Raising Cohesion from a Mob of Direction-less PartsTalk Given at The RAND Corporation, October 11, 2012

a new grammar of strategy®

Health System Innovation

- Strategy and Management at a System Level-Singer, John. "What Strategy is Not." MIT Sloan Management Review. 49.2 (2008): 96.

-Singer, John. "Strategically Thinking About the Subject of Strategy." Business Strategy

Series. 9.4 (2008): 211-212.

-Singer, John. "Framing Brand Management for Marketing Ecosystems." Journal of

Business Strategy. 27.5 (2006): 50-57.

- Ecosystem-Centered Business Models-Singer, John. "Systems Marketing for the Information Age." MIT Sloan Management

Review. 48.1 (2006): 96-97.

-Singer, John. "Systems Marketing: A New Operating Model for Pharmaceutical

Marketing." Journal of Consumer Behaviour. 4.6 (2005): 480-495.

-Parise, Salvatore, Patricia Guinan, and Bruce Weinberg. "The Secrets of Marketing in a

Web 2.0 World." Wall Street Journal 15 Dec. 2008: B2.

-Singer, J.G. (2009). Ecosystem-centered business strategy. Proceedings of the 3rd IEEE

International Conference on Digital Ecosystems and Technologies (pp. 686-691). Istanbul:

IEEE. 0.1109/DEST.2009.5276680

www.bluespoonconsulting.com

Framework Research Over Seven Years

TECHNOLOGY

BEGETS TECHNOLOGY

BEGETS TECHNOLOGY

BEGETS TECHNOLOGY

GLOBALIZATION ERASES BOUNDARIES

Future of

Complexity and

Information Glut

Old Era

New Era

?

Fragmentation Getting Worse, Not Better

A Marketing Challenge, Not a Technical One

“Despite many waves of debate and piecemeal reforms,

the U.S. health care system remains largely the same as it

was decades ago. We have seen no convincing approach

to changing the unsustainable trajectory of the system,

much less to offsetting the rising costs of an aging

population and new medical advances…

…The big question is whether we can move beyond a

reactive and piecemeal approach to a true national health

care strategy centered on value. This undertaking is

complex, but the only real solution is to align everyone in

the system around a common goal: doing what's right for

patients.”

A Strategy for Health Care Reform -- Toward a Value-Based SystemMichael E. Porter, Ph.D.N Engl J Med 2009; 361:109-112

Strategy and Management at a System Level:Strategy That Raises Cohesion from Direction-less Parts

“Shock French price cuts for effective drugs”

“Philippines Seeks Second Round of 50 Percent Drug Price Cuts”

“China plans 40% price cuts on key drugs”

“Japan’s drug pricingreform will trigger industryreorganization”

“Obama seeks $135Bdrug price cuts over 10 years”

“Brazil pushes Merck,Pfizer to cut drug costs”

“Greek drug prices cut byan average 21.5 percent”

“Germany cuts drug industry’spricing power”

“New Indian drug price cutsof 10% to 70%”

A Structurally-Different World

Provider

Partner

Partner

Partner

Market Market

Market

Platform

Solution Shared

Marketspace

“Ecosystem”

Product

“Isolation”

Platform Market

Conventional View of Market Strategy System-Level View

Health Ecosystem Design

Opportunity Space from Market Integration

Disclaimer: Blue Spoon Consulting does not have a financial relationship with any company mentioned.

Brand names are used for illustrative purposes only.

New Value Propositions (and Sustainable Growth Models)

Part

VS.

Part Re-positioned

in New System for Health

a new grammar of strategy®

Pfizer

General Mills

Verizon

Microsoft

Design Management Team:Shared Vision, Planning,

and Implementation Strategy

Ecosystem Management & Marketspace Awareness

Collaborative Commerce Network

< 25 users

Joint Data Network< 500 users

Information & Sensor Network

> 1000 users

Information

Timeliness:

MonthsWeeks

Days

Keystone Players

Niche Players

Ecosystem Design & Coordination

perpetual innovation aligned within

ecosystem boundaries

World Health Organization

International Council for Science

A Closed Circuit ofSelf-Making and Self-Control

Capable of Generating

Open-Ended Growth.

A New System of Health (Obesity/Diabetes):

Raising Cohesion from a Mob of Directionless Parts

Steady Exchange of Information

Institutional Components That Set System-Level Rules of Play: Government, Public Health, Science Mediators

(E.g., Amazon.com, McKesson, Yahoo, Health Delivery Systems, Developer Community)

Age-adjusted Percentage of U.S. Adults Who Had Diagnosed Diabetes

2007

Source: CDC’s Division of Diabetes Translation.

National Diabetes Surveillance System (available at: http://www.cdc.gov/diabetes/statistics)

Regionalized Market Approach:Design and Deploy Multiple Health Ecosystems for Diabetes

Customized for Regions, Integrated Delivery Networks, Centers of Excellence, Accounts

System-Level Performance Measures- Health outcomes (population level)

- Resource utilization (direct and indirect)

- Economic performance (state and country)

- Market dynamics (ecosystem components)

- Emergence (innovation and ideas)

A Globally Superior StandardEconomic Rewards Go to Those Able to Play

the System as a Unified Whole

-Strategy and Management

at a System Level. The future of

social system design is in devising

reliable processes to birth

self-organizing structures.

-Sustainable Growth Models. Keep

adding players to the system -- the

more they are connected, the more

valuable the ecosystem becomes.

-Don!t Aim for Optimization.

Aim for good enough. Social systems

are in a constant state of flux and

reinvention.

There is No Central “I” to

Appeal to: No Beginning,

No Center, No End…

A New Way of Steering: The Logic of the Internet