Digital transformation is all the rage in healthcare these days. The truth is that digital transformation has been at work for decades, especially in industries outside healthcare. Whether it was called disruptive innovation, digitization, or even the “ Dot-Com Boom”, the notion of digital transformation and how it has categorically altered the course of businesses, markets, and consumer experiences weighs heavily on healthcare innovators today.
With technology giants finally getting in on the action, and getting things right, healthcare is poised to undergo a long and painful period of digital transformation. And yet, many leaders and managers in Healthcare today are grappling with how to navigate this brave new world.
While a Hitchhiker’s “Guide To Healthcare Digital Transformation” would be a tome, addressing a few fundamental questions will start the journey on the right foot.
What is Digital Transformation?
Digital transformation represents a complete reconsideration of business strategy, markets, offerings, customer segments, customer experience, operating model, human capital and organizational processes.
While the trigger for a digital transformation effort is often sudden, a transformation effort must be able to still establish a well-thought out digital strategy. This strategy must be measurable and actionable. It should pursue a clear vision, be backed by key decisions that fully leverage the changes and opportunities digital technologies offer in regards to businesses and societal impact. Leaders taking on a transformation often have specific tools or technologies in mind, e.g. “we need an AI strategy.” Digital transformation, however, should be guided by the broader business strategy. Otherwise, it will inevitably underdeliver.
Who Owns Digital Transformation?
There are considerations for people who will be served, people who will be serving, and people needed to operate the business in it’s transformed state. But the first question is usually: who owns digital transformation?
For several years, digital transformation was considered the de facto domain of CIOs. More recently, it was a tug-of-war between CIOs and CMOs, with “digital technology” competing for sponsorship with “digital channels”. With the advent of Chief Digital Officers (CDOs) and Chief Innovation Officers (CInnOs), the waters have muddied further. Healthcare organizations, including Pharma, are busy recruiting CDOs from other industries, following the broader enterprise trend.
The 5th Annual State of Digital Transformation Survey data bears this out: CIOs (28%), CEOs (23%), Boards (14%), CDO (11%), CInnO (11%), CMOs (5%; down from 19% in 2017), and CXOs (5%).
One thing is clear: Digital transformation is an enterprise-level initiative that is fast becoming the responsibility of the CEO, with an accountable CIO, CDO, or CInnO ensuring rapid but responsible delivery and stewardship. A transformation team, with clear roles and responsibilities, is therefore essential.
How Will Digital Transformation Impact People?
Reimagine the future Customer Experience: Most economic levers in a business rely on consumption and consumers. Customer experiences change to meet expectations and consumption models. While organizations instinctually look to digital for cost savings, that often leads to incrementalism over true transformation. The likes of Netflix, Lyft, and Oscar Health were not born from cost-cutting efforts, but rather customer experience and expectation reframing. Knowing your customer ensures the transformation can think big, and start small.
Avoid falling in love with Ideas: Innovators are people too, and digital transformation is often an opportunity to start with a “blank slate”. Ideation and concept development are given the white space to spark new ways of capitalizing on opportunities. The pitfall here that organizations often “fall in love” with those ideas, and either skip rigorous validation with the outside world or ignore validation feedback that rejects them. It is essential to learn and iterate, even if it means throwing out ideas entirely.
Leverage experienced Insiders: external consultants are good, but what worked for other organizations will not translate wholesale in a transformation. Institutional knowledge about what works and what doesn’t in daily operations is critical. This not only serves up a “reality check” on unmet needs of customers, it also sets the stage for change management, governance, and measurement of the transformation.
Use holistic methods like Service Design: Between the vision, customer experience, and insider knowledge, teams often find themselves dealing with conflicting priorities and a lack of alignment. By using service design – which is a holistic “surface-to-core” method of designing digital-first (but not digital-only) businesses, a transformation effort can go from being an ambiguous “hot mess” to a tangible definition that can be agreed upon by all: executives, insiders, customers, consultants, and partners.
Confront human capital issues with authenticity: Digital transformation, if done right, will have significant impact on an organization’s human capital. While some of that is undoubtedly negative, there is a lot of positive potential as well. It is critical for leaders to recognize employee fears of downsizing and emphasize that digital transformation is an opportunity for employees to upgrade their expertise and be a part of the new way of doing business. New talent will inevitably need to be added, as digital transformation requires an integrated group of digital product managers, technologists, UX designers, data scientists, and privacy/security experts.
Commit and transition to a Culture of Agility: Speaking of culture, digital transformation is uncertain: adjustments to shifting technology, market, and ecosystem changes are inevitable. Decisions on which ecosystem partners to use (and which ones to switch to) are par for the course, and leaders must experiment and adapt in short time frames. For multinationals, different regions often have trouble adopting technology developed in another region, leading to more iterative refinement and decisions. This model of iterative innovation and transition should start small – often in an insulated part of the organization. However, gradual scaling is imperative – using frameworks such as Scaled Agile Framework for the Enterprise.
How Should a Digital Transformation Effort be Structured?
The key elements of strategy, customer experience, culture and human capital have already been touched upon. Predictably, more needs to be considered for a digital transformation initiative to be successful. The transformation team must also plan for ecosystem and technology, data and measurement, and governance.
Below is a digital transformation framework used by Medullan to guide the planning and execution of such efforts:
Digital transformation starts with a digital maturity assessment and creates a “living repository” in the form of a digital portfolio. Delivering on that portfolio becomes an exercise in empowering the transformation team to follow an execution roadmap that will undoubtedly evolve and mature over time.
Healthcare organizations are often derided as “laggards”, but that is an ignorance of the heavy industry burdens in economics, policy, clinical inertia, hyped expectations and regulation. Digital transformation efforts in healthcare are no more likely to fail than in other industries, as long as transformation teams follow a deliberate and transparent process.
Digital transformation is, as with so many things in healthcare, a people thing.
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