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GeTTInG STARTeD: tHe patH to InnoVatIonTo become more innovative, organizations need passionate, supportive leader-

ship; an environment that nurtures a culture of creativity; and a systematicprocess that allows employees to generate ideas, and test and share their results.

You can’t do today’s job with yesterday’smethods and still be in business tomor-row.” The old truism sums up the chal-lenge for the hospital field as it prepares

for a dramatic change in the care delivery system.The shift to bundled payments and value-basedcare will require health care organizations tothink outside the box to develop new businesslines and ways of providing care.

Innovation is more important than ever ashospitals and health systems move into unchartedterritory. “We are in a time of tremendous changeand we are not taking full advantage of the inno-vations and ideas of people within our organiza-tions,” says Naomi Fried, chief innovation officerfor Children’s Hospital Boston. “Innovation is anecessity, not a luxury.”

That sentiment is echoed by PhilipNewbold, president and CEO of MemorialHospital & Health System in South Bend, Ind.

“We have no way to invest in the future if wedon’t invest in innovation,” he says. Newboldadvocates elevating innovation to the level of anorganizational competency. “Innovation is themost important competency of the future,” hesays. “Like quality improvement was 20 years ago,innovation is a competency; we’ll have to spendsome time learning it and practicing it.”

The place to start is at the top. Innovativeorganizations require passionate leadership thatsets the vision for the organization and allocatesthe necessary resources to facilitate innovationfrom within, asserts William Dwyer, a health carestrategist and futurist. The ability to assemble theright team to inspire and support the effort is akey characteristic of an innovative leader, he says.Innovative leaders also recognize and take smartrisks. “They are not always the market innovator,but a fast follower,” Dwyer says. “They also havethe ability to listen to the market and see change

as an opportunity and not as a threat.”Becoming an innovative organization requires

significant culture change. “The culture must beproactive and open to risk-taking,” Newbold says.“One way to change the culture is to have everyoneinvolved.” That includes educating employeesabout innovation and the organization’s vision. Butthat’s only the beginning. “If an organizationspends the effort on building the competency ofinnovation, it needs to build an environment thatallows it to flourish,” says Andrew Garman, CEOof the National Center for Healthcare Leadership.Among other things, organizations should haveprocesses in place to encourage the formation ofteams that will develop, test and share ideas. It’sequally important to recognize and reward individ-uals and teams for their creative efforts.

Success in the future may require a level ofdisruptive innovation, turning the health caredelivery model on its head. “Disruptive innovationcan be quite intimidating, doing things that chal-lenge the success of existing business lines and thestatus quo,” says Jason Hwang, M.D., executivedirector of health care at the Innosight Institute, aninnovation think tank in Mountain View, Calif.,and co-author of The Innovator’s Prescription: ADisruptive Solution for Health Care. “Hospitals andhealth systems essentially must create their owncompetition in-house,” Hwang says, and thatincludes developing new delivery systems to keeppatients out of the hospital and sacrificing immedi-ate profits for more down the line. “If you don’t doit, someone else will,” he cautions.

It’s important to remember that changetakes time and innovative organizations aren’t cre-ated overnight. “You have to stay with this for along, long time,” says Newbold. “We’ve been atthis for eight or nine years and we are just gettingtraction.” •

TIpS: WHat It taKeS to be SuCCeSSFulIn their book Wake Up and Smell the Innovation, newbold and Stoverhighlight the key aspects of innovation necessary for organizations to be successful. They were adapted from innovation guru Larry Keeley of Monitor-Doblin, an innovation strategy firm based in Chicago. newbold and Stover write: “essentially, innovation must be a competency that becomes an integral part of your organization’s culture. The process of making it so requires courage.”

Source: H&HN research, 2012

HOW WE DID IT: This gatefold was produced byresearching published studiesand articles and conducting interviews with hospital andindustry executives.

Research: Lee Ann Jarousse,ljarousse@healthforum.com

Design: Chuck Lazar,clazar@healthforum.com

H O S P I T A L S & H E A L T H N E T W O R K S

your neW CoreCompetenCy

praCtICeThe practice of innovation can take multiple forms. Some

organizations may choose to establish formal innovation centers and hire full-time employees to drive it within the organization.

The title of chief innovation officer or chief transformation officer isbecoming more prevalent in hospitals and health systems. A process

also should be in place to encourage innovation at the front line toenhance the care process as well as the customer experience.Separately, organizations may choose to develop a formalized

process to explore new business models and services that will differentiate the organization in the future.

leaDHospital executives are the drivers of innovation

within their organizations. It’s up to the CEO to assemble the right team and create an environment that fosters innovation and

raises the concept to the level of a core organizational competency. A good place to start is with an organizational assessment to

determine the hospital or health system’s innovation capabilities and employee perception of innovation. By building and supporting

this kind of culture, leaders can enable innovative thinking and practice among all levels of the organization.

planTo fully support innovation, organizations need

a system in place that encourages creative thinking, provides a venue to test new ideas and a means to accelerate their

dissemination. Innovation policies at the board level solidify the organization’s commitment. The process should make it easier for all

employees to discuss and develop ideas and see them through tofruition. That includes funding specifically for innovative projects.

