The importance of workflow

November 3rd, 2011

This evening I had a personal epiphany on the importance of workflow on the adoption of innovation. For the last year or so, I had the Dragon Dictation app on my iPhone, but rarely used it. Now that Siri allows me to dictate directly into the iPhone’s E-mail application, I use it all the time! The seemingly insignificant ‘burden’ of having to dictate into the Dragon app, then copy/paste into an e-mail was, apparently, quite a significant barrier to my adoption of this really valuable voice recognition feature.

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Twitter at RSNA 2010

January 3rd, 2011

The results for RSNA 2010 are in, and the level of Twitter activity was significantly higher than last year. There were 394 different users who used the #RSNA10 hash tag, up from 163 in 2009. Collectively, they sent out 1818 messages, which was easily double the amount of messages sent out during the previous year’s conference (2009: 857 tweets).

Interestingly, the level of social engagement was up this year over last. Using the number of retweets and replies as a measure of message amplification and person-to-person interaction, respectively, 2010 showed significant improvement. Retweets accounted for 24% of the total traffic versus 16% in 2009. Replies were up to 19% versus 11% in 2009.

These results suggest that the Twitter audience is growing at RSNA, and that audience is becoming more engaged in this form of social media.

Figure 1: Analysis of tweets containing the #RSNA10 hash tag, decomposed into tweets, re-tweets, and replies.

Figure 2: Top 15 tweeters (left), re-tweeters (middle) and repliers (right). Analysis of all tweets containing the #RSNA10 hash tag.

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Burning trains and statistical lies

December 31st, 2010

Earlier this week, one of Israel’s trains caught on fire and halted all traffic between Haifa and Tel Aviv, one of Israel’s busiest rail corridors. Despite this service interruption, YNet News reported that Israel Railways claimed a 90% on-time performance metric during the same time period. A miracle, right?

It turns out that Israel Railways only counts operating trains in its calculation. So, all trains that would have been traveling on the Haifa – Tel Aviv line were selectively taken out of the equation! “Lies, damned lies, and statistics.

Motivation for this creative accounting? On-time performance is used by the Israeli government to set subsidies for Israel Railways.

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Moral hazard in the judicial system

October 22nd, 2010

Much has been written about the moral hazards of our financial system, but today’s CNN headline indicates an interesting parallel in the judicial system: “Jury awards $18.5 million to man cleared by DNA.”

A first jury convicted this individual, without bearing any significant risk (beyond a weight on their conscience) that their judgment may be wrong. A second jury then awarded damages that are paid for by the state. Once again, the jury bore none of the financial downside of their decision. That is, until the State of New York decides to raise the jurors’ (and your) taxes to cover the now larger budget deficit.

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One way Twittering at RSNA 2009

December 19th, 2009

Overcoming the legal and regulatory hurdles associated with social technologies in MedTech is just the beginning of the battle. Companies must still segment their audience by their social-graphic tendencies in order to develop a Web 2.0 strategy that fits with their patients’ and physicians’ social technology engagement habits. I recently attended the annual meeting of the Radiological Society of North America, where social technology crossed paths with physicians and the medical imaging industry in a high-profile way. 

Conference organizers generated hype around Twitter and pre-announced that Twitterers should include the #RSNA09 hash tag to label their RSNA related tweets. A live feed of #RSNA09 tweets was posted prominently on the main RSNA conference web page. Yellow-shirted Twitter teams walked around the conference to promote the medium by drawing attention to themselves (yellow t-shirts in a sea of suits) and sponsoring Twitter-mediated giveaways. 

As a result, 163 Twitterers sent a combined 857 tweets in the nine days around the official four and a half days of the conference (see Figure 1).  The top 15 Twitterers, who generated over 55% of the total tweets, were overwhelmingly represented by commercial vendors and the RSNA staff (see Figure 2). 

 

Figure 1: Analysis of tweets containing the #RSNA09 hash tag, decomposed into tweets, re?tweets, and replies.

Figure 2: Top 15 tweeters, re?tweeters and repliers. Analysis of all tweets containing the #RSNA09 hash tag.

 

A lexical analysis showed that 141/857 (16%) of the #RSNA09 tweets were re-tweets, indicating that one person thought it worthy to repeat what another person had said. An additional 80/857 (11%) of the #RSNA09 tweets were directed at, or explicitly mentioned, another Twitterer. Using the re-tweets and referential/conversational tweets as a measure of social interaction among conference attendees and vendors, this analysis shows that there was only a moderate amount of Twitter-mediated social interaction at RSNA 2009 (27% of all tweets). 

Was Twitter an effective outbound marketing channel at RSNA09? Perhaps; the silent customers, including physicians and hospital administrators, who may have been following the #RSNA09 twitter feed, may have read vendors’ tweets and subsequently followed a hyperlink or visited their exhibit at the trade show. The entry cost for vendors to use this communication channel is negligible and their actions are immediately observable, which facilitates a rapid competitive response (see Figure 3). Yet, the modest level of social interaction suggests that the Twitter audience was not fully engaged by this social technology. 

