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Branding And Healthcare

Healthcare Brands And Dinosaurs

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I gave a speech at HIMSS last week, the largest healthcare event in America and my topic was “Disruptive Innovation and the Consumerization of Healthcare”. As I think more about it, there is a really good lesson learned from Kodak for brands in the healthcare industry.

Moore’s Law is a predictable law that has accurately forecasted the performance and cost improvements of microprocessors for over 40 years. Evolutionary improvement is a totally linear concept.

Innovation is NOT evolution!

Yet innovation never occurs in such a predictable linear way. After I left Apple in 1993 I was asked by the new CEO at Kodak to advise on the future of digital imaging. My advice at the time was pretty simple. “Kodak should focus on picture making, not just picture taking”.  As a $20 billion market cap company, I said why not try to acquire Adobe the creator of Photoshop which was trading at about $1.2 billion?

The executives at Kodak, were top of their class chemical engineers. They saw the growing importance of digital imaging, but in their linear analysis of the digital threat, they concluded it was decades away from becoming mainstream so they doubled down on vertical integration into film processing while setting up a small ancillary digital imaging group to develop and sell digital cameras.

By the early 2000s, digital camera picture quality was getting very good, broadband Internet was coming on strong, and inexpensive photo quality printer meant there was now a high quality end-to-end system for digital photography. Kodak however, was still focused on marketing its single use film camera, which continued to sell well.

In 2007, everything changed almost overnight and Kodak was completely caught unprepared. Apple and Google introduced smart phones that could take high quality photos and send them wirelessly over the now widely available 3G Network.

Meanwhile, Facebook almost overnight became a social media sensation with most of its content made up of personal photos sent from smart phones. Many people abandoned their single use film cameras and stopped printing photos as publishing photos to Facebook took off. A perfect storm decimated Kodak in less than 2 years. Last year, Kodak filed for bankruptcy.

Disruption is non-linear.

I believe the consumerization of healthcare holds really big opportunities for breathtaking innovation. It also holds perils for healthcare brands who fail to adapt and prepare for non-linear disruption.

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