately.

Are you confident the NHS IT strategy is on track?

I’m pretty confident it’s on track and on budget. What I need to reassure myself about is that we don’t become so obsessed with the technology and contracts that we forget why we’re doing it – which is to ensure the patient has a good encounter with the NHS. It’s terribly easy in highly technological areas to forget that.

You’re particularly keen to publish more outcomes data?

Current NHS information systems are not designed to facilitate measurement of clinical outcomes, and much of what they provide are surrogate measures. So we asked trusts to send us, from information they currently collect, what they think is most useful in measuring clinical services. We ended up with about 500 measures and are consulting on what people think has real validity. We’ll then publish them for people working in the NHS as benchmarking outcomes – these are not targets. When we have a clear idea

Above: Sir Bruce Keogh

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which are the popular measures we’ll publish some on NHS Choices. We’re hoping this will improve the data quality in time.

New metrics will develop from the bottom up. People have said a lot of what we do is difficult to measure, but the workforce has the intellectual firepower to crack this nut.

Will we see data on individual clinicians’ outcomes?

We already do in cardiac surgery: 70 per cent do it, and it remains voluntary. But no – although if groups of clinicians want to do it, that’s fine. The data quality makes me cautious, and I believe the best care is delivered by teams. The moment you attribute stuff to a single clinician you risk sending a message that actually it’s that individual delivering the care. However, I would expect local organisations to know how individual clinicians are doing.

What advice would you give boards keen to improve clinical engagement in their organisations?

The NHS in general – and ultimately, boards – need to focus more on talent spotting: identifying and developing clinical leaders, not waiting for them to emerge. I distinguish leaders from managers because the qualities required are different. You can be a good leader without being a good manager. It’s about encouraging clinicians to take both clinical and financial responsibilities and encouraging them to define the priorities for their services. The biggest incentive boards can offer to get clinicians engaged is giving them the freedom – that’s the support and managerial capacity – to develop their services. What’s turned them off over the years is the feeling that they haven’t been listened to. So to reverse that, boards should throw down the gauntlet and invite them to take greater responsibility. But you have to recognise that not every clinician wants to be involved in management.

Issue 19, October 2008 Personal experience

ANDREW MORRIS

When Andrew Morris, OBE, chief executive of Frimley Park NHS Foundation Trust in Surrey, visited an accident and emergency department in Boston in the US a year ago it made a lasting impression on him.

“It brought home how our A&E was long past its sell-by date,” he says. “All patients in Boston were assessed in single rooms.

There was no reason why we couldn’t emulate that in the UK. And now that’s what we’re trying to do.”

Opening soon, Frimley Park’s new A&E department will have 23 single rooms where patients can be assessed in private. It is not the only development at the trust inspired by the trip across the Atlantic, which was made by senior managers in the local health economy. “We went to try to pinch from them some of the better things they do around quality of service,” says Mr Morris.

The ‘superb’ way that Massachusetts General Hospital applied IT in radiology was another remarkable discovery.

“It brought home the uses of IT in terms of online reporting. We’ve taken a few strands of their thinking and applied it here.”

Now Frimley Park is about to enable on-call radiologists to view downloaded images of scans from home, saving them from having to travel into the hospital out-of-hours.

Mr Morris and his colleagues visited Boston on the NHS Institute’s Massachusetts-based ‘Innovations in healthcare – US perspective’ programme, which has now been running for seven years. Teams of four to eight participants, including chief executives and senior clinical leaders, are invited to take part in the five-day trip.

“We prefer whole health economies to send a team, not just individual organisations,” explains the NHS Institute’s Head of Board Level Development, Gerry McSorley. “And we always encourage mixed teams of managers, doctors, nurses and allied health

Visiting the US can inspire NHS leaders to initiate change back home.

professionals. We do try to emphasise these people should be at senior leadership level. They have to understand the way in which the health economy works so they can interpret what happens in Boston more widely and translate it when they get back.”

Although Massachusetts healthcare is not typical of the US in some respects – the state is moving towards universal health insurance coverage, for example – the programme includes speakers with a nationwide perspective too. Recent participants have learned about veterans’ healthcare and the national strategy for informatics. “They get a sense of what’s happening in the US more widely,” says Dr McSorley.

Forthcoming tours will include a visit to at least one major community healthcare site, run by the Cambridge Health Alliance, and to long-term care facilities. The way in which US healthcare manages the gap between primary and secondary care is especially interesting, says Dr McSorley. The system is biased towards hospital provision, with many primary care physicians working in hospitals.

American clinicians are heavily engaged in leadership and management, he says, and their passion for quality is impressive, holding many lessons for the NHS in the way they use technology and informatics to drive improvements in service.

Dr Margaret Goddard, medical director of Liverpool Primary Care Trust, took part in the programme last year with colleagues from the Royal Liverpool Hospital, and was particularly interested in quality issues.

“I was certainly impressed by what they’re trying to do in driving up quality,” she says.

“My background is in general practice, and with the new GP contract and Quality and Outcomes Framework, I could see some similarities between us and them. I felt we’re not that far behind.”

Above: Andrew Morris, OBE

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Innovate / Improve / In View Common voice

Innovation through co-creatIon C K Prahalad, the Paul and Ruth McCracken Distinguished University Professor of Strategy at the Ross School of Business at the University of Michigan, is “the most influential living business thinker in the world” according to global guru ranking, the Thinkers 50, published by The Times.

Born in the town of Coimbatore in Tamil Nadu, Coimbatore Krishna Rao, C K Prahalad studied physics at the University of Madras (now Chennai), going on to work as a manager in a branch of the Union Carbide battery company. Prahalad then went to the Indian Institute of Management, before earning a doctorate (DBA) from Harvard.

He taught both in India and America, eventually joining the faculty of the University of Michigan.

Prahalad’s first book, Competing for the Future, written with fellow management guru Gary Hamel, then a young international business student, introduced the term “core competencies” to the management lexicon.

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He followed up the bestselling success of his first book with The Future of Competition, written with Venkat Ramaswamy, introducing the notion of “co-creation”, and The Fortune at the Bottom of the Pyramid, arguing that the world’s poor (the “bottom of the pyramid”) represented an untapped market worth anything up to $13 trillion a year.

In his most recent book, The New Age of Innovation, Prahalad continues his remarkable intellectual journey, describing a new competitive landscape that is based on two simple principles – N=1 and R=G. Des Dearlove talked to Prahalad about his latest thinking and how it applies to the NHS and public health.

Can I begin by asking you what it’s like to be the number one management thinker in the world?

First I would say that I’m happy to be in that slot – if you’re going to be in that list, it is better to be number one. But it’s also a very humbling situation, because if you’re number one people think you know the answers to everything, and you must have the humility to say, no, I don’t. And, therefore, I think I’ve become a lot more humble and, more importantly, a lot more cautious about what I say.

Issue 19, October 2008 Title

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Innovate / Improve / In View Common voice

What did your early experiences in India teach you?

Growing up in India is an extraordinary preparation for management – for three reasons. One, you grow up in large families so you always have to make compromises; you have to learn to accommodate. And India is a very diverse culture, in terms of languages, religions, income levels, so you start adjusting and coping with diversity at a very personal level as a child.

“ N =1 and R=G. This is going to be the pattern for the future.”

And the second reason?

I was lucky because my parents were very academically oriented. My father was a judge and a great scholar. He taught us very early in life that there is only one thing which when you give more, you have more – and that’s knowledge. That has stuck with me.

Then, in the plant in Union Carbide, I had to work with communist unions. I had to set rates – I was a young industrial engineer – and negotiating rates with the Unions taught me a lot.

They’re very smart people, they’re very thoughtful, and if you were fair and honest, you could deal with them in an interesting way. So it taught me not to think of these groups as adversaries, but to collaborate, be honest and be fair.

Can you explain the idea of co-creation, and how it is developed in your latest book, The New Age of Innovation?

Co-creation is an important idea. What it says is that we need two joint problem solvers, not one. In the traditional industrial system, the firm was the centre of the universe, but when you move to the new information age, consumers have the opportunity to engage in a dialogue and be active and, therefore, they can shape their own personal experiences.

So with co-creation consumers can personalise their own experience and the firm can benefit. And this is becoming much more common and possible today.

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What would be an example of that?

Let’s take Google – everybody Googles now. But if I look at Google, it does not tell me how to use the system; I can personalise my own page, I can create iGoogle. I decide what I want. Google is an experience platform. Google understands that it can have a hundred million consumers, but each one can do what they want with its platform.

That is an extreme case of personalised co-created value. In the new book, our shorthand for that is N=1.

On the other hand, Google does not produce the content at all. The content comes from a large number of people around the world – institutions and individuals. Google aggregates it and makes it available to me.

That is the spirit of co-creation, which says that even if you have a hundred million consumers, each consumer experience is different because it is co-created by that consumer and the organisation, in this case Google. So resources are not contained within the firm, but accessed from a wide variety of institutions; therefore resources are global. Our shorthand for that is R=G because resources are now coming from more than one institution.

So, we talk about N=1 and R=G. This is going to be the pattern for the future.

How do these two principles apply to an organisation like the National Health Service in the UK? I don’t know the NHS well, but I can talk about public health and also health services.

If you take what happens in a hospital, or what happens to me personally as someone who wants to maintain good health, each one of us is unique. We all have our own history of good health and health problems, so there is data about all of us personally.

There is nothing that stops the doctors who treat me from taking me aside and discussing the risks and the benefits of following a certain regime.

Issue 19, October 2008

Can you give me an example of that?

Episodes of illness increase the cost of the health system. So if you want to reduce the cost, you have to focus on wellness and wellness requires the N=1 approach. That’s because we’re all different and we all have different propensities for disease – genetic and also lifestyle. So you have to get to that level.

For example, if people are mildly obese, the doctor might alert them to the fact that they are susceptible to Type Two diabetes, that their cardiovascular disease and high blood pressure are issues that they have to worry about. They can do that today.

So, for example, my doctor and I could look at my medical records and my episodes of illness and discuss a regime to keep me healthy. That is a co-created regime. The doctor cannot tell me to walk four miles every day because if I’m living near a rundown area that may not be very wise.

On the other hand, the doctor can make an arrangement for me to go to a gym so I can exercise. So, I follow this regime and the doctor keeps track of me.

How could you take that further?

Well, let’s assume that I go to the next step; let’s assume I am a heart patient and I have a pacemaker. The doctor can say, all right, this is the bandwidth within which your pacemaker must operate and we’ll remotely monitor you with your permission.

If something goes wrong, we’ll send you a message, either through a cell phone, or through a PC, or the regular phone, or just send somebody to say get to the hospital because we need to treat you, or just rest for two days. So the doctor can become my personal friend.

So that’s the N=1 part. What about R=G? How does that apply to a health service?

Health is important to all of us so it is critical that we get into an N=1 way of thinking.

We cannot continue to treat patients like they’re an assembly line. But the R=G is more interesting. It says that the hospital can create an ecosystem where it doesn’t do everything.

For example, I may have a social worker come and talk to me, or talk to women who are pregnant on what they should do to have a healthy baby. The hospital could have a relationship with an ambulance service, a relationship with a dietician, all kinds of relationships. For example, with Type Two diabetes you can have testing labs, which are not necessarily in the hospital. So as the patient I don’t have to go and stand in a big queue.

So the hospital is part of a wider ecosystem?

Yes. The hospital can build a whole ecosystem of suppliers, low cost, connected to the hospital, where the hospital becomes the nodal institution which sets the standards and the parameters on how health security and privacy will be dealt with, and also provides the monetising system where everybody gets paid for doing this. So the whole idea in healthcare is to help move away from treating illness to treating wellness and creating wellness. If you start from that perspective, then N=1 and R=G become imminently possible, in fact required.

