CMO Web Meeting to Feature Scott Davis

A Chief Marketing Officers' Innovators' Studio web session is scheduled for September 2, 2009 from 1:30 pm to 3:00 pm EDT. Scott Davis, author of the recently released book The Shift: The Transformation of Today’s Marketers Into Tomorrow’s Growth Leaders, will be our guest catalyst for this virtual working session. For those CMOs that attended July's Innovators' Studio, this is a great opportunity to have your staff learn about marketing's role in driving growth, and, of course, for those CMOs that couldn't make the summer session, this webcast will afford you the opportunity to better understand how to redefine the role of the chief marketing officer and build a future-ready marketing organization. If you are an Innovators' Studio CMO, register by emailing Jody at jcorrigan@navvisandcompany.com or calling her at 540-545-8260.

Advanced Service Line Marketing for Orthopedics

Tomorrow, August 18, 2009, Bill Munley, vice president for professional services and orthopedics at Bon Secours St. Francis in Greenville, SC, will be joining me on a HealthLeaders Media Webcast - "Advanced Service Line Marketing: New Orthopedics Growth Strategies." During this session, we'll talk about trends influencing demand for orthopedics and explore three key initiatives that Bon Secours has undertaken to drive volume and revenue in this category. The session begins at 1:00 p.m. eastern on Tuesday, 8/18. HealthLeaders Media senior managing editor Gienna Shaw will moderate. To hear a brief interview that Bill and I did with with Gienna, click here.

Karen Corrigan

Industry Transformation Requires a Long View Strategy for Health Systems

Over the next decade, the US healthcare system will undergo an unprecedented era of reform and transformation, driven by the tenets of government-led reform. A shift of this magnitude changes the underlying basis for competition and will challenge even the most successful of health systems to stay ahead of the curve.

In the short term, the end point and exact design of health care reform are less important than the wheels being set in motion regarding increased industry consolidation, physician integration, care coordination, cost restructuring and competitive positioning. Over a longer horizon, however, the elements of success for health systems will be dramatically different than today, requiring a vision-driven approach to evolving and transforming the enterprise.

Now is the time for health systems to take a fresh look at their strategic plans, and assess whether they are prepared to compete in a value-based marketplace with increased emphasis on cost, quality and access.

Success will require executives, board members and physician leaders to develop a shared understanding of industry changes, adopt a vision for the future of the health system, anticipate the pace of market transformation and maintain focus through the stages of strategy execution.

Here are 7 key questions to get the conversation going at your next leadership meeting:

• How does the leadership of the health system believe the future is likely to unfold?
• What will be the fundamental requirements of success and how do those differ from today?
• What role do you want to play in that future and what will it take to get there?
• In what businesses and markets should the health system invest its resources, either through ownership or partnership?
• What core competencies will create sources of advantage and market leverage?
• How should the parent company influence and relate to the businesses under its control?
• What changes will be required in the operating and leadership structure to achieve the vision?

A defining characteristic of leadership is the ability to drive strategy-critical change in the face of uncertainty. This is certainly one of those times.

Karen Corrigan

Closing the Brand Equity Gap of Investment and Realized Return

Over the past couple of decades, health systems have made substantial investments in brand building. Many have succeeded in creating stronger brand awareness. Some have improved market position. Only a few, however, have fully realized the substantial, measurable advantage of a fully activated brand strategy.

What these brands leaders have discovered is that:

• Strong brands influence consumer choice
• Strong brands attract and retain the best talent
• Strong brands create contracting, partnering leverage
• Strong brands shape referral patterns
• Strong brands build customer loyalty
• Strong brands better weather economic cycles

The gap between investments in a brand and realized return cannot be closed with brand advertising alone; nor, can it be resolved by customer service, clinical quality, lean operations and other initiatives pursued in isolation of a comprehensive, integrated approach to better leverage the outcomes for market advantage. Greater share. Increased volumes. Better profitability. Customer loyalty.

The only way to narrow the brand equity gap is to effect strategic, operational, clinical, physician and marketing alignment to create and deliver a meaningful, differentiating and durable brand value proposition. Brand alignment builds the brand-driven culture that transforms an organization from one that simply ‘promotes a brand’ to one that ‘delivers the brand.’

