KEY TAKEAWAY: In an unpredictable healthcare marketplace with little flexibility and short-lived advantages, you win by adapting to change faster than others. You should be continually experimenting and identifying new options faster and more frequently. Test new ideas and then drop what doesn’t work and scale up what does.
The adaptive business strategy proposes that winning comes by changing faster than your competitors. Therefore, you continuously experiment, identify new patient preferences and serve those.
To excel using an adaptive business strategy:
- Know what you don’t know – look beyond the obvious for information which contradicts long-held beliefs. Use that to spot new opportunities.
- Be flexible but at the same time disciplined – manage your experiments well but be comfortable with heading off in a new direction if the data supports it.
- Never ever bet the farm – but always have a portfolio of ideas simmering away. Run small and economical experiments to find a way forward.
- Always balance speed and accuracy – forget about detailed analysis and instead remind yourself the target is unknowable and shifting. Iterate quickly and learn again and again as you watch for the telltale signs of success.
- Specify beforehand how you will scale up – when an experiment looks promising. If you have clear rules, you’ll be able to move quickly to exploit opportunities.
- Learn from your early failures – don’t miss out on the valuable information which your unsuccessful attempts contain.
- Be equally flexible about your organizational structure – so you can quickly organize your firm to put resources where they generate the most gains.
- Understand the practicalities involved in applying the adaptive strategy – don’t try and apply an adaptive strategy with a traditional business structure. Being experiment-driven requires distinctive operational disciplines. Make sure you don’t sabotage your own efforts by the way you are organized.
Traps or common pitfalls which you should avoid when applying an adaptive business strategy include:
- Don’t be overconfident – test your personal beliefs against the realities of the marketplace and go with what you can prove with data.
- Be careful not to tune out dissent – or having a confirmation bias where you hear only what you want to hear. Instead, you should welcome robust debate and view input which is contrary to your beliefs as potentially valuable.
- Don’t invest in elaborate predictions or plans – the world is changing too quickly for that.
- Don’t be rigid – and unwilling to change your direction as new information arises. Being adaptive means to move in new directions so do that.
- Run lots of small low-cost experiments – rather than just a few high-cost variations. Keep your risks and costs in balance.
- Be open-minded about failures – if you punish employees who fail, nobody will step up to try anything new. Celebrate good intentions.
- Avoid fads – they are too short-lived to be helpful over the long haul. Instead of following the crowd, do things which you have data to show helps you head in the right direction.
“Many leaders of big organizations, I think, don’t believe that change is possible. But if you look at history, things do change; if your business is static, you’ll have issues.” – Larry Page, cofounder and CEO, Google