IN ADDITION This Des Dearlove interview with C K Prahalad and one with Lynda Gratton on Hot Spots, were filmed for the Guru Channel on BusinessSchoolTV. Visit www.bschooltv.com/_index.html to watch them.

Multinational Mission by C K Prahalad and Yves Doz. Free Press, 1987.

Competing for the Future by Gary Hamel and C K Prahalad. Harvard Business School Press, 1994.

The Future of Competition by C K Prahalad and Venkat Ramaswamy. Harvard Business School Press, 2004.

The Fortune at the Bottom of the Pyramid by C K Prahalad. Wharton School Publishing, 2004.

The New Age of Innovation by C K Prahalad, M S Krishnan. McGraw-Hill Professional, 2008.

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Innovate / Improve / In View Footprint

MBAs and the NHS

The NHS has gone through huge changes since it was established 60 years ago. One of the significant advances is an increasing acknowlegement among healthcare staff that they need to understand the process of management, and even learn its language.

Widget Finn discusses the advantages of healthcare staff gaining more of an understanding of the process of management. She has had articles published in The Daily Telegraph and The Times.

Some business schools have responded by offering MBA (Master of Business Administration) programmes which are tailored to the healthcare sector, though medical staff often find that a general MBA gives a valuable insight into management practice which helps them offer better care to their patients.

Lack of communication between managers and medics can cause problems according to Dr Alistair Baker, consultant paediatrician at King’s College Hospital. “Doctors and managers don’t understand each other’s point of view, and medical staff feel the power is transferring to management.

Sometimes it seems the NHS puts staff first and patients second, so to ensure patients’ best interests we medics must at least speak the management language.”

Dr Baker began an executive MBA at ESCP‑EAP European School of Management (Paris) last December. He explains “I’d done a lot of management work, but wanted a qualification that would be respected by both medical colleagues and managers.

I realised that my management view was limited by the perspective of the NHS and needed to see what management was about elsewhere.

It’s hugely changed the way I think and work. I now measure everything – when I go to work and go home and how I spend my time. My secretary, who’s hugely efficient, fills in a weekly time management form, demonstrating that she turns out 800 items of work per week. I use it as a point of reference for other clerical staff.”

Dr Baker’s patients in the Paediatric Liver Centre at King’s College Hospital are also benefiting from a rigorous management approach.

“The process of taking blood in treating liver disease had no governance structure or risk assessment and work schedules

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were unclear. We’ve brought in a training programme for healthcare assistants to do the job of taking blood, created a set of performance indicators and collected data on all the processes.”

Julie Gillson, lead nurse at Newcastle General Hospital’s Walk-in Centre, decided that if you can’t beat ‘em, at least understand what they’re saying. “In meetings with managers I knew a lot about the health side, but didn’t understand the business issues. I realised I needed to learn the jargon.” An MBA at Newcastle Business School has helped her recognise management styles and techniques. “I can now analyse how people reach a decision, and appreciate that there are different ways of managing. In the past I would have dropped at the first hurdle if the approach had been unsuccessful. I’m now much more confident when working with managers, and being able to use their terminology has improved my credibility.”

Stephen Diacon, director of MBAs at Nottingham University Business School, which offers an MBA tailored for the healthcare sector, comments “The NHS is one of the largest organisations in the UK and healthcare is an increasingly challenging environment, especially for doctors who have to juggle a complex portfolio of managing budgets, people and risk.

Our MBA is designed to help healthcare professionals invest in developing their management and leadership skills.”

Gillson would like to see management on the curriculum for all healthcare professionals. She argues “There’s nothing in nurses’ training about how to manage. I know that having an MBA has made a big difference in my job applications and caught the attention of the senior consultants and general managers who’ve interviewed me.” She is about to take up a post as chief matron in charge of a team within Northumbrian Healthcare.

Issue 19, October 2008

“In the last decade the NHS has moved to being run as a business, and the medical staff need to understand how things work.

Senior medical people can no longer say ‘My patient needs this, I don’t care how we get it.’ We need to know what things actually cost, and have to understand all the aspects of customer service, strategy and finance.”

When Lynn Davies, now manager for clinical support services at Birmingham Royal Orthopaedic Hospital, moved from nursing into healthcare management in the 1980s, a doctor remarked “You’re not a nurse now, you’re stepping over to the dark side.” That, says Davies, sums up how medical staff then saw managers.

She qualified as a nurse in 1973, and has seen huge changes in the NHS with the introduction of a management layer and the recognition that medical people also need to manage.

“When I became a theatre sister I did basic courses on budgeting and staff management, then took the Certificate of Health Service Management. After 16 years working in the operating theatre the post of theatre manager became vacant. Rather than someone coming in to tell me what I already knew I decided to do it myself.”

every clinical person’s development so they can actively improve what they do in relation to patient experience.”

Opinions are divided about whether a tailored healthcare MBA or a general one is more valuable. Gillson points out that not all business scenarios can be applied to the healthcare situation. “Newcastle Business School has brought in some healthcare case studies as there are quite a few medical people on the programme. But it’s useful to work alongside people from other disciplines and get a feel for how business works.”

Diacon agrees that the mixture of sectors in a general MBA brings benefits for everyone.

“By joining the MBA community healthcare professionals benefit from the opportunity to network and exchange learning with business leaders from other sectors.”

“ When I became a theatre sister I did basic courses on budgeting and staff management, then took the Certificate of Health Service Management. After 16 years working in the operating theatre the post of theatre manager became vacant.

Rather than someone coming in to tell me what I already knew I decided to do it myself.”

And, most importantly, they share a common language with hospital managers which will benefit the patient.

For further information on MBA courses visit: www.nottingham.ac.uk/business www.eduniversal.com/business-school/deanword/escp-eap/766 www.newcastlebusinessschool.co.uk www.open.ac.uk/oubs

Her line manager suggested that if she wanted to switch to management she should consider doing an MBA, but it wasn’t until 2001 that she decided to go ahead.

“I chose the Open University Business School programme because the distance learning system appealed to me rather than sitting in a classroom. The finance module was particularly relevant because I’m responsible for a budget of £22 million, which is a huge responsibility, and I need to understand the figures. Now I make sure all my managers who have budgets spend time with the finance department. Management training – perhaps a mini-MBA – should be part of

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Innovate / Improve / In View Outside view

Planning for the future

If only we could predict the future, formulating a strategy to ensure efficient and effective services in five, 10 or 15 years’ time would be comparatively straightforward.

Unfortunately, no business tool or computer program exists that will ever be able to do that with any degree of meaningful precision.

But there is a method strategists can use to help them better prepare for whatever the future may hold.

Scenario planning involves generating a series of different plausible futures using real data covering, for example demographic, social, economic, technological and other trends. Perhaps its most important attribute is to shake the inertia in an organisation that tempts it to assume the world in five or 10 years’ time will not be significantly different from the present. Scenario planning will not forecast the future for you, but it will convince you that the future will not resemble today.

With its origins among military strategists during the Cold War, scenario planning was taken up eagerly by large private sector corporations: Shell became renowned for using it extensively. Its advent in the NHS is more recent, although one early example is now part of health service folklore. On the eve of the internal market reforms in 1990, the then East Anglian Regional Health Authority commissioned an exercise to explore how the NHS might respond once the market went live. Dubbed the ‘Rubber Windmill’, after three days simulating the internal market the entire system crashed.

But in the process it produced key findings that influenced the way the market eventually developed.

A similar exercise, run by the King’s Fund last year with consultancy Loop2, performed the same function for the current NHS reforms.

Windmill 2007 staged a two-day simulation of a fictional but realistic health economy

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Professor Paul Corrigan, director of strategy and commissioning, London SHA, Professor John Appleby, chief economist, King’s Fund,

and David Hunter, professor of health policy and management, Durham University, give their views on how to make the best use of scenario planning.

from 2008–11 with 70 senior managers, clinicians, policy-makers and regulators, and included a series of workshops for a further 30 key players in the health system.

productivity; and one where public and health service were ‘fully engaged’ and progress rapid.

The organisers described their rationale: “The impact and intent of individual policies and initiatives are often well understood, but their combined effect? Nobody knows. Even if policy-makers thought they knew, had mapped it all out on a giant whiteboard in Richmond House, they would be wrong. It simply isn’t possible to compute the sum of all the individual behaviours of all the different interests as they respond to the changed incentives and opportunities created by the reform programme.”

Yet without some idea of where the reforms might send the service, plans and strategies are compromised, opportunities may be overlooked and the danger of unintended adverse consequences hovers over the NHS. “Conventional methods of predicting the future will not help,” they argued. “What is needed is a way of modelling how the system will actually respond. This requires a ‘soft’ qualitative approach that uses a behavioural simulation to draw on the knowledge and instincts of real players in the system to understand the future.”

Another method, based on quantitative rather than qualitative data, was used

by Derek Wanless in his 2002 report on the NHS’s long-term funding. He concluded that patients’ demands for greater choice and higher-quality services would be more important than an ageing population, in driving up costs by 2021. And acknowledging the uncertainty inevitable in judging the impact such factors would have, Wanless plotted three possible scenarios: one in which ‘solid progress’ was made in improving health status and service efficiency; one with ‘slow uptake’ of measures to improve health and NHS

Most recently, health minister Lord Darzi’s report High Quality Care For All also made use of scenario planning techniques. As part of the report’s consultation process, two ‘deliberative events’ were held at which over 1,000 patients, members of the public and NHS staff discussed what people would want from healthcare in the future and how the health service could best deliver 21st century care. The events made use of table discussions, presentations, films and electronic polling. In addition, the report held an international summit for 950 clinicians and stakeholders designed to influence the future shape of local models of care.

Emphasis was on involving as wide a range of groups as possible, including patient representatives, professional bodies, trade unions, voluntary and third sector organisations. Each strategic health authority involved staff in creating ‘comprehensive and coherent’ visions for the future, based on the best available clinical evidence and views of patients’ needs and the public’s aspirations.

Lord Darzi identified six major factors that would drive change in the NHS in the next few years: – ever higher expectations – demand driven by demographics – the age of information and connectivity – the changing nature of disease – advances in treatments – changing expectations of the health workplace.

These factors are likely to form a template for any local health organisation wishing to carry out its own scenario planning as an aid to deciding strategy.

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Scenario planning: three views Professor Paul Corrigan, director of strategy and commissioning, London SHA An organisation will find scenario planning useful depending on two factors, says Professor Paul Corrigan: “The nature of the information that goes into it and – most important – what you think it’s useful for. If you think it will tell you the future, it won’t – because nothing does. If you look 10 years in advance, the only constant is that the world is always different from 10 years previously. But the nature of the difference is unpredictable.”

He warns: “A lot of organisations now believe they want to understand the future so they can adapt their organisations around it. Then the future is different to what they think it is and the organisations are left high and dry.

“We need to look at what the future might be and create an adaptable organisation so it can relate to any of the futures that might come up. A lot of NHS organisations look towards scenario planning to tell them what will happen so that they can create another rigid organisation around that, rather than a fluid organisation.”

Inevitably, much of the information used in scenario planning cannot be scientific.

“If you were looking at the economics of the NHS a few months ago, land values would have been quite an important part but probably wouldn’t be now,” Professor Corrigan points out. Information about medical technology and consumers’ attitudes to convenience are crucial for the NHS, he suggests.

