INNOVATION
Joe Messina, Director of Planning
Marla Kouche, VP-Strategic Program Office
Innovations in New Product Development & Marketing 2009
FROST & SULLIVAN EXECUTIVE MINDXCHANGE
June 7-10, 2009 / SAN FRANCISCO, CA

Lessons Learned
1. Insight on building pragmatic innovation practices
that are effective at creating ROI
2. Tools & methods to “change the engine while the
airplane is in flight”
3. Successful factors for creating a corporate culture
of innovation
4. Best practices gleaned from the 2008 MindXchange
applied toward innovation excellence
2

Quest Diagnostics and MedPlus
• Parent Company: Quest Diagnostics (NYSE: DGX)
– Global leader in diagnostic laboratory testing, information and services
– >$7B in annual revenue
– Established business relationships with 300,000+ physicians, 3,000+ hospitals
and 1,000 payers
• MedPlus, Inc.
– Healthcare information technology subsidiary of Quest Diagnostics
– Headquartered in Cincinnati, Ohio with operations serving North America
– Commercial software provider responsible for 25-30% compound annual growth
and external IT strategy
– Create and deliver IT solutions to Hospitals, Health Systems, RHIOs, and
140,000+ physicians
3

Our Vision
Dedicated people improving the
health of patients through
unsurpassed diagnostic insights
45,000 employees
and innovation.
Our Mission
We will be the undisputed world
leader in diagnostic testing,
information and services.
450 employees
4

Enabled by the MedPlus Solutions
Clinical Portal Clinical Catalyst ChartMaxx
• Seamless access to • Bridge to a full EMR • Centralized electronic
aggregated patient • Point-of-care toolset for the access to the complete
clinical data creation, management & legal medical record
• Driver of physician sharing of clinical • Preserves paper processes
satisfaction and improved information for the floor while
clinical decision making • Incremental functionality to automating work flows for
the existing Care360 HIM and back office
Data Exchange Physician Portal • Fully supports HIM
Services compliance needs
• Facilitate the exchange of Patient Portal • Improved data access
information between source supports improvements
systems and user systems • Engage the patient in the beginning with
management of their care registration through
• Hybrid-federated data model
• On-ramp for the patient for delivery of the final bill
• Enterprise Master Patient administrative and clinical
Index capabilities
• Record Locator Service
5

Opportunity… Right Place, Right Time…
The Healthcare IT Outlook, spurred by the Economic
Stimulus Package, directly aligns to our core competencies
Majority of records still Data resides in Unconnected networks —
exist in paper different silos suboptimal business &
clinical outcomes
6

Change Imperative
Getting to revenue in Emergent business Employee attrition and a
an opportunistic model and product drop in satisfaction
market platform scores
7

discovery
8

Early Conversations
1. What is the mission… what is our change agenda?
2. What can we learn from other innovation models?
3. Why did it take so long for us to get this far?
4. How will we resource/fund the program?
5. How does this pipeline connect to our others?
6. How will we prioritize projects?
7. What kind of innovation do we seek?
8. Are all innovations welcome?
9. What core capabilities do we possess?
10. What core capabilities do we lack?
11. How wide/open is our community?
12. How will we engage people over time?
9

Innovation Models
RANK RANK COMPANY REVENUE MARGIN KNOWN FOR ITS MOST
2008 2007 GROWTH GROWTH INNOVATIVE
2005-08 2005-08 [% WHO THINK SO]
1 1 APPLE 30.4 15.8 Product (47%)
2 2 GOOGLE 52.6 -8.2 Customer Experience (26%)
3 3 TOYOTA 4.2 -35.9 Process (35%)
4 5 MICROSOFT 13.5 -1.3 Process (26%)
5 7 NINTENDO 61.1 20.6 Product (48%)
6 12 IBM 4.4 14.3 Process (31%)
7 15 HP 10.9 31.6 Process (39%)
8 13 RIM 74.1 11.2 Product (53%)
9 10 NOKIA 14.0 -10.3 Product (38%)
10 23 WAL-MART 9.1 -2.1 Process (49%)
11 11 AMAZON.COM 31.2 -4.8 Customer Experience (41%)
12 8 P&G 11.7 2.4 Process (27%)
13 6 TATA Private Private Product (44%)
14 9 SONY 3.1 -41.1 Product (40%)
15 19 RELIANCE 28.5 11.9 Business Model (35%)
16 26 SAMSUNG 10.5 -1.5 Product (41%)
17 4 GE 10.1 -12.2 Process (36%)
18 NR VOLKSWAGEN 7.1 33.6 Customer Experience (38%)
19 30 MCDONALDS 7.2 9.5 Customer Experience (55%)
20 14 BMW 6.9 -14.6 Customer Experience (37%)
BusinessWeek: The 50 Most Innovative Companies 10

