What Cheetos can teach us about better decision making in the age of consumerism David Soderberg Director, Consumer Insights, Spectrum Health System Holly Sullivan Director, Strategic Partnerships, Spectrum Health System The opinions expressed are those of the presenter and do not necessarily state or reflect the views of SHSMD or the AHA. 2017 Society for Healthcare Strategy & Market Development
This is the start of my journey...
CPG* is great at understanding customers, the marketplace, & analytics Because they HAVE to be! 85% of new products FAILin year one *Consumer Packaged Goods
Healthcare isn t great at decision making it has historically lacked incentives SUPPLY VS & DEMAND
The state of healthcare in the US today What if restaurants billed like hospitals?
If you were to purchase any of the following, what would be your expectations in terms of experience? Chest CT (with contrast) ER Visit Tonsillectomy Cardiac Catheter
Patients will finally be forced to act like Consumers An estimated 46% of covered workers have deductibles of at least $1,000, up from only 10% in 2006. 3
VC fundraising in healthcare continues to grow: $5 billion already raised in 1H 2017
There are two broad themes we can steal from CPG 1. Tools for Innovation and Growth Innovation process Segmentation Household panel metrics Consumer idea validation and optimization testing 2. Culture Storytelling Data science experimentation Biasfor action Agile sprints
The key to change is to start with the consumer first not Provider need but Consumer need.
In CPG companies, successful innovation follows a six-step process
CPG Step 1 Choose your target market and ensure it is aligned with strategy 12
CPG Step 1 You ve chosen your target customer, what problem are you trying to solve? Revenue $/unit Volume Has your price increased? Has your case mix changed? Penetration Frequency Are you seeing more people? Or seeing the people you already have more often? 13
HC Step 1 Solve for symptoms, no time spent discovering problem and root causes 14
CPG Step 2 Spend time understanding your target market to uncover unmet needs 15
HC Step 2 Make assumptions based on internal expertise 16
CPG & HC Step 3 Ideate! 17
Even with the best of intentions, you can lose a lot in translation between different teams internally. This is why testing ideas with customers is so important.
CPG Step 4 Validate your idea with customers Field a survey and ask ~150-200 people about your idea! Introducing New <Product Name> New <Product Name> is the first snack to <description of consumer benefit> <Product Name> is able to deliver <benefit> because it is made with <reason to believe the benefit> Would they buy it? Is it unique? What do they like about it? What do they dislike about it? Don t forget to add either a control cell or multiple versions of the idea in the same format responses to one idea in isolation don t mean much. Available in: <Flavor> <Flavor> <Flavor> 19
HC Step 4 Validate your idea with customers Introducing STR!VE is a new offering from Spectrum Health that provides primary care infused with wellness through a membership based model. STRIVE offers a new and differentiated member experienceand relationship with the provider, focused on prevention not intervention. Benefits: Access designed about you 1:1 provider/coach relationship Respect your time & money Personalized wellness planning and education Community wellness partners Offered at $159/yr membership 20
CPG Step 5 Optimize the important parts and test them with customers Packaging Structure Brand Name Logo Design Flavors and Pack Design Product Taste Price 21
HC Step 5 Optimize the important parts and test them with customers Brand Name Price Services offered Wellness Partners Wellness Classes Convenience Factors 22
Step 6 Test one last time with the fully optimized version then execute! 23
Step 6 Test with the fully optimized version then continuously listen to feedback and improve! 24
There are two broad themes we can steal from CPG 1. Tools for Innovation and Growth Innovation Process Segmentation Household Panel metrics Consumer Idea Validation and Optimization Testing 2. Culture Storytelling Data Science experimentation Biasfor action Agile Sprints
All decisions, no matter how rational they seem, are based on emotion. Storytelling is the best way to infuse emotion into a message and to help your ideas gain traction internally. 26
Our traditional approach: Big fat business plans that sit on the shelf 27
Our emerging approach: storytelling and visualization 28
THERE IS NO INNOVATION WITHOUT DISCOVERY 29
Bias for action 30
Bias for action 7 MONTHS 8 MONTHS October 2016 Final Business Plan Approved July 2017 Opening June 2016 Concept November 2016 First Team Meeting 15 MONTHS 31
Using Agile Sprints helped deliver a new portal & 30+ new dashboards in < 3 months 32 www.trello.com
What can Cheetos tell us? We need to discard traditional thinking and the language that keeps us stuck: It has always successfully worked this way We can be discernably superior for the long-term My market is different than adjacent ones More analysis will yield a better answer We are too [big/ important/ successful] to fail
Key Takeaways 1. Frameworks CPG six-step Innovation Process Gallup Employee Engagement Model 2. Applying consumer insights to healthcare 3. Free software tool Trello.com
Questions? David Soderberg David.soderberg@spectrumhealth.org Holly Sullivan Holly.sullivan@spectrumhealth.org Please be sure to complete the session evaluation on the mobile app! The opinions expressed are those of the presenter and do not necessarily state or reflect the views of SHSMD or the AHA. 2017 Society for Healthcare Strategy & Market Development