Obamacare and Innovation

This is a re-post of an article on Obamacare written in March when the case was before The Supreme Court.  Now that we know the basis for the constitutionality, let's look at the new American health care system through the lens of innovation and entrepreneurship. 

No matter what side of the Obamacare debate you come down on, it is big news this week as The Supreme Court hears the arguments for the single payer mandate, commerce clause regulation, and whether the government in the future can make you buy a cell phone or broccoli! 


No matter how you slice it or dice it, we have a problem in American health care.  In our employer based system, many small entrepreneurial startups cannot lure in talent using the health care benefit because they cannot afford it.  This in turn stifles new business growth. 


In addition, the uninsured expect to be able to get health care at the hospital when they need it with no responsibility to pay.  Those costs are rolled into the fees charged the insured!  So, the argument goes, wanting privilege without responsibility needs to end by mandating that people get their own coverage.  This will increase the number of insured which helps health insurance companies. 


All of this sounds good, BUT.  What about the constitutional issues and the relationship between a government and its people, freedom, individual rights, and so forth?


I am not making this article partisan.  In my research, I found constitutionalists are writing much more on the issue of how Obamacare will effect innovation, so there are more articles here from that perspective.  I would appreciate it if anyone can provide more arguments for innovation from the pro-Obamacare point of view. 


No matter how this turns out, there is much room for innovation in the way we do health care in America. What do you think--will innovation be helped or hindered by Obamacare?

• Obamacare to Spend $1 Billion on Innovation (The New American)
• Obamacare's threat to medical breakthroughs (Orange County Register) 
•  Looking for Solutions in a Rapidly Changing Health Care Environment (Knowledge@Wharton)
• Taxing Medical Progress To Death (Michelle Malkin) 
• How Obamacare Is Putting Medical Innovation in the Hospital (AEI)
• Obamacare CER Institute Seen as Threat to Innovation (Heartland Institute)

Before we go today.. I love books of lists!  I loved this and hope you do too!

• The World's 50 Most Innovative Companies.  (Fast Company) 

Diffusion of Innovation

Diffusion of innovation is an idea that some groups within a market are more ready and willing to adopt a new product than others and that the product is diffused through a society in waves.  




One of the biggest threats to preventing diffusion of a great innovation can lurk within.  In your organization, who are the innovators, early adopters, early majority types, late majority types, and laggards?  One of the challenges most of us face where we work is selling an idea to people in our own organization. 

People who as consumers tend to be laggards or late majority should not be put in positions at work where they can prevent innovation--here's why. 

Your ability to compete is often hindered by the play-it-safe crowd.  Let's stay with our proven "same-old" products and services because they prefer the safety of the familiar. 

The lesson of Kodak is staying with film and not moving forward in their digital innovation gave competitors an the opportunity to kill Kodak with their own sword.  The Kodak "play it safe" in our familiar territory approach to business is at best dangerous, and at worst life ending. 
The four main elements in the diffusion of new ideas are:
(1) The innovation
(2) Communication channels
(3) Time
(4) The social system (context)

Why do new ideas get shut down before they can ever get an opportunity for wider diffusion into the market?  Many times, organizational leadership puts people in positions where they become gatekeepers of innovation.  So, your own company social system can be a threat to your company's success if people who are laggards as consumers are put in positions where their "lagging" personality shuts down communication of ideas, innovation, and entrepreneurship at work.

For example, if you have a person who tends to avoid risk, play it safe, does not want to rock the boat, is controlling and on a power trip, does not like change, does not have a smart phone or use email, or thinks tomorrow will always be the same as yesterday, then it is likely good ideas will be aborted before they ever get a chance to grow by people who are by nature resistant to new ideas. These people are innovation killers.

Laggers will never communicate good ideas coming from those working under them to people above them.  Having naysayers as gatekeepers can lead to competitors having first mover advantage, and taking over your place in the market--can anyone say "Research in Motion?"

A proper balance of taking successful products through their full life cycle, knowing when to cannibalize your own old products, having good research and development, and maintaining the same entrepreneurial spirit that brought you success in the first place are keys to success in your industry!

• The Theory (Parsons The New School of Design) 
• Diffusion Applied: How Great Leaders Inspire Action (Simon Sanek)
• A cool video that explains this in under 4 minutes: Below

Youth Entrepreneurs and More Reads For Today

• All Terrain Brain: Great site for 8-12 Year olds to discover the entrepreneurial spirit (Website)
  
  Read how kids have started their own businesses.  Then, follow the roadmap (great videos--follow the maze).
• Startup Basics--From EIN to Workers Comp   (Business News Daily)
• New Teaching and School Models (Kauffman Foundation)
• The Founders Dilemmas.  Read author intro here.  Watch a sketch by Noam Wasserman here.  

Innovation Steps

The main idea I want you to think about today is this: What problems are people facing in a slow stagnating economy that you can turn into innovation opportunities?  What are people complaining about most?  What solutions are people searching for?  Now think through these innovation steps

Innovation Steps

1. Problems people have are most often the driving force behind innovation.  Problems, in reality, are human needs.  New ideas and ventures start with a problem.  The root of innovation is people want something solved, thus human need is the breeding ground for innovation.

Make a list of problems people have in the present economy.
2.  In many cases, an "aha moment" is the spark that lights the fuse of idea dynamite--exploding creative ideas that are the seed of solutions to solving the problems people have.  

Look at your problem list and brainstorm solutions.  Write them down because you will forget them. 

 3. Ideas alone will not result in innovation.  Ideas go through trials, iterations, and a development process.

The innovation process takes the idea and first prototypes it out to people.  Then, based on feedback, ideas are refined over and over asking "Will this solve your dilemma?"  

Who will you want to show your proto-type solution to?  Are you willing to listen--I mean really listen to people?

An Old Example



Let's make the abstract concrete.  The old Miller Lite beer problem was we want something that tastes great, but is less filling. 

Many businesses face this same challenge today as Americans are thinking more about obesity and health. 

People want healthy food and beverage items that are good for you, and taste good.  The problem is people are feeling pressured by society, wellness programs, and peer pressure to get healthier. 

So, let's say you devise a great idea for a zero carb product.  You roll out your prototype and ask customers and potential customers over and over and over--Does it taste good?  Is it healthy enough to meet your health and taste concerns?  This is how the iteration step works.

4.  Your innovation iteration launches your marketing plan.  As you have people try your products or services, look for which segments of people are responding most positively.  It may not be who you expected. 

Exposing your innovative solution to future customers helps with customer analysis and targeted marketing should you go to market. 

In our company, we were targeting the weight loss segment with a new low calorie "light bread," and in the process discovered diabetics found our product meeting their nutritional needs.  We never thought of that segment till we were doing store event promotions and talked to people receiving our promotional products!

All of the innovation steps described above can take weeks, months, and even years.  If you have an idea that you and many others think is good, be persistent and one day it just may pay big dollars!

Keep innovating! It is what America does best, and is the key to a recovery banging on all cylinders.  Go out and win!