Innovation Categories
1. Business Model: strategy / positioning
2. People: management / community
3. Process: operational efficiency
4. Product: technology / services / customer experience
11

Innovation Strategies
1. Inspire: Provide an inspiring vision; lead innovation;
emphasize opportunities, not problems; trust your people.
2. Organize: Set rules; create a system, guiding structures
and processes supporting innovation and idea management.
3. Synergize: Leverage diversity; facilitate cross-pollination
of ideas; create and empower cross-functional teams.
4. Empower: Create a culture of questioning; encourage risk
taking; give your people freedom to experiment, fail, and
restart.
5. Reward: Measure progress; reward both individual and
collective contributions; celebrate success, make business fun.
12

Change Agenda
Hero-culture Mentoring-culture
Formal and closed Informal and open
Command and control Consensus-driven
Fear of making mistakes Explore and evaluate
Local thinking Systems thinking
Redundancy Diversity
13

Challenges
BUSINESS AND PROGRAM
14

BUSINESS CHALLENGE
1 MILLION
TRANSACTIONS PER DAY
15

BUSINESS CHALLENGE
non-traditional competitors
Stimulus
19.6 HIT LAND RUN
2009
billion
16

BUSINESS CHALLENGE
emergent
standards
and
business
model
17

PROGRAM CHALLENGE
HIGH EXPECTATION
low realization 18

PROGRAM CHALLENGE
task-tool
mismatch
19

PROGRAM CHALLENGE
competing
priorities 20

process
PROGRAM CHALLENGE
entrenched
behaviors
idea
21

PROGRAM CHALLENGE
resource
constraints 22

solution
23

DEVELOP COMMUNITY VISION
buyer-seller market IDEA
IDEA
IDEA
IDEA
24

PROVOKE STRATEGIC CONVERSATION
how big… how open?
2009 2010 2011
• MedPlus Employees • MedPlus Employees • MedPlus Employees
• Quest Employees • Quest Employees • Quest Employees
• Advisory Customers • Advisory Customers • Customers
• Partners • Partners
500 members
500 members 10,000 members
10,000 members 100,000+ members
100,000+ members
25

ADOPT-ADAPT COMPLIMENTARY
management frameworks
BOS Blue Ocean Strategy
BSC Balanced Scorecard
SCRUM/Agile
Six Sigma
Carrots
26

INJECT DISCIPLINE
innovation program
• Articulate Mission, Vision, Values and Change Agenda
• Install the Innovation Foundation
– Team
– Process
– Funding
– Idea Management Technology
– Reward System
• Cultivate community soil w/
challenges & content aligned to
strategic objectives
• Seed, Manage and Harvest
27

DESIGN PROCESS
dual pathways
DIRECT-INJECT
INCUBATE
ELICIT EVALUATE INCUBATE JUSTIFY RATIONALIZE DELIVER
• CHALLENGE • SCREEN • RESOURCE • COST/BENEFIT • GROUP/PACKAGE • DMAIC
• IDEATE • PICK • REFINE • PRIORITIZE • ITIL
• FRAME • ANALYZE • SCHEDULE • SDLC
• CATALOG • EXPERIMENT
• PROTOTYPE 28

CREATE INNOVATION PIPELINE VIEWS
Tomato garden
Source: Strategy as a Portfolio of Real Options, Timothy A. Luehrman, Harvard Publishing
29

PROVIDE A REVIEW PLATFORM
fast-pitch spotlight 30

GO I AM NOT
SIT I LIKE LONGHORNS A CROOK NUTS
GO AWAY I GOT NO
[regional dialects]
MONEY
crush kill destroy
I SEE
I PASS
PAIN
passive consultative stern
I’LL TAKE
__ BEERS
DEVELOP SCREENS AND DECISION RULES
tribal voting gestures 31

