Progressions 2012 - Health care everywhere

Creatively disrupting business models

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To succeed in the behavioral change business, life sciences companies need to extend their business models in patient-centric ways.

Firms can learn from other sectors whose business models have been disrupted by similar forces.

A patient-centric future will make life sciences companies' existing business models (the ways in which firms create, deliver and extract value) increasingly defensive. Experimenting around the fringes with new business models is no longer sufficient.

Behavioral economics demonstrates that the reason people fail to make behavioral changes is that they have predictable biases that affect decision making.

Companies need to significantly extend their business models to be:

  • Data-centric: to harness and monetize insights from data obtained from sensors, devices, social media threads, etc.
  • Behaviorally savvy: to better understand and influence patient behaviors.
  • Experience-focused: with personalization, mass customization and an increased focus on industrial design.
  • Holistic: with approaches that encompass the cycle of care and the life cycle of the patient.
  • Revenue-flexible: as companies capture value in different ways, reflecting the changing ways in which they are creating and delivering value.

Life sciences companies can learn from other sectors whose business models have been disrupted by similar forces. These sectors include newspapers, electronic gaming, retail trade/market exchanges and commercial banking.

Customers in these industries have been empowered with information and control, spurring companies to revamp their value propositions, change the relationship with the customer and expand their sources of revenue.

Although the trends are clear, it is very difficult for large, mature incumbents to disrupt their own business models.

  1. Move quickly to out-innovate the competition
  2. “Think different” to find untapped surpluses in other sectors
  3. Follow the value not the money, and start by changing the value proposition rather than focusing solely on the bottom line
  4. Remember that moon shots matter, and that a clear call to action can set strategic direction, engage talent and align resources and activities



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