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ОглавлениеLEARN: Establish Your Point of View
WHEN HOMEPLUS DEFINED the customer shopping experience as its edge of disruption, it invested in a six-week pilot that had remarkable success. The pilot was designed to interact with shoppers in a new way, and once an order was placed through the app, within three hours, Homeplus would have the order at the customer’s door, guaranteed. Brilliant, right? The pilot sparked a massive public reaction, and Homeplus saw a spike in sales, but consumers overwhelmingly indicated that a three-hour delivery time was too long, and the spike quickly died down after the “first impression” bubble burst.
Before you become distracted by an internal soliloquy about the state of modern society and our impatience, it’s important to understand that it was not that three hours was not an extraordinary logistical achievement, but rather that it was too long a window of time to not know when the Homeplus delivery guy would be at your home. It is understandable that the Homeplus team assumed customers would be wowed by the three-hour delivery window, and that they overlooked the effect of the length of that window on customers’ lives. This is why Homeplus’s willingness to take an intelligent and controlled risk—and actually test the concept in the market—was such a strong way to learn at its edge of disruption.
TAKE INTELLIGENT RISKS IN THE REAL WORLD
Homeplus had found a new edge of disruption—e-tailing. But it had to learn more about it to elevate its perspective and fully solve the challenge. Some investigating turned up interesting results. The company took a deep look at the market demographics for its targeted consumers. Residents of Seoul already work some of the longest hours on earth.1 When they aren’t working, they generally prefer to spend time in their neighborhood rather than at home. Given those cultural norms, three hours was too long a window; it did not offer enough flexibility to accommodate the typical lifestyle of the customers. So, after the initial six-week trial, Homeplus began tweaking the approach, looking at different delivery options and pickup stations, gradually growing its presence in the e-tailing space based on what it had learned. The original idea was ultimately a market failure in some ways, but what it taught Homeplus was invaluable. The knowledge helped Homeplus to develop a strong point of view on the future of the customer experience in buying groceries and the role Homeplus could play in that space. Thus the Homeplus leadership team invested in a relatively controlled, intelligent risk in exchange for valuable insight, without betting the farm. It shows the value of courage, optimism, and curiosity in defining a company’s edge of disruption, and the need to push further into learning about the edge for a fairly traditional industry.
If a grocer can do it in the face of massive legacy real estate and capital investments, so can you. Think about your team, your region, your function, or your company—wherever you have line of sight. What controlled risks could you take to learn how you could matter more to your internal or external customers?
You might be thinking that grocery is one thing, but your business is far more complex than selling fruit to people (and trust us, so is the grocery business). The truth is, everyone has these challenges, but exceptional companies find ways to deal with them. As we shared in the introduction to this section, from its inception GHX has been faced with a Gordian knot— so many intertwined and dependent challenges that it can feel unsolvable. But GHX stepped into the complexity of the US healthcare system, and into other geographies as well. In doing so, it has created the space for customers, competitors, suppliers, and others in the industry to come together and collaborate on solutions. By bringing these diverse market views together, GHX has been able to continually redefine its edge of disruption and solve some of the most complex problems in the cost of healthcare. GHX has done this by being willing to take intelligent risks that are grounded in a core belief in the value of co-creating with its customers and its market.
CO-CREATE WITH YOUR CUSTOMERS AND YOUR MARKET
Henry Ford reportedly once said that “coming together is a beginning; keeping together is progress; working together is success.” If you buy into that, co-creating with your customers and your market to learn about your edge of disruption and establish your point of view is the ultimate measure of success. In our experience, no one does this better than GHX. As its success confirms, engaging your customers and your market in co-creating—both in defining and solving for your edge of disruption—creates tremendous respect for your ability to bring people together around interesting challenges. And you often fast-track the sales process later on, because people are primed to buy solutions they helped to build. Working together to solve systemic problems creates more value for everyone—you, your customers, their customers, your competitors, and the industry as a whole. Starting this early by co-creating possible solutions with outsiders gives you the ability to create solutions that matter more than any that the participants can accomplish individually, and being the company that creates the space for co-creation gives you the strongest position for maximizing your value contribution.