Some NHS organisations are accomplished at scenario planning and others are not, Professor Corrigan argues. “Those that do it best are the institutions most open to the messages it tells them. You can do scenarios and then do nothing with the result. You can do scenarios and follow them slavishly.

There are pitfalls in both following scenarios as a set of orders and dismissing them as a set of myths.”

Reality, he says, will lie somewhere inbetween.

Professor John Appleby, chief economist, King’s Fund “The process is almost as interesting as the outcomes,” says Professor John Appleby who was a member of the project team for Windmill 2007. One valuable aspect of it is “getting people to talk to others they wouldn’t otherwise talk to”.

He adds: “It’s not like feeding numbers into a spreadsheet model with results and confidence limits. It’s more to do with broad recommendations. People wouldn’t claim this is what’s going to happen. It’s more to do with testing, constructing a future and getting people to think.”

The type of qualitative information produced by exercises like Windmill 2007 can help keep more heavyweight number-crunching in perspective, Professor Appleby says.

“Economists love their data, but you can get carried away and find patterns and relationships in the data that are wrong. You need to get your theories right first. Scenario planning can help you get your thoughts straight about what’s realistic.”

On the other hand, qualitative data has limits too. “You have to be careful not to push what you say in conclusion further than the evidence will bear. You can sweat the data too much. It may be a help but it’s not the only thing you should do to find out, for example, how many physios you will need in 20 years’ time. The Windmill-type exercise can help you think about the factors on the supply and demand side driving the need for physios. But you will need to get into the numbers in more detail at some point.”

David Hunter, professor of health policy and management, Durham University “Scenario planning gets people to think creatively about possible futures and can generate new ideas and thinking,” says Professor Hunter. Developing scenarios may help in thinking about a wider range of possibilities: “They surface the hidden”.

But he warns: “You need to be clear at the outset about what it is and isn’t. It can’t predict the future, though it may be that people sometimes go into scenario planning believing it can.”

Professor Hunter, who says he has ‘dabbled’ in scenario planning in relation to public health, believes the key to its success is “engaging as many people as possible from as many backgrounds as possible, making it clear to them what the purpose of the exercise is”.

At its weakest, it may be “an elaborate exercise to come up with what is just common sense anyway”, or else it generates a worst case that no one wants to entertain.

Its starting point is always the present, and the data on which it relies exist already, “which isn’t necessarily a bad thing as some of that data isn’t used anyway. But I’m not sure it’s anything more sophisticated than that”.

Professor Hunter suspects that in general the NHS does not do scenario planning well or systematically. “It tends to be a one-off and then left for a couple of years. Even if there’s buy-in from the chief executive, I’m not sure there’s necessarily follow through.”

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The Contribution Revolution Letting Volunteers Build Your Business

By Scott Cook Reprinted with permission Harvard Business Review

Intuit’s cofounder challenges traditional companies to follow the lead of internet superstars – and of innovative peers such as Honda, Procter & Gamble, and Hyatt – in tapping the contributions of countless people beyond their organizations.

Scott Cook is the cofounder and chairman of the executive committee of Intuit, a financial software and web services firm based in Mountain View, California. He is also a member of the boards of directors of Procter & Gamble and eBay. He is a coauthor, with Clayton Christensen and Taddy Hall, of Marketing Malpractice (HBR December 2005).

Earlier this year, I spent an intense half-day closeted in a room with the top 70 executives at Intuit. Our aim was to come up with ways that people outside the company could volunteer their time, energy, and expertise to make life better for our customers. Sound odd? Well, if you’re not conducting an exercise like that at your organization, you risk missing the boat on a sea change that’s transforming business.

Every day, millions of people make all kinds of voluntary contributions to companies – from informed opinions to computing resources – that create tremendous value for those firms’ customers and, consequently, for their shareholders. When I first encountered this idea, several years ago, it struck me as unfathomable: Volunteerism was for charities, not for red-blooded, profitmaking firms.

That was just my first surprise. I also began to see that user contributions are fueling some of the world’s fastest-growing and most

© 2008 Harvard Business School Publishing Distributed by The New York Times Syndicate

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competitively advantaged organizations – in some cases revolutionizing the economics of entire industries by radically shrinking their cost structures. Think of eBay, which opened as an online store with no inventory, leaving it up to customers to fill its “shelves” with goods to sell. Or Wikipedia, which gutted the value proposition of 230-yearold Encyclopaedia Britannica by offering a free encyclopedia written and updated frequently by unpaid amateurs.

In other cases, the contribution is not as obvious but just as central to the value proposition. Skype incurs almost no capital costs because its internet-based phone system is built on the unused processing capacity of its customers’ personal computers. Google, too, is built on user contributions: Its search engine relies on the algorithmic aggregation of links created by others between websites, and its ad placement system relies on data from people’s click behavior.

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OK, I’m not saying you can or should transform your company into a Google or a Skype whose business model is primarily based on user contributions. But you should understand the power of the phenomenon and, as I have, learn from the growing number of companies in traditional industries – firms like Honda, Procter & Gamble, Best Buy, and Hyatt – that are tapping user contributions to improve products, better serve customers, generate new business, reduce costs, boost employee performance, and more. Contributiondriven results like those are achievable for pretty much any business.

The concept of user contribution isn’t new.

But the companies I’ve just mentioned – both the internet highfliers and the old-economy behemoths – have actively created something I call a user contribution system. That is, they’ve created methods for aggregating and leveraging people’s contributions or behaviors in ways that are useful to other people.

The users can be customers, employees, sales prospects – or even people with no previous connection to the company. Their contributions can be active (work, expertise, or information) or passive and even unknowing (behavioral data that is gathered automatically during a transaction or an activity). The system is the method, usually internet-based, by which contributions are aggregated and automatically converted into something useful to others. Although the company retains control of the system and may choose to modify its design, the system converts inputs into useful outputs in real time with little or no intervention by the company.

Such a system creates value for a business as a consequence of the value it delivers to users – personalized purchase recommendations, connections between buyers and sellers of hard-to-find items, new personal or business relationships, lower prices, membership in a community, entertainment, information of all kinds. (See the exhibit “A User Contribution Taxonomy” for a breakdown of various types of user contribution systems.)

The challenge for executives is twofold: First, you must learn how to spot opportunities for creating value from user contributions.

Second – and here’s the difficult part – in acting on these opportunities, you must overcome natural organizational resistance to the idea of relinquishing significant control to people outside the company. The advice I offer here is based on my personal experience at Intuit – the successes and failures, the moments of exhilaration and the times when I had to conquer my own fear of putting so much power in the hands of users.

Revolutionary Potential, Debilitating Myths Though I didn’t know it at the time, my interest in user contribution systems began in the early 1990s with a series of slim red books. The Zagat guides offered reviews with quantitative ratings based on sustained performance rather than on a single visit or two by one reviewer. And those recommendations originated not with paid experts but with regular diners like me. It was a decade, though, before I recognized the significance of the method to my own company. That “aha” came from watching the winners on the web.

“ Every day, millions of people make all kinds of voluntary contributions to companies – from informed opinions to computing resources – that create tremendous value for those firms’ customers and, consequently, for their shareholders.”

The success of the leading internet firms has admittedly been touted ad nauseam by the media and business experts. Yet for better and for worse, the internet is a reflection of society and the preferences of hundreds of millions of people around the world. Like book best-seller lists, rankings of the most popular websites reflect what’s winning the battle for people’s attention.

The companies joining the list of most popular websites in recent years include Wikipedia, YouTube, Facebook, Craigslist, and MySpace. They have joined such older sites as Amazon, eBay, and Google. At first glance, these sites seem to have little in common, targeting unrelated areas of human endeavor: the cataloguing of information, video entertainment, social interaction, classified advertising, retail shopping, internet search. Some of the sites charge users; others are free. One’s a nonprofit; another has one of the highest profit margins among public companies.

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Despite their differences, all these winning sites rely on – or are themselves – user contribution systems. Much of their success flows from inherent characteristics of contribution systems that create advantages, detailed here, of a magnitude rarely known in traditional business.

Cost advantage. What does Wikipedia pay the authors and editors of its articles? What does Facebook or MySpace pay those who painstakingly fill in and update the personal profiles that make the site so valuable?

Nothing. These sites enjoy free “raw materials,” as users perform gratis work that companies typically have to pay for. People contribute for various reasons, some of them self-serving but all of them sufficient to make formal payment unnecessary. (See the sidebar “Why Do Contributors Contribute?”)

Scalability advantage. Inexpensive does not mean incomplete. Quite the opposite: The contributions of countless people can be aggregated into vast compilations that surpass traditional offerings. Wikipedia has 10 times as many articles as Encyclopaedia Britannica. Craigslist’s free classified advertising sites feature more than 30 million new offerings every month, and eBay’s virtual shelves feature 120 million items, many times more than any other store on the planet can offer. Such scale doesn’t require broad or deep contribution: Only a small percentage of users may contribute (about one user in 1,000 for Wikipedia) and active contributions may require little effort (as with Flickr, the photo-sharing site).

Competitive advantage. Some contribution systems give companies a structural advantage over rivals because of network effects. That is, the more people who contribute to the system, the more useful it becomes, creating an upward spiral in which increasingly more people choose to use and contribute to it. Network effects once drove the winner-take-all market-share gains of

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Microsoft’s Windows; today, they propel the success of sites like Wikipedia and Facebook.

Contribution systems won’t displace most traditional products or businesses: I’m not expecting Wiki-Milk to displace real milk or the dairy industry. Still, given the power of user contributions, too many business leaders are failing to look for opportunities to leverage these systems in their industries. I think that’s partly because of the novelty of the phenomenon, but it’s also because of beliefs rooted in the past. All too often, executives mistakenly view user contribution as: An unmitigated threat to traditional forprofit businesses. But consider Schibsted, a 170-year-old Norwegian newspaper publisher that, instead of ignoring the online threat savaging much of the newspaper industry, started reinventing itself in the mid‑1990s by embracing user contribution and becoming a leading European provider of online classified advertising.

Only for tech companies. But consider the Canadian grocery store chain Loblaws, which solicits online customer reviews and incorporates them in the marketing of new products.

Unreliable and error-ridden because the contributions come from amateurs. But consider the study in Nature that found volunteer-written Wikipedia to be, in general, about as accurate as expert-written articles in Encyclopaedia Britannica’s online edition.

Just another bubble, lacking a strong business case or profit-producing potential.

But consider LinkedIn, whose social networking site for businesspeople now profits from numerous revenue streams: traditional ones, such as site advertising, upgrades to premium membership with more features, and paid job postings, along with more novel ones, such as tools that corporate HR departments can use to screen job candidates.

“ The power of contribution systems is now being tapped by traditional marketing powerhouses.”

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A user contribution taxonomy

User contribution systems aggregate and leverage various types of user input in ways that are valuable to others.

User Contribution Systems

Active

Aggregates content

Passive

Aggregates stuff for sale

Opinion & ratings: Zagat guides

Goods: eBay online marketplace

Expertise: Wikipedia encyclopedia

Advertising: Google’s AdWords advertising placement system

Software code: Firefox web browser Creative expression: YouTube video-sharing site

Services (and goods): Craigslist online marketplace

Aggregates behavioral data

Aggregates resources

Buying behaviors: Amazon’s product recommendations

Computing capacity: Skype internet-based phone system

Web-linking behavior: Google’s search engine algorithm

Computer sensing capabilities: Honda’s InterNavi traffic information service

Company behavior: Westlaw’s PeerMonitor law firm database

Social connections & personal information: Facebook social networking site

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Where Can Contribution Systems Help My Company?