Karen Corrigan

Chief Marketing Officers Convene at Innovators' Studio

Last week I had the pleasure of spending time with healthcare marketing executives at the Chief Marketing Officers’ Innovators’ Studio. This group meets three times yearly in ‘deep dive’ working sessions designed to advance the discipline and practice of marketing as a driving force for growth and innovation in health systems. Our July session had a two-fold aim: (1) the evolving role of the marketing executive as chief growth officer and (2) transformation of the marketing operation to that of a strategy-critical business competency.

Over the course of two days, we dissected the current state of marketing in healthcare organizations and created a framework in which to evolve marketing’s role and competencies as the organizational growth engine. We took a hard look at the professional skills requirements for chief marketing executives, the capability requirements of future-ready marketing organizations, and the marketing performance expectations that should be requirements at the C-suite.

How fortunate we were to have Scott Davis, author of The Shift, and Don Friedman, chief marketing officer for CA, as guest catalysts for this work session. Their insights, perspectives and experiences seeded valuable ideas and stimulated much discussion.

Over the coming month, I’ll be blogging on the ‘ah ha’s’, explorations and recommendations from the CMO’s Innovator’s Studio and invite you to join in with your own questions, observations, comments and BIG IDEAS.

Karen Corrigan

Rapidly Restructuring Healthcare Markets Require New Approaches to Brand Management

Ever more complex health system structures, physician relationships, expanding clinical portfolios, new business ventures and expansion into new markets require a proactive, focused and purposeful plan to build and leverage brand equity across the enterprise – across geography – across constituencies.

Today, health systems’ approaches to branding must evolve to address and manage the complexities of:

• Hospital and health system mergers & acquisitions
• Physician integration, joint ventures and owned medical practices
• Ambulatory, post acute and retail diversification
• Academic, technology and business partnerships
• Multi-market, multi-state expansion initiatives
• Enterprise IT/EHR/Website strategies
• Co-branding/co-marketing relationships

This requires more sophisticated methods for determining, managing, and building brand portfolios in diversified health systems, addressing multiple facilities, strategic business units, markets, physician integration, and partnering ventures. Because at the end of the day, the objective isn’t what to call something, it’s market leverage.

Karen Corrigan

Keeping Your Brand Healthy After Physician Integration: Part II

Health systems that ignore the implications of physician integration to the organization’s brand do so at their own peril. Hundreds of doctors in an employed physician structure can produce hundreds of thousands of patient visits in a year – each visit shaping and reinforcing the organization’s brand reputation.

Without an explicit strategy for creating and delivering a brand-defined experience in physician practices, health systems run the risk of developing a brand reputation they don’t want – formed from inconsistency of service, customer indifference, fragmented care, complex processes, poor medical care.

But it doesn’t have to be that way. The key question for health care executives is how to leverage investments in physician integration to increase total brand equity – to build a powerful, differentiated brand presence and to drive growth from a core positioning platform.

To do so, we must first understand brand as a central and foundational underpinning of competitive strategy. Brands are potent business-building assets for driving growth, engaging customers, building profitability. As you develop and evolve the integrated physician structure, key issues regarding brand and business building strategies should be addressed from the beginning.

So how can a health system turn a potential brand liability into an advantage?

• Determine your unique brand value proposition. How you plan to create and deliver value to current and prospective customers through the fully integrated physician practice is fundamental to long term success. What significant customer-centered benefits (more timely appointments, better coordinated care, personalized service, best in class physician talent, etc.) will your patients gain as a result of the integration strategy?
• Agree on brand identity. Names may be about egos, but brands are about business. The right brand identity should, first and foremost, ease the selection process for your customers. Brand identity for the physician group should be chosen in the context of the health system’s strategic positioning and growth goals, as well as its overall brand building strategy.
• Create brand alignment across operating, clinical and marketing systems, and build a discipline to channel investments into those things that matter most.
• Hardwire customer service, operating and patient care processes to ‘deliver’ on the brand. Patient experience is born through brand activation, a process whereby the brand value proposition is translated and transformed into actionable principles, features, service standards and behaviors. Remember that brand reputation is built primarily through customer experience.
• Enhance brand performance. Establish and monitor key metrics regarding growth, revenue, profitability, brand awareness, brand preference, customer advocacy and staff engagement. Identify growth opportunities in key segments, markets, channels. Address barriers that may limit the power of your brand to move market share.

