Lessons In Cross-Industry Customer Innovation Craig Brandis R&D Director Welch Allyn

Overview In a highly competitive industry, maintaining continuous customer intimacy and innovating is imperative to long-term survival. Traditional Voice-Of-The-Customer (VOC) methods are not sufficient Traditional design and development methods are not sufficient KeyTake-Aways: Lessons learned in applying different methods of VOC Success factors in translating VOC results into high-value products Examples of patterns of disruption through discerning high customer value

In a highly competitive industry, maintaining continuous customer intimacy and innovating is imperative to long-term survival.

Traditional Voice-Of-The-Customer (VOC) methods are not sufficient

Traditional design and development methods are not sufficient

KeyTake-Aways:

Lessons learned in applying different methods of VOC

Success factors in translating VOC results into high-value products

Examples of patterns of disruption through discerning high customer value

Welch Allyn “ A privately-held, family-owned manufacturer of medical devices, products and solutions used by caregivers in doctors' offices, hospitals, and emergency response settings around the world. Focus is on innovative solutions for frontline care. Patient Monitoring/Propaq LT (2005) Ambulatory Telemetry Monitoring/Micropaq (2002) Panoptic opthalmoscoope (2002) Suresight vision screener (2002)

“ A privately-held, family-owned manufacturer of medical devices, products and solutions used by caregivers in doctors' offices, hospitals, and emergency response settings around the world. Focus is on innovative solutions for frontline care.

Healthcare Trends Worldwide today: •1 billion adults overweight •860 million chronic disease patients •600 million elders age 60 or older 75-85% of healthcare spending is on chronic disease management

Worldwide today:

•1 billion adults overweight

•860 million chronic disease patients

•600 million elders age 60 or older

75-85% of healthcare spending is on chronic disease management

Trends in Patient Monitoring Crowded field, more competitors every year Slow annual market growth in traditional segments Fewer skilled caregivers taking care of more patients Boundaries of care settings are blurring Patients and caregivers are more mobile

Crowded field, more competitors every year

Slow annual market growth in traditional segments

Fewer skilled caregivers taking care of more patients

Boundaries of care settings are blurring

Patients and caregivers are more mobile

Trends In Patient Monitoring Clinicians have lots of data, they want more timely and useful information Increasing demand for interoperability Usability expectations in the professional arena are increasingly set by the consumer market

Clinicians have lots of data, they want more timely and useful information

Increasing demand for interoperability

Usability expectations in the professional arena are increasingly set by the consumer market

From The Voice of the Customer to New, Innovative Solutions… Few breakthroughs in underlying monitoring technologies the last 20 years Meeting customer needs with high-value, differentiating solutions in this market requires: Reliable VOC methods to identify high value opportunities A repeatable way to translate these to winning products and services Do it fast er than the competition No, duh…but if it were easy…

Few breakthroughs in underlying monitoring technologies the last 20 years

Meeting customer needs with high-value, differentiating solutions in this market requires:

Reliable VOC methods to identify high value opportunities

A repeatable way to translate these to winning products and services

Do it fast er than the competition

No, duh…but if it were easy…

Experience With Formal VOC Methods Spectrum of VOC methods we use: Focus groups Market surveys Research studies Pilot programs Thought leaders Outsourced/Ethnographic studies Internal/Data-driven studies Others…

Spectrum of VOC methods we use:

Focus groups

Market surveys

Research studies

Pilot programs

Thought leaders

Outsourced/Ethnographic studies

Internal/Data-driven studies

Others…

Outsourced/Ethnographic VOC Outsourced to an ID/creative firm They take it from ethnographic studies to product concepts Advantages Fast Does not tie up as many internal resources Focused Deliverables are usually high quality product concepts Disadvantages ID/creative firm not totally immersed in the medical world Often more qualitative than quantitative