Even without knowing your business, I’d be willing to bet that contribution systems can address one or more of the business challenges you face better than the methods you currently use. To spur your thinking, let’s look at some of the different ways that traditional companies are employing user contribution systems in a wide variety of business activities and functions. (See the exhibit “Putting User Contribution Systems to Work.”)

Customer service. Company-hosted online support forums, in which product users answer questions from other users free of charge, are commonplace among software and personal computer companies. I admit my initial surprise when I experienced firsthand how a user community can answer tough questions that even the manufacturer cannot. Now noncomputer firms, such as AT&T, are beginning to follow this practice.

Troubleshooting is just one way to harness user contributions for service. Hyatt Hotels and Resorts has launched an online concierge service called Yatt’it that aggregates and lets users rate travel tips posted by Hyatt’s customers and concierges.

The aim is both to reduce the burden on concierges and to give travelers tailored, extensive city information in advance of their trip – and, if they’ve already arrived, without their having to wait in line.

Companies also use contribution systems to serve customers in ways that create a brand new business. Westlaw, the legal research service, created a B2B contribution system that helps its customer base of law firms address important strategic issues. West PeerMonitor automatically aggregates anonymized financial and operating information from participating law firms.

The firms access the database to see how their performance compares with that of

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Why Do Contributors Contribute?

Most contribution systems offer no financial compensation to contributors.

In fact, payment can destroy participation by undermining a sense of collaboration and trust. Rather, they rely on motivations intrinsic to humanity – or involve contributions that require no motivation at all, because the user contributes without realizing it.

I’m contributing? Some systems collect participants’ resources or data as a byproduct of things people are doing for other purposes. As shoppers buy from Amazon, they automatically contribute to its recommendation engine, which suggests products based on the ratings and purchase decisions of other customers.

Practical solutions. In some systems, participants contribute in order to get reasonably immediate rewards. For example, the site Del.icio.us enables users to organize their bookmarks of websites. A by-product of this activity is that, when aggregated, the bookmarks produce an index to the web that is valuable to others.

Social reward. Many systems provide the benefits of interaction with others: being part of a community with a common interest, generating business prospects, getting a date – the drivers behind social networks like Facebook and LinkedIn. Reputation. Contribution can be sparked by a desire for public recognition, like Amazon’s badge for a “top 1,000 reviewer,” or for the admiration of peers: Wikipedia articles carry no authorship credit, yet authors earn the respect of other contributors.

Self-expression. Many user contribution systems thrive on individuals’ desire to air their thoughts, opinions, or creative expression, with the possibility of realtime feedback from users – witness the six million videos on YouTube.

Altruism. Why would a person write a glowing online review of a restaurant – when it may become harder to get a table if others act on the opinion?

Some people want to help local diners or reward superb restaurant owners.

Others simply want the truth to be heard.

Issue 19, October 2008

peers and how other markets compare with their own – data that may help a firm decide, for example, whether to expand geographically or whether a key practice area is operating efficiently. This customer service is valued so much that Westlaw charges handsomely for it.

Marketing. The power of contribution systems is now being tapped by traditional marketing powerhouses, including two of the giants: Procter & Gamble and Unilever.

Procter & Gamble has created a website, BeingGirl, aimed at teen and preteen girls – a difficult group to reach in the marketing of its feminine-hygiene products because young girls are often uncomfortable viewing TV ads on the topic in the company of friends or family. The site originally consisted solely of information from experts. But in 2005, P&G borrowed the contribution concept from tech websites, adding forums where girls could interact with one another. Now users can share their questions and personal experiences and get support and advice from other girls. This creation of a community around an important topic promotes engagement with the site – and with the Always and Tampax brands that it discreetly promotes. P&G says that as a marketing tool BeingGirl is now four times as effective as comparably priced television advertising.

The website In the Motherhood, cosponsored by Sprint and by Unilever’s Suave line of personal-care products, also offers a community forum where users can share stories and offer tips – in this case on the subject of being a mom. In addition, mothers can submit stories (3,000 of them so far) that serve as potential plotlines for an online comedy series. The community votes on the submissions, and those selected by the users are produced by professional directors and actors and subsequently posted to the site. (Several dozen have been produced so far, and cumulative views

have passed the 20 million mark.) Unilever research finds that the site increases users’ intent to purchase a Suave product and engenders a feeling in customers that the makers of Suave really understand their lives.

Employee support. Most company intranet sites are one-way streets, with management broadcasting the “company line” to employees. Best Buy, the U.S. retail chain, uses the opposite approach in a contribution system dubbed BlueShirt Nation.

BlueShirt Nation allows employees to share and discuss their ideas and experiences: what works and what doesn’t in carrying out a particular task or in interacting with customers, for example. The site, launched two years ago by two junior employees with no corporate IT support or funding, today has more than 20,000 registered employee users.

“ The power of contribution systems is now being tapped by traditional marketing powerhouses, including two of the giants: Procter & Gamble and Unilever.”

Best Buy has discovered that unfiltered information from colleagues can be more effective than memos from HR. For example, BlueShirt Nation ran a contest in which employees submitted videos they had conceived and produced, with no company oversight, to spur employee adoption of 401(k) plans. The result of the buzz generated by the contest? A 30% increase in plan enrollment.

Capital resources. Build a global telecommunications system with almost no capital equipment? Make free, high-quality video calls anywhere in the world? Both once were unfathomable. But that’s what Skype has done, thanks to a contribution system.

Founded by Swedes and engineered in Estonia, Skype is the marquee example of how a company can reduce the cost of capital equipment to almost nothing by having users contribute the capital goods.

Skype’s free software utilizes idle computing power on users’ PCs to manage the calls – as many as 12 million simultaneously – for its

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PUTTING USER CONTRIBUTION SYSTEMS TO WORK Contribution systems can improve a variety of company functions; the benefits to the business flow from the benefits that contributions provide to other users.

Hyatt Customer service Yatt’it, an online concierge service: Users provide local travel tips, which are then rated by others Benefit to Users Better information when you want it – without waiting in line Benefit to Company Improved customer satisfaction and reduced costs for staffing concierge services Unilever Marketing In the Motherhood, a user forum: Moms share experiences and also submit and vote on plot lines for an online comedy series Benefit to Users The exchange of information, a sense of community and engaging entertainment Benefit to Company Increased brand awareness and loyalty to Suave products (through site sponsorship) and brand reach (20 million views of the online shows to date)

Best buy Human resources BlueShirt Nation, an employee-run intranet: The site offers advice for tackling job-related problems and promotes employee programs Benefit to Users Employee empowerment, better decision making, and increased awareness of company programs Benefit to Company Increased employee engagement and buy-in for company programs; identification of best practices Honda Capital investment InterNavi automotive navigation and information system: Customers buy GPS devices, which provide traffic-related data that the system aggregates and makes available to system subscribers Benefit to Users Real-time information on traffic and driving conditions, as well as localized advice on food and lodging Benefit to Company Reduced cost of capital (which is borne by customers) and ongoing revenue from subscription service

300 million customers. Its costs are so low that the company, which was acquired by eBay in 2006, can deliver high-quality voice and video computer-to-computer calls between subscribers at no charge. And it’s profitable: revenue comes from calls made by Skype users to mobile phones and landlines, as well as from services such as voice mail.

Traditional companies, too, get customers to contribute needed capital. In Japan, Honda captures real-time traffic data from GPS

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Threadless Design and development Community design process: T-shirt manufacturer lets users vote on designs submitted by amateur designers and produces shirts based on the winners Benefit to Users Designer exposure and recognition; customer sense of ownership in selected designs Benefit to Company Reduced research and development costs (because fewer staff designers are needed) and high inventory turnover (because user-selected designs typically sell out) American idol Production Contribution-defined TV show: Millions of viewers cast votes to select a new recording star from a group of amateur singers Benefit to Users Compelling entertainment, resulting in part from user ownership of results Benefit to Company Access to inexpensive talent, reduced production costs and significant advertising revenue

systems that Honda owners buy from the company. Speed and location reports from each vehicle contribute to a data stream that Honda aggregates with other traffic data to provide information on traffic jams and other conditions to Honda drivers who subscribe to the company’s InterNavi service. Users benefit from enhanced traffic updates; the company can offer a superior subscription service without having to pay for the capital infrastructure.

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And there’s more: Honda drivers also contribute reviews of local businesses and points of interest that other drivers can read from their InterNavi-equipped Hondas – an automotive version of a Zagat guide. Honda’s system thus combines three user contributions – capital equipment, data about user location and vehicle speed, and reviews.

“ Contribution systems can improve a variety of company functions; the benefits to the business flow from the benefits that contributions provide to other users.”

Design and development. User contribution can tackle creative challenges from the technical to the artistic. The emblematic example of contribution in R&D is open source software, such as the Linux operating system and the Mozilla Foundation’s Firefox web browser, which is created and regularly upgraded by communities of unpaid volunteer developers. (This low-cost model makes Mozilla one of the rare nonprofits that is highly “profitable.”)

In the creative arts, Threadless, a company that manufactures T-shirts, relies on a community of volunteer designers and artists to submit designs and a community of customers to select those that will go into production. Both of the user groups, as well as the company, benefit. The designers get free exposure for their work and a chance at monetary compensation: They receive $2,500 plus a percentage of sales if their design is chosen by Threadless customers. The customers get distinctive T-shirt designs that they have collectively selected. Threadless gets inexpensive design services and an unusually engaged customer base that snaps up the T-shirts it produces, minimizing stale inventory, price promotions, and other margin-eroding practices.

Note that the Threadless user contribution system is subtly different from customer innovation approaches like “crowdsourcing,” which are used with success

by Dell, Starbucks, and other companies.

Crowd-sourcing is not a user contribution system, in the pure sense, because the

company stands between the input and the output. For example, it sifts through people’s ideas for new products and services, selects ones to pursue, and then invests the time and expense needed to develop them.

Production. In some cases, organizations can “delegate” some or all of the production process to users. Wikipedia delegates all of it.

The producers of Fox Television’s American Idol delegate part of the process.

The show relies on users (through their votes for performers) to make decisions traditionally reserved for television producers; it relies on amateur performers to offer entertainment usually provided by high-priced stars. The contributing singers benefit from a shot at stardom. Viewers, who contribute their opinions, benefit from compelling entertainment (if the show’s high ratings are any indication) and a strong sense of engagement because their votes determine the show’s content. Fox and its producers benefit from lower costs and from advertising revenue driven by the show’s tremendous popularity – which results, in part, from the drama generated by the show’s user-contributed surprises.

How Do I Get My Company Started?

I became convinced of the broad business potential of user contribution systems in 2005. Only now, three years later, has the Intuit organization embraced the idea. (See the sidebar “How We’re Doing It at Intuit” for the story of my company’s successes and disappointments so far.)

I underestimated just how countercultural the whole user contribution paradigm would be. It poses a challenge to longunquestioned beliefs about the role of management, the value of experts, the need for control over the customer experience, and the importance of quality assurance.

User contribution seems messy and scary; giving customers a public podium to

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comment freely about your products and company seems to violate the management canon “Don’t hold me accountable for what I don’t control.”

tell the organization in advance that this is OK. Communicate the value of the lessons learned from those failed experiments so that other teams benefit.

Naturally, adopting these methods is easier when competitors have beaten you to the punch and shown you where user contribution works in your industry. But what if you want to lead your rivals? Here’s my advice for senior managers trying to create contribution systems in their companies:

Let enthusiasts and young employees provide ideas and leadership. Expect ideas for contribution systems to emerge from those who use them the most. Often, these will be your youngest employees. Seek them out. Make them your mentors. Ask them to take the lead in creating ways for your company and customers to benefit from user contributions. Have them develop prototypes and show them directly to you; then help them act on some of the ideas that emerge.

