Ninety percent of healthcare chief strategy officers (CSOs) think new technologies will transform their industry over the next five years. Yet only 13 percent feel their organizations are prepared. This is far less than peers in other industries, reveals Accenture research. How can CSOs get ahead of disruption and set priorities, make investments and allocate resources to compete and win in such a dynamic environment?
A perfect target
The US healthcare industry is uniquely susceptible to disruption. It is a growing industry with widespread inefficiencies that draw new entrants looking for opportunities. In fact, even the hint of incursions by non-traditional new entrants has negatively impacted share prices across healthcare segments including health insurers, distributors, pharmacy benefit managers and drug makers.
Big technology platform players, in particular, bring distinctive capabilities like consumer relevance, artificial intelligence, and digital supply chains powered by ecosystem effects and large cash reserves. All of these aim to address longstanding healthcare challenges and leapfrog incumbents.
Winners focus here
The survey results indicate that disruption-ready healthcare companies (those with CSOs who feel prepared for disruption) are more likely to engage in three functional activities. These are growing and maintaining ecosystem partnerships, developing cross-industry platforms, and building and sustaining collaborative operating models.
It is no coincidence that the technology players rapidly breaking into healthcare have digital business models that are enabled by technology and cultural competencies to excel in these same areas.
Where healthcare stacks up
While disruption-ready healthcare companies are engaged in these important areas to defend market share, innovate and grow the business, their performance lags peers in other industries. This signals they are not realizing the full value of their efforts. Accenture’s survey of CSOs reveals how healthcare stacks up in three areas of cross-industry comparison:
- Partner or Perish. These companies are more likely than the rest of the industry to partner with competitors, logistics companies, innovators and retailers. However, they fall short in partnership engagement compared to other industries. They are in the bottom half of all industries in collaborative partnerships. (see Figure 1)
- Push for Platforms. Platforms are the powerhouses of the ecosystem, connecting consumers with producers of services. Even though more healthcare companies are investing in platforms (see Figure 2), healthcare ranks last in its perceived benefit from these investments. (see Figure 3)
- Explore the Uncharted. A little more than half of disruption-ready healthcare CSOs report focusing outside of traditional ecosystem strategies. Cross-industry leaders including pharmaceuticals, telecommunications and chemicals are much more committed to rethinking business models to match ecosystem strategies. (see Figure 4)
Take control of disruption
Healthcare CSOs can take action to ensure that disruption is an opportunity for the business rather than a threat:
- Don’t face disruption alone. Deepen and broaden alliances with a diverse array of companies in and beyond the healthcare industry to become a part of the ecosystems that customers engage in.
- Make the company indispensable. Become a critical part of the integrated solutions that today’s customers demand. Tap into customer data insight for customer-focused solution development.
- Embrace operational flexibility. Take a deep, hard look at what organizational changes are needed for the company to be more collaborative and open.