1. 1. INNOVATION Joe Messina, Director of Planning Marla Kouche, VP-Strategic Program Office Innovations in New Product Development & Marketing 2009 FROST & SULLIVAN EXECUTIVE MINDXCHANGE June 7-10, 2009 / SAN FRANCISCO, CA
2. 2. Lessons Learned 1. Insight on building pragmatic innovation practicesthat are effective at creating ROI 2. Tools & methods to change the engine while theairplane is in flight 3. Successful factors for creating a corporate cultureof innovation 4. Best practices gleaned from the 2008 MindXchangeapplied toward innovation excellence 2
3. 3. Quest Diagnostics and MedPlus Parent Company: Quest Diagnostics (NYSE: DGX) Global leader in diagnostic laboratory testing, information and services >$7B in annual revenue Established business relationships with 300,000+ physicians, 3,000+ hospitals and 1,000 payers MedPlus, Inc. Healthcare information technology subsidiary of Quest Diagnostics Headquartered in Cincinnati, Ohio with operations serving North America Commercial software provider responsible for 25-30% compound annual growth and external IT strategy Create and deliver IT solutions to Hospitals, Health Systems, RHIOs, and 140,000+ physicians3
4. 4. Our Vision Dedicated people improving the health of patients through unsurpassed diagnostic insights 45,000 employees and innovation.Our Mission We will be the undisputed world leader in diagnostic testing, information and services.450 employees4
5. 5. Enabled by the MedPlus Solutions Clinical Portal Clinical Catalyst ChartMaxx Seamless access to Bridge to a full EMR Centralized electronic aggregated patient Point-of-care toolset for the access to the complete clinical data creation, management &legal medical record Driver of physician sharing of clinical Preserves paper processes satisfaction and improved information for the floor while clinical decision making Incremental functionality toautomating work flows for the existing Care360HIM and back office Data Exchange Physician Portal Fully supports HIM Servicescompliance needs Facilitate the exchange ofPatient Portal Improved data access information between sourcesupports improvements systems and user systems Engage the patient in the beginning with management of their careregistration through Hybrid-federated data model On-ramp for the patient for delivery of the final bill Enterprise Master Patient administrative and clinical Index capabilities Record Locator Service5
6. 6. Opportunity Right Place, Right TimeThe Healthcare IT Outlook, spurred by the Economic Stimulus Package, directly aligns to our core competencies Majority of records still Data resides in Unconnected networks exist in paperdifferent silossuboptimal business & clinical outcomes 6
7. 7. Change ImperativeGetting to revenue in Emergent business Employee attrition and a an opportunisticmodel and product drop in satisfaction marketplatformscores7
8. 8. discovery 8
9. 9. Early Conversations 1. What is the mission what is our change agenda? 2. What can we learn from other innovation models? 3. Why did it take so long for us to get this far? 4.How will we resource/fund the program? 5.How does this pipeline connect to our others? 6.How will we prioritize projects? 7.What kind of innovation do we seek? 8.Are all innovations welcome? 9.What core capabilities do we possess? 10. What core capabilities do we lack? 11. How wide/open is our community? 12. How will we engage people over time? 9
10. 10. Innovation Models RANKRANK COMPANY REVENUEMARGINKNOWN FOR ITS MOST 20082007 GROWTH GROWTH INNOVATIVE2005-082005-08[% WHO THINK SO]1 1 APPLE 30.4 15.8 Product (47%) 22 GOOGLE52.6 -8.2 Customer Experience (26%) 33 TOYOTA 4.2-35.9 Process (35%) 45 MICROSOFT 13.5 -1.3 Process (26%) 57 NINTENDO61.1 20.6 Product (48%) 6 12 IBM4.4 14.3 Process (31%) 7 15 HP10.9 31.6 Process (39%) 8 13 RIM 74.1 11.2 Product (53%) 9 10 NOKIA 14.0-10.3 Product (38%) 1023 WAL-MART 9.1 -2.1 Process (49%) 1111 AMAZON.COM31.2 -4.8 Customer Experience (41%) 12 8 P&G 11.72.4 Process (27%) 13 6 TATA PrivatePrivate Product (44%) 14 9 SONY 3.1-41.1 Product (40%) 1519 RELIANCE28.5 11.9 Business Model (35%) 1626 SAMSUNG 10.5 -1.5 Product (41%) 17 4 GE10.1-12.2 Process (36%) 18NR VOLKSWAGEN 7.1 33.6 Customer Experience (38%) 1930 MCDONALDS7.29.5 Customer Experience (55%) 2014 BMW6.9-14.6 Customer Experience (37%) BusinessWeek: The 50 Most Innovative Companies 10