Figure 3: Three large medical imaging vendors: cumulative tweeting by day at RSNA 2009. Philips and Siemens demonstrated a relatively consistent level of twittering, while General Electric had a surge of activity on the second day of the conference.

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Social technologies in the medical technology industry

December 16th, 2009

Medical device and pharmaceutical vendors in the regulated health care industry are feverishly trying to develop Web 2.0 strategies that leverage social technologies to connect with patients and health care providers. However, progress has been slow, in large part due to the FDA‘s existing regulations on product labeling and the lack of clear guidance on how existing regulations from traditional print and television media apply to the newer, internet-enabled Web 2.0 channel.

My use of the term “social technologies” is a conscious choice over the ubiquitous “social media”. The latter connotes a communications strategy aimed at pushing out a message, as the marketing function has traditionally done through newspapers, magazines, and television. The tools that enable social interaction on the internet are capable of offering companies much more than an outbound marketing channel. When used effectively, Web 2.0 enables individuals to come together as a community. I posit that Web 2.0 has flourished in settings where individual users perceive a direct benefit from their engagement, and where they feel empowered and free to interact. Companies that can create the right environment for their customers will reap much more benefit than can be achieved from “just another outbound marketing channel”; these companies will be able to harness their communities’ collective wisdom for driving innovation processes and rely on customer-to-customer interaction for word of mouth marketing and for solving simple service requests.

One of the key, fundamental differences between the old and new channels is directionality. Print and television are largely unidirectional, allowing vendors to disseminate a carefully crafted message that complies with FDA regulations. The internet made it easier for customers and vendors to engage in instant dialogues, which can still be controlled and made to comply with regulations on labeling. On the other hand, Web 2.0 social technologies bring together groups of people so that they can interact with one another. These tools benefit from network externalities, but as the number of engaged users grows, the resulting multilogues become harder, if not impossible, to control. Further complicating matters are tools like Google’s SideWiki, which allows a user to visit any site and to leave comments in the margins of the web page. The comments are stored on Google’s servers and are adjoined to the site’s web page only in the users’ web browser. The website owners have no control over the comments that visitors leave in the SideWiki [1] but a naïve third party may go to the company’s website, stumble upon the SideWiki discussion, and think that the company is somehow involved. Legal and regulatory teams fear that a visitor may discuss an unapproved application of their medical device, and that the FDA will hold the company responsible for off-label promotion. Unfortunately, the FDA has not provided guidance and companies can’t control and don’t have the resources to respond to every SideWiki comment on every page that may be left on their websites.


[1] Last month, Google announced a webmaster SideWiki entry which allows the owner of the website to write a special SideWiki entry that will remain the top entry of that page. This may be exactly what the FDA regulated industry ordered; companies will now be able to leave a disclaimer distancing themselves from the rest of the user generated notes in the margins.

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Disruptive innovation in the medical technology industry

November 22nd, 2009

In their article “Disruptive Technologies: Catching the Wave”, Bower and Christensen argue that incumbent firms have difficulty commercializing new disruptive technologies that initially appeal only to a limited number of customers. Incumbents may not be able to effectively identify the next generation technologies, nor develop them properly, because their firms are aligned to serve the needs of their existing customer base. The model asserts that new entrants are better positioned to develop rapidly the new technology, bringing it to a level of maturity that ultimately allows the new firm to address the mainstream customers of the incumbent firm, effectively overtaking the latter in their own markets. However, the medical technology industry challenges this model and the advantages it bestows on new entrants.

While incumbents stay operationally close to their mainstream customer physicians, as Bower and Christensen propose, medical technology firms do spend considerable strategic resources on a small minority of visionary and key opinion leader physicians. These firms recognize that the physician community is conservative in its adoption of new technologies, and that the evolution of patient care is initiated at academic medical centers before diffusing into the mainstream community, a process that can take 7-12 years. I would therefore contend that firms are adept at observing the emerging clinical trends, one of which may spark the next disruptive innovation. Whether a firm is organizationally capable of taking a calculated gamble and investing directly in one or more of these new technologies will ultimately depend on the culture and risk profile of the firm. Overall, though, I believe that, in the medical technology industry, the incumbent firm will worry less about being unseated by a new entrant, largely due to the significant entry barriers in this heavily regulated industry.

By definition, disruptive innovations in health care correspond to technologies for which there are no substantial equivalents. Therefore, companies must seek regulatory approval from the Food and Drug Administration (FDA) using the Pre-Market Approval (PMA) application process. Applicants must demonstrate the safety and effectiveness of their device for each specific clinical application (“indication” or “intended use”) using bench-top, pre-clinical (animal) and clinical (human) trial data.[1] This clinical trial work, per indication, can easily add three to five years to the already committed technology development time, at additional cost of $10-20 million per year.

