Clinical Innovations - Six Innovations - Innovation Number Three

Lessons from retailers: Hidden in plain sight and DIG (Demand-First Innovation and Growth)

Retailing is America’s most productive sector. In the last dozen years, chains like Wal-Mart, Starbucks, Staples, Home Deport and Home Stores have sparked America's remarkable productivity. How have they done this? By restructuring the way they do business. According to marketing guru, Erich Joachhimsthaler, retailers have done it by looking at behaviors and demands of customers from the "outside-in," i.e., through the eyes of time-bankrupt hardworking two-career families, seeking convenience and by adopting a strategy of DIG (Demand-first Innovation Growth).

Retailers have introduced multiple sites for shopping (mail-order catalogues, Internet, television), increased convenience by minimizing travel time (by placing outlets in malls, neighborhood stores, office buildings, transportation terminals), placed goods in huge stores that offer one-stop shopping, reorganized contents around lifestyles and trained employees to play defined roles concentrated on serving the customer.

Similar changes are beginning to occur in health care:

•Retail clinics in drug stores, grocery stores and retail outlets

•Urgent clinics that are specialized easy-to-reach

•Exercise and fitness facilities in retirement villages

•Big MACCs (Multispecialty Ambulatory Care Centers), conveniently located in suburban and rural settings

•Big Boxes (large buildings co-owned by hospitals and doctors with joint reception areas, support personnel and support services)

•Specialty surgical hospitals for heart, orthopedics and neurosurgical disorders

•"Focused-factories" with integrated teams to treat diabetes, AIDS, heart disease, back disorders, hernias, infertility

•Companies that specialize in providing care in the home for the frail elderly (that socially isolated one percent segment of the population that account for as much as 20 percent of health costs)

Because of this restructuring, still in its early stages, general hospitals may go the route of downtown department stores, no longer able to provide everything-for-everybody and forced to diversify. Hospitals will have to decentralize, downsize and "act small."