On December 22, 2022, the Peking University Global Health and Development Forum 2022 was held with the main theme of Digital Transformation and Development Divides. Co-organized by the Beijing Forum, Asian Development Bank and PKU Institute for Global Health and Development, this Forum brought together world leading scholars, policy researchers and industry leaders from both China and international communities to share their insights and recommendations on the thematic topics, attracted over 10 thousands online viewers participated in the event. John Glaser, Program Director of “Leading Digital Transformation in Health Care” at Harvard Medical School and the former Chair of the Global Agenda Council on Digital Health at World Economic Forum delivered a keynote speech at the session of Digital Transformation in Healthcare.
It is a great pleasure to be here today to discuss the digital transformation of healthcare. As many of the speakers have noted, we are currently in the early stages of this process. Our goal is to apply technology to improve the management of chronic diseases, reduce unnecessary variation in care, and accelerate the discovery of new treatments and therapies.
One of the key things we should do as we engage in the digital transformation of healthcare is to learn from the experiences of other industries. Industries such as retail, financial services, entertainment, and agriculture have already undergone their own digital transformations and can provide valuable insights to guide us in our own journey.
We can see a simple framework emerging across all of these efforts. At the top left, there is a clear vision for what the organization wants to achieve. This vision may include improving the ability of people with diabetes to manage their health or ensuring that people in rural areas have access to specialists. In light of this vision, we then examine the top right and consider which technologies can help us achieve it. For example, can artificial intelligence help us? Can various sensors help us? What capabilities can be brought to the task? Sometimes, new technologies open up new opportunities or allow us to tackle problems that were previously difficult to solve.
Once we have linked the vision to the technology capabilities, we move on to the second set of boxes, which includes the plan for what we will do tomorrow and next year, including budgets, phases, and staffing. Another important aspect is the competencies and capabilities of the organization. These can greatly enhance the likelihood of a successful transformation or hinder it if they are lacking. It is often neglected but it is crucial for the success of the transformation.
Managing change is a critical aspect of the digital transformation process. Organizations must assess their capabilities and competencies in order to successfully embark on this journey. Two major activities that organizations must undertake include managing change and experimentation. Transformation implies a significant level of change that will affect not only the organization but also its employees, patients, partners, community, and government. Change management is essential in order to introduce a new way of working to all of these stakeholders. Additionally, the vision of transformation may be aspirational, but organizations may not have a clear understanding of how to achieve it. Experimentation and learning are crucial in order to tune the vision and learn about new technologies.
Furthermore, organizations must constantly assess their plans and factors, and repeat this process periodically. Transformations are never truly complete as the world is constantly changing, with new technologies and external factors emerging. This process, involving the establishment of a vision, linking it to technology, and assessing plans and factors, forms a continuous loop, with change management and experimentation being key success factors.
Additionally, it is important to note that most transformations are not successful, with only 30% of transformations deemed successful by the companies that launched them. The majority, about 44%, were disappointing in their results, and 26% failed completely. This highlights the importance of careful planning, risk management, and change management in order to achieve the desired outcomes of a digital transformation.
Transformations are highly risky and difficult to execute successfully. When they are successful, there are typically three major reasons why. The first is a focus on the transformation itself, with the technology being secondary. Organizations must remember that the technology is only valuable to the degree that it helps them achieve their objectives. A common problem is becoming too enamored with the technology and forgetting the reasons for undergoing the transformation in the first place.
The second reason for success is the implementation of an innovative business model. A business model is the way an organization will provide its services and how it will generate revenue. Successful companies often change or innovate their business model in order to better meet the needs of their customers and stand out from competitors. For example, a hospital may shift from being a provider of inpatient care to a provider of care across a variety of settings such as clinics, homes, and nursing homes. The ride-hailing service companies such as Uber, Lyft, or Didi have a different approach of how to get customers from one point to another in a city, making it easy for customers to find the driver and pay for the service.