Use personal experience to move mind-set.

I’ve found that heads and hearts don’t change until people participate in contribution systems themselves. To overcome wariness in inexperienced executives, ask enthusiasts to share stories of their personal experience with user contribution systems. To build awareness, have people count the user contribution systems found on an Amazon page and classify them by type. (If you look hard, you’ll find 23 separate systems on a single Amazon product page.) Ask inexperienced executives to find and use contribution systems of personal interest to them – that helps develop a visceral feeling for how they work.

Get sub-teams of leaders to brainstorm about contribution systems that might solve customer or employee problems and then ask them to sketch out prototypes they can present to a larger group.

Nurture small experiments.

Encourage unofficial and “guerrilla” experiments. Challenge employees to create contribution systems that they are passionate about, without requiring them to get clearance from management.

Experiment with small batches of employees or customers. (At Intuit, we tried one experiment on the TurboTax version that has the smallest sales volume, accounting for less than 1% of customers for that product.) Most of the experiments will fail;

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Set boundaries but guarantee freedom within them. I’m not advocating that you blow up your current business and completely reinvent it around a contribution system. Experiment at the edges of your business. Give experimenters a defined sandbox – spacious, perhaps, but defined – rather than an endless expanse of beach.

Within those limits, though, make sure they aren’t distracted by experts and that their experiments aren’t smothered by larger initiatives with broader mandates.

Protect experiments from your company’s natural control instincts. Ceding some control of business processes to outsiders, even in a sandbox, will be scary for your organization. Leaders in certain functional areas – marketers and lawyers, for example – will feel especially anxious. (I can identify, having had to swallow hard a few times over things we were about to try at Intuit.)

To counter the instinct to preserve control and the status quo, name a godfather or godmother with bigtime clout to protect experiments and break through barriers when initiatives meet organizational resistance. (Three people, two division general managers and I, played this role in our early experiments at Intuit.)

“ I’ve found that heads and hearts don’t change until people participate in contribution systems themselves.”

Issue 19, October 2008

HOW WE’RE DOING IT AT INTUIT As a member of the boards of eBay and Amazon in the late 1990s, I was exposed to user contribution through the work of Jeff Bezos, Pierre Omidyar and Meg Whitman. But the concept seemed rare and specialized, so I missed seeing its broader application and value. (I once told Jeff Bezos I thought his plan to supplement professional book reviews on Amazon with reviews written by anyone who felt like it was crazy: Even if you got people to take the trouble to contribute, who’d give credence to the opinion of someone they’d never heard of? Wisely, Jeff ignored my advice.)

When our customer service team at Intuit began user contribution experiments – online support forums moderated by employee enthusiasts – I, along with others on our leadership team, really didn’t get the significance of what they were up to. Over time, though, I began to see the contribution concept that underpinned these revolutionary successes. Reinforced by Tim O’Reilly – who taught me that user contribution is the most important concept in Web 2.0, the moniker he coined – I knew we had to act.

Early success. At our annual off-site in 2005, I put this question to the company’s top 300 executives: How might we leverage user contribution at Intuit, both to enhance existing businesses and to create new ones? Two executives in our Plano, Texas, division began to think about how to solve a common problem faced by professional tax preparers – getting answers to obscure questions. The result was a quickly cobbled-together wiki/ forum site where tax preparers could contribute both questions and answers for the benefit of other tax preparers.

Just 33 days after the executive off-site,

TaxAlmanac was launched. Today, it has 170,000 pages, drawing on the collective expertise of thousands of tax professionals, and is used by 400,000 unique visitors – about equal to the number of tax preparers in the country.

Tax preparers benefit from expertise that’s free. Intuit benefits when visitors then buy our tax prep software – customer acquisition at almost zero cost.

However, despite my evangelizing, the idea of contribution systems wasn’t taking off elsewhere within the organization.

TaxAlmanac was a small island in a sea of indifference.

A major setback. I then resurrected an idea that had been proposed several years before by an Intuit engineer: a Web site with user-generated reviews of local businesses to help folks find a good plumber, car dealer or restaurant, linked to our Quicken financial software products.

It seemed like a sure bet, so we put a big team on it, and in late 2005, we launched Zipingo. But the site failed to attract a critical mass of users, and we shuttered it in August 2007.

What went wrong? We made mistakes that stemmed from the difference between traditional products and contribution systems. User contribution is first of all about the users and their content. We failed to nurture and encourage early contributors, and we got distracted creating our own content – ancillary information like business addresses for the listings.

Zipingo’s failure hurt. I stopped pushing big team efforts to develop new contribution systems at Intuit. But even as I pulled back, small contribution-system projects started sprouting up.

Gaining traction. One of our engineering leaders conceived the idea of embedding a Q&A community into a product itself – that is, creating a user forum on every page of TurboTax, with questions and answers relevant to the topic of the particular page. Many were wary of the idea, and some were even hostile.

I encouraged the group’s efforts, but in an echo of my own skepticism about Amazon’s user reviews years earlier, I wondered silently whether people striving to finish their own taxes would stop to answer some stranger’s questions.

Working with the support of his division manager, the engineer’s team of three built the system and tested it in the least popular version of TurboTax Online in January 2007. Just five weeks into the initial test, one-third of the questions posed already had answers. Crucially, our internal tax experts were pleased by the quality of the answers, which seemed to be self-correcting as other users refined them. TurboTax Live Community, as it’s called, was the kind of clear success I’d been seeking. Live Community systems have spread to our other divisions and are inspiring more contribution experiments.

Yet wariness persists. This year, when the TurboTax marketing team decided to solicit and post all user reviews, unedited, on a prominent link from the product’s home page, I blanched and took a deep breath. Again a surprise: The vast bulk of reviews are so positive that it looks as if we’ve posted only the good ones (which, I hasten to add, is not the case). Once again, we’re learning from that most reliable of sources – our customers.

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Innovate / Improve / In View Classic insight

Use your customer base to jump-start projects. Some new contribution systems face a chicken-or-egg problem – that is, they’re empty and useless until folks begin contributing to them, but few visitors will be attracted to something that is empty and useless. Your company probably has advantages that startups can only dream of: existing customers, traffic to your website, accumulated behavioral data, and, sometimes, media that will find your experiments newsworthy.

Let users “vote,” early and often.

Customers are better than executives at picking winners in this arena, so get experiments into the hands of real customers as quickly as possible. Minimize or eliminate time lost to market research, lengthy analysis, PowerPoint presentations, or frequent reviews by management. (We’ve borrowed an idea from Google by creating a public webpage – intuitlabs.com – that displays our current experiments and gives experimenters a fast, direct path to customers, bypassing normal product-launch procedures.)

Seek organizational buy-in only after you’ve had some success. The guerrilla experiments are designed to get around organizational resistance. Ultimately, you want innovation in user contribution to become embedded in the organization’s normal processes, but you’ll most likely struggle to shift mindset until you can point to a successful experiment or two.

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The meeting earlier this year of Intuit’s top executives to spur action on user contribution systems would have been a wasted effort two years ago. Then, we had only begun to experiment. But with several successful initiatives now in operation, Intuit’s newly promoted CEO, Brad Smith, and I felt the time was right to move the idea into the mainstream and talk about why user contribution is a focus of our evolving company strategy. I can’t say everyone at that meeting bought into the concept. Some undoubtedly saw it as a distraction from their day jobs.

Still, there was real energy in the room that day. In the middle of the meeting, I stopped to ask whether folks had questions.

Rather than answer them myself, I wrote the questions on the board and asked the entire group to tackle them. As I watched, people provided answers, better than the ones I would have given. (In fact, some of them became content for this article.) As we moved to take a break, I reminded our executives that we all had just experienced user contribution in action.

Since that meeting, the activity of teams working on user contribution has increased from a tide to a torrent around the company.

And we’ve only just begun.

Issue 19, October 2008 Focus on

INNOVATIVE PARTNERSHIPS

Dr Lynne Maher is Head of Innovation Practice at the NHS Institute for Innovation and Improvement. Lynne leads on the field of service innovation, exploring the practical application of new processes, methods, tools and techniques within the NHS to achieve transformational change for health services. She is the sponsor for work in the NHS exploring the use of design principles to really understand the actual experiences of care from the perspectives of patients and staff. Here she explains how the NHS is thinking differently to co-design services, and through this kind of partnership, have developed Experience Based Design, a ground-breaking method of designing health services with patients, based upon their actual experience of the service provided.

There’s no doubt that innovation is one of the buzz words of the 21st century. As the financial crisis rolls on, the need to ‘innovate’ is becoming an increasingly urgent priority in boardrooms across the country. Within health services, Lord Darzi’s report High Quality Care For All, sets out our specific innovation challenge, “to focus relentlessly on improving the quality of care patients receive”; “to seek to harness innovation” and to “create partnerships that empower patients”.

Historically, innovation has been synonymous with new technology and scientific breakthroughs. In our everyday lives innovations such as the iPod and the Dyson vacuum cleaner have changed the way we do things. Within health services new diagnostic procedures, pharmaceuticals and information technologies have revolutionised treatment.

In reality, changes in the service we provide in health settings have not reflected these changes in technological innovations. Yet, innovation is also about fundamentally rethinking the way we design and deliver services, implementing new ways of working and creating new partnerships. For the NHS, this broader definition of innovation is critical because it is these innovations that will lead to improved quality of care for patients and partnerships that truly empower patients; both will ultimately result in transformed health services.

At the NHS Institute for Innovation and Improvement our mission is to seek out innovations and work with frontline teams to maximise the potential for their use within health services for the benefit of both patients and staff. To achieve this we recognise that if we approach a challenge with the same mindset as we have always had we will only achieve the same results as we always have.

Our search for new approaches, new tools and techniques brought us into the world of service design, historically not a natural partner for our scientific world of health services. However, designers are experts in designing services and through this innovative

partnership we have developed Experience Based Design (EBD) a process which builds on the concept of co-creation, identified by Professor Prahalad (see page 6), and involves both staff as they provide care, and patients as they receive care, in designing health services together.

“Everyone is equal, we are all leading the work together.” Patient EBD aims to move the NHS from a service that does things to and for its patients to one where the service works with patients and supports them with their health needs. It changes the traditional view of the user as a passive recipient of a product or service to a new view of users as the co-designers of healthcare products or services. The focus of this approach is on supporting patients, carers and staff to tell their stories – as these are captured they create a unique view of patients’ and staff actual experiences of the whole service rather than a view of the technical or business process which has often been our focus in improvement efforts.

“Working with patient feedback and patient stories on the development of care pathways has radically transformed our approach. I use Individual stories that have emerged from this work regularly to talk to all staff about how we can truly focus on the real patient experience of the services we provide.” CEO There is an emphasis on emotions and feelings, as described by the patient and carer experience of receiving care and by the staff experience of providing care, at crucial points in the pathway. What this often uncovers is the seemingly minor details that can make a big difference to a patient’s overall experience.

This rich information is formed into an emotional map, a tool used to pinpoint parts of the care pathway known as touchpoints – where the users’ experience is most powerfully shaped. Patients, carers and frontline staff then review touchpoints to highlight areas of exceptional practice,

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Innovate / Improve / In View Focus on

where patients were delighted with the service and areas where systems and processes need to be redesigned to create a better patient experience of health services.

Luton and Dunstable Hospital was one of the pilot sites for EBD. Here patients and staff of the head and neck cancer service have looked at their own experiences during the patient pathway and, collaboratively, come up with new designs to improve their experiences and move the whole organisation towards offering services that are co-designed.

