“The part that separates most companies regarding innovation, those that truly get it, is the bridge between the invention and the innovation,” Baxter chairman & CEO Joe Almeida said last week at the annual Cleveland Clinic Medical Innovation Summit.
The ability to bring innovation or an invention to the world is what distinguishes companies that offer health outcomes. “The ability to create value in healthcare and access is quite significant.”
Take Baxter’s recent focus on end-stage renal disease and the problem of distributing more treatments. Of the 4 million to 9 million people worldwide with this disease, only 2.8 million are treated, partly because many patients are in hard to reach areas of the world, where access to data is limited.
Lack of access inhibited distribution of Baxter’s main end-stage renal product, peritoneal dialysis. So Baxter engineers developed a new product, a hemodialysis therapy called HDx, which can be used instead of its peritoneal dialysis product. HDx functions like an artificial kidney, but is easier to distribute+.
“The ability to take an innovation and bridge it across the globe is what differentiates people in healthcare. So understanding the dynamic of the geographies where we work is fundamentally important,” noted Almeida. “In essence, it is more complicated to create that invention innovative bridge in emerging markets today than it is in developed markets, due to the true economic aspect of the demographics and ability to afford healthcare.”
To develop that bridge, Almeida worked to shift several processes within Baxter. One was the culture. “Culture will take the company to its top performance,” said Almeida. “And it can take a company down so fast. It’s all about leadership and the people that you have around the table leading the company. Strategies can be replicated, cultures can’t. Culture is your value as a company.” Almeida helped Baxter create a culture that learned “how to fail, fail fast, and fail forward.”
“Innovation is a capability achieved by companies that are nimble, companies that learn,” said Almeida.
He also suggests that companies can improve their innovation capabilities by understanding the financial health of their business.
“Make sure that you can capitalize the allocation properly,” he said. “You’ve got to have the ability to fund things 100% when you decide to fund them. Can you fund a program for one year or for the lifetime of the program, with specific milestones that you can decide yes or no, because you know the assumptions made today will change? As long as you understand how they will change and how to adapt, it’s fine. One thing that really kills innovation is the stop and go. The stop and go is done usually because of problem pressure.
A willingness to fail at and properly fund inventions is a 24/7 task. “There’s no magic bullet,” he said. “You pick your battles. I’ll give an example. Health care is a risk-averse environment. You need to get creative people to understand how to deliver the innovation in a faster way. What we usually do is tackle the most complex processes, picking examples one at a time, and go deep in those examples.”
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