The third reason for success is the focus on change management, which is critical in order to introduce a new way of working to all of the stakeholders involved in the transformation. This includes the organization's employees, patients, partners, community, and government. The transformation process is not just about implementing new technology or changing a business model, it's also about managing the people and processes involved to ensure that the organization and its stakeholders can adapt and benefit from the changes.
An innovative business model is one that gives a company or organization a competitive advantage and puts its competitors at a disadvantage. The way industries transform is often through the emergence of pioneers, whether they be current incumbents or new entrants, who come up with new and innovative models that are then copied or replicated by others. Eventually, the industry's definition of what it means to be in that industry changes, as what and how of doing business evolves.
An example of a change in what is Amazon's recent acquisition of One Medical, a large physician practice group in the United States. Amazon is now expanding its business to provide direct patient care and changing what it means to be in the retail business. An example of a change in how the use of continuous glucose monitoring is to measure and assess a patient's diabetes status. This provides an ongoing, around-the-clock measurement of glucose levels, feedback to both the patient and the provider, and alerts if the patient may be in trouble, along with information about what may have caused the spike in blood sugar, such as a meal or exercise.
Business model innovation and change management are two major reasons for the success of a digital transformation. And the third reason for success is that the transformation achieves the goals they had in mind, that is on time and within budget.
The key to a successful digital transformation is strong organizational competencies. One of the reasons for failure is the lack of capability or sufficient skill to be innovative or manage change. In order to be successful in digital transformation, organizations need to have competencies such as the ability to learn, be agile and have effective leadership.
According to research done by MIT, organizations that excel in digital transformation have a focus on innovation and product development. They are constantly learning, gathering consumer feedback through minimal viable products, and are good at disseminating that learning throughout the organization. They are also agile, able to quickly shift focus or reallocate resources as needed in response to new learning.
Leadership is also a key competency in successful digital transformations. Organizations that empower their front-line staff, such as doctors and nurses, to lead the transformation have a better chance of success. This ensures that the transformation is tailored to the specific needs and context of the organization, rather than being dictated by those at headquarters who may not fully understand the intricacies of the field.
Organizations that excel in digital transformation possess a number of competencies that set them apart from their peers. One of the most important of these is the ability to understand what is working and what is not, and to make the necessary changes accordingly. Additionally, they possess strong skills in change management. This means that they are able to communicate the need for change to their employees in a way that empowers them to drive the transformation, rather than feeling like victims of it.
To achieve this, these organizations often push decision-making power as far down the hierarchy as possible, and hold employees accountable for delivering on their responsibilities in the transformation. They also excel in encouraging innovation, and are able to fund new ideas while also knowing when to terminate those that are not successful. Failure is seen as an opportunity to learn and improve, rather than an occasion for blame or punishment.
Managing change is perhaps the most critical competency of these organizations. They understand that transformation requires significant changes to what an organization does and how it does it, and are able to navigate the process of transformation effectively. They follow best practices such as the 8-step change management framework proposed by John Kotter of the Harvard Business School, and understand how to create urgency, build teams, develop vision, and sustain momentum through the process.
Finally, these organizations understand that transformation is an ongoing process, and that it never truly ends. They approach it as a journey that is ongoing, not a project with a fixed endpoint. It is important to note that such transformation takes time, like transforming automobiles from gas-powered to electric-powered, it may take many years. The process is also incremental and iterative, and one organization may take many steps on the journey.
In conclusion, organizations that excel at digital transformation possess strong organizational competencies, such as the ability to learn, innovate, and manage change effectively. These organizations prioritize learning from external sources and colleagues, as well as quickly and decisively responding to new information. They also promote a culture of empowerment and accountability, encouraging employees to take ownership of the change process. Furthermore, they recognize that transformation is an ongoing process that requires time, patience, and the cultivation of relevant competencies. As a constant effort in learning, adapting and innovating, it is important to be equipped with the right skill set and to have the right mindset. Transformation, like finance and human resources, should be treated as a continuous journey that organizations must embark on. I hope my comments have been informative and helpful.