The team came up with a variety of issues that led to 43 separate changes. These included improvements in communication, preservation of dignity, increases in efficiency, improvements to the environment and in patient safety.

“The thing that amazed me…is how much can actually be achieved – simply because we’re working as equals alongside staff, sharing ideas.” Patient

developed a guide and toolkit, which will be available from the end of November 2008. The Guide to Experience Based Design will provide support for healthcare staff to redesign their health services to meet the needs of patients and staff through improving the experience of care.

It centres on four key steps: capturing the experience; understanding the experience; improving the experience; and measuring the experience.

This alignment on the experience of the patient – directly or indirectly – is a core principle of good service design. Innovative solutions will come from not just better listening but through working together.

“Through EBD we’re seeing a new dynamic emerge between individual doctors, clinicians and patients. It’s different and deeper than anything I’ve seen before.” CEO

Taking health innovation into the next century Healthcare organisations in the UK, the US and Australia are already using techniques and principles taken from experience based design to build active new partnerships with service users and staff. The approaches have been used by patients and staff across a wide variety of services including mental health, cancer, emergency, children’s, renal and short stay. It’s through these partnerships that patients, carers and frontline teams have been able to talk honestly about their own experiences.

“There is a lot of lip service paid to the whole idea of patient involvement…we have to get beyond the token gesture.” Consultant To help guide healthcare practitioners and boards to initiate EBD in their own organisations the NHS Institute has

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IN ADDITION For more information on the NHS Institute and the Guide to Experience Based Design, visit www.institute.nhs.uk/ebd

Issue 19, October 2008 How to …

EngagE Patients In Service Design – don’t be afraid to ask In his report, High Quality Care for All, Lord Darzi defines quality in service as: ‘clinically effective, personal and safe’.

Personal is the word that stands out. Darzi is saying that services must be orientated around individuals; services must be fit for everyone’s needs.

The report argues that it is time to “move from an NHS that has rightly focused on increasing the quantity of care to one that focuses on improving the quality of care”.

For Darzi, quality is not merely about doing the same things better, but about creating personalised services.

The move from quantity of services to quality of services involves switching attention from the productive capability of the NHS machine (how may cancer patients can we treat with these resources?) to the ability of NHS services to meet the needs of patients and the public (how can we support the health needs of each and every person in Britain in a timely manner?).

What is needed is a new way of thinking about services that starts with the individual not the organisation. We call this Service Thinking.

Service Thinking changes how we look at the world. One of the lessons from the credit crunch, for example, is that treating financial services as products is dangerous.

Simply selling a mortgage to a household – and passing that risk on to other banks – is irresponsible. Banks need to help their customers navigate their changing financial circumstances and retire comfortably. In other words, financial products aren’t sufficient – we need services that genuinely support the best interests of customers over the course of their lives.

So, how does this apply to the NHS? As the Darzi report makes clear, services that care for people only when they become sick are not enough. We need to support people to lead healthy lives, stay out of hospital and feel good. That requires a shift from traditional product thinking – treat the patient when they become ill; to service thinking – support the patient’s health and wellbeing.

Service Thinking presents a major challenge.

It requires a new type of engagement with patients and the public. And it means NHS staff handing over some of the control to patients.

Our experience at live/work working with NHS trusts and the NHS Institute for Innovation and Improvement is that engaging patients in the design of services is particularly challenging because of the past focus on increasing the quantity of services.

The NHS is good at managing demand, yet personalisation requires that it becomes demand-led: hence the provocative title of this article. I am not really suggesting that people in the NHS are scared of patients.

But I have experienced a fear of engaging patients – a reluctance to ask them about their experiences, what they think and what they might like. This fear is entirely rational.

Responding to patients needs could very easily create more work for clinicians and staff and stretch the capacity of services.

For example, we saw this very clearly working with the kidney dialysis team at Salford Royal Hospital. They were very aware that patients had unmet needs but also that they had no capacity to meet them. Opening up to patients risked the painful recognition of shortfalls in service.

We see this paradox in many sectors.

A shift towards quality of service, towards giving customers what they need when they need it, can threaten the delicate balance of organisations. Commercially this often manifests itself as the fear of undermining existing revenue streams. In the public sector, it is more likely to be upsetting the demand management that is in place to protect the system. The concern is that there will not be sufficient resources to meet the new demands.

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Innovate / Improve / In View How to …

In reality, of course, identifying and serving unmet needs can reduce the strain on other parts of the system – freeing up resources.

For example providing patients with personal information on their health can help them become better able to judge whether they need to see a clinician and save unnecessary consultations. A more regular ongoing personal service, perhaps over the telephone, can prevent the need for emergency care.

But before the cost savings can be realized, we need to make the switch to Service Thinking. We need to understand that Service Thinking is an antidote to the fear of engaging patients and a way to identify new opportunities for improving the quality of care and transforming services. We need to move on from seeing quantity and quality as competing.

Through our work on over 200 service innovation and design projects with clients big and small, public and private, and our analysis of the best thinking in service economics, management and marketing, we have identified four key elements of Service Thinking and applied them to our experience of working in the NHS. Get personal Services cannot truly be mass-produced. They are subtly or substantially different every time they are delivered. We can fight this or seize the opportunity and enable the service to adapt to meet individual user requirements.

For the NHS this means empowering patients to pull services when they need them. In our work with Ealing Primary Care Trust, on a project to improve services for people with Multiple Sclerosis, we saw that many patients attended a monthly clinic but found that they had little to discuss at the scheduled time. We proposed a telecare service that would enable people to contact an MS expert at their point of need.

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Embrace experiences Once we focus on individuals we can then craft their experience. We look for ways to make it right for the people the service is there for. It may need to be nurturing or dependable, maybe even exciting. A service approach can make these decisions and design the experience to ensure that users get the value they need from the service.

Even better, as an experiences service it can delight customers and grow with them.

In Ealing we found that some patients coped less well than others with their diagnosis of MS and that the period after diagnosis was crucial to their ongoing wellbeing. We designed a post-diagnosis experience that helped patients understand their condition and how best to live with it.

Only connect Services happen when a provider and user come together. If we think this way we connect with people. We don’t produce the service in one place and ship it to the next. We do it together and can both benefit from a closer interaction. This may mean that we can help the customer self-serve, or that we know when they need specific high touch support.

Clinicians working in our team on the MS project noticed that some patients were not getting the medication they needed due to relapses not being identified and recorded.

We proposed giving patients a diary, paper and online, to record the progression of their condition and enable the MS team to better understand each patients requirements.

Sustain it Service Thinking makes us think about opportunities in the long run. Because services are temporal Service Thinking helps us recognise that resources are finite. Because resources – time, money and material – are finite we think about how to make best use of them. It gives us the opportunity to imagine how we sustain ourselves.

The Darzi report proposes the piloting of personal budgets. In Ealing we found that some of the most pressing patient needs were not medical but social. Some people with MS can be very young and need to be able to sustain their normal lives as best they can. This is key to the whole idea of wellbeing. One of the commissioners we worked with thought that a personal budget would help give people the control they needed to make the decisions best for them. Perhaps Ealing can bid for one of Lord Darzi’s pilots.

Ben Reason (ben@livework.co.uk) is a founding partner of the service design firm live|work.

With Chris Downs and Lavrans Løvlie, Ben is credited with introducing the idea of service design to the business world. Since live/work’s launch in 2001, the consultancy has pioneered service design as a concept and a means of improving business performance.

For more information visit: www.livework.co.uk

Issue 19, October 2008 Benchmark

CHINA

China impressed the world with the sheer scale of this year’s Beijing Olympics and their supporting razzmatazz. Home to almost a quarter of the global population, it is a nation that tends to do everything on a massive scale.

Its healthcare system boasts 305,000 institutions, including 64,000 hospitals with 2.9 million beds. They are staffed by 4.24 million health workers, including 1.83 million doctors and 1.24 million nurses.

Yet the Chinese people deem their health services far from adequate. “Expensive to receive, inconvenient to access” is the most common complaint. The World Health Organisation is critical too, reporting: “Regulations related to public health and delivery systems are underdeveloped and only weakly enforced, and monitoring capacity is weak. Most health facilities lack a clinical governance system, and there are important regulatory gaps.

For example, hospital accreditation is not linked to pricing compliance and comprehensive safety records, and doctors and health institutions are not constrained in their engagement in commercial incentive programmes.”

WHO further warned that safety standards and health regulations “are inconsistent in their design and enforcement”. Indeed China seems cursed with periodic health catastrophes, most recently the contamination of powdered milk by an industrial chemical that left more than 50,000 children ill, some fatally. In 2003 the outbreak of SARS (severe acute respiratory syndrome) had repercussions throughout China and the wider world, which waits nervously for any sign that avian flu may be the next health crisis to surface among China’s teaming urban populations.

At least the SARS episode acted as a wake-up call to the Chinese government to modify its laissez-faire attitude to healthcare.

Surprisingly for a communist regime that seeks to closely regulate many other aspects of its citizens’ lives, funding and the provision of healthcare have been left largely to the market since the 1980s. But the reforms that worked wonders for China’s economic development wreaked havoc on its healthcare.

As the government abandoned a free, universal health service and withdrew from funding, local health departments and service providers were expected to generate a significant proportion of their own budgets from user fees. The result has been overprovision of specialised services and expensive medicines for those able to pay and underprovision of services for those who cannot. The poor and those on low incomes – especially in rural areas – find it hard to access care in the face of rising fees.

By 2000, according to WHO, the government contributed only about 17 per cent of total health spending, insurance covered 29 per cent, while people paid out of their own pockets for 54 per cent.

Local government was responsible for 90 per cent of state health spending, but was left with inadequate resources to meet its obligations, inequitably distributed among the provinces. The collapse of the co-operative medical system for the rural poor left 900 million people uninsured.

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Innovate / Improve / In View Benchmark

Since providers are paid on a fee-forservice basis and their income is derived from the revenue they raise, they focus on profitable rather than cost-effective services. Overcharging, overdiagnosis and prescription of unnecessary medicines are common problems, says WHO. As purchasers are individuals rather than organisations, they are in a poor position to judge the appropriateness, cost, efficiency and quality of their care. Although insurance coverage has increased, protection is often very limited – for example, outpatient services are usually excluded – and reimbursement levels low.

China’s slow response to the SARS outbreak made politicians realise that they could not continue to be so detached from the country’s healthcare infrastructure and that they needed to resume greater responsibility for health services. In an admission that market-driven reforms had failed, health became a major component of China’s 11th five-year plan, for 2006–10.

President Hu Jintao stated that all Chinese people should have access to affordable essential health services, and in 2007 the government significantly increased its financial contribution to rural healthcare.

Fourteen government departments are now working together on a healthcare reform programme. However, China watchers say that, as always in this vast nation, reform is proceeding only at a painfully slow pace.

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Tradition versus the west: a touch of TCM One major aspect of China’s current fiveyear plan is to support the development of traditional Chinese medicine (TCM) and foster a modern TCM industry.

Debate about the relative merits of TCM and western medicine has ebbed and flowed in China since the 19th century.

During the cultural revolution of the 1960s opinion swung in favour of TCM, only to lurch the other way in the 1970s. By the 1980s the proportion of China’s doctors practising western medicine exceeded TCM practitioners: market-led reforms brought increased competition for TCM practitioners from profit-making hospitals, clinics and pharmacies offering western medicine.

As a result, TCM was often perceived, among the urban young especially, as antiquated, non-scientific and based on superstition. But it cannot be so easily dismissed. For example in 2005, a trial in Asia funded by the Wellcome Trust found a drug derived from artemisinin, a traditional Chinese remedy, was more effective at combating malaria than the conventional western treatment using quinine.