Education and training is also critical. It’s not necessary to reinvent the wheel. Outside experts can be brought in to share their

experiences, and a number of successful models already are in place within the hospital field. Source: Wake Up and Smell the Innovation,

by philip A. newbold and Diane S. Stover, 2010

FoUR TYpeS: areaS oF InnoVatIon at WorKThere are different types of innovation and each has an important role in organizational strategy and achievement. Here are fourtypes that should be part of an organization’s efforts to innovate. phil newbold, president and Ceo of Memorial Health System, SouthBend, Ind., and Diane Serbin Stover, chief marketing and innovation officer, outline the first three in their book Wake Up and Smellthe Innovation, and assign percentages as to how much the specific type of innovation should make up the organization’s strategy.

SuStaInIng | Sustaining innovations address existing products and processes to preserve or

extend their life span. Sustaining innovation is common in health care as organizations consistently seek

ways to improve quality of care and eliminate unnecessary expenses. Implementation of Lean or Six

Sigma are examples of sustaining innovations. These projects should comprise 70 percent of innovation

work within the organization.

tranSFormatIonal | Transformational innovations are more complex and may involve combin-

ing products and services to differentiate them from competitors. outpatient Lasik surgery is an example

of transformational innovation. These projects should comprise 20 percent of an organization’s efforts.

reVolutIonary | Revolutionary innovations should comprise 10 percent of the organization’s

innovation work. These projects involve significant organizational change and have substantial economic

impact and often address customer preference. Freestanding surgical and ambulatory care centers are

examples of revolutionary innovation.

DISruptIVe | Disruptive innovation involves turning current practices completely upside down.

Technology, such as the development of the electronic health record, can have a disruptive effect on the

health care delivery system. The development of medical homes and retail health clinics are other exam-

ples of disruptive innovation in health care. Sources: Wake Up and Smell the Innovation, by philip A. newbold and Diane S. Stover, 2010, and H&HN Research, 2012

70%

20%

10%

WIlD CarD

CHIlDren’S HoSpItal | BOSTON

Children’s Hospital Boston launched its Innovation Acceleration Program in2010 to support innovation at the grassroots level, offering both formal andinformal resources. Chief Innovation Officer Naomi Fried describes her respon-sibilities in overseeing the provision of resources, supporting the organization’sinnovation strategy and identifying unmet innovation opportunities. “Our lead-ership had the foresight to recognize that we weren’t doing as much clinicalinnovation as we should,” Fried says. “Our goal is to enhance the culture and toprovide tangible results and support.” Among other things, CHB’sInnovestment Grants provide seed funding to support clinical innovation. AFastTrack Innovation in Technology award offers software developmentresources. A team of dedicated software developers works on short projectswith innovators to develop a pilot or prototype of a software program.•

HealtHeaSt Care SyStem | ST. PAUL, MINN.

HealthEast believes innovation is an important part of work within the organization.To that end, the first hour of new-employee orientation is focused on the organiza-tion’s vision and how innovation is part of everyone’s job to make the organizationa better place to work and to receive care. “We really push innovation; it has to be apart of our culture,” says Tom Schmitt, vice president and CEO, Woodwinds HealthCampus. Small improvement teams are formed to identify solutions to problems atthe grassroots level and spread the results across the organization. Innovation is oftencounter to how some executives and managers are accustomed to leading. “It’s a typeof servant leadership, stepping back and supporting front-line staff in their work,”Schmitt says. “That will create more sustainable solutions.”• •Ca

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CompetenCyInnovation must become a competency that is practiced and supportedthroughout the organization.Leadership support and ongoing education are essential to raising innovationto the competency level.

CultureInnovation must be ingrained in theorganization’s culture. Again, leader-ship support and the allocation ofresources are important factors in developing and sustaining a culture ofinnovation. It’s also important to estab-lish a policy and formal mechanisms tofoster, test, spread and celebrate inno-vation throughout the organization. All employees should be encouraged toparticipate in innovation programs.

CourageInnovation requires risk, and risk takes courage. Innovation challenges the status quo and mayencounter resistance within theorganization. not every idea will succeed. Senior leaders mustacknowledge failure while alsochampioning the effort and encour-aging innovation to proceed.

PRESSURE PROVENLEADERS

YOUR

FROM K2 TO NEW YORK TO FLAGSTAFF TO YOU.

INTERIM LEADERPRESSURE PROVEN

B. E. Smith partners with you to select a proven leader who can handle the ups and downs of the healthcare industry. Our proven interim and long-term executive placement solutions help you transition through change to build toward sustainable success. And if you have other obstacles to climb, our consulting expertise can help you rise above them, too.

Call 877-802-4593 or visit BESmith.com.

I N T E R I M L E A D E R S H I P | E X E C U T I V E S E A R C H | C O N S U L T I N G S O L U T I O N SI N T E R I M L E A D E R S H I P | E X E C U T I V E S E A R C H | C O N S U L T I N G S O L U T I O N S

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This gatefold is sponsored by: