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Rachel Corn

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South Street Strategy Guest Blog: Healthcare Reform: Who's Looking out for the Small Guy?

Posted by Rachel Corn

Tue, Jul 30, 2013

 

stethoscopeIn early 2012 we did some research on healthcare reform predictions. At the time, there was a pretty strong consensus that large groups, most of which were already insured, would experience little impact. The uncertainty lay around small businesses (<100 employees) offer rates: the Robert Wood Johnson Foundation predicted pretty much neutral effect, but RAND predicted an overall increase in offerings. So where do we stand now?We have found most analysts are pretty shy when it comes to forecasting new numbers. For the overall market (all sizes) the International Foundation of Employee Benefit Plans (IFEBP) reports that 94% of employers are definitely or very likely to continue employer-sponsored health care. That’s a pretty good indication of no major drop outs compared to 2012, when only 46% were certain that they would continue sponsorship.

But expanded health insurance coverage will come at a cost, and small employers particularly are vulnerable. As a result, they are implementing cost control tactics: encouraging healthy behaviors and wise usage that reduces costs, entering private health exchanges, offering self-insurance for small groups, and reducing the number of full timers.

For insurance companies, reform opens up new opportunities to serve the small business market. Small businesses today are treated as a uniform group with similar needs. As reform unfolds, the market will fragment into: those who truly believe in providing insurance to their employees and will continue to do so, those who cannot afford to pay increased premiums but are still interested, and those who simply opt to exit the market. Smart and creative insurers will look for ways to serve the middle segment with unique offerings, whether those are self-insurance, stripped down plans, voluntary products, or others. The insurers that will move first by matching deep customer knowledge with creativity and innovation will have a leg up in this rapidly evolving market.

Rachel is a Director at  South Street Strategy Group, she specializes in finding growth opportunities in new market segments, new products and businesses and innovative business models.

South Street Strategy Group, an independent sister company of Chadwick Martin South Street Strategy GroupBailey, integrates the best of strategy consulting and marketing science to develop better growth and value delivery strategies. 

 

Topics: South Street Strategy Group, strategy consulting, healthcare research, health insurance research

Innovating Inside the Box

Posted by Rachel Corn

Tue, Jul 02, 2013

thinking outside the boxDrew Boyd and Jacob Goldenberg want you to Think Inside the Box.

Their recent article in the Wall Street Journal encapsulates the increasingly jaded perceptions of innovation in the corporate world—where “brainstorm has become a byword for tedium and frustration,” and innovators are told to “go wild making analogies to things that have nothing to do with your product or business.”Ouch.

But it’s true. Innovation has suffered from a bad reputation of unfocused creative sessions that, in the end, provide little value to solving a real business problem. The answer? We at South Street have long believed that efficient and effective innovation requires focus. Focus on solving a pressing problem which a business owner experiences…focus on how to get to an underserved but attractive customer segment… focus on ways to extract complexities out of the system.

It may sound counterintuitive, but in our work we advocate that constraints are a necessary element to fuel innovation and creativity.

So what techniques does focused innovation employ? Here are a few that we’ve found applicable across industries and clients.

  • Lightening up. Boyd and Goldberg call it “subtraction.” GE called it “de-featuring.” Regardless of the name, the strategy involves removing essential elements in order to get a new offering. Think: an exercise bike is a bike with one wheel removed. It’s a simple solution, but it opened up a new market of users. And it’s an idea that’s applicable in both product and service industries. For instance, we’ve worked with a top health insurance company to take a complex product offering that had become “richer” over time, and we created an affordable stripped-down model. The rich version has a place, but some segments may prefer the light version.

  • Merging together. In this case, rather than taking features out, seemingly unrelated features are offered in an all-in-one package. For example, the CAPTCHA system not only helps thwart hackers and fraudsters; the text you enter is actually contributing to transcribing old text that’s hard to decipher. At South Street, we worked with a client to merge several disparate products and services to serve a unique segment—one that could not have afforded or had access to the products à la carte.

  • Segmenting out. In our opinion, any innovation needs be rooted in a strong understanding of your target segment. Without this, techniques that define a new offering (such as lightening and merging) are taking shots in the dark as to what your customers really want or need. Look at a customer group that has strong financial potential for you. What are their highest-level goals and needs, and are you (or your competitors) currently satisfying these needs? What techniques can you use to pull from what you are already offering and customize it for this segment?

Innovation should be all about solving specific business problems. By doggedly sticking to this focus, innovation need not be a buzzword at your company.

Rachel Corn is a Director at  South Street Strategy Group, she specializes in finding growth opportunities in new market segments, new products and businesses and innovative business models.

South Street Strategy Group, an independent sister company of Chadwick Martin South Street Strategy GroupBailey, integrates the best of strategy consulting and marketing science to develop better growth and value delivery strategies. 

