Every business has processes it has performed from its beginning. Correlated with how many years the company has existed is how relatively “evolved” its core functions have become over time.
The distinctions between evolution and innovation are a bit gray: one person’s innovation is another’s evolution. It is common to take the position that innovators make something happen, while evolvers have it forced upon them. But either can be reactive and proactive.
In Rene de Ruijter’s article, “The Evolution of Ideas,” he postulates that, “innovation is a gradual process sped up by competition and misfortune”. In an analogy of processes, products, and services to living organisms, he observes that ineffective versions of any of these will eventually be replaced by better adapted, more “evolved” ones. The prior versions become extinct.
So, how do we know which of our processes, products, and services are on the verge of extinction? And how do we steer them away from the abyss?
The first step is to identify the process, product, or service that is at the core of the enterprise. One that, if it became extinct, the business would cease to exist. For any of these to become extinct would mean that it was no longer needed by customers or no longer viable for them. It may also mean it becomes too difficult to provide, regardless of client demand for it. One of the basic laws of microeconomics defines the essence of survival in the business world: the law of supply and demand.
Considering these two possible extinction scenarios opens the focus for innovative evolution. Applying innovation to alter the direction of evolution creates the force that changes course – the altered path from why the demise may happen to why it will not.
Let’s use a basic product example – the lightbulb. It’s been around in one form or another since the early 1800s. Now, we may consider the two possible “extinction” scenarios: lack of demand and inability to supply.
1. Demand: No one wants lightbulbs anymore
2. Supply: The lightbulb company is unable to manufacture and deliver lightbulbs
Creating each scenario, in as many ways as possible, will unveil where innovation is needed. We may construct two possible reasons to explain the first scenario: why lightbulbs would no longer be wanted.
1. They are regulated against/considered too energy-consumptive (exactly what happened to the incandescent lightbulb)
2. Computers, tablets, TVs, cell phones, and related communication devices provide all the light needed in homes after dark
Next, consider innovations to the existing product that will help it survive in the new environment. The incandescent manufacturers mostly switched to halogen or CFL technologies. Others focused on LED bulb production. As for being pushed out of the market by communication devices, expansion into flatscreen production might be a possible anti-extinction strategy. Some extinction scenarios may seem far-fetched, but the creative thinking required to answer survival questions will fuel the innovative strategies needed to stay relevant and ready.
The business process outsourcing industry is constantly managing the man vs. machine balance. The industry has historically attracted many clients due to the cost advantages of labor arbitrage. Now that technology is doing the work that humans have traditionally done, is utilizing an outsourcing partner still relevant?
If the outsourcing partner utilizes innovative evolution strategies, they have already prepared for this. It is a demand threat. “What do we do if our people are no longer in demand?”
The distinction of “people” is where the solution lies. In actuality, it was a people-powered process that was outsourced. The true impetus to outsource was a less-expensive way to perform a process, or “process-arbitrage”. Due to the fact that many processes that were outsourced were performed by people, not programs, the reference became labor arbitrage.
Now that technology is catching up with humans, it’s what the people already know of the process that powers the technology. Using the knowledge of our revenue cycle teams, with their years of experience and understanding of the nuances of each stage in the patient/provider/payer revenue cycle process, enables our IT teams to create workflows, and subsequently automations, that are efficient, accurate, and reliable. Automations that are not crafted under the guidance of experts will simply automate inefficiencies and missteps.
With no shortage of processes to automate, the innovative evolution in the man vs. machine threat to humans is training people to train technology.
When innovation and evolution are consciously merged, they advance organizational survival and success in unexpected and unparalleled ways. Pre-emptive innovation in the face of the newest challenges and the next threats is the driving force behind businesses that survive and thrive.