It is therefore not surprising that the periodic attempts to curtail TCM have never fully succeeded. People may choose it because they believe in its effectiveness or because it offers a more personal patient experience. Based mainly on herbal medicines and acupuncture, TCM adopts a holistic approach, with consultations

involving discussion of the patient’s diet and psychological state. Many Chinese turn to TCM because they simply cannot afford western treatments. As China’s population continues to grow and healthcare costs increase, politicians may find the ready availability of effective, low-cost TCM a valuable resource.

Today much debate centres around applying the same scientific rigour to testing the efficacy of TCM as is applied to western medicine. For its part, the Chinese government is trying to regulate production of TCM materials – partly to ensure quality control but also because of environmental concerns: the practice of using endangered species in remedies of sometimes dubious effectiveness has become increasingly controversial. The government has issued regulations designed to protect TCM and encourage research and development into it. Rhinoceros horn and tiger bone are now banned as TCM ingredients, while use of rare resources such as natural musk is limited.

So far the state has approved more than 9,000 TCM preparations for sale, and in 2007 TCM accounted for 26.5 per cent of China’s pharmaceutical output. In 2004 the government introduced ‘good manufacturing practice’ certification to encourage the industry to modernise, and made it compulsory at the beginning of this year. More than 300 enterprises have so far gained accreditation.

Issue 19, October 2008

IN VIEW + CHINA STATS BASKET

RUSSIA

OFFICIAL NAME People’s Republic of China POPULATION 1,330,044,605 (2008)

K A Z A K H S TA N

CAPITAL Beijing LANGUAGE Standard Chinese or Mandarin, Cantonese, Shanghainese, Fuzhou, HokkienTaiwanese, Xiang, Gan, Hakka dialects, other minority languages

MONGOLIA

HEAD OF STATE President Hu Jintao (since March 2003)

Beijing

GOVERNMENT Communist state; 2,987-seat National People’s Congress; China is divided into 23 provinces, five autonomous regions and four municipalities ETHNIC GROUPS Han Chinese 91.5%; Zhuang, Manchu, Hui, Miao, Uyghur, Tujia, Yi, Mongol, Tibetan, Buyi, Dong, Yao, Korean and other nationalities 8.5% SMOKERS OVER 15 66.9% (m); 4.2% (f) (2002) LIFE EXPECTANCY 71.37 (m); 75.18 (f) (2008) TOTAL HEALTH EXPENDITURE 4.7% of GDP; public: 38.8%, private: 61.2% (2005) OTHER VITAL FACTS In the 19th and early 20th centuries, China suffered civil unrest, famine, military defeat and foreign occupation. After 1945, the Communists under Mao Zedong imposed strict controls over everyday life. Following his death in 1976, China introduced market-oriented economic development, and by 2000 output had quadrupled.

By 2007 it was the world’s second largest economy, although 21.5 million people in rural areas live below the official absolute poverty line. For many, living standards and personal freedoms have improved dramatically, yet political controls remain tight and no substantial political opposition groups exist. China’s “one child” policy means it is now among the world’s most rapidly ageing countries. Deterioration in the environment is another long-term problem.

CHINA

NORTH KO RE A SOUTH KO RE A

N EPA L B H U TA N TA I WA N INDIA

BURMA ( M YA N M A R ) BANGLADESH

VIETNAM L AO S

Pacific Ocean

MAKE THE LINK Chinese Embassy: www.chinese-embassy.org.uk/eng National Bureau of Statistics of China: www.stats.gov.cn/english Ministry of Health (in Chinese): www.moh.gov.cn National Population and Family Planning Commission of China: www.npfpc.gov.cn/en

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Innovate / Improve / In View A book in 10 minutes

THE INNOVATOR’S PRESCRIPTION: A DISRUPTIVE SOLUTION FOR HEALTH CARE In the new book, The Innovator’s Prescription: A Disruptive Solution for Health Care, Clayton Christensen, the Robert and Jane Cizik Professor of Business Administration at the Harvard Business School, and author of The Innovator’s Dilemma, together with doctors Jerome Grossman and Jason Hwang, turns his thoughts of innovation to the healthcare arena.

While Christensen is writing partly about the US healthcare system, a market-led system, substantially different from the National Health Service in the UK, in many ways, there are important parallels between the two systems. And, indeed, many of the observations that the authors make are equally applicable to the public sector NHS and healthcare provision in the UK. The authors begin by outlining a number of worrying factors for healthcare providers.

For a start, the cost of healthcare provision is growing rapidly; in the US for example, in 1970 it accounted for approximately 7 per cent of GDP, but that figure had risen to 16 per cent by 2007. The growth in healthcare costs also outpaces the growth in the US economy.

Even in nationalised health systems, budget limitations impose considerable pressures on provision. While the NHS, for example, has cut waiting times and upgraded facilities, says Christensen, the increasing costs associated with this have not been offset by improved productivity.

Christensen approaches the problem of providing for healthcare in the future from the perspective of introducing innovation to reduce the cost of healthcare provision, and improve quality and accessibility of care. The emphasis is on making healthcare more affordable, while at the same time improving quality.

To do this Christensen applies the principles of disruptive innovation (DI) to the healthcare sector. The essential

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Steve Coomber has done the reading for you.

fundamentals of DI are that initially, products and services offered are both complicated and expensive. Only the wealthy can access them. Only the extremely technically competent can provide them – or indeed, in many cases, use them.

In time, however, a force which Christensen calls DI, transforms the particular sector, enabling the same products and services to be provided at much lower cost. One obvious example of this is the mainframe computer, which was eventually replaced by the personal computer, a product available more widely and at a much lower cost.

Three elements of DI Disruptive innovation consists of three elements: a technological enabler; a business model innovation; and a new value network.

In healthcare, the technological enablers are those things that enable the precise diagnosis of the patient’s condition. This involves a move from what the authors call intuitive medicine – highly trained and expensive professionals solving medical problems through intuitive experimentation and pattern recognition – to empirical medicine – which uses data to assess which methods of treatment are more efficacious than others.

When patients can be diagnosed precisely, then standardised therapies can be applied to treatment – precision medicine.

With regard to the business model innovation, the authors identify three types of business model in the healthcare system: solution shops; value adding process (VAP) businesses; and facilitated networks.

For each to function most effectively, they need to be separated, whereas in modern healthcare systems they have become intermingled.

Solution shops diagnose and solve unstructured problems, the value is primarily

delivered through the people they employ, and those people are usually experts who use intuition and analytical problem solving skills to ‘diagnose the cause of complex problems’. This may be, for example, the diagnostic work performed in general hospitals as well as in some GP practices.

The VAP business model is where organisations “take incomplete or broken things and transform them into more complete outputs of high-value”. Car manufacturers, or oil refineries, are examples of VAP business models. Surgery and medicine prescription after a rules-based diagnostic test are VAP activities.

VAP activities follow on from a definitive diagnosis. Where they can be separated organisationally from solution shops, then costs come down considerably. In a way, what the authors are suggesting sounds like minihealthcare factories, providing commoditised services following diagnosis, in much the same way, for example, as a laser eye clinic operates.

Finally, facilitated networks allow people to exchange things of value with each other. The authors point out that these can be effective business models for the care of chronic illnesses, for example, where patients with chronic diseases can exchange information and resources in order to manage and improve care.

In the first wave of innovation the authors envisage the healthcare system separating out into the three different types of business model: solution shops focusing on diagnostics; value adding process hospitals providing a specialist focus on post-diagnostic procedures; and facilitated networks managing the care of many behaviour dependent chronic diseases.

Once the three different types of business model have separated out, further DI will produce new business models within each.

Issue 19, October 2008

The Innovator’s Prescription: A Disruptive Solution for Health Care will be published early in 2009.

The third and final enabler of DI is the creation of a new independent value network platform around the new business models. Incorporating new business models and innovations, within the existing value network, often leads to that innovation being reshaped or co-opted to conform to the old system. Hence the need for a new value system, say the authors. So in order to succeed, once existing organisational models are fragmented into separate business models, they then need to coalesce into a new value network.

Future trends Left to its own devices, DI may take a long time to impose itself on existing healthcare provision models, says Christensen. But the process of DI can be speeded up. Much of the discussion at this point refers to the market-led solution in the US, with various corporate providers. However, there are a number of observations relevant to the NHS. For example, the book notes that when healthcare providers are rewarded for providing more care, then supply creates demand. The more sickness there is, in theory, the greater the potential reward.

Surely it is, suggests Christensen, better to focus on solutions that reward wellness.

The authors also note a trend for corporations to integrate more healthcare provision into their corporate competences, at the same time dismissing the widely offered notion that organisations should stick with their ‘core competence’ as a comparatively recent, backward looking, and misguided concept.

Christensen predicts that information technology will play an essential role in the emergence of disruptive business models.

In the first instance information technology will facilitate the point of care provision from solution shops to user networks where appropriate, enabling doctors and nurses and patients to share insights and

information that may previously have only been available to specialists.

The second way that Christensen sees IT being instrumental to DI in healthcare, is through the enhancement of medical records, both as basic electronic medical records and more usefully as personally controlled electronic medical records, where control resides with the patients, who can access their records from anywhere in the world.

A number of changes are due in the pharmaceutical medical devices industries as well. For a start, blockbuster drugs will become rare, drug companies will market directly to patients, diagnostics will become more profitable relative to therapeutics, and pharmaceutical companies will realise that where they have been outsourcing the management of clinical trials and development of precision diagnostics, they have been ridding themselves of the part of the business that will be most profitable in future. Also, companies that manufacture generics at the moment will move upstream into proprietary products.

With medical devices and diagnostic equipment, says Christensen, there will be a move to decentralisation. During the early phase of most industries, the expensive technical nature of equipment means that people travel to the equipment, rather than bringing the equipment to people. So, documents to be photocopied are taken to a centralised photocopying room. But, as technology improves, and costs come down, so the machines used are closer to the consumers – a photocopying machine in every office. And so it will be with medical devices and diagnostic equipment.

Medical training will also need to change in the future. Current medical training, says Christensen, reflects the healthcare of the past. When medicine was more of an intuitive art than a rules-based science,

doctors were trained to work individually, and to work intuitively. Also, most diseases were acute and could be observed in hospital. In the future, however, in a time when there is more precision medicine, more healthcare will be provided by people other than doctors; nurses, for example.

Fit for purpose And, while expert surgeons and doctors will be required in the solution shops, says Christensen, although possibly fewer than are needed today, more expertise will be required in the area of process and equipment knowledge and improvement.

For most nations, the challenges of providing adequate, effective healthcare are considerable. Christensen and his co-authors provide a well reasoned and thoughtprovoking prescription to help policymakers and managers ensure that healthcare systems of the future are fit for purpose.

As might be expected from someone who is both a leading management academic and bestselling author, The Innovator’s Prescription is an extremely interesting, persuasively argued and insightful book.

For Christensen fans, it is another fascinating exposition of the innovator’s dilemma as applied to a specific market sector. For anyone working in healthcare, particularly in a managerial or leadership role it is a must read.

NOW YOU’VE READ THIS BOOK, MAYBE YOU’LL LIKE… The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail by Clayton Christensen.

Harvard Business School Press (1 Jul 1997).

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Innovate / Improve / In View Over the fence

INNOVATION LABS – THE WRITING’S ON THE WALL

Writing on the walls, using Lego to build models, playing pinball – these are not the kinds of activities you would usually expect from your employees at work. But at the innovation laboratory (iLab) at the Royal Mail, and many other iLabs in the UK that are modelled along the same lines, these activities are encouraged rather than frowned upon – all in the name of innovation.