Topics: South Street Strategy Group, strategy consulting, product development, growth and innovation

Medical Devices: Innovation for Less Is More

Posted by Rachel Corn

Tue, Jun 18, 2013

medical device innovationIn the world of medical technology, the historical driver of value has been feature-driven. Hospitals, insurance companies and other payor audiences have been willing to pay a premium for new features—up to a point.

Today, though, in a climate of increased scrutiny over costs, more competition, and stricter reimbursement rules, payors are no longer eager to pay for minor features. This is especially true when looking to “leaner” markets outside of the US. Furthermore, consumers are becoming more empowered in their healthcare and as a result are increasingly looking for solutions that fit their lifestyles, rather than technical feature sets.It’s time for medical technology companies to think about step-change innovation as a driver of value for them and their customers. And this innovation needs to begin and end with focus:

  • …on the customer segment: What are the current and potential markets for this product? Are there under-penetrated segments where a gap exists? Traditionally, companies have not focused on the end-user (the patient); yet this is an opportunity for innovation. We have also seen quite a few products “de-featured” for emerging markets and then brought back to the developed world for a unique segment. Is there a viable market segment that would be served with a “light” version of your product?

  • …on the customer goal: What are customers trying to accomplish with your products? How can you make their jobs easier? This requires communicating solutions—rather that discrete features—that directly solve a pain point. This could involve software, services, etc.

  • …on regulation: Between healthcare reform, re-admission rules and electronic records, healthcare is a prime field to view regulatory changes as an opportunity to make the customer’s life easier. In what ways will regulations change your customer’s business and how can you help?

Looking for innovation in your existing portfolio can be highly lucrative. An example of a “de-featured” product is from GE India: it stripped the bells, whistles and 423 pounds from GE’s $100,000 Logiq 9 ultrasound machine and introduced a handheld device at about a tenth of the price. While this monitor was less advanced than its predecessor, it was a great fit for India due to small size and portability.

What hidden gems lie in your portfolio? Have you uncovered and exhausted opportunities for innovation?

Rachel Corn is a Director at  South Street Strategy Group, she specializes in finding growth opportunities in new market segments, new products and businesses and innovative business models.

South Street Strategy Group, an independent sister company of Chadwick Martin South Street Strategy GroupBailey, integrates the best of strategy consulting and marketing science to develop better growth and value delivery strategies. 


Earlier this year CMB’s MedTech team partnered with the Massachusetts Medical Device Industry Council (MassMEDIC) to survey members for their perspectives on the past, present, and future expectations for innovation and growth in the medical device industry. Click here to download: The 2013 MedTech Industry and Innovation Study.

Topics: technology research, South Street Strategy Group, strategy consulting, healthcare research, product development, growth and innovation

AMP Up Marketing on a Tight Budget

Posted by Rachel Corn

Thu, May 30, 2013

marketingToday most companies are watching their expenditures closely and are challenged with how to effectively get the word out to prospective customers, but on a limited budget. The key to this is focus, across three different dimensions that we call AMP:

  • Audience. It’s tempting to think that “marketing” doesn’t happen until after a product is finished and ready to sell. However, efficient and effective marketing is tailored to specific segments. This requires a company to have a firm focus on what it’s selling and to whom – early on in product development.

  • Message. In today’s media environment, generic messages are worthless. With a specific, well-researched target market in mind, companies can craft tailored marketing messages that speak specifically to that target’s needs and goals.

  • Promotion. There are some core tactics that every marketer has in his or her arsenal of tools: advertising, PR, conferences, social media, among others. Focus on key tactics and related outlets that you know your target market will look to for the needs you’ve identified.

Blanketing the entire marketplace with broad messaging is expensive, and typically ineffectual for anyone other than big brands who have to maintain broad-based awareness. Doing less in a deliberate way can make your money stretch farther and deliver more tangible results in terms of new, worthwhile prospects. Following the above guidelines, in this specific order, can help you focus your marketing activities.

Do you already have a segment you can hone in on to AMP up your marketing?

Rachel Corn is a Director at  South Street Strategy Group, she specializes in finding growth opportunities in new market segments, new products and businesses and innovative business models.

South Street Strategy Group, an independent sister company of Chadwick Martin South Street Strategy GroupBailey, integrates the best of strategy consulting and marketing science to develop better growth and value delivery strategies. 

Topics: South Street Strategy Group, strategy consulting, product development, marketing strategy

A Getting-to-No Growth Strategy

Posted by Rachel Corn

Thu, Apr 11, 2013

South Street Strategy opportunityHow many times have you looked at all of the to-do’s you’ve crossed off your list during any given week and wondered, “What do I actually have to show for it?” The fact of the matter is that the work day is a constant struggle to separate out the important from the urgent and from the importantly urgent so that we maximize our time on activities that are most likely to contribute to corporate metrics. We must be strategic about how we get through the day.