The mantra for health systems seeking leverage from their physician integration investments is simple. Build the brand. Build the business.

Keeping Your Brand Healthy After Physician Integration: Part I

The rapid restructuring of the physician services sector and resulting physician alignment, integration and employment models are presenting new brand building challenges for health systems, hospitals and physician organizations. Assuming the average primary care physician sees about 5,000 patients visits a year, back of the napkin math shows us that a health system with 100 employed physicians brings in a half million visits or so annually – with 300 to 400 physicians that number can rise upwards of 2 million. Now assuming that brand impressions are shaped through familiarity and frequency of use, then it’s easy to see how a large employed physician practice can be the catalyst for building – or unraveling – brand reputation.

You see, what we’re still learning in healthcare is that brand is built more powerfully through the customer experience than through promotions. The most creative imagery and well-crafted messages of killer advertising will not survive poor or inconsistent customer service – physician offices that don’t return patient calls, or don’t answer calls over the lunch hour when it’s most convenient for patients to make them, or can’t make timely appointments or see patients on time, or the poorly trained and groomed front desk staff, or the torn upholstery of the waiting room chairs, or the rushed appointment, or the doctor or nurse that enters the exam room, eyes on the chart and not on the patient. Or even worse – the missed diagnosis, the wrong medication, the preventable error.

The significance and potential impact of these everyday irritants and sometimes serious missteps cannot be underestimated once aggregated under the brand umbrella of a large health system. Every physician practice is now a branded access point, perhaps even the most critical of those touch points capable of enhancing or destroying brand reputation.

Brands are about business – growth, customer loyalty, profitability. It just doesn’t make good business sense investing millions to effect a large scale physician integration strategy if only to lose that and more by not purposefully addressing how brand equity will be preserved and enhanced.

So how can brand be unleashed to drive growth and innovation for the health system-physician enterprise? Well, that’s Part II – coming soon.

Karen Corrigan

How to Lose a Nurse

The call to nursing came the summer my 15 year old daughter had a leg injury that landed her a desk job in a Nicaraguan clinic during a church mission trip to Vida Joven in the mountains north of Managua. Instead of joining her fellow teens in camp activities (made difficult enough even without a leg in a cast by the weather, terrain and primitive conditions), she joined a group of doctors and nurses that set up a temporary clinic to provide medical care to people in neighboring villages. Families, often towing five or six shoeless children, walked as far as ten miles to see the American doctors and receive much needed medical treatment for ailments ranging from intestinal parasites to skin fungus to respiratory impairments caused by sleeping in enclosed tarp huts where kerosene is burned to warm the chilly mountain air. Babies with birth defects, children suffering from malnutrition, young men with malaria, diarrhea, festering cuts – curses of the poor in developing countries.

My daughter spoke Spanish well enough to facilitate conversations between the doctors, nurses and patients. And she was put to work dispensing medications – everyday drugs we take for granted but precious to those that suffer while waiting months and months for the clinic to come to Vida Joven. She came home that summer eyes wide opened by the abject poverty of the people living in the western Hemisphere’s second poorest country.

She went back to Nicaragua every summer of her high school years, taking on greater responsibilities in the medical clinic and growing in the conviction that nursing was what she wanted to do. Back at home she searched for a university with a nursing program. She spent spring breaks and summers off building an orphanage in Boliva, nursing at a hospital for women and children with AIDS in Kenya, volunteering at a clinic in La Paz. One day she said to me, “Mom, I was born to be a nurse. I just didn’t know it until now.” Now being the day she came across a tiny rain-soaked boy of four or five stooped and shivering under a tree in Nicaragua – shoeless, hungry, sick. Something clicked for her. And six years later here she is – RN, BSN.

Last night she called me – distressed, angry – wanting to quit her hospital job of just one year after spending another twelve hour shift trying to care for too many critical patients with too few staff, missing supplies, inoperable equipment and physicians that don’t return calls when their own patients are heading south. Concerns tumbled out. The evening she couldn’t get the doctor or charge nurse to believe that her patient was septic (he was). The day that she held tight to a hypothermic patient using her own body warmth to try and raise the woman’s temperature because there were no warming blankets on the unit and no one to search for any. The night just six months out of school when she was the senior nurse on the floor. The critical care patients admitted to med/surg beds without the monitoring equipment or staff to keep them alive. The psych patient admission that punched her in the face. That one shift when the unit had twice the staff (‘don’t get excited,’ said the charge nurse, ‘it’s the show for JCAHO’), the next day when they were all gone. The countless meetings where nurses were invited to share their concerns and ideas. The weeks that ensued where nothing changed.

