A few weeks ago, my oldest son and I went to the theater and saw the J.J. Abrams version of Star Trek.  For the closet Trekkie in me the movies was amazing – remaining close to the core of the original Gene Roddenberry “Wagon Train” in the galaxies, this new version of Star Trek was a wonderful ride.  Walking slowly out of the theater in order to hear the mythic sounds of the original television Star Trek theme music (albeit updated); the sounds were muted by attendees my age or older saying, “Did you see Mr. Spock?  That was the real Mr. Spock, not the other guy…he’s just pretending to be a young Mr. Spock.”

Reality as we know it was altered.  Could there be a real Mr. Spock when he was the figment of a writer’s imagination and the persona of an actor?

Two weeks later Business Week shared research on new product or new service development debunking long held myths that there was a competitive advantage of being first to market.  Any Business 101 student knows that the objective of any strategic plan is the development of a long-term, sustaining competitive advantage.  In deference to the authors of Blue Ocean strategy, the ability to capture strategically a unique differential has been the brass ring of strategists, markers, and planners. 

Citing the fact that reality is more complicated than a business school model, capturing market opportunities in a global environment strewn together with lines of invisible Internet band with, is virtually impossible.  Hitting that moment in time when an idea on target versus ahead of its time is exceptionally difficult.  The team of Moren Levesque, an entrepreneurship researcher at the University of Waterloo Levesque, professors Maria Minniti of Southern Methodist University and Dean Shepherd of Indiana University introduced the hypothesis that evaluating the market entry moment versus waiting is based on observing the participants before the launch compared to learning’s resulting from participation after market entry.  Entrepreneurship Theory and Practice published the result of the research indicating the role of different learning environments as an influencer to entrepreneur market entry behavior and actions. 

If an environment is considered hostile, there is minimal benefit waiting.  If the learning environment is less hostile, observing other players and other companies can have a benefit to identifying the right moment to enter the market.  Within healthcare, the timeline for development of a new pharma treatment or a minimally invasive procedural option is long and cumbersome.  Observation in this less hostile environment is beneficial and a tool for strategic planning.  Development of a new access site of care or electronic medical record technology, for example, lives within a light speed decision-making process.  Observing specific indicators will not support a better decision therefore, action is warranted.

 

If the research is accurate, the generation-old theory of first to market may not be true.  (Note:  As a graduate of Indiana University, home to one of the researcher’s disbelief would be as unacceptable as not paying alumni dues.)  There is a degree of common sense in the idea that reality is messy and competitors more often follow their individual decision-making patterns versus business theory.  For example, if an integrated health system has consistently been late to market without a significant change to the organization their decisions will not change. 

There was a health system whose physicians were not supportive of bariatric surgery.  Regardless of the research, outcomes, and “conference speak” surgical weight loss was too difficult and without insurance coverage would not be requested by consumers.  At the same time, a small, independent for profit hospital had a medical staff fully engaged in the idea of a bariatric center of excellence.  They began their journey of capturing the lion’s share of the initial surgical weight loss market over fifteen years ago.  They did this while all of their colleagues at the larger integrated system sat back in disbelief and wonderment – especially about malpractice rates.

Once the program was well established and the tone of concern for surgical weight loss deadened by the stampede of consumers who wanted the surgical option, one of the largest integrated healthy systems used their financial resources to simply shift the physicians and program to their institution.  Second to market was successful.  The original, for profit facility was unable to regain the stature of dominance and corresponding volumes enjoyed previously.  As other competitors entered the market duplicity was the rule of thumb and look-alike programs sprang up in settings that were appropriate and unfortunately those that were inappropriate due to safety and quality.  The look-alikes copied the surgical program because that is where the profitability was identified.  These surgical and administrative leaders failed to dig deeper and really examine those initial, gold standard programs. 

A common characteristic found with the gold standards sites was the presence of a system of care.  Surgical weight loss was one option among a host of options focused on weight loss.  The surgical volumes were exceptionally high for the g old standard site; the number of consumers entering the system who did not have surgery was tremendous.  Regardless if the program was third or fourth to market, the opportunity was seized by the small independent hospital and the opportunity to move into the market at just the right time was expedited by careful examination and due diligence of observing the value proposition, buying habits, and the need to quality and safety as the objective versus profitability.

There is a secondary learning in this case study.  Do not loose site of the fact the first hospital in the market to develop a program was a for-profit facility.  Keenly aware of consumer interest, demand, and spending habits, the for profit or retail site of care was able to recognize a trend in its early stages based on pent-up consumer demand concurrent with managing the clinical advances, outcomes, and quality standards.  The ability to target the best moment of entry was at the cross section of consumer demand, clinical outcomes, and financial investment.

In a few years, my grandson will not know the difference between the real Mr. Spock and the fake actor playing Mr. Spock.  The idea of laptops, mobile telephones, and space travel will be reality and not the physical incarnation of a science fiction writer.  This is not so different from the evolution in medicine from identification of an illness to identification of a treatment. 

Peter Drucker said of innovation:

  “…innovation is more than a new method.  It is a new view of the universe, as one of risk rather than of chance or certainty.  It is a new view of man’s role in the universe; he creates order by taking risks.”

Finance departments will always make 1 + 1 = 2 and business theory will become static.  If we are to accept this new research and waiting is as good as first to market, we will “boldly go where no man (or woman) has gone before.”