Outsourced to an ID/creative firm

They take it from ethnographic studies to product concepts

Advantages

Fast

Does not tie up as many internal resources

Focused

Deliverables are usually high quality product concepts

Disadvantages

ID/creative firm not totally immersed in the medical world

Often more qualitative than quantitative

Internal/Data-Driven VOC Built around structured interview methods and conjoint analysis Market-Driven Product Development (Mello) Done internally with cross-functional group Uses a rigorous data collection and step-wise integration process Advantages Granular, traceable results, statistically valid answers Quantifies what the customer actually values More internal sense of ownership Transparent Encourages internal, cross-functional innovation Longer shelf-life, underlying analysis can be reused Disadvantages Labor and time intensive by internal staff Requires buy-in and commitment across all involved groups

Built around structured interview methods and conjoint analysis

Market-Driven Product Development (Mello)

Done internally with cross-functional group

Uses a rigorous data collection and step-wise integration process

Advantages

Granular, traceable results, statistically valid answers

Quantifies what the customer actually values

More internal sense of ownership

Transparent

Encourages internal, cross-functional innovation

Longer shelf-life, underlying analysis can be reused

Disadvantages

Labor and time intensive by internal staff

Requires buy-in and commitment across all involved groups

Analyze Successes for Patterns of Opportunity Hypothesis: high customer value opportunities often have recurring patterns Common themes Repeat with some variation Recognizable

Hypothesis: high customer value opportunities often have recurring patterns

Common themes

Repeat with some variation

Recognizable

Case Study:Welch Allyn FlexiPort Cuffs Problem: Incompatible cuffs and hoses for different devices Flexi-port blood pressure cuffs Uses one cuff for all electronic and manual devices Move patients from room-to-room, procedure to procedure without hunting for new cuffs for different devices VOC pattern: Make it plug and play. Fix the disconnects.

Problem: Incompatible cuffs and hoses for different devices

Flexi-port blood pressure cuffs

Uses one cuff for all electronic and manual devices

Move patients from room-to-room, procedure to procedure without hunting for new cuffs for different devices

VOC pattern: Make it plug and play. Fix the disconnects.

Case Study: Welch Allyn Flexnet Wireless Problem: Too many proprietary networks & monitoring “islands” Solution: Real-time patient monitoring on the hospital’s shared, standard 802.11 a,b,g wireless network with other hospital applications, anywhere in the hospital. Single wireless infrastructure No proprietary components Huge savings in operating costs VOC pattern: “Eliminate silos. Build on common, existing infrastructure.” Deeply understand the infrastructure needs Networks increase in value with connectivity Customer-centric Builds trust Leads to other opportunities

Problem: Too many proprietary networks & monitoring “islands”

Solution: Real-time patient monitoring on the hospital’s shared, standard 802.11 a,b,g wireless network with other hospital applications, anywhere in the hospital.

Single wireless infrastructure

No proprietary components

Huge savings in operating costs

VOC pattern: “Eliminate silos. Build on common, existing infrastructure.”

Deeply understand the infrastructure needs

Networks increase in value with connectivity

Customer-centric

Builds trust

Leads to other opportunities

Case Study: Welch Allyn Clinician Notifier Problem: Clinicians can’t be everywhere at once Solution: “Real-time central monitoring in the palm of your hand” VOC pattern: make the most critical info mobile and timely VOC pattern: it is all about the workflow

Problem: Clinicians can’t be everywhere at once

Solution: “Real-time central monitoring in the palm of your hand”

VOC pattern: make the most critical info mobile and timely

VOC pattern: it is all about the workflow

Case Study: Hamilton C2 Ventilator Problem: “What does this button do?” Solution: Ventilation Cockpit with real-time animation of patient’s lung function Shows effect of medications and areas of compromised lung function Closed loop ventilation Ventilation continuously adapts to changes in patients lung mechanics VOC pattern: “Draw me a picture” VOC pattern: “Learn from the patient”

Problem: “What does this button do?”

Solution:

Ventilation Cockpit with real-time animation of patient’s lung function

Shows effect of medications and areas of compromised lung function

Closed loop ventilation

Ventilation continuously adapts to changes in patients lung mechanics

VOC pattern: “Draw me a picture”

VOC pattern: “Learn from the patient”

What Is Missing From Traditional VOC Methods? Real-time, continuous, two-way dialog with customers Still “us and them” vs. customers inside the tent as equals What if customer needs change faster than our development cycles?