STAGE EVENTS
mission impossible
• 50% short of MBO pipeline target
350
Double our
– Have 250 ideas…need 250 more pipeline …
produce at least
• 15 days left 250 sweet new
new ideas
ideas!
• Twas week before Christmas
• 25% of staff stirring
• 1st Time Challenge… FUD
• 6 Teams
• 18 framed questions
• 90-minute team sessions
32

REDIRECT INVESTMENTS
portfolio judo-flip
Market Share Market Share
High Low
10 % 20%
Market Growth
High Pearl Oyster
Market Growth
Low Cow Dog
70%
33

iPhone App
Spark: CTO Challenge to develop a robust application that runs
effectively on Apple iPhone platform.
Incubation Team: 4 Software Engineers, 1 Executive Sponsor
Seed Investment: <$50,000
Highlights: Proved technical feasibility of Care360 on iPhone,
positive market reaction.
Lessons: 1) Concept required passionate “owners” to sustain
forward motion. 2) Business relevance was required to attract
commitment for initial seed investment. 3) Ramp-up time was longer
than expected but Apple development publications and support were
solid. 4) Importance of mobility to a growing customer segment.
Business Impact: Buzz from Sales channel, prospective HIE
customers and business partners who are looking for leverage within
vertical (healthcare) markets. Technical Team acquired requisite
knowledge of new development environment (COCOA technology
framework and Objective-C language).
Road Ahead: Care360 iPhone application is now available in the
Apple App Store. More muscular mobility strategy in play.
34

lessons
35

HOW MIGHT WE…
Gain products
Reduce theclinical involve,
Stretch internal order adoption
Expand our model ofCloudservicing
Improvehealthcare datarelevant
Betterourinfrastructureinnovation?
Impactunderstand, morehow
Make growthcollaborative a our to
Drive betterthe thatwithinthat cost
Accelerate our rateofdomain andin
products arefor experience
insights on usable?
using handling
products world markets?
from our _
customers?
computing? cents?
market knowledge?
between customers?
serve_ to are Quest
developing nation? produce and
emergingand deployed and used?
MedPlus home office practices?
solo to five-physicianand remote
locations?
own?
LESSON NO. 1
Framed challenges work
36

Ant Farm, by Uncle Milton, invented 1956
LESSON NO. 2
Harness the community
make the innovation process transparent… make it theirs
37

• timely
• right-sized
• individualized
LESSON NO. 3
Reward quiet contribution too
38

LESSON NO. 4
Inform culture thru stories
39

Noise-dampening
Accessible
Extensible
Immediate
Fun
Simple
Cost effective
powered by spigit
LESSON NO. 5 muchmuch
Technology makes it easier
40

recap
• Installed Strategic Management Frameworks
– Blue Ocean, Balanced Scorecard, SCRUM/Agile,
Six Sigma
• Reoriented the Portfolio for innovative growth
• Launched formal Innovation Program
– Team ◦ Mission/Vision/Objectives ◦ Funding ◦ Plan
– Pointed innovation feelers to strategic objectives
– Ran Innovation events to keep it fresh and relevant
– Rotated core team to create energy and diversity
– Installed connectivity technology
– Improved innovation measurements
• Harnessed COMMUNITY to moderate,
evaluate and form ideas
41