Her panic was palpable; seated in the fear that her patients are in harm’s way of a system that is just plain broken. And I heard what she wasn’t saying out loud.

That even in the jungles near Matagalpa, even in the slums of Nairobi, even in the makeshift clinics where a handful of professionals and a dozen suitcases of medical supplies somehow divide like fishes and loaves – she never felt as powerless or worried for the safety of her patients as she does in this nationally-ranked, Magnet-designated hospital.

And that breaks my heart.

Is Service Line Success Embedded in Design or Execution: Part 4

This is the final installment of four posts on healthcare service line strategy and structure.

With Service Lines, Imitation is Not the Answer

The classic flaw of imitation is the assumption that someone else is doing it right.

For the service line management model to be an effective growth engine, providers must move beyond benchmarking and replication to forge a distinctive position in the market. The secret to competitive effectiveness is not to be better than the competition. But to be different in a way that is distinct, relevant and truly meaningful to your customer base -- by seeking different value-producing approaches to the market, by driving innovations in service delivery, by creating unique approaches to integration and service consolidation, by cultivating unique partnerships, by understanding how different degrees of centralization, delegation of authority, and functional specialization work together to achieve differentiation.

The key consideration for health care leaders is how those differences add value to the service line model in achieving the company’s strategic vision and goals.

So, the critical question for service line execs is how differentiated value is defined, created and delivered. This requires more than an aggregation of tactics, but a leadership-driven approach to identifying opportunities, crafting strategies to create a distinct and compelling value proposition, developing a effective business model and operating structure, forging physician partnerships, and prioritizing investments.

What's important to keep in mind is that service line management, in and of itself, is not the goal. When aligned to an organization’s strategy and configured to achieve results, it can, however, be a powerful model for creating and sustaining competitive advantage.

Karen Corrigan

Is Service Line Success Embedded in Design or Execution: Part 3

This is the third installment of four posts on healthcare service line strategy and structure. Watch for the 4th post in coming days.

Brand vs. Service Line Management

In comparing and contrasting healthcare’s service line model with industry’s product or brand management model, fundamental differences are realized across key factors:

Market orientation -- A key difference between service line and brand managers (and among better performers and poorer performers of service line management) is the vantage point from which decisions are made – poorer performers operate from the inside out (“here’s my program – let’s see if we can find some customers”) versus outside in (we’ve identified segments offering significant opportunity for growth – let’s build a product to attract them.”). In competitive consumer markets, maintaining an external focus while keeping a direct line into the operations team to deliver against changing consumer requirements is paramount to success.

Strategic focus – Historically, the strategic focus for hospital service lines has been development of profitable clinical services to compete with other health institutions; improving quality, lowering costs, aligning physicians, and adding services all are aimed at creating a better offering. Competitive advantage, however, isn’t sustained by being “better” than the competition but from being “different.” Brand managers seek to create markets and new sources of revenue by finding new and different ways to meet customer needs, extending the life cycle of the brand and representative products, forging strategic partnerships to enhance product offerings, and developing proprietary approaches for channel leadership.

Competitive posture – The health industry’s supply-side orientation to strategy tends to favor defensive posturing. Service line initiatives are over-invested in similar activities amongst providers in a market to protect position and share, as opposed to proactive strategies to leverage strengths against emerging market conditions that offer opportunity for substantial growth. A demand-side perspective acknowledges that consumers have shifting needs that can be met in a myriad of ways. It opens up our thinking as to not only “who” but “what” we compete against.

Value innovation – Organizations that consistently perform above industry norms are those that better anticipate changes in competitive dynamics and continually innovate to create greater value for customers and the market. However, the health industry’s penchant for benchmarking and low tolerance for risk-taking sentences service lines to numbing sameness and marginal improvements. Value innovation does more than raise the bar – it resets the rules of competition by de-commoditizing health care services. The ultimate pay-off is substantial gain in growth.

