Disruptive forces: Coming to a business near you
In a world where companies that didn't exist a generation ago are now global heavyweights, businesses of all stripes need to adapt or risk unforeseen consequences.
Claire Celeste Carnes, Providence Health & Services' innovation venture partner, told a Chamber Forum audience Monday that businesses need to find ways to perform better, faster and cheaper because disrupting influences will change industry models with or without the participation of existing players.
"Everybody has a little bit of technology in their jobs today. Twenty years ago, you would go, 'I don't want to do email, that's not part of my job,' " she said. "Now, of course, we all do. You can actually build a prototype and show someone your product within a week. You need 3D printing, that speeds up the cycle of innovation much more quickly."
When the economy is strong, venture funding is good, Carnes said.
"We're seeing crazy, crazy deals," she said. "A lot of money is pouring into start-ups, and quite honestly there is more infrastructure for start-ups. The practices are better understood, there is a lot of education and every good MBA program has a focus on entrepreneurship."
The key drivers in innovation, Carnes said, are reducing customer friction and pain, deciding who matters and measuring what's working.
Mobile-app-based transportation firm Uber solved a major friction and pain point, she said, with its cab rides on demand. "Uber wasn't the first; there were other ride-sharing services. But they won because they identified a way to solve customer pain: Where is my cab? Will I make it to the airport on time? The pain point wasn't that you couldn't get a cab, but you don't know where it is."
She noted Alaska Airlines sped up things by allowing travelers to check in on their cellphones. Amazon eliminated the three steps between authors and readers by removing distributors through e-commerce in 1996, letting people self-publish beginning in 2005, and then digitally sending books to devices in 2007.
"They eliminated the friction in the system, and take margins on both ends," she said.
Behavior is, nonetheless, hard to change.
"Do you think innovation is easy? No, it's going to be hard," she said. "People can't picture what they want."
Providence recently released a $39-per-visit app called Health eXpress designed to make health care readily accessible via computer, smartphone or tablet. Patients meet with a board-certified doctor or nurse practitioner through secure video technology.
Carnes said patients have noted the doctor or nurse is looking directly at them rather than peering off in another direction because of the video.
"If people use our Health Express model they may not come in our clinics. We actually don't charge as much for that online model as we do in our clinics. Is that really a good thing? Absolutely. We have to disrupt ourselves or someone will do it for us — gladly."
That's what innovators do, she said.
"They don't care about our heritage or our history or what we're really good at or what we've done in the past," she said. "They don't care what it cost me to do something, because they can do it cheaper. They don't care that we serve the community, that we have a long history of working in our community."
Start-ups offer something for free with the idea that customers will pay for the product if they want more or buy a subscription, she said.
"They're working on those ideas to figure out if it's a good idea," she said. So if they lose money short-term, it's no big deal.
"We don't have any claim to our customers. We earn our customers every transaction, every day. No matter how mundane or well-established you think your business is, think about whether you are ripe for disruption."
Reach reporter Greg Stiles at 541-776-4463 or firstname.lastname@example.org. Follow him on Twitter at www.twitter.com/GregMTBusiness, on Facebook at https://www.facebook.com/greg.stiles.31, and read his blog at www.mailtribune.com/Economic Edge.