This same concept applies when growing a business. When it comes to growth strategies, most firms don’t suffer from a lack of ideas and paths to choose from. Conceptually, most business leaders understand that deciding what not to invest in is just as important as deciding what business opportunities to pursue. Yet many companies still find themselves stretched in many directions, with various product lines, strategies and consumer segments. Budgets, time and employee energy are spread across too many initiatives, many of which are low ROI activities

It’s hard to say “no” when opportunity—in the form of a potential revenue stream—comes knocking. But the irony in finding growth is the ability to focus and say “no” even when it means turning down a potentially exciting or even lucrative business initiative. Without this focus, businesses can’t make sufficient investments in the most high-priority initiatives. Management struggles because they are doing everything at once. A company’s best people are spread across different projects and can’t execute efficiently. And, in some cases, even finding time to meet and move projects forward is stymied by overcommitted schedules.

A business leader must find the courage to make decisions and focus their people and their funds on the goals that are most likely to get them ahead of the competition.

How do you get to “no”? For starters:

  • Focus on one or a few key customer segments where your value proposition is most differentiated. Look at customer segments where you perform better than the competition and customers feel you truly—instead of marginally—meet their needs. This typically requires a robust market segmentation to guide your focus.

  • Focus on your business’ core capabilities and strengths, and commit to investing only in these capabilities. Many companies run into trouble when they move away from their core in search of more attractive opportunities. Cisco’s Flip phone was an attractive idea, but turns out the fickle world of consumer electronics was too far afield from the company’s core business.

  • Focus on balancing the needs of  your customer today versus your customer of tomorrow. A tech company, for example, will want to devote more of their investments (20-30%) on future customer needs. On the other hand, more mature industries such as insurance will dedicate most of their budget to current customer profiles and any directly adjacent capabilities.

Saying yes to everything makes it harder to achieve anything. How effective is your company at getting to “no”?

Rachel Corn is a Director at  South Street Strategy Group, she specializes in finding growth opportunities in new market segments, new products and businesses and innovative business models.

South Street Strategy Group, an independent sister company of Chadwick Martin Bailey, integrates the best of strategy consulting and marketing science to develop better growth and value delivery strategies. 

Topics: South Street Strategy Group, strategy consulting

South Street Strategy Guest Blog: Is Process Killing Your Innovation?

Posted by Rachel Corn

Wed, Mar 27, 2013

Geoff Nicholson, 3M ambassador and former vice president for international technical operations, was recently quoted as saying “Six Sigma ‘killed’ innovation at 3M.” His reasoning? The Six Sigma process requires a full-blown business case and even a 5-year business plan to get a new idea off the ground and into production. The result: a company once synonymous with innovation saw its new product introductions drop and ranking as a BCG innovative company plummet from number 1 to number 7 in four years’ time.

Nicholson describes a core challenge to scaling innovation: how do you institutionalize it 

south street strategy innovationwithout stifling it?

Frameworks like Six Sigma and Stage Gate rely on strict “go-no-go” decisions at key junctures, based on quantified metrics such as market size, market share potential, volumes, etc. Quantifiable approaches like this work best with incremental innovations, such as line extensions or expansions into adjacent markets.

But, breakthrough innovations—the Model-T, iPod, Post-It Notes—target new-to-the-world markets and demand curves that are hard to quantify.

An alternative approach to assessing demand for a new offering is to take it through a proof-of-concept evaluation. With a small budget, a team of individuals passionate about the idea can use small-scale testing or research techniques to understand whether the idea works and if people want it. One of our clients always sets aside 15%-20% of his funds for sussing out new, big ideas in just this manner.

Without a doubt, companies seeking to innovate should try to learn rather than re-invent the wheel with each initiative. That is one reason South Street recommends clients seeking to “institutionalize” innovation do so with a playbook, rather than a process. A playbook assumes there are some generally repeatable steps at a high level, but they can be re-ordered and prioritized/de-prioritized based on management discretion and the unique nature of the opportunity or challenge addressed. This requires a deeper knowledge of different methods, deeper thought and judgment on the part of participants and more institutional agility, but it also ensures that the right tools are used at the right times. As the 3M story illustrates, instituting a one-size-fits-all process for innovation actually erodes this very capacity.

Is process killing your innovation?

Rachel Corn is a Director at  South Street Strategy Group, she specializes in finding growth opportunities in new market segments, new products and businesses and innovative business models.

South Street Strategy Group, an independent sister company of Chadwick Martin Bailey, integrates the best of strategy consulting and marketing science to develop better growth and value delivery strategies. 

Topics: South Street Strategy Group, strategy consulting, growth and innovation