What Is Disruptive Innovation and Why You Can't Afford to Ignore It

Qmed Staff

October 16, 2015

6 Min Read
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For those of us in the medical device industry, attempting to predict when and where disruptive innovation will happen, can be baffling. Here are some pointers on how to identify what it is and how to actually create disruptive medical products.

Craig Scherer

When we look back at the history of the medical device industry, the 1990s brought the computerization of healthcare. The 2000s were all about "creating an innovation culture." Today, all we seem to hear about is disruptive technology and innovation. Over the past two decades, the medical industry has experienced healthy revenue and margin growth, driven by its ability to provide improved patient outcomes through the application of new technologies. Dramatic and powerful change, however, is already upon us. Cost continues to be a major driver and trying to predict where these cost influencers will come from and what they will look like even a few years down the road can be a real challenge. Renowned 20th century economist, John Kenneth Galbraith, believed that "there are two kinds of forecasters: those who don't know, and those who don't know they don't know.'' For medical device industry professionals, attempting to predict when and where disruptive innovation will happen, seems to put us all in that second category. As device developers, we have to accept the inevitability of this significant impact.

It's Not so Black and White

From published articles, to conference topics the sense of urgency to focus on disruptive innovation is everywhere. Does this mean that "regular ol' innovation" is less desirable? Not really.

This need to categorize a technology or new device as disruptive is really quite artificial and in fact can be damaging to a company's business goals. I've witnessed development teams abandon new concepts and products simply because they labeled as "not disruptive enough." The tragedy here is that many of these new device solutions actually met the company's businesses goals and would have been perfect additions to their offerings. The truth is that disruptive innovation is only identified as disruptive after it happens, when all variables have aligned correctly and there is a significant response in the market.

In actuality, disruptive innovation and sustaining innovation are really the two extremes on either end of the innovation continuum. There are all kinds of appropriate innovation happening across the full spectrum of this continuum.

Keeping Pace with Change

Because there are so many changes happening today in the medical device industry and the larger healthcare ecosystem, companies must constantly monitor this dynamic landscape to keep abreast of the "new normal" and respond appropriately.

  • Evolving Healthcare Delivery Models. Emerging environments like remote surgery centers and walk-in clinics have a tremendous impact on device development, as stakeholder needs within these environments are quite different than the needs within more controlled hospital environments. Emerging medical specialties such as nurse practitioners, and entities such as care management organizations also require developers to recognize the clear differences between these specialized clinical needs and those of more traditional users. mHealth and cloud-based solutions create a whole new set of clinician and patient requirements. Perhaps the most significant trend in healthcare delivery is to create lower cost, end-to-end solutions focused on total cost of care. 

  • Communication between Device Makers and Clinicians. As developers, it is critically important to understand our target users in the environment of use in order to ensure that our technologies are appropriate for the intended clinical users. Influences including purchasing organizations, device review boards, and the Sunshine Act have all made communication with clinical end users a torturous path. This makes the development of products that clinical users want and need and that are safe and efficacious an incredible challenge for device designers. 

  • Emerging Opportunities. Cost reduction always seems to always be the primary goal of every new program. However, in the case of emerging markets it's not enough to simply make a lower cost version of a product marketed to other global markets. It is also critical for developers to take into account the regional and cultural drivers and context of use to drive appropriate solutions for these high potential markets. There is a largely underserved market that exists in lower income groups and emerging markets. Just one proof point of this dynamic is in the Sub-Saharan African country of Tanzania. Substantial opportunity exists to leverage mobile technology to improve health outcomes. On October 14, the Healthy Pregnancy, Healthy Baby SMS Service announced the 1 millionth sign-up for its healthcare app in Tanzania.

Creating a Plan

Because disruptive innovation often begins with disruptive technology, we must first create a plan to identify and maximize core technologies to implement solutions that best meet all stakeholders' needs.

Here are some core components to help create a sound innovation plan:

  • Establish a culture that recognizes innovation and plans for disruption--move past your sacred cows, encouragedissent and reward disruptive thinking.

  • Create a systematic approach to "watch dogging" technology--partner with think-tanks, universities, incubators, and accelerators, and look inside and outside the med device industry.

  • Design a formal technology vetting system--understand the cost of acquisition and development, and confirm viability of the technology at a production scale.

  • Remember that disruptive innovation doesn't need to be so disruptive--research the needs of each group and make an effort to fit within their current behaviors, expectations, and workflows.

Embracing Disruption

Innovations designed to accommodate these disruptions happening at the macro level include some pretty amazing emerging technologies. Breakthroughs like digestible and implantable sensors, robotic surgery and 3-D printing of biological materials are enabling some pretty amazing medical procedures. On the digital side, Apple's ResearchKit, Google's much anticipated next-gen Google Glass, the Internet of Things and a score of other digital technologies will transform medical treatment and development of healthcare delivery systems.

The necessity to create a plan to research, monitor, and ultimately embrace disruption has never been greater. For every disruptive winner there is a least one if not several losers. This is not a new concept, the locomotive displaced the stagecoach, the telephone replaced the telegraph, digital photography replaced film, VHS tapes were replaced by DVDs and in turn by streaming video, and so on. The key to all of these disruptions were that the systems and infrastructure had to be in place to make them work. Without the PC, digital photography would be useless. Without broadband, there is no streaming video.

As the rate of disruption continues to increase, the key to success will be to respond with agility and purpose. Don't be on the lookout for disruptive innovation--create disruption by reacting rapidly to these constantly changing external influencers. Henry Ford said it best when he said: "the airplane takes off against the wind, not with it."

Craig Scherer is the co-founder and senior partner of Insight Product Development (Chicago).

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