Real-time, continuous, two-way dialog with customers

Still “us and them” vs. customers inside the tent as equals

What if customer needs change faster than our development cycles?

Lessons From Other Industries Web 2.0 New Platforms New Media Health 2.0 SAAS Google

Web 2.0

New Platforms

New Media

Health 2.0

SAAS

Google

Lesson From Web 2.0 Have ordinary customers help design your products Not just retained thought leaders, include ordinary customers Also invite customer participation by "giving away" usable, high-value content online Blogs, wikis, social media, youtube Threadless.com The Business of Community Harvard Business Review June 08 Dr. Xavier Perret ,MD PCP - Helps Welch Allyn brainstorm product concepts

Have ordinary customers help design your products

Not just retained thought leaders, include ordinary customers

Also invite customer participation by "giving away" usable, high-value content online

Blogs, wikis, social media, youtube

Lessons From New Platforms iPhone 15000 3 rd party apps in under 12 months > 100 medical apps Lessons: Focus like a laser on the user experience Open the platform Enable and simplify transactions

iPhone

15000 3 rd party apps in under 12 months

> 100 medical apps

Lessons:

Focus like a laser on the user experience

Open the platform

Enable and simplify transactions

Lesson From New Media Radical Personalization Internet Radio Pandora Last.fm Continuous user profiling and adaptation Data mining Learning Fully personalized apps

Radical Personalization

Internet Radio

Pandora

Last.fm

Continuous user profiling and adaptation

Data mining

Learning

Fully personalized apps

Lesson From Health 2.0 User-directed websites for chronic diseases Discover the wisdom of many Give up some control to customers and patients to gain access and trust Patientslikeme.com Healia.com

User-directed websites for chronic diseases

Discover the wisdom of many

Give up some control to customers and patients to gain access and trust

Lesson From Software As A Service (SAAS) and Cloud Computing Salesforce.com vs. thick-client CRM “ Success as a Service” How locked in is the customer really if there is an alternative that costs 75% less?

Salesforce.com vs. thick-client CRM

“ Success as a Service”

How locked in is the customer really if there is an alternative that costs 75% less?

Lesson From Google “ Fail faster to learn and succeed quicker” Agile development methods: No focus groups Alternate beta versions and measure “ Data is apolitical” – Melissa Meyer, Google VP

“ Fail faster to learn and succeed quicker”

Agile development methods:

No focus groups

Alternate beta versions and measure

“ Data is apolitical” – Melissa Meyer, Google VP

Can A Medical Device Company Be “Googley”? Ten Principles of a "Googley" User Experience 1. Focus on people - their lives, their work, their dreams 2. Every millisecond counts 3. Simplicity is powerful 4. Engage beginners, attract experts 5. Dare to innovate 6. Design for the world 7. Plan for today's and tomorrow's business 8. Delight the eye without distracting the mind 9. Be worthy of people's trust 10. Add a human touch

Ten Principles of a "Googley" User Experience

1. Focus on people - their lives, their work, their dreams

2. Every millisecond counts

3. Simplicity is powerful

4. Engage beginners, attract experts

5. Dare to innovate

6. Design for the world

7. Plan for today's and tomorrow's business

8. Delight the eye without distracting the mind

9. Be worthy of people's trust

10. Add a human touch

New Innovation Models Emerging models: Connect and develop Open innovation Welch Allyn’s Blue Highway New company focused solely on innovation

Emerging models:

Connect and develop

Open innovation

Welch Allyn’s Blue Highway

New company focused solely on innovation

Summary: VOC to High Value Products And Services Extend your VOC models to include data-driven and continuous Analyze previous successes for VOC patterns of opportunity Learn real-time, continuous methods from other industries Get more “googley” in how you innovate

Extend your VOC models to include data-driven and continuous

Analyze previous successes for VOC patterns of opportunity

Learn real-time, continuous methods from other industries

Get more “googley” in how you innovate

Questions or Comments? ...Thank you! Email: craig.brandis@welchallyn.com 503.530.7342 Linkedin: www.linkedin.com/in/craigbrandis

...Thank you!

Email: craig.brandis@welchallyn.com

503.530.7342

Linkedin: www.linkedin.com/in/craigbrandis