{"id":3739,"date":"2019-06-20T12:00:07","date_gmt":"2019-06-20T17:00:07","guid":{"rendered":"https:\/\/advmedtechconf.wpengine.com\/?p=3739"},"modified":"2019-06-13T15:51:24","modified_gmt":"2019-06-13T20:51:24","slug":"modern-approach-innovation","status":"publish","type":"post","link":"https:\/\/themedtechconference.com\/modern-approach-innovation\/","title":{"rendered":"A Modern Approach to Portfolio Strategy: From Feature Innovation to Value Innovation"},"content":{"rendered":"\n

By Matt Singer, ZS Principal <\/em><\/p>\n\n\n\n

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In a recent\nZS survey<\/a> with hospital executives in the U.S. and Europe, we found that\n90% of respondents think that medtech manufacturers can\u2019t succeed with product\ninnovation alone. Moreover, that same number of respondents said that they\ndidn\u2019t believe that medtech companies understand the trends shaping the health\ncare landscape and how those trends affect providers\u2014and therefore, what\nmedtech customers need and value. <\/p>\n\n\n\n

How can medtech improve the relevance of a portfolio for evolving customer needs? We believe that this requires a mindset shift from featured innovation of the past to value-based innovation, which we define as solving customers\u2019 important problems in a better way than alternatives, supported by evidence.<\/p>\n\n\n\n

The key elements are, first, a broader definition of the customer. In our survey, only 10% of global hospital executives believe that medtech companies are launching new technologies that align with customers\u2019 needs. To be a value innovator today, a medtech company must continue to broaden its definition of the customer, to include administrators and other stakeholders beyond the clinician, which introduces new sets of needs to address via innovation. While most downstream commercial organizations have evolved their go-to-market model accordingly, the innovation process hasn\u2019t caught up yet; Now is the time. \u00a0<\/p>\n\n\n\n

The second key element is a deep insight into customer needs because, with a broader definition of the customer, the needs become different. With a focus solely on the surgeon, the needs will mainly focus on the procedure, the resulting clinical and sometimes financial outcomes. However, other stakeholders are likely involved in the buying decision and they may value something different or use a different yardstick to measure value. One hospital C-suite executive told us, \u201cI don\u2019t want to spend more simply to use a new technology that adds huge costs for only incremental improvements.\u201d This executive may use a different definition for \u201cimprovements\u201d than the clinician and may have a radically different set of priorities. <\/p>\n\n\n\n

The third key element is to change the mindset to solution development rather than product development. Medtech is a product-driven industry with highly skilled engineers who excel at developing new products. In many cases, these products are highly complex and development cycles sometimes exceed five years. Today, with different types of competitors emerging, that take a much faster and nimbler approach (such as Google and Amazon), a new product idea might be irrelevant by the time of commercialization. And in some cases, the \u201csolution\u201d shouldn\u2019t be a product alone or even a product at all. It could be a service or a mobile app, or some combination thereof; Product features come later. The point is that the focus is on solving important customer problems rather than on \u201cif you build it, they will come.\u201d Having a solution-driven approach can mean that innovations can come to market faster, increasing customer relevance and capitalizing on growth opportunities <\/p>\n\n\n\n

Now let\u2019s look at how to enable value innovation.<\/p>\n\n\n\n

Opportunity assessment<\/em><\/h4>\n\n\n\n

We believe that the most important decision an organization\ncan make is when defining its value proposition\u2014which includes who the customer\nis, what needs you want to address and how you demonstrate and address those\nneeds better than alternatives. Consequently, the company needs deep insight\ninto market dynamics, customer needs and the competitive landscape. <\/p>\n\n\n\n

Seems obvious right? It\u2019s not that these topics aren\u2019t considered; it\u2019s that they aren\u2019t considered early or rigorously enough. Upstream marketing teams typically have limited budgets to conduct the rigorous work required. Instead, companies often rely on their deep experience, input from local sales teams and relationships with key opinion leaders. In many companies, upstream marketing will collect input from regional commercial organizations, which are very busy driving the base business. Unfortunately, this process results in an incomplete understanding or one too focused on where the market is today vs. in the future.<\/p>\n\n\n\n

To truly enable value innovation, you have to invest in a rigorous and externally driven definition of the market fact base. While the investment may seem large, it pales in comparison to the amount of money spent on R&D or on developing products that customers won\u2019t pay for and value. . One medtech CEO we interviewed recently discovered that their company spent $30 million on developing \u201cinnovations\u201d that ended up having no commercial value because there was no mechanism to feed evolving customer needs into the innovation process. Spending a little more in advance to avoid such a catastrophe seems like a good investment. <\/p>\n\n\n\n

A rigorous opportunity assessment:<\/p>\n\n\n\n