Think back to what we’ve shared about GHX. It occupies a unique place in healthcare as a company that was created by five competitors and originally chartered to fill a very specific need. By its very founding, GHX was placed in the middle of its market, and it had to negotiate, partner, cajole, convince, and, yes, even push others in the industry to join in what was at the time a bit of an experiment in e-commerce. Over the years, this position has helped GHX to find a confident position as a convener of ideas, a place where its customers and the rest of the market can come together to co-create solutions to some of the most difficult challenges in healthcare today.
But it wasn’t always a given that GHX would have the ability to effectively co-create with its customers and its market. It had some significant obstacles to overcome, including building trust among competitors and between suppliers and buyers, protecting its neutrality in the process, and convincing the industry that GHX had the capability and the influence to effectively create a collaborative space. You may encounter some of these obstacles as well. It can be scary to go out to customers or others and actually not have answers to the big problems, but what GHX has learned is that by asking the right questions, you demonstrate your strength and the value of your involvement, and you wind up with better solutions. Knowing what questions to ask and what solutions to invite your customers and your market into solving will enhance your reputation as an organization that matters more, because you will be creating more value for the industry, for your customers, and for yourself.
Knowing what questions to ask and what solutions to invite your customers and your market into solving will enhance your reputation as an organization that matters more, because you will be creating more value for the industry, for your customers, and for yourself.
Earlier in this section we mentioned the challenges related to tracking implantables. There were plenty of questions to ask, and even more solutions to explore for this problem. As we talked with GHX’s Karen Conway, executive director, industry relations, and Margot Drees, VP of global strategy, about the evolution of the industry discussions, they highlighted three important outcomes from the process of co-creation.2 First, GHX gained traction for the development of its own part of the solution. Second, by driving industry alignment, GHX had better visibility into the larger problem and how it could help add more value. Third, and related to product development, was a significant lesson from the process of co-creating with the market. It might seem counterintuitive, but this lesson is all about going broad and ambitious for a moment, and then narrowing your focus to a solvable piece to deliver that makes progress against the bigger challenge. Let’s take a closer look.
In 2010 GHX started internally discussing the opportunity related to tracking medical devices, and in 2011 it invited its partners in the industry to begin the hard work of defining and learning about this new edge of disruption. In bringing all the right people together and fully appreciating the breadth of the problem, GHX was able to drive the creation of an exciting and creative demonstration of what “could be” for implantables. After two years of active and engaged debate, argument, consideration, and creation, and dedicated facilitation from GHX, the coalition working on the problem committed to building a demo for what they believed was possible—from an optimistic and curious position that challenged many assumptions being made in the industry about implantables.
They brought this demo to the GHX Supply Chain Summit in 2013 in the form of a site at the event set up to resemble an operating room, where they demonstrated how use of implantables in the scenario could be tracked and recorded for appropriate and timely billing, as well as to support patient notification. It was a big moment that really highlighted the success of the co-creation in defining the desired end state in a way that no single organization could have accomplished—all enabled by the discussions GHX prompted by going out to the market and saying, “Let’s solve for this.”
After the summit, stakeholders were eager to move forward on provisioning the whole solution. The insights generated from the co-creative process were enough to pique serious interest from influencers and buyers across the sector. This is just the type of access an elevated perspective creates, something we will dedicate an entire chapter to in the “Elevated Relationships” section. GHX was positioned to offer an even more powerful perspective on what could and could not be achieved in this space. But there was also a sobering realization: The “ideal” solution developed and showcased at the summit would be difficult to replicate in delivery because it required extensive technology, process, and behavior change from every single person end to end, including physicians and other highly specialized, highly trained people involved in the surgical processes. Coordinating all of this change at the same time simply would not be possible.
Armed with this refined perspective, GHX took a step back and reevaluated what would be the best edge of disruption to tackle first, now that the full problem set was defined. In the spirit of progress, in 2014 GHX decided to focus narrowly on AOM, Advanced Order Management, as a first step in solving for tracking implantables. Because the whole industry fully understood both the problem and the larger solution, solving for a piece of it became meaningful and important. Without that shared understanding, generated through the co-creation process, solving just a piece of the problem would have been out of context and potentially meaningless in advancing the industry toward the desired end state.
The result? Today AOM is improving accuracy and reducing invoice problems, and providing greater visibility than ever to implantables spend and use. It does this by automating many of the steps involved in managing implantables, from requisition to electronic purchase order creation. In the process, visibility of which implantables are being purchased and consumed becomes available. AOM tackles the first set of problems in the medical device supply chain that will move the industry toward the desired end state that everyone has co-created through the collaborative process. If GHX had not co-created with its market, it very likely could have developed a product that only solved for a tiny and potentially obsolete part of the problem. Because its leaders took the time to step back and invite others in, the solution fits today’s realities and tomorrow’s vision of an industry-wide, seamless integration of implantables management into the healthcare system, improving both costs and patient experience and safety.
