Innovation Won't Thrive where Creativity isn't Valued

In Sparking Innovation (Harvard Business Press), Stanford University professor Robert Sutton describes how the ‘hippie’ founders of Lotus woke up one day to realize that a multi-billion dollar company built on creativity was stifling the very innovation that made it successful.

This ‘face the mirror’ moment came when they decided to put the resumes of the company’s creators (under assumed names) through its human resource screening system and discovered that they couldn’t even get a call-back for open positions. As the company grew, it brought in ‘suits and ties’ that could operate the business and sell the products but not create innovations to sustain competitiveness.

Health system CEOs lament the lack of innovation in their organizations and are perplexed as to how quickly innovation initiatives fizzle out. All too often, health system structures, operating systems, policies, culture and hiring practices form the antithesis of innovation. Our business practices, reward systems, hiring and promotions policies support left brain thinking and behaviors. We crave the orderliness of it, find safety in its logical processing, relax in its familiarity.

By contrast, while we love the output of a creative, right-brainer – be it a work of art, a brilliant book, or a breakthrough product innovation – we are mystified, even fearful of the creative process. It’s messy, non-linear, riddled with risk. So, we tend to hire to our safety zone – and end up with a company of smart people that can build organizations, systems, flowcharts and spreadsheets to manage the business, but can’t create the value innovations that drive growth, profitability and future success.

Sometimes “the difference between innovative work and routine work are the types of people who do the work.”

As with most things, the key is to strike a balance. If health systems are to spark the innovations needed to thrive in an industry undergoing massive transformation, they’ll need to address not only ‘how’ to acculturate the creative process but also ‘who’ is sitting around the table.

Karen Corrigan

GUEST BLOGGER: MIKE EATON

Flirting with Market Irrelevance?

I visited recently with a senior business development leader for large Midwestern health system. As we talked, he candidly shared a concern that his system might not survive in the market. He noted that repeated growth strategies to reverse a steady decline in market share had been tried, but to no avail. The system was on its third iteration in five years of cost-cutting, eliminating positions, programs and shuttering some underperforming sites.

"We can't cut our way to market relevance," he said, "but nothing else seems to have worked."

The irony of his situation is that the system's decline has come during a period of steady growth in overall demand and technological innovation that has improved the product. Much like the venerable auto brands Oldsmobile, Plymouth and (soon) Pontiac that have disappeared from the market because they were no longer meaningfully different to customers, the decline of my friend's employer begs the question whether there is a coming shake-out of health system brands.

Whether health system reform passes or not, we know that demand will continue to grow and that reimbursement to providers will likely be cut. To balance this dynamic will require payers to allocate resources to those providers who can deliver better outcomes and radically different service at a lower total cost. Some systems will have the leadership, market and performance transformation strategies to make that leap. Many others will not.

So I pose this question: will incremental peformance improvement position your system to survive in a market that will likely demand transformational change? If not, do you have in place the leadership and strategies to become meaningfully different? Those questions ought to be at the forefront of health system thinking. Failing to ask and answer the questions just might relegate a system to the same fate that has beset much of the domestic auto industry.

Mike Eaton is a vice president for consulting with Navvis & Company in St. Louis, Missouri.