Ecosystems: Rewriting the Boundaries of Business

As new opportunities emerge and new business combinations take place, first-mover advantage and innovation ecosystems are top of mind. Both spark discussion in senior ranks, and we see many experiments underway. These concepts are also linked. Strategists think about first-mover advantage within an ecosystem — where the collective movement improves speed, reduces risk, and a more effectively crowds out the competition.

Yogesh speaking about the innovation journey

The Importance of Your Innovation Ecosystem

This strategic view of ecosystems and first-mover advantage is important for all companies. And it is particularly important for R&D leaders of health technology companies. Why? Because these leaders are bringing increasingly complex products to market, and there is an increasing rate of change of technology platforms. With these changes in mind, some believe that within a decade companies will define their business models based on their effectiveness in operating within ecosystems.

An organization entering a new market or territory alone can be an easy target. However, an ecosystem – or swarm – moving forward together protects its members and reduces the risks of entry and competition. These concepts highlight the importance of ecosystems and encourage us to examine how ecosystems are constructed.

Leaders often focus on a singular “node” of an ecosystem and fail to holistically understand the importance of all the ecosystem elements. In response, we developed an Ecosystem Framework—a helpful guide and an on-going reminder of the elements necessary for effective ecosystem development.

We help organizations build effective innovation ecosystems. And we’ve worked with companies, government agencies, universities, research labs, science parks, entrepreneurs and others across the globe to create ecosystems to accelerate good ideas to market more rapidly.

Current Ecosystems

Health care technology companies participate in a fragmented ecosystem. There is as much competition as cooperation. Large companies struggle to find the most productive ways to work with entrepreneurial companies and vice versa. The result is missed opportunities to master emerging technologies and new service models.  This is in part based on internal pressures, where success is driven by meeting near-term goals. The focus on the short term leaves little time to think beyond today or outside the needs of a specific business unit.

Challenges also exist at the state and federal levels with misaligned reimbursement models and complex regulatory requirements. However, the environment is finally beginning to change. We see a move towards value-based care and customers who feel empowered to make healthcare choices and voice their expectations. This means we have the opportunity to rethink collaboration, redefine co-creation, and realign around the unprecedented opportunity to impact health and disease.

Future Ecosystems

For health technology companies, future success will require capabilities in emerging areas—artificial intelligence, personalized medicine, robotics, big data, and digital engagement, as examples. Historically these areas have not been core competencies of traditional medical device developers. Winning in this future context will require integrated solutions that combine hardware and software components. Building stronger relationships with universities and with other—perhaps non-traditional—organizations with complementary capabilities will be essential.

I’ve seen the power of ecosystems. I’ve seen companies realize that looking for research and co-development partners early on can result in better products and increased productivity.  I’ve witnessed what happens when organizations band together to influence the Food and Drug Administration/Centers for Medicare & Medicaid Services policy and payment model reimbursement challenges that often discourage the development of breakthrough innovations in certain categories.

Most companies view their product launches as a key success metric. At the same time, there are many high-quality health care technology products whose path to adoption was rocky. Ironically, it was not because the product wasn’t an impactful innovation. Rather, the because the “receiving” clinical workforce was not prepared for the unexpected workflow implications, required changes in care practices, and/or the new and different roles that were needed to adopt the new solution. The most visible example is ongoing adoption challenges with electronic health records. Proactively anticipating how the workflow will be impacted in response to the introduction of new health innovations is an often-overlooked node of ecosystem development, but a vital one for having the maximal impact on care delivery.

Strengthen Your Ecosystems

We ensure that these ecosystems become the connective tissue that allows innovation to thrive. With an eye towards the future and we identify new and non-traditional partners.

Questions we help clients answer include:

  • How do innovation assets match with sectors that are primed for rapid and sustainable growth in global markets?
  • Which potential partners are best to coordinate with to proactively influence the policy landscape?
  • Which traditional and/or non-traditional organizations help expand capabilities and get impactful products to market more quickly?
  • What needs to be done to ensure that clinical workforces are also being developed such that emerging innovations can be leveraged by professionals [or patients] with the appropriate mix of skill

We advise on partnerships that lead to the formation of an effective innovation ecosystem. Ultimately this reduces the risk in new product development, improves the chances of success, and accelerates speed to market.

Commit to Action

The mandate for R&D executives is to revisit what it means to collaborate versus compete. We believe that the only way to solve our most complex challenges is through collaboration and effective ecosystems. Yes, we have much to solve, and we will get there faster with better results when we do so together.

How can we help you start—or accelerate—the creation of your effective ecosystems?

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