Marketing – The traditional service line marketing toolbox has offered up a limited set of tactical activities to promote service line offerings and cultivate referral relationships. In consumer markets, marketing is a strategy-critical core business competency to create profitable exchange relationships between an organization and its publics. It is the principal process for creating and linking customers to the organization’s products and services. In comparison, the traditional industrial marketing model includes major functions of producing, packaging, pricing and promoting individual products.

Scope of responsibility and authority – One of the fundamental issues with the service line management model is lack of agreement as to whether service line leaders are operations managers, clinical leaders, business developers, marketing managers or some combination of the mix. A matrix reporting structure, which is often poorly defined, limits the manager’s ability and authority to achieve service line objectives. If we contrast this model to that where cross-organizational teams work for a brand manager who reports to senior executives, there are lessons to learn about lines of authority and accountability for performance

Performance metrics – In poorer performing service line organizations, performance objectives and measures of success are unclear and reward systems are not linked to achievement of specific goals. Even worse are those where authority and accountability are so misaligned that turf wars break out inside the very service line structure intended to “break down silos.” Consider the service line leader who is held accountable for volume growth and profitability, but has no authority to impact capacity, through-put or supply costs. In competitive consumer markets, metrics such as preference share, conversions to trial, percentage of revenue growth from introduction of new products, and repurchasing rates, among others, are leading success indicators.

Coming next: Imitation is Not the Answer

Karen Corrigan

Is Service Line Success Embedded in Design or Execution: Part 2

The following is a continuation of an earlier posting.

The Disconnect Between Strategy and Service Line Structure

At the risk of boring repetition, structure should follow strategy. There is no universal ‘right’ way -- or ‘wrong’ way, except perhaps blind restructuring of clinical services into service lines without a defined strategy as to how value will be created and what capabilities and resources must be brought to bear effective execution.

Strategy then is not just an aggregation of tactics, but a leadership-driven approach to articulating a futuristic vision for how a service line intends to compete. To get to this point, health systems must develop a point of view as to how the market is likely to unfold, identify specific strategies to create a distinct and compelling market position and then create a business model and structure to effect achievement of its goals.

In its generic form, the product line and brand management models developed by industry leaders such as Proctor and Gamble and GE, are useful frameworks for designing an approach to service line leadership with the fundamental intent of optimizing the organization’s market position for a defined service line.

There may be more to learn today from the product or brand management models that evolved in the consumer goods and services industries as we address increasing consumer influence in the selection, purchase and use of health services and products. However, to be receptive to the advantages offered by brand management models, we must suspend the predominant notion about brands as communication devices and adopt an understanding of brand as the totality of customer experience resulting from organizational decisions regarding positioning, design, development and delivery of products and services.

Fundamental differences are realized across key factors. Part III will compare and contrast healthcare’s service line model with industry’s product or brand management model.

Join the discussion. What do you believe to be the key strengths and pitfalls of service line management models?

Karen Corrigan

Is Service Line Success Embedded in Design or Execution? Part 1

The popularity of service line management has waxed and waned over the past two and a half decades. This can be attributed to a number of factors ranging from the changing nature of competition in the health industry to misalignment of internal resources to variations in clinical practice to mixed financial results.

Since its origin in the early 1980s, much has been debated about the structure, strategy and capabilities resident in service line organizations. In general the service line business model has evolved from service line marketing to clinical program operations to a more systematic approach of managing a defined line of business delivering a bundle of services to distinct market segments.

In practice, however, service line models differ widely across health systems and hospitals – and with varying results. Not all service line marketing models failed in the 1990s; not all integrated service line business models work today.The key question to explore is “what” creates success – the model itself or superior execution of a service line strategy.

In coming posts, I'll compare and contrast the various aspects of design and leadership. Please join the discussion.

Recommended Reading

I recommend “Innovating in the Great Disruption” by Scott Anthony (HBR Innovation Insights). The key take-away: innovation is a strategic priority, especially in a prolonged disruptive economic period where business transformation is required to propel us forward to economic prosperity. However thriving will require a different mind-set and mastery of three disciplines: (1) Accelerating progress by finding creative, inexpensive ways to bring new ideas to market; (2) Mastering the paradox of exploitation and exploration (exploiting the current business; creating the future business); and (3) Discovering opportunities in the value-conscious segment (not to be confused with the ‘low price’ segment). Read more at http://discussionleader.hbsp.com/anthony/2008/12/innovating_in_the_great_disrup.html