Week 7 – Taking Strategy from Development to Implementation

              During my time employed at a healthcare startup, I observed an aura of cynicism begin to permeate the culture. Unfortunately, I believe the fault lies with the executives – as we discussed in class, a company’s leadership earns its high salaries by being aware of emerging trends in the market and making decisions that harness these trends. Instead, the startup’s CEO continues moving forward with the same strategies that had worked for him decades ago.

               The article “Twelve Forces That Will Radically Change How Organizations Work” stated that “…executives will need to become far more comfortable leading in a digital world—a potential challenge given that many people with the best digital skills are often younger than leadership team members and have different working styles.” ^[1] Our leadership team was 90% white, male, 55+, and clearly baffled by changing work styles of the younger generations they were hiring. The company’s mission – to improve health outcomes – attracted many passionate young people, and yet I remember one company all-hands call where, in response to a question on high attrition rates, our CEO blamed the largely millennial team because of our tendency to move from job to job at much higher rates than previous generations.

               Cynicism also grew from the feeling that we were falling short of our desired goal to improve health outcomes for those using our wellness platform. Several studies point to the diminishing returns of incentive-based programming (Fitbit is a common case study – despite attempts at gamification, goal setting, and “badges”, over the course of a year users’ health generally does not improve with wellness devices).^[4] Ignoring this data, the company pursued a product fully dedicated to motivating behavior change by offering incentives for tracked behavior (i.e. $20 for drinking 48 oz. of water each day for a week). Customers’ true behavior doesn’t align with the product, leaving room in the industry for a new entrant to take advantage of behavior science, provide a more effective service without incentive payments, and thus bring a less expensive wellness program option to market. ^[2]

               A tech-empowered, purpose-seeking workforce out of touch with the executive team, combined with a miss in the market, drove the deteriorating culture where I worked, and based on what I hear from my colleagues that still work there, I think there will be no saving the company. However, if I were CEO, I think there is so much potential for the company if they took Michael Porter and Mark Kramer’s advice and asked themselves: “Could our product design incorporate greater social benefits?” Currently, the strategy involves selling a generic wellness platform to as many employer groups as possible, but a far more interesting idea that could generate social value for many parties would be to use the platform as a research tool (at least partially). First, the startup could design variations of a wellness program using the latest findings in motivating behavioral change; it could test out different combinations of feedback loops, praise, punishment, and reward. Employees could then opt-in to this “research-focused” version of the platform. Over the course of many years, we could use the data collected on their health changes to determine what, if anything, creates real long-term change in healthy behaviors. This would create value for many players in the value chain – the startup itself would benefit from the research by continually improving its product, employees would become healthier over time and improve health outcomes, and employers could reduce costs caused by absenteeism and productivity reduction.

Were the company to re-orient itself around creating social value, rather than its current structure, I think it would see a great decline in the toxic cynicism that currently plagues its offices and be a driver for significant gains in the healthcare space.

 ^[1] Twelve Forces That Will Radically Change How Organizations Work (Bhalla, Dyrchs, and Strack, Boston Consulting Group, March 2017); https://www.bcg.com/enus/publications/2017/people-organization-strategy-twelve-forces-radically-change-organizationswork.aspx

^[2] 2018 Corporate Longevity Forecast: Creative Destruction is Accelerating (Anthony, Viguerie, Schwartz and Landeghem, Innosight, 2018); https://www.innosight.com/insight/creative-destruction/

^[3] Creating Shared Value (Porter and Kramer, Harvard Business Review, January-February 2011)

^[4] Effectiveness of activity trackers with and without incentives to increase physical activity (TRIPPA): a randomised controlled trial (Finkelstein, Eric, Benjamin A Haaland, Marcel Bilger, Aarti Sahasranaman, Robert A Sloan, Ei Ei Khaing Nang, et al. https://www.thelancet.com/journals/landia/article/PIIS2213-8587(16)30284-4/fulltext