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Lean Innovation within UnitedHealth Group
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Lean Innovation within UnitedHealth Group

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  • 1. Lean Innovation at UnitedHealth Group Presented by Chicago Lean Startup and Pathfinder Software
  • 2. A little about 3
  • 3. Fortune 17 Workforce: 150,000 28,000 Physicians, Nurses, and Clinical Practitioners 12,000 Technologists Manages $150B+ in health care spend annually 4
  • 4. 250,000+ Plan Sponsors 85 Million Consumers 780,000 Care Providers 5
  • 5. OUR HEALTH BENEFITS BUSINESS OUR HEALTH SERVICES BUSINESS Helping People Live Healthier Lives Making the Health Care System Work Better for Everyone UnitedHealthcare Community & State UnitedHealthcare Employer & Individual UnitedHealthcare Medicare & Retirement UnitedHealthcare Military & Veterans UnitedHealthcare International “Health in Numbers” OptumInsight OptumHealth OptumRx “Good for the System” 6
  • 6. INNOVATION MAD LIBS What if we used [insert technology] and added [insert core asset] and gave it to [insert market] so that they could [insert something cool]? 7
  • 7. NEW IDEA What if we used smartphones and added our Rx data and gave it to consumers so that they could track their medications? 8
  • 8. OMG!! $$ $$ 9
  • 9. NEW IDEA What if we used fancy charts and graphs and added claims data and gave it to consumers so that they could manage medical expenses easier? 10
  • 10. OMG!! $$ $$ 11
  • 11. THE TRADITIONAL PATH from to idea profit BUSINESS PLAN FINANCIAL MODEL PRODUCT MANAGEMENT WATERFALL ENGINEERING 12
  • 12. GO FOR LAUNCH!! 13
  • 13. BUT THEN 14
  • 14. GREMLINS = UNCERTAINTY Customer Adoption Product Features Design Marketing Partners Sales Cost Structure Funding Support Priorities Revenue Streams Time UNCERTAINTY 15
  • 15. No business plan survives first contact with customers 16
  • 16. Innovation at Big Companies: Types Sustaining (easier) Breakthrough/Disruptive (really hard) Driven by core strengths Growth Strategy Precedent (M&A, Build) Established R&D, IP Models Disruptive innovation combative with Core No “one model” 17
  • 17. Innovation Antibodies: Heavy governance Functional Silos Not Invented Here Liability, Brand Risk Protecting the Core 18
  • 18. Lean Startup to create startups Portfolio Management Entrepreneur-Centric Approach Experiments and Learning Phases and Milestones Changing Culture 19
  • 19. Portfolio Management Sourcing Filtering Measuring throughput potential performance Staged-Risk Funding 20
  • 20. INNOVATION PORTFOLIO ideas problem validation problem solution fit 10 customers 100 customers 1,000 customers scale 21
  • 21. Entrepreneur Centric Founder Teams Entrepreneurs In Residence (EIRs) Low-Cost Dev, Lean UX/Design VC-Like Board Coaching, Mentorship Co-Located Teams 22
  • 22. Experiments and Learning Customer Development Getting Used to Failure Designing Experiments MVPs Interpreting Results 23
  • 23. Phases and Milestones Problem - Market Fit Problem - Solution Fit Product - Market Fit 24
  • 24. HIGH LEVEL STAGES Stages Problem-Market Fit Goals Validate the Customer Validate the Problem Problem-Solution Fit Product-Market Fit Validate the Solution Validate the Business Methods Interviews Field Research Secondary Research Minimum Viable Product (MVP) Cohort Analysis A/B Testing Customer Acquisition Testing Sales/Marketing Funnel Customer Acquisition Optimization Customer Acquisition Costs Lifetime Value Churn Pricing Cost Structures Outcomes Establish Patterns Market Size, Sales Model Early Adopter Archetype Problem Importance Paying Customers Distribution Models Revenue Models Validated Business Model Position for Scale/Growth Funding Strategy Leverage Op-Ex Cap-Ex Cap-Ex Follow On 25
  • 25. Changing Culture Getting Used to Failure Recognizing and Managing Uncertainty Resourcing Comfortable Being Uncomfortable Be Bold and Pioneering 26
  • 26. GARAGE PROGRAM UHG’s Garage is a service focused on identifying, nurturing and accelerating the commercial viability of innovative internal business ideas. The Garage manages a small, discreet portfolio of seed-stage business ideas through a disciplined, entrepreneur-centric process designed to rapidly de-risk ideas in the market, and provide paths for commercialization, follow-on and exit. Entrepreneur Idea Internal Idea Sources: • Idea capture systems • Innovation Groups • Business Segments Idea Idea Idea Entrepreneur Idea Entrepreneur EIR Sources: • Dedicated Entrepreneurs In Residence (EIRs) • Segments can provide (but must dedicate full-time or provide sabbatical) EIRs are matched to Ideas based on domain knowledge, passion and entrepreneurial talent tools Facilities Resources • Off-grid space • EIRs • Collaborative • Developers, culture • Casual environment Mentorship • Advisors, Mentors, Coaches Designers • UHG Leaders • Data/Analytics and SMEs Experts • External SMEs • Clinical • Regulatory, Legal • Program Management Process • Learning- Driven Process • Lean Startup • Customer Development • Staged-Risk Funding • Business Model Validation Tools Metrics Garage Mission: • Build and sustain a culture of experimentation that enables the growth and scale of new health businesses, products and services • Reduce the cost of innovation • Increase innovation portfolio throughput through staged-risk funding, rapid iterative development • Diversify portfolio through option value • Highly • Innovation Adaptive Agile Accounting Development • Cohort Analysis • Lean UX • A/B Testing • Infrastructure • Validation of • Continuous business model Deployment assumptions • Financial analysis 27 27
  • 27. Some Results 60 pipeline candidates 12 “projects” started 373 Customer Interviews Conducted 7 closed in Phase 1 < 3 months 25% move to Phase 2 28
  • 28. MVPs 29
  • 29. 30
  • 30. 31
  • 31. Key Learnings Create air cover Align to top strategic risks Bring Legal in Regular coaching! Ask for forgiveness, not permission Start “lean”, experiment and iterate Measure everything Find the right people 32
  • 32. THANK YOU Todd Wyder Pathfinder Software Kunjorn Chambundabongse (K C) kunjornchambundabongse kunjorn 33

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