Assuming that a firm was to obtain regulatory approval, it would then need to generate evidence to convince the Center for Medicare and Medicaid Services to issue a billing code for the new procedure and the third-party payers (e.g. Medicaid, private insurance firms) to reimburse physicians for performing the procedure. A positive coverage decision from insurers can easily take several more years for disruptive technologies, which are likely to be more costly, yet lack the long-term outcome evidence justifying their use over the cheaper existing methods. While a small venture-capital backed firm may have the financial resources to execute these steps, they will lack the experience and tacit knowledge required to successfully maneuver through the, often bureaucratic and political, regulatory and reimbursement systems, let alone scale-up for full production and distribution. Similarly, the new entrant’s financiers will want to see a return-on-investment on a time horizon which is shorter than the time needed to reach the mass market.

In contrast with Bower and Christensen’s example of the computer industry, the factors presented here pose significant entry barriers – in cost and time – for new entrants in the regulated health care industry. Time affords incumbents the opportunity to respond competitively. On the other hand, new entrants’ inexperience in navigating these obstacles, coupled with their investors’ desire to cash out, increases the probability that an incumbent, with the experience to commercialize the new medical technologies will take the opportunity to become a strategic partner, or owner, of the new entrant, as its disruptive technology matures and starts to threaten the incumbent’s existing technology markets.


[1] A. Yustein, “The FDA’s Process of Regulatory Premarket Review for New Medical Devices.” Gastroenterology & Hepatology Annual Review, Vol. 1, June 2006, p.142-144.

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Leverage is getting a bad rap

January 4th, 2009

Anyone listening to the news these past few months has heard about the role of leverage in the economy’s collapse. Riding the housing boom, individual families were allowed to over-leverage themselves by taking mortgages that they couldn’t afford to pay. New homeowners were gambling, with money they didn’t have, that their houses would continue to appreciate in value.  Then, financial companies joined the party by gambling heavily on mortgage-backed securities with money that they didn’t have. The housing bubble burst, and the rest is history.

The natural reaction might be to think that leverage is a bad, bad thing. But, as your parents probably told you: “it takes money to make money.” In the US, we hardly pay for anything with cash. We take out 30-year mortgage loans for our homes.  We take out 5-year car loans.  We finance our education with student loans. Companies routinely issue short- and long-term debt to finance their growth ambitions. Done sensibly, credit is a means to accelerate your personal or corporate growth objectives.

In 1991, Michael C. Jensen wrote in Montgomery and Porter’s Strategy: Seeking and Securing Competitive Advantage:

Debt is a powerful agent for change. For all the deeply felt anxiety about excessive borrowing, “overleveraging” can be desirable and effective when it makes economic sense to break up a company, sell off parts of the business, and refocus its energies on a few core operations. Companies that assume so much debt they cannot meet the debt service payments out of operating cash flow force themselves to rethink their entire strategy and structure. Overleveraging creates the crisis atmosphere managers require to slash unsound investment programs, shrink overhead, and dispose of assets that are more valuable outside the company. The proceeds generated by these overdue restructuring can then be used to reduce debt to more sustainable levels, creating a leaner, more efficient and competitive organization.

I’m not sure that the sentiment is welcome in the aftermath of this economic meltdown, but I agree in principle with Jensen’s concept that debt is a powerful agent for change. Re-read the passage and reflect on how it applies to sensible leverage (instead of over-leverage) and personal strategy (instead of corporate strategy). By taking out a mortgage for my house and student loans for my MBA, I am acutely aware of the need for adequate cash flow to service my debt. The financial burden forces you to focus on determining what is important to you and instills a sense of urgency to deliver on those objectives. 

Oh, how I recall with fondness the glory days of a fellowship-funded, graduate school PhD program: single, debt-free, sharing a rented house, and no pressure to wrap up my thesis.

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A brave new site

November 28th, 2008

I’ve been taking advantage of the Thanksgiving holiday to relax, which has included reading some more of Robert Reich‘s book The Future of Success: Working and Living in the New Economy. I am really enjoying his analysis of our new (early 2000′s) economy; Professor Reich does a great job explaining how the things that we love as consumers — like the great deals we’ll get tomorrow on Black Friday — end up affecting us as the workers that make these products. If you wonder why you work harder in today’s technology-enabled society, you may also enjoy this book.

As companies remove layers of hierarchy and flatten their organization, the chances of a rapid rise through the ranks is becoming a thing of the past. Companies offer their high potentials a series of rotations (read:lateral moves) aimed at expanding their repertoire, but this strategy can placate their human capital for only so long. Professor Reich reminds us that, since you can no longer rely on your company for promotion, the new economy will be built on individual brands and self-promotion. 

These concepts are not new, but reading them again this evening motivated me to reinvigorate my personal brand. I hope you enjoy the new website layout and content as it appears. Your comments and suggestions are always welcome.

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