Using the experiences of the Royal Mail and other organisations, Steve Coomber looks at how the unconventional environment of an innovation lab can generate an atmosphere conducive to creating ideas.

The Royal Mail was one of the pioneers of the iLab concept in the UK. In the late 1990s, its then director of futures and innovation, Maureen Gardiner, led a project team that created a pilot innovation laboratory split into four areas: the technology showcase; the creativity lab; the development centre; and the office of the future.

During the three-year pilot, which began in 1997, the centre was visited by scores of people, ranging from students to senior executives, most of whom were very impressed by what they saw. The senior team at the Royal Mail was impressed too, sanctioning a fully functioning iLab, which opened in 2000, based at the Royal Mail’s Coton House Learning and Development Centre in Rugby.

The success of the Royal Mail’s iLab has spawned many imitators across the UK, such as the iLab at the University of East Anglia (UEA), for example, created with the help of some of the Royal Mail’s iLab team members. It is a good illustration of both the fundamental elements of the innovation laboratory, as well as the challenges involved in transferring the concept into the public sector.

Gurpreet Gill was the project manager in 2001 when the iLab concept was introduced at UEA. The steering committee at the UEA also included Maureen Gardiner, and David Lomas, the Royal Mail’s innovation lab manager at the time.

An innovative combination “It was about transferring the concept to higher education,” says Gill. “The idea behind iLabs is that they are creative spaces designed to encourage people to think collaboratively, so it is about joined up thinking, encouraged through the use of technology and creativity – a marriage between these two elements.”

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There is a substantial body of research suggesting that the environment employees work in affects the way that they think. In a formal meeting room, people further up the corporate hierarchy may get more say, for example, and their ideas might receive more weight. Equally, conversation may be very orderly and turn-based, and not necessarily the most conducive to new idea creation.

That is why innovation laboratories take a more radical and unconventional approach to the design of physical space.

“The iLab is a completely different space to the normal working environment,” explains Gill. “Everything about it is designed to enhance group collaboration. There are floor-to-ceiling whiteboard walls, so people can draw on the walls, write on the walls, and photograph the results. The rooms themselves look very different; there are toys, gadgets, brightly coloured furniture, group tables that encourage people to talk to each other. Plus there is collaborative brainstorming software which allows people to share ideas anonymously, so you are working simultaneously, but anonymously.”

This last point is an important one, adds Gill.

The Royal Mail discovered that anonymity meant that people were more liberated when using the iLab and less reticent about putting forward ideas, even if those ideas were half formed, or not very well thought out.

Also, where there are teams with a distinct hierarchy, anonymity means that the people lower down the hierarchy have an opportunity to put forward their views, and can do so without feeling that the value of those views will be judged on the basis of the seniority of the person that suggested them, as opposed to their intrinsic merit.

Issue 19, October 2008

The iLab challenge Transferring the concept into the UEA was a difficult task, though, says Gill. Indeed, one significant challenge was persuading the university that the iLab was worth having at all.

“One of the hardest things was selling the idea, because people didn’t really know what you were talking about, they didn’t know what innovation labs were,” she says. “It was really difficult to explain what was involved, so we bought a mobile system of laptops that ran the collaborative software, took some examples of the toys in the space with us, and held presentations and seminars.”

Another issue is the facilitation, where designated people lubricate the wheels of creativity during sessions in the iLab space.

“Facilitating is difficult, you need certain skills and it can be quite challenging,” explains Gill. “So you train facilitators but it can be quite difficult to nurture their ongoing development, and to find people with the expertise and time to work in the lab. So there is a need to organise coaching for the facilitators.”

Finally, Gill points to the challenge of keeping the iLab experience fresh, not only in terms of the facilitators and the techniques and approaches that they use, but also with the physical environment, which needs to be changed regularly and kept up to date. This can take a lot of funding.

At London Business School, the management innovation laboratory (MLab) is a recent initiative co-founded by Julian Birkinshaw, professor of strategic and international management at London Business School (LBS) and Gary Hamel, a visiting professor of strategic and international management at LBS.

The MLab is a groundbreaking attempt to bring together progressive companies and leading management academics to experiment with management innovation in both a laboratory and an organisational setting.

“There are three parts to an innovation laboratory, and if you want to do it properly you need all three,” says Birkinshaw. “One is the physical space, an environment where there is licence to think differently and stimuli to help you do that, so that is the hardware part. Then there is the software, by which I mean the facilitation of the conversation.

And the third part, where most organisations fail, is to actually create a laboratory setting in the workplace whereby you carry out an experiment or quasi-experiment.”

It is this last part which is such a challenge, says Birkinshaw, to create an experimental mindset in the workplace where you actually test and measure certain variables both before the innovation is implemented and afterwards. Unfortunately, some organisations are tempted to put in the shiny bright physical space, and the collaboration software tools to go with it, and then just expect that will be enough, that somehow innovation will take hold in the organisation.

But adopting that approach is a mistake.

“That’s not enough,” warns Birkinshaw.

“Firstly, because you have no idea whether that experiment has been a success or a failure, and secondly, if you just try something and then wait to see what happens, the chances are if you don’t give it the necessary support then it fails. Most companies do not take the concept of experimentation in innovation seriously.”

Experimenting in the workplace So organisations need to be brave. They need to be bold enough to test hypotheses within the workplace, to put in place measures to understand the before and after, and they have to be prepared for the experiment to “fail”. Not an easy task for most bosses.

“In organisations, senior executives like to be seen to know what they are doing. So if they make a decision to do something, the chances are they actually want to roll it out, rather then being seen to say that they are trying it as an experiment. Because, by definition, that means that they don’t really know what the outcome will be,” says Birkinshaw.

“They much prefer to use the word prototype, or pilot, meaning that they think they are almost all the way there but are not quite sure. But pilot suggests that they have already decided, whereas ‘an experiment’ suggests that they do not know what the outcome will be. So it does take a much greater level of self-confidence to go down that route.”

Innovation laboratories undoubtedly offer organisations a great deal in the way of creative idea generation. As Gill notes, for example, the UEA iLab has been used profitably by multifunctional groups, administrative staff, academics, researchers, cross-functional groups, project groups, indeed almost anyone who had a problem to solve or something to plan.

The question is, though: once you have implemented the iLab, and generated new innovations, whether they are products, services or management processes, are you willing to follow through and experiment with those innovations in the wider organisation? That, it seems, is the acid test for innovation friendly organisations.

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Innovate / Improve / In View What you can learn from…

THOMAS ALVA EDISON Thomas Alva Edison (1847–1931) is perhaps the greatest innovator that ever lived. By the end of his extraordinary career, he had accumulated 1,093 US and 1,300 foreign patents.

Edison’s inventions included an electrical vote recorder, an automatic telegraph system, the carbon rheostat, the phonograph, a carbon telephone transmitter, the kinetograph –the first commercial motion picture camera, and the nickel-ironalkaline storage battery. Not forgetting that he discovered incandescent light and installed the first direct current electric power generating and distribution system.

There are few people who have not benefited from his inventions, or are not aware of his famous maxims such as: “Genius is one percent inspiration and ninetynine percent perspiration,” or “Results! Why, man, I have gotten a lot of results. I know several thousand things that won’t work.”

But, there is much more to Edison than pithy remarks and phonographs.

Innovation is often incremental Innovation is often equated with the Eureka moment, the Archimedes flash of inspiration. But as Edison demonstrated, much innovation is not about the new at all. Instead innovation is often concerned with incremental product and process improvement over a long period of time.

Edison’s most celebrated invention is a good example. With electric light bulbs, Edison’s original design remained virtually unchanged in its basic concept for years, yet between 1880 and 1896 periodic product and process improvement led to a fall in price of around 80 per cent.

The power nap Edison was not a fan of sleep. Popular opinion has him sleeping two hours a night.

Although the reality was somewhat less extreme, he certainly got by on six hours or fewer. He had no time for those who slept long hours though, believing that people tended to oversleep given the chance, and that this had an adverse effect on their alertness during the day.

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Although Edison is often said to have practised polyphasic sleep – sleeping in a number of short periods through 24 hours – he was more likely to have been biphasic – sleeping twice a day, with one core sleep and then a ‘power’ nap in the afternoon.

To aid napping, Edison had makeshift beds wherever he worked so he could catch 40 winks when he needed to.

By adopting this type of sleep pattern Edison believed he could be more productive and more creative, work longer and do so more efficiently. Ironically, the invention of the light bulb and artificial daylight has led to an always-on world, and all of us getting less sleep than we probably need. No doubt, Edison would have been pleased.

Be prepared to fail Edison may be responsible for a long list of brilliant inventions but he also notched up a few failures along the way. His concrete houses were not popular. The marketing campaign that pitched them as “the salvation of the slum dweller” probably didn’t help. The concrete furniture and the concrete piano also failed to catch on.

With typical persistence he set out to extract iron from low-grade ore. Initial attempts were unsuccessful, but by the late 1890s Edison had managed to get costs of production down to $4.75 a tonne. The only problem was that the market price of iron was $3 a ton. Realising it was a lost cause Edison closed down production.

Where there’s muckers there’s brass The concept of the lone inventor creating brilliant new products and services is a romantic notion. Edison was no romantic, however. And he was far from a lone inventor. In a way, Edison mass produced innovation. He certainly systemised and planned for innovation on a large scale.

The hard toil of invention was largely in the hands and minds of Edison’s employee inventors, or ‘muckers’ as they were known.

They were very familiar with the 99 per cent perspiration. They worked an average six day, 55 hour week for low wages.

With teams of muckers on constant go, Edison could churn out inventions on an industrial scale – hence the astonishing number of patents he filed. Edison knew that his inventions were meaningless if not commercialised, or popularised, and that couldn’t be done on his own. Resulting in the need for a team of the brightest and best minds to help. He even employed a young Henry Ford.

The ideas factory Although Menlo Park in California is the place most commonly associated with Edison’s triumphs, the inventor habitually created areas for experimentation, where he gathered diverse teams of talent and the resources to make invention happen. This was true of his laboratory complex at West Orange, New Jersey, after Menlo, which was run along the lines of a factory, including time clocks and burdensome administration.

It was also true of Edison’s early career when he moved into a four-storey building at Ward Street, Newark, New Jersey, hired the talents of Charles Batchelor, an English mathematician, and the Swiss machinist John Kruesi, and started inventing on a grand scale.

In short order he produced a stock printer, quadruplex telegraphy and a machine to enable the rapid decoding of Morse code.

Read, read, read Academics expend many hours speculating and researching about innovation, and more specifically about how to be a great innovator. If there is one answer to that question that you could take from Edison’s life, it might be to read a lot.

Although Edison only managed three months of official schooling, he was subsequently home-schooled by his mother and from a young age he was a prodigious reader. Newton’s Principa Mathematica, Parker’s Natural and Experimental Philosophy and Gibbons’ Decline and Fall of the Roman Empire had all been devoured before the age of 12. It was a pattern that continued as Edison embarked on a lifetime of discovery and self-tuition. And something that should be recommended for anyone interested in creativity and innovation.

Issue 19, October 2008 Title

Dates for 08/09 portfolio Coaching Skills Development

School of Coaching / Performance Coach

Cohort 6

Warwick

Workshops 1 and 2: 4–5 March 2009 Workshops 3 and 4: 28–29 April 2009 Workshops 5 and 6: 3–4 June 2009 Innovations in healthcare – US perspective

NHS Institute with the Radiology Consulting Group

1–5 February 2009

Boston, USA

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