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 Today in Health it, this story is Death by Pilot or Innovation Theater. My name is Bill Russell. I'm a former CIO for a 16 hospital system and creator of this week in Health IT a channel dedicated to keeping Health IT staff current and engaged today, no sponsor. Just wanna make you aware of a service we offer.

We do three full length shows on this week in health. IT every week. There are interviews, new shows and solution showcases. You may not have time to listen to every episode every day, but we develop clip notes to keep you informed. This is an email that goes out 24 hours after each show airs on the channel with a summary, bullet points and two to four short video clips.

Subscribe on our website this week, health.com. Just click on the subscribe button in the top right hand corner. Or if you think like I do, I would have my entire team subscribe so that you and your team. Can have the discussion started on the right foot. All right. Today's story, it's Friday, and as you know, on Friday I like to go through my junk drawer, pull out a couple of stories or actually one story, but today it just happens to be two stories and they're related.

The first story comes from healthcare IT news. Livongo founder says, the time for piloting is over. And this is from Glen Tolman, now CEO of transparent, former CEO of Livongo, former CEO of Allscripts. So. Industry veteran, who is also a health tech startup. Success story, we wanna partner with health systems across the country, said Tolman at the AVI Virtual Network Summit this week.

We think health systems are not the problem. They are the solution. The problem is in the middle. Tolman continued, although he goes on to say the following. Only in healthcare. He said, do providers present you with inconvenient appointments? Exactly when you have to work at sometimes far away locations.

And meanwhile, costs keep increasing if you're a health system in the market and your competitor is better than you, he said. You can't try to hide it. Instead, he suggested to innovate, to fix the problem or risk losing out at every moment you're dropping behind or you are getting better. He said he pointed to the fragmented system that can lead to confusion and inefficiencies.

His son, for example, gets insulin. He. To treat his type one diabetes from one provider, a pump from another, and a continuous glucose monitor from a third, he's insured by a fourth, and that's just to stay healthy, said Tolman. If anything goes wrong, his son has to be hospitalized. How could that possibly make sense?

He wondered. It's interesting, he says the first statement, but all the rest of the statements don't really support. That. Sounds like health systems are a part of the problem from these comments, but here's where I think it gets interesting the way Tillman sees it. We're at a pivotal moment in digital health.

I believe the next 18 months will define the next five years. He said, if you're not moving now, you've gotta stop piloting. You've gotta stop studying, you've gotta jump in. He said, overall, he said The people who matter in the industry are those being served patients and their families. How do we empower people to live healthier lives?

He asked, it's important to note that in order for digital to win, the conversation has to shift from sick care to WellCare. When an industry shifts, it creates room for new entrants. Think video rental. It shifted from the VHS to online, and we shifted from Blockbuster to Netflix. Retail shifted. And Amazon moved in, but that's not really what I want to talk about.

What I want to talk about is the phraseology that he used. The phrase that jumped out at me was, you've gotta stop piloting, studying, and you have to jump in death by pilot. A pilot used to be the first step in doing something larger, but in healthcare, a lot of times it is the first step in bankrupting a startup.

This is where the second story comes in, and the second story is really a book review. It's a book called. Death by Innovation Theater, and I love that title. And it comes from a pretty obscure source, sifted eu. And what it does is it follows the, uh, life of a startup and the startup was called Earn It. It involved an IoT connected piggy bank that lit up when you put coins in it as well as a mobile app.

The team raised a couple hundred thousand dollars on Kickstarter, then they went into the Techstars program to develop the company. They planned to sell the app directly to consumers, but when this proved tricky, the Earn It team pivoted to offer a white label service for banks. They. Signed a deal with a big Danish bank and entered discussions with dozens more financial institutions.

That's where Innovation Theater really started to kick in, says Nielsen, a flurry of accelerator programs and pitch competitions began the Earn It team ran pilots with several banks and they actually were quite good at landing a pilot and we're generally able to negotiate getting paid for doing them.

By the end, I was the pilot master. I knew exactly how to sell a pilot to a bank. We could have built a business just out of doing pilots, but that's obviously not what we had set out to do, said Nielsen. Each pilot would typically take six to nine months to carry out three months usually for the pilot itself with some time before and after for the prep work and feedback.

It was a lot of time for a small team to spend on something that ultimately . Didn't lead to any further business. What I had missed was what would happen after the pilot finish reflects Nielsen. There was often little connection between the main company and the innovation team. No discussion about price or next steps.

Over time, Nielsen became better at recognizing the warning signals. Of when a project was likely not to lead anywhere, but the process of learning this was painful and occasionally funny. Nielsen was good at getting pilots with banks but couldn't get them to go further. One time we traveled to South America for a weeks accelerator with a bank based there.

When we got to the bank, the people in the reception didn't seem to know any of the people we who were hosting us. It wasn't a good start, said Nielsen. When we did get in and walked through the bank, we went through all these departments where there were people in blue suits and white shirts, very formal bank employees, and then at the very back there was a detached creative space with beanbags and whiteboards.

It was clear straightaway, said Nielsen. The innovation team, were very disconnected from the rest of the operations, and were likely to have little power to really integrate any startup from the accelerator program into the bank. Nielsen says he came across this separation a lot. One time I drove several hours to a startup speed dating event in the Netherlands.

I tried to find out beforehand if any real decision makers would be there and had been assured there would be, but when I got there, it was immediately obvious. It was just juniors and people. Who had just been hired, a thought about just sneaking out and leaving. Nielsen said, Nielsen isn't saying that corporate innovation theater was the only thing that killed his business.

He goes on to talk about a couple of the mistakes they made attaching to big buzzwords and some other flaws in the, uh, product set and their go-to market. But what left Nielsen feeling particularly frustrated was not getting clear enough feedback from the corporate interactions earn. ITT ended up getting caught up in innovation theater that wasted everyone's time and didn't provide them with any real guidance on market fit or direction.

It was limbo, A vacuum corporate innovation theater was part of a pattern that led to our downfall. Nielsen says, alright, so you wrote a book, death by Innovation Theater, 10 Corporate Innovation Lessons Learned by a Startup. And here's five of the things that he put together that he thinks will help startups.

The first one, stop doing pilots without discussing the end deal. Amen. Number two, don't do pitch competitions. Seems like it flies in the face of how things happen today, but he suggests that that's the way to go. Don't fall in love with a particular technology. They fell in love with IoT because it was hot.

It got conversations started, but at the end of the day, it didn't help their product at all to differentiate itself or to really move forward. Uh, have a clear success criteria. This is always important. We do it for every other project in healthcare, but sometimes we don't do it for these pilots. Number five, always make a business case.

Always. Startups might worry that it's hard to put their value into numbers, but if you can't make a business case, you will never get past . The innovation department. All right. That's all from those two stories. What's the so what here? You may not like the so what? Glenn Tolman was being nice and he was only half right?

And here's what he said. We think health systems are not the problem. They're the solution. The problem is in the middle. Tolman said health systems are the problem and the solution. If you aren't gonna admit the first, you're never going to be the second you are the problem. Now you can create a future where you are the solution.

The innovation theater concept hit me between the eyes. You know, when you finally hear a concept that gets connected to something that you've been seeing and experiencing for years, and everything starts to come into focus. Innovation theater is prevalent in healthcare. You've seen it and you've likely experienced it.

You've seen the pitch competitions year after year to find out that the companies are no longer around two years later, you've seen accelerators that extract so much value out of the startup that the cap table goes wonky and they can't recover. You've seen the, the funky confines of an innovation team that have no resemblance to healthcare.

You've seen innovation arms that. No one within the healthcare system can explain what they do or what they've contributed. You've seen countless articles and promotions of innovation where all you see is promotion of an innovation, arm's, latest investments. We've all seen it. I've had a front row seat to this more than once.

I like the lessons for startups in the article. I'd like to add a few for health systems and innovation arms. This isn't a comprehensive list. This is just something I jotted down this morning. We provide healthcare for our communities. This is the first one we provide healthcare for our communities. Say it over and over again.

Healthcare is driven by the quadruple aim, cost, quality, outcomes, experience. If the startup doesn't have a clear value proposition to healthcare, stop and reevaluate the endeavor. Number two, tear down these walls. The innovation arm shouldn't exist in Willy Wonka's chocolate factory. While healthcare is practiced in a far different environment, innovators should be immersed in the environment, elbow to elbow with the practitioners.

Number three, we want the startup to succeed. Say that over and over again. The goal isn't for the health systems to extract all the value out of a startup until there's nothing left. Never ask for free service. Never start a pilot without a success criteria and a clear intention to move forward. Never engage unless you are committed to the success of the project and the company.

I've been with too many founders who have been kicked, punched and left for dead. Some had bad solutions, but most had good solutions and were just treated poorly, not helped or ignored by their sponsors or just used. I. For innovation theater, I could probably go on, but in the interest of time, that's all for today.

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