By KIM BELLARD
I read two articles this week that got me thinking, Robert Charette’s “Inside the Hidden World of Legacy IT Systems” (IEEE Spectrum) and Douglas Holt’s “Cultural Innovation” (Harvard Business Review). Both deal with what I’ll call legacy thinking.
It’s a particular problem for healthcare.
If you work in a large organization, especially one that has been around for at least a few decades, the words “legacy system” probably strikes angst in you. If you’ve dealt with such an organization, legacy systems probably contributed to problems you may have had with them. Think about health insurance claims systems, hospital billing systems, financial institution account records, or practically any government system.
Dr. Charette points out:
Though these systems run practically every aspect of our lives, we don’t give them a second thought because, for the most part, they function. It doesn’t even occur to us that IT is something that needs constant attention to be kept in working order.”
Because they usually work OK, management often doesn’t want to risk the potential disruption of replacing or modernizing them, so they get older and older, with more and more layers built on them, and with the people who originally built them or understand the language they are written in (e.g. COBOL) gone.
The problem is that not only might legacy systems start breaking down, but, as Tony Salvaggio, CEO of Computer Aid, Inc., told him, new technologies are “going to blow up 30 to 40 percent of [existing] business models.” Companies reliant on outdated legacy systems may find themselves not able to compete.
I spent several years working in a large Blue plan trying to bring it into the digital era. Legacy systems were the bane of our efforts. Legacy system thinking limited how developers approached our projects, what skills they brought to them, and how the projects were managed. I like to think we won the war, but we lost more battles than we won, settled for more compromises than we should have had to, and always had to design knowing those legacy systems would limit what we could deliver to our customers.
And my Blue plan was considered one of the most innovative Blues.
Healthcare is limited by legacy systems not only in how it can innovate but how it can think about innovating. Which bring me to the second article.
Dr. Holt, a former Professor at the Harvard Business School and now a consultant on branding and innovation, distinguishes between incremental innovation – “build a better mousetrap” – and “cultural innovation” — reinventing the market. As he says:
Cultural innovation operates according to qualitative ambitions: Change the understanding of what is considered valuable.
He walks through some examples, using them to explain five steps to cultural innovation:
- Deconstruct the category’s culture
- Identify the Achilles heel
- Mine the cultural vanguard
- Create an ideology that challenges the Achilles heel.
- Showcase symbols that dramatize the ideology
As he reminds us, “Markets are belief systems embraced by those who participate in a category: companies, consumers, and the media.” I’d never thought of healthcare as a belief system, but it’s a good a mental model as I’ve heard.
If I get sick, I go to the doctor. I may ask a few questions, have some preferences, but the doctor is the expert. If I’m sick enough, I go to the hospital, where they do more expensive things to me. Oh, and, to the extent possible, someone else should pay for my care. I wait a lot for things to happen.
That’s a fragile belief system.
Healthcare doesn’t have “an” Achilles heel; it is almost nothing but Achilles heels. There is no shortage of “cultural vanguards” nibbling away at the margins of healthcare, such as DIY, biohacking, or even SDoH. But none of them has — yet — made the case for a new ideology that truly challenges our existing status quo. None of them are – yet – forcing us to examine healthcare from the outside.
Dr. Holt goes on to say:
Even if they don’t think in such terms, companies are masters of their category’s existing culture. They have to be to excel at their current business. Their metrics and planning focus on it. As a result, managers come to perceive the category as an immutable reality, even though it’s actually built on a fragile consensus. If you’re trapped in the present tense, it is extremely difficult to examine the category from the outside and identify its emerging flaws.
Healthcare is built around doctors, hospitals, insurance companies – but that’s our existing belief system. Those doctors, hospitals and insurance companies are built on legacy systems – but, again, they don’t have to be. Healthcare is trapped in the “present tense.”
Dr. Holt warns:
Incumbents are so intent on winning the category as it’s currently defined that they fail to identify cracks in its foundation. Cultural innovators outmaneuver them because they look for opportunities to blow up the dominant ideology in favor of a new regime.
As I’d previously suggested, First, Let’s Blow Up All the Hospitals.
I’ll give an example from yet another article, Alex Voight’s Tesla Introduced A Business Model the World Has Not Seen Before (Clean Technica). Tesla, which is now the largest car manufacturer by market capitalization despite far fewer actual sales, is playing a different game. Mr. Voight argues: “Tesla is the only automaker worldwide that continuously improves the vehicles it has sold, and for free.” If you are an automaker that doesn’t do the same, “you won’t be in business for very long, or will shrink until you are unrecognizable.”
We don’t have a “Tesla” for healthcare…but someday we will. The status quo is not an “immutable reality.”
If you are in healthcare and rely on legacy systems, you’re in trouble. If you are in healthcare and are not acutely aware of what your Achilles heel is, someone else is going to exploit it. Even if you are a new healthcare entrant with more modern technologies but still based on the current ideology, your impact is going to be limited.
We usually think of “legacy” as something we want to pass to future generations, but there are too many of healthcare’s legacies that we shouldn’t. We spend too much time talking about innovation culture when we should be thinking more about cultural innovation.
Kim is a former emarketing exec at a major Blues plan, editor of the late & lamented Tincture.io, and now regular THCB contributor.