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Why Innovation is Elusive to Most Companies

By Edwards L. Blach, DVM, MS, MBA
December, 2018

Innovation is an elusive trait for most companies. For big companies, it’s even rarer. Unless you’re a company like Amazon or Google, both of which were born of innovation, and have grown by breaking conventional thinking and truly innovating, it is very difficult for most companies to adopt or gain any hint of entrepreneurship from within. If a company doesn’t have innovation as part of its DNA, it will almost always fail at it. 

Veterinary practices have similar challenges with innovation. They are dependent upon their current model, so even if they sense that some clients might want to be served differently, it is almost impossible to make sweeping changes to their business model. Veterinary practices are known to be slow adopters of new opportunities. They respond to hearing their clients ask for something, or to hearing that their competitors are offering something that they don’t offer. Thus, they aren’t early adopters. They follow the lead of someone else, and most certainly are not innovators.
                                                                                                    

Why is innovation so difficult?
For most companies, if they decide that they want to be innovative, they start some type of initiative to become innovative. Then they assign some long-standing employee, who comes from their longstanding, non-innovative business model as their “director of innovation.” That doesn’t make a lot of sense, but this is what happens over and over. Instead of “director of innovation,” the title should be “protector from innovation.” They assign some significant salary to the position, and govern them with the same company policies that govern their old non-innovative business model. 

The innovation initiative never takes hold, because every person in the company is paid by and dependent upon their old business model. Thus, decisions are made that protect their current model, rather than thinking purely with a focus on customer experience and need. What does their customer want? This is the core question, but as long as the initiative is dependent upon the current business model, no decisions will be made that might threaten it. The innovation initiative was founded by a realization that the current business model is failing, but the company doesn’t have the ability to move beyond that failing model. 

In the event that something truly innovative is presented to an industry, the market share leaders typically will do everything they can to kill or delay adoption of the new innovation, in an effort to not have to invest in anything new, or to change anything that impacts their lifestyle or job. They will attack innovators as “crazy” or “nuts”, and make moves to discredit the innovation. If they can’t kill the innovation, big non-innovative companies will often purchase the younger, innovative companies, because they realize that they are not innovative, and even with significant funding, they don’t have innovation in their DNA or in their people. Sadly, these purchases are usually the beginning of the failure of the innovative company for all the reasons above.

Innovation in veterinary medicine
In veterinary medicine, companies acknowledge repeatedly that the industry is changing, and the change is being driven by a customer appetite for solutions that are more convenient, lower cost, and immediate. They acknowledge that the current model that forces consumers to drive to a clinic in order to get simple answers is broken. They acknowledge that reactive medicine isn’t the best solution for satisfying customer needs. The veterinary model needs to be more proactive, and health focused, rather than sickness focused and reactive. Certain conditions and situations require a veterinary practice visit, but many do not, and the veterinary industry has been reluctant to adopt and develop solutions that will help clients get resolutions to their problems without a clinic visit. They want to drive clinic traffic in order to create transactions. That is veterinary focused, not customer focused, and if the industry refuses to acknowledge this, clients will find other solutions. 

Innovation is also made difficult because in most situations, innovation is born from hunger.  There is a real need to innovate. This hunger is what drives creativity and urgency, which is what pushes companies and people to go above and beyond to find solutions. Companies that are bloated and fat, that pursue innovation as a fad, will always overpay their people, even if they don’t get results. You see it often when big companies work with small companies. The big companies usually take weeks or months to make even small decisions. Everything is done by committee and consensus. And along the way, everybody gets a paycheck. At the small company, their people are hustling, working on multiple deals simultaneously, because they know that the big companies won’t make timely decisions. Remember, people at big companies get paid whether they make progress or not. The small companies go out of business if they don’t make progress rapidly, because funding is typically modest.

Therefore, to improve your chances for success at innovating, here are some recommendations:

  1. Innovation must be a priority, not an initiative. Make innovation a priority.

  2. Engage people from outside your company who have a history of innovation. Only they can see things objectively and ask the hard questions that will challenge your assumptions.

  3. Engage smart, energetic people who are not a part of your industry. They will challenge your conventional thinking and assumptions.

  4. Isolate the innovation team, both financially and organizationally, from your primary company. This group should be treated like a startup, and it should be staffed with startup people. The group and the organization need to be hungry.

  5. Don’t be afraid to support a model that might kill or harm your existing model. Competition is good. If your current model is stale, it probably doesn’t warrant protection, at least at the expense of innovation that might replace it. If the innovation is sound, a competitive environment will allow it to be tested, proven, and to grow on its merits.

Topics: Is My Practice Healthy?

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