Refining and learning about your understanding of your right edge of disruption is one of the underlying objectives of co-creating. You don’t want to go around giving out PowerPoint Promises. That kind of reputation will never give you the access you need to influence the marketplace. As you define your edge of disruption, remember that refining your ideas and narrowing your focus are a part of the process. Once the larger problem has been clearly articulated, achievable step solutions are legitimate ways to add more value.
As you define your edge of disruption, remember that refining your ideas and narrowing your focus are a part of the process. Once the larger problem has been clearly articulated, achievable step solutions are legitimate ways to add more value.
GHX has co-created with its market in other areas as well. In 2008, it began a similar journey to facilitate traceability of pharmaceuticals, an area with problems similar to implantables. It is very difficult to track down the ultimate recipient of a prescription, making timely recalls and patient notification incredibly hard if not impossible. More importantly, the pharmaceutical industry has issues with drugs being counterfeited, adulterated, and diverted from their proper destinations. These challenges can be addressed with a comprehensive approach to tracking and tracing pharmaceuticals, but again, no one organization could possibly own and deliver that end-to-end solution. As a result, almost twenty organizations in the industry participated in early discussions about the problem, including suppliers, providers, regulators, industry associations, and of course, GHX as the host.
Phase 1 for pharmaceuticals was a collaborative effort to develop requirements for the industry to define an Interoperable Track and Trace System that would provide a simple and accessible solution for users across the healthcare system. Phase 2 included building a prototype of a working interoperable system, designed to use prototyping to uncover additional requirements and further learning about how to handle security issues in a potential solution. The insights from Phase 2 were further used to engage with and inform regulators and policy makers, who play a very active role in healthcare. Using this iterative process, the working team was able to produce an exciting result for everyone.
The effort culminated in 2013 with the delivery of an end-to-end solution in a “live” scenario that included AbbVie, Inc., McKesson, and the Veterans Health Administration to jointly deliver an award-winning proof of concept that demonstrated full traceability on an interoperable system.3 In addition to those companies participating in the demonstration, Johnson & Johnson Health Care Systems, AmerisourceBergen, and others contributed to the development of the system. It was truly a collaborative effort from across the industry, and it provided a breakthrough moment in making what seemed impossible a reality. Out of that work, the industry is on its way to implementing real change in how pharmaceuticals are tracked, and everyone who participated in the effort has an opportunity to matter more as the solutions are designed and implemented across the industry.
Looking at these two examples, it would appear that the edge of disruption for GHX in this space isn’t just implantables or pharmaceuticals—it’s Track and Trace across the entire healthcare supply chain, or any other systemic problem that requires cross-industry collaboration! What GHX has learned about how to successfully define, develop, and execute co-created solutions in healthcare is unparalleled. The benefits to GHX of learning about the challenges it wants to solve through co-creation with its market cannot be overstated. The access these co-created activities provide is clear, especially as GHX nurtures elevated relationships (more on that in the next section).
For now, note that the co-creation approach gives GHX deep insight and knowledge to guide product development. It was also able to confirm that it was working at a meaningful edge of disruption, one that mattered more to its customers and other influencers in healthcare. Last, GHX has had an influential seat at the table for some of the most important conversations in their industry, and many clients would likely suggest that, going forward, it would be crazy to talk about something like Track and Trace without GHX in the room.
Consider that in September 2014, the US Food and Drug Administration (which regulates medical devices) published a final rule that includes the requirement for a unique device identifier to support tracking of medical devices, as well as a larger mandate related to product data. Luckily, thanks in part to GHX and its efforts to co-create a solution, the industry has already gotten a head start on solving this new challenge. Who do you think the manufacturers reach out to as they adapt to this new regulation, which is devastatingly complex to comply with in the real world? GHX may not own the end-to-end work, but having an end-to-end solution envisioned makes any individual piece more impactful and stickier—it matters more. The added value of co-creating when you are learning about your edge of disruption is that it amplifies rather than diminishes the value of the work you decide to do.
As a convener in the industry, GHX doesn’t shy away from tackling big and thorny problems, or from spending time— sometimes years—bringing the market along and crafting viable solutions that will resonate with customers. GHX’s success shows that you can’t be afraid of big problems, or of solutions that take time to evolve. In a complex industry with many challenges, there may not be many “quick and easy” solutions for the problems that matter the most, but unless someone has the courage to step out and bring their customers and the market together, those problems won’t get solved effectively.
The same is true in complex organizations. Perhaps you are trying to improve from within. Engaging people outside your team—your internal customers and your larger organization— to co-create a solution can be effective, but don’t expect results overnight. You may have to authentically be in it for the long haul to create something that matters. Homeplus was able to test a new go-to-market approach with a few weeks of a strong marketing campaign supported by a reasonably isolated technology infrastructure, and it generated results that matter. We aren’t saying it always takes years; however, don’t be afraid of the solutions that do require more effort and time.
As you work to learn about your edge of disruption, you may find you have more questions than answers. You may not even have the problem fully defined. GHX is exceptionally good at co-creating a problem definition and solutions with its customers and its market, and we recommend you consider this approach as you work to learn about your edge. Another approach is to make sure you “know what you know.” This takes a commitment to catalog and leverage your organizational knowledge and expertise to continually push forward on the edge of disruption, which helps you to learn as much as you can about the value you can create. And we haven’t found many companies that know what they know better than DPR.
If you were to meet Doug Woods at a shopping center, you would think he was a knockabout kind of guy. Someone who attends every one of his son’s football games, cooks good ribs, and appears to be in the manual trades. You certainly wouldn’t think that he, and the company he cofounded, might have built the very shopping center you were in, and more likely built the highly complex data center that the retail brands in the shopping center use to give you that special loyalty discount you crave so much. Oh, and you probably wouldn’t think that his company also may have built the high-tech science laboratory that sits next to the very field on which he likes to watch his son play football.
Doug Woods is a shockingly humble guy, which we are convinced is part of the reason that DPR (as we noted in the Introduction, he is the D in DPR) has a sustained discipline of seeking feedback, learning from its experiences, and pushing “ever forward” to matter more to its customers tomorrow than it does today.
Through our conversations with DPR, we discovered that you can often learn a tremendous amount about your edge of disruption when you look right in front of you: at your people, your suppliers, your contractors, and your customers. They all have experiences that help you to better understand your edge of disruption. It takes courage and humility to ask about those experiences, learn from them, and synthesize them to find and stay at your own edge.
The construction industry is known for its rough-and-tumble, almost cutthroat contracting processes. In the thick of deeply rooted industry assumptions about contractors, the bidding process, and how work gets done, DPR has managed to challenge everything.
DPR is a $3 billion technical construction company that was founded in 1990. For five years in a row starting in 2010, DPR ranked on Fortune’s 100 Best Companies to Work For, landing in the top ten in 2014. The Huffington Post included DPR in its list of “10 Companies College Students Should Want to Work For,” alongside companies like Google and Zappos.4 Even more astonishing, as of 2015, DPR received more than 80 percent of its business from referrals. DPR was so clearly the obvious choice for certain clients that 25 percent of them (and in some years as many as one-third) engaged DPR to deliver multimillion-dollar projects without undergoing competitive bidding. That’s definitely not the norm in DPR’s industry.
To truly appreciate DPR’s accomplishment, you need to understand a little more about the construction industry’s bidding process. Like many industries that run on competitive bidding, construction has over the years become a game where some contractors bid low to win the work and anticipate making up money in change orders later on—a game that is avidly supported by some customers who pit contractors against each other to drive down price, without regard for the actual cost of the program. The bidding process has become a deeply held assumption in the industry, making DPR’s “no-bid” awards in a highly commoditized industry unusual and impressive. Pushing back on clients’ procurement-oriented process, the company built strong, enduring, strategic partnerships to benefit clients and deliver better project outcomes.
This was one of DPR’s most valuable moves to its edge of disruption. It set out to fundamentally redefine the way GCs and clients partnered to build great things. DPR was on a one-way mission to break the traditionally adversarial nature of the industry in which the three cofounders had spent their lives, and it wanted to create a company that did it better than anyone else. For DPR, this edge consisted of three key elements. First, it specifically focuses on technical construction in partnership with customers. DPR set out from its very inception to live at the edge of building construction and strived to seek and accept only work that was technical and complex in nature. Second, it is determined to be “ever forward.” If a new and better way to do something emerges on the fringe of the industry, DPR embraces it. It believes in continual self-initiated change, improvement, learning, and advancement of standards for their own sake. For example, DPR is constantly taking new technology such as building information modeling from the edge of disruption and creating better outcomes for its clients in the process. And finally, DPR very purposefully encourages different models for contracting. The traditional bidding and contracting process itself was at times in conflict with building partnerships, and was a causal factor in the adversarial nature of the business. DPR refused to comply with the status quo and, with every opportunity over the years, continued to guide its clients, and increasingly the industry, in a more collaborative direction.
How did DPR pull that off? It’s not because DPR is the only general contractor in its space (it’s not) or because DPR has some proprietary way to build (it doesn’t). And it isn’t because Doug Woods, DPR cofounder, is a nice guy who is completely committed to his company (although he is). It’s because DPR has spent time and energy making sure it is very clear about the type of clients it wants to work with (more on this in Chapter 4), and is always looking out to the future for ways to matter more. We’re going to talk more about its approach to customers in Section Two, “Elevated Relationships.” For now, though, let’s consider how DPR knows what it knows, and how it uses that to challenge its assumptions about how work gets done.
DPR purposefully and methodically captures knowledge inside and outside the organization for subsequent use. It includes everyone in its collection process, even its customers and subcontractors. Its ongoing push to learn keeps the company continually on the edge of disruption in its industry when it comes to customer satisfaction, and it supports DPR’s unique approach to project delivery and its overall business. How? Because it always works to understand what works and what doesn’t, and that stops it from making assumptions about how work gets done. At the same time, its processes are visible to its customers, giving buyers the confidence to know that DPR is using the most relevant processes and techniques to build great buildings.
You can’t learn from your expertise if you don’t know what it is or where it exists inside your organization.
Think about it for a minute. You can’t learn from your expertise if you don’t know what it is or where it exists inside your organization. DPR is obsessed with cataloging and registering everything it knows. An obvious way DPR catalogs knowledge is simply by doing more than most companies do to solicit client impressions and perceptions. When we visited DPR’s office in Redwood City, California, to interview senior leaders, everyone we met seemed to be either coming out of a feedback session or heading into one. One executive was conducting a customer satisfaction survey with his client on a recent project. When he asked the client to rate its project compared to previous experiences, the client said that DPR was not only the best GC experience he had ever had, but the best customer service experience, period. Not something you’d expect to hear about a construction company.
Customer feedback sessions are only one of a number of techniques DPR deploys. Another technique, called craft sessions, enables DPR to gather knowledge from employees and subcontractors on an ongoing basis. “Craft” is the specific building trade engaged to help build projects. To ensure that DPR employees and subcontractors are constantly improving, the company facilitates regular structured conversations to share best practices. In one session, for instance, a tradesman shared how he had discovered a new and faster way to estimate and install drywall, shaving 10 percent off the scheduled time while reducing waste. Another clued the group in to a newly discovered green product that had performed even better than less environmentally friendly products. At DPR, managers facilitate these calls in a structured way that verges on scientific, expecting participants to contribute and learn. Because of the formal nature of this collaborative learning, we might best think of these calls not just as standard meetings but as true “learning labs.”
DPR also gathers knowledge internally through its Global Learning Group, charged with formal learning and development. As Cari Williams, DPR’s head of people practices, told us, “Who we build is as important as what we build.”5 Rather than simply buying content and hiring trainers from outside the company, DPR challenges its people to develop their own content by taking stock of what they already know.
DPR didn’t overlook the job site as a place for capturing knowledge. It launched Opportunity-For-Improvement (OFI) programs and charged every job site with seeking out either best practices or new ideas for improving everything from record keeping to tool use; employees recorded their insights on the OFI cards. Although the cards themselves hardly broke new ground, the intensity with which DPR deployed them did. The company eagerly took action in response to OFI suggestions, showing near-religious discipline in sharing the best of them across the company. Then in 2009, recognizing the difficulties that an organization of DPR’s size has in scaling ideas, DPR created an Innovation Support Team whose sole responsibility was to take OFI-style cards and spread the insights they contained. The Management Committee appointed Jim Washburn, DPR employee number nine, to head up the Innovation Support Team, and allocated it significant financial and human resources, including implementing software to capture and track ideas from the OFI suggestions and other sources.