reference
42

About the Presenters
Marla J.J.Kouche
Marla Kouche Joseph R. Messina
Joseph R. Messina
Vice President, Strategic Program Office of MedPlus, Inc.
Vice President, Strategic Program Office of MedPlus, Inc. Director of Planning, Strategic Program Office of MedPlus, Inc.
Director of Planning, Strategic Program Office of MedPlus, Inc.
4690 Parkway Drive
4690 Parkway Drive 4690 Parkway Drive
4690 Parkway Drive
Mason, OH 45040
Mason, OH 45040 Mason, OH 45040
Mason, OH 45040
www.medplus.com
www.medplus.com www.medplus.com
www.medplus.com
marla.kouche@medplus.com
marla.kouche@medplus.com joe.messina@medplus.com
joe.messina@medplus.com
http://www.linkedin.com/pub/marla-kouche/7/482/1a
http://www.linkedin.com/pub/marla-kouche/7/482/1a www.linkedin.com/in/joemessina
www.linkedin.com/in/joemessina
Marla J.J.Kouche is the Vice President of the Strategic Program Office of MedPlus,
Marla Kouche is the Vice President of the Strategic Program Office of MedPlus, Joe is aaPlanning Director within the Strategic Program Office of MedPlus, Inc., aa
Joe is Planning Director within the Strategic Program Office of MedPlus, Inc.,
Inc., aawholly owned subsidiary of Quest Diagnostics. With over $7B in annual
Inc., wholly owned subsidiary of Quest Diagnostics. With over $7B in annual healthcare information technology subsidiary of Quest Diagnostics. With over $7B
healthcare information technology subsidiary of Quest Diagnostics. With over $7B
revenue, Quest Diagnostics is the world’s leading provider of diagnostic testing,
revenue, Quest Diagnostics is the world’s leading provider of diagnostic testing, in annual revenue, Quest Diagnostics is the world’s leading provider of diagnostic
in annual revenue, Quest Diagnostics is the world’s leading provider of diagnostic
information and services. Ms. Kouche is responsible for the management of the
information and services. Ms. Kouche is responsible for the management of the testing, information and services.
testing, information and services.
organization’s enterprise-wide customer facing strategies, product planning and
organization’s enterprise-wide customer facing strategies, product planning and
management disciplines and direct product line responsibility for all technology
management disciplines and direct product line responsibility for all technology Since joining MedPlus in 2001, he has held aanumber of positions focused on
offerings. Since joining MedPlus in 2001, he has held number of positions focused on
offerings. systemic change, applying transformative frameworks to NPD, BPM, KM,
systemic change, applying transformative frameworks to NPD, BPM, KM,
innovation and strategy management.
innovation and strategy management.
Since joining MedPlus in 1998, she has held several positions with varying
Since joining MedPlus in 1998, she has held several positions with varying
strategic, technical and business layers, including the role of Vice President of
strategic, technical and business layers, including the role of Vice President of Prior to joining MedPlus, Joe served as aaproduct lifecycle management specialist
Finance for the organization. Prior to joining MedPlus, Joe served as product lifecycle management specialist
Finance for the organization. with Siemens PLM, IBM and Lockheed where he worked closely with clients across
with Siemens PLM, IBM and Lockheed where he worked closely with clients across
aavariety of industries including architecture-engineering-construction, aerospace
variety of industries including architecture-engineering-construction, aerospace
Prior to joining MedPlus, Ms. Kouche was with Deloitte and Touche LLP, the
Prior to joining MedPlus, Ms. Kouche was with Deloitte and Touche LLP, the and defense, automotive, consumer electronics, energy, healthcare, high-tech,
and defense, automotive, consumer electronics, energy, healthcare, high-tech,
international audit and accounting firm. She served as aaspecialist within the
international audit and accounting firm. She served as specialist within the manufacturing, and telecom. He has aaBA in Architecture (1983) from the
manufacturing, and telecom. He has BA in Architecture (1983) from the
SEC and Information Technology sectors.
SEC and Information Technology sectors. University of Kentucky and Balanced Scorecard (BSC) Practitioner Certification
University of Kentucky and Balanced Scorecard (BSC) Practitioner Certification
through Kaplan and Norton.
through Kaplan and Norton.
43

Publications
The Balanced Scorecard, Making Us More Ruthless Execution, 10 Rules for
Robert Kaplan, David Innovative, Amir Hartman Strategic Innovators,
Norton Jeffrey Phillips 2003 Vijay Govindarajan,
1996 2008 Chris Trimble
2005
Blue Ocean Strategy, The Ten Faces of The Global Brain, Democratizing
W. Chan Kim, Renée Innovation, Mohan Sawhney Innovation,
Mauborgne Tom Kelley 2007 Eric Von Hippel
2005 2005 2005
Getting to Innovation, Globality, Fast Innovation, The Human Side of
Arthur B. VanGundy Hal Sirkin, Jim Michael George Managing
2007 2005 Technological
Hemerling, Arindam Innovation,
Bhattacharya By Ralph Katz
2008 2003
Around The The Carrot Principle, Think Better,
Corporate Campfire, By Adrian Gostick, Tim Hurson
by Evelyn Clark Chester Elton 2007
2004 2009
44

Publications
How to get the most 12 Different Ways for Perfecting Cross- Co-Creation's 5
from your best ideas, Companies to Pollination, Guiding Principles,
Accenture Outlook Innovate, Lee Fleming Martijn Pater
2008 Sawhney, Wolcott & 2004 2009
Arroniz
2006
45