What Blockbuster has to do with long-term care
Recently, a colleague of mine overheard a long-term care provider ask the following question of a technology enthusiast at an event: “so, what technology should I purchase to be innovative in my business?”
Oh dear. No wonder the senior living industry is gun-shy around technology overhauls, if these are the questions that are driving adoption.
Let's start at the beginning and be very, very clear: innovation is not technology. Innovation is a mindset, a willingness to take a risk and change the way you run your business. In other words, a company doesn't innovate by adding technology on top of existing business processes — it innovates by changing those business processes, often with the help of technology.
The concept of disruptive innovation probably isn't new to many of this blog's readers. A recent Harvard Business Review article said that disruptive innovations are like missiles launched at your business. We've all watched these missiles annihilate their targets and bring down some of the biggest, most well-respected companies around: think Blockbuster. Tower Records. Borders. Polaroid.
And across the worlds of music retail, banking, photography, the story has been the same. Dominant players spent their time and money meeting the needs of the more profitable, high-end customers. In the meantime, disruptive innovations snuck up from below to address the lower end of the market, and over time, these products improved and became preferred by the majority of the market, pushing the legacy companies out of business.
The companies that survive market disruptions are those that learn how to disrupt themselves, while also finding a way to maintain profitability of legacy operations until they are obsolete. Consider IBM. Personal computers were growing to replace IBM's legacy business, the mainframe computer. So IBM diversified its business, creating an e-business consulting arm, while still supporting its legacy operation – the mainframe computer – for use in the most complex computing applications.
So, what does this mean for you and your peers in the long-term care industry? The market forces in senior living are changing rapidly. The coming generation of older adults is radically different from past generations. This generation is demanding, tech-savvy, and fiercely independent, yet often sicker. A vast majority will want to age in their own homes. And many of them will have a much more active and empowered family caregiver in their lives, who won't be left on the periphery of care anymore.
In sum, that's a lot of change coming your way. Yet the business model of today's standard long-term care provider does not embrace the needs of this new generation. You, the provider, need to start thinking like a start-up. Don't let the disruptive innovation sneak in from below, while you're only focused on improving your legacy products and services.
Here's where we come to possibility thinking. Business strategy has traditionally been an analytic process revolving around constraints and limitations. But true innovation requires seeing new possibilities not identified before. Throw off the shackles of your legacy operations, and start thinking about your future customers and how you might serve them in a radically new way. Because that, not technology, is the true revolution.
Shannon McIntyre Hooper is the director of corporate communications for Intel-GE Care Innovations.