Health care costs per person in McAllen, Texas are twice that of El Paso, Texas although both have similar demographics and similar health care outcomes. In fact, McAllen scored second only to Miami as the nation’s most expensive health care system. When a hospital CEO in McAllen, Texas heard this for the first time from a New Yorker magazine reporter all she could say was "That’s interesting."
It’s hard to believe that the CEO of a profitable organization with very good people, the best equipment, and the latest technology could miss something this big. Data supporting the reporter’s claims were publicly available. The gap in costs had been growing steadily for years. The doctors working in the town and hospitals intuitively knew that costs were out of line. But since the profits were rolling in and customers weren’t complaining, no one took the time to look around. Now McAllen, Texas is the national poster child for wasteful health care spending.
Regularly asking the question "What are our downsides, what’s known and undone and what’s unknown?" is one way to innovate before being blindsided like the McAllen hospital CEO. A small Wisconsin chemical manufacturing company president asked this question of himself and his staff on a regular basis and it helped his company grow and stay successful for over thirty years. With too much e-mail and too many urgent demands, what’s important suffers at the hands of what’s urgent. Pausing to identify downsides can be a key strategy for innovating before it’s too late.
"What’s known and undone" are tough issues because they’re on someone’s list but for usually political reasons have yet to be resolved. A small specialty materials manufacturer had steadily and profitably grown over the past 15 years. The President knew that his long serving R&D Vice President was brilliant but incapable of managing people or projects. Over the past three years several large opportunities were lost to competitors because R&D couldn’t stay on task.
The combination of the recent downturn and the lack of sales from new business caused the company to let go 20% of the staff. Solving this thorny "known but undone" personnel problem in good times could have saved those jobs.
"What’s unknown" is a similarly tough question to answer because the field is so large. The Ford Edsel was the best researched car prior to launch but was also one of the biggest sales failures. Some have attributed a missed shift from income determined to lifestyle determined car buying as the source of the problem. This expensive failure might have been avoided if Ford had asked itself if customers were looking at car purchases as they had in the past, answering the "what’s unknown" question.
The McAllen CEO could have been out in front by determining downsides earlier but instead is now caught in the cross-hairs with no time and no room to innovate. What’s on your downsides list?
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Matt Edison works as the Reactive Silicones Business Manager for Gelest, a specialty chemical manufacturer. Since 1989, Matt has also worked for DuPont, General Chemical, and Inolex Chemical where his jobs included Plant Manager and Engineering Manager, among others. In his current role, Matt leads business development projects, manages the company’s silicone technology group, and improves the company’s business systems. These duties combine his special interest in aligning resources to realize customer opportunities. Matt lives in Woodbury, New Jersey with his wife Ellen and their four children. He can be reached at [email protected].