11. 11. Innovation Categories 1. Business Model: strategy / positioning 2. People: management / community 3. Process: operational efficiency 4. Product: technology / services / customer experience 11
12. 12. Innovation Strategies 1. Inspire: Provide an inspiring vision; lead innovation; emphasizeopportunities, not problems; trust your people. 2. Organize: Set rules; create a system, guiding structures andprocesses supporting innovation and idea management. 3. Synergize: Leverage diversity; facilitate cross-pollination ofideas; create and empower cross-functional teams. 4. Empower: Create a culture of questioning; encourage risktaking; give your people freedom to experiment, fail, andrestart. 5. Reward: Measure progress; reward both individual andcollective contributions; celebrate success, make business fun. 12
13. 13. Change Agenda Hero-culture Mentoring-culture Formal and closedInformal and open Command and controlConsensus-driven Fear of making mistakesExplore and evaluate Local thinking Systems thinking Redundancy Diversity 13
14. 14. Challenges BUSINESS AND PROGRAM 14
15. 15. BUSINESS CHALLENGE1 MILLION TRANSACTIONS PER DAY15
16. 16. BUSINESS CHALLENGE non-traditional competitors$19.6 Stimulusbillion HIT LAND RUN 2009 16
17. 17. BUSINESS CHALLENGEemergent standards and business model17
18. 18. PROGRAM CHALLENGEHIGH EXPECTATION low realization 18
19. 19. PROGRAM CHALLENGEtask-tool mismatch 19
20. 20. PROGRAM CHALLENGEcompeting priorities20
21. 21. process PROGRAM CHALLENGE entrenched behaviors idea 21
22. 22. PROGRAM CHALLENGEresource constraints 22
23. 23. solution23
24. 24. DEVELOP COMMUNITY VISIONbuyer-seller marketIDEAIDEA IDEAIDEA 24
25. 25. PROVOKE STRATEGIC CONVERSATION how big how open? 20092010 2011 MedPlus Employees MedPlus Employees MedPlus Employees Quest Employees Quest Employees Quest Employees Advisory Customers Advisory Customers Customers Partners Partners500 members500 members10,000 members10,000 members 100,000+ members100,000+ members25
26. 26. ADOPT-ADAPT COMPLIMENTARYmanagement frameworks BOS Blue Ocean Strategy BSC Balanced Scorecard SCRUM/Agile Six Sigma Carrots 26
27. 27. INJECT DISCIPLINEinnovation program Articulate Mission, Vision, Values and Change Agenda Install the Innovation Foundation Team Process Funding Idea Management Technology Reward System Cultivate community soil w/ challenges & content aligned to strategic objectives Seed, Manage and Harvest27
28. 28. DESIGN PROCESS dual pathwaysDIRECT-INJECTINCUBATE ELICITEVALUATEINCUBATE JUSTIFYRATIONALIZE DELIVER CHALLENGE SCREEN RESOURCE COST/BENEFIT GROUP/PACKAGE DMAIC IDEATE PICK REFINE PRIORITIZE ITIL FRAME ANALYZE SCHEDULE SDLC CATALOG EXPERIMENT PROTOTYPE 28
29. 29. CREATE INNOVATION PIPELINE VIEWSTomato garden Source: Strategy as a Portfolio of Real Options, Timothy A. Luehrman, Harvard Publishing29
30. 30. PROVIDE A REVIEW PLATFORMfast-pitch spotlight30
31. 31. GO I AM NOT SITI LIKELONGHORNS A CROOK NUTS GO AWAY I GOT NO [regional dialects] MONEY crush kill destroy I SEE I PASS PAIN passive consultative stern ILL TAKE __ BEERS DEVELOP SCREENS AND DECISION RULEStribal voting gestures31
32. 32. STAGE EVENTS mission impossible 50% short of MBO pipeline target Have 250 ideasneed 250 more 15 days left350 Double our pipeline produce at leastSweet250 sweet new new ideas Twas week before Christmas ideas! 25% of staff stirring 1st Time Challenge FUD 6 Teams 18 framed questions 90-minute team sessions 32
33. 33. REDIRECT INVESTMENTSportfolio judo-flip Market Share Market ShareHighLow10 % 20% Market Growth High Pearl OysterMarket Growth LowCow Dog 70%33
34. 34. iPhone App Spark: CTO Challenge to develop a robust application that runs effectively on Apple iPhone platform. Incubation Team: 4 Software Engineers, 1 Executive Sponsor Seed Investment: