You're a Technology Company, So Act Like One
I've spent over 20 years in medical and healthcare technology. And the thing that's been evident for much of that time is that medical technology companies don't see themselves as technology companies first; the larger players see themselves as gate keepers of tradition, partnered with health care providers and institutions. That might have been a noble undertaking at one time: healthcare providers and their institutions used to be the cathedrals of medicine, and medical technology companies ensured that they had the tools they were asking for to maintain the standard of care they wanted to meet.
But that time is LONG past. Hungry entrepreneurs and technology companies view themselves first as technology companies, and look for opportunities to disrupt the fragile status quo. Technology, they reason, can be applied to anything, so why now take on the biggest opportunity for disruption of them all? Health care is smack in the middle of bullseye for these folks.
It makes the recent report from Ernst and Young all the more irritating to read: Medtech isn't spending enough on R&D to keep up with the changing face of health care; a change that is being led by predominantly technology-first companies.
There's a lot of good stuff to read in there, but the money quote for me is this: " Medtechs continue to use conventional strategies, such as buybacks and tuck-in acquisitions, to create scale in must-win therapeutic areas to grow. However, as the shift of power from providers and payers to patients and consumers continues, this business-as-usual approach no longer works."
This is more charitable than it needs to be. Business-as-usual hasn't really worked in about 10 years, when you saw growth the medtech sector shrink from double-digit to single-digit annual rates. And why? Enabling technology and a much more favorable distribution of knowhow, along with changing attitudes at all levels of health care (including regulators) meant that a.) the traditional barriers to entry lowered significantly and b.) there was a generation of technology entrepreneurs who wanted a bigger challenge, and they saw health care as exactly what they were looking for.
It's also why the recent trends of medtech M&A being "red hot" or some such are also frustrating. Most of those deals are tuck-ins or mergers between complimentary companies. Very few are large firms taking on interesting technology solutions and putting their muscle behind expanding them. There are a LOT of missed opportunities on the table.
Everyone can be a health care company now, which frankly isn't an unalloyed good thing. Technology executives without a background in medicine and an attitude of "move fast and break things" have a real chance to do some damage, which will also impact the large firms by reducing interest in new, innovative solutions from burned consumers. So, what do you do?
1.) Know where you are, and what you've got lurking in the basement. Chances are, if you're an established firm with seasoned professionals, the future of your company is already at least partly employed by you. Start elevating information from within, and allow brutal honesty from the people who know your business the best.
2.) Know where the market is headed. Not just your immediate competitors, because they have all the same problem you have. Know what forces outside of your normal purview are lighting fires outside the gate.
3.) Know where you want to go. This is key, and not as easy as you might think. In the context of a digital camera revolution, Kodak wanted to sell paper and chemicals because that's what they knew how to do. Now, when I teach at Universities, no one knows what that "K" logo is from.
4.) Know what steps to take, in what order for YOU to get there. You are what you are. So an honest assessment of what you need to do next and then after that is in order. You might need to wreck some things, but then that becomes the base material to build something new to get you where you want to go.
Everyone's a health care company now, and everyone is either a disruptor, or about to be disrupted. If you're worried about the future, you should be, but the best way to predict the future is to create it. And maybe, you could use a little help. Book a free one-hour introduction with TWC today!