22 Oct Leading the Medical Device Industry into the Medical Revolution
By John Maculley
New possibilities for medical device companies
Throughout the healthcare industry, an ongoing cultural shift is prompting medical technology leaders to reconsider their customer engagement strategies. In the electronics and consumer products industries, new product development (NPD) teams have demonstrated consistent expertise in characterizing the broad range of their customers’ experiences and thoughtfully directed that input into innovative product design. For the past two decades, these industries have prioritized the needs of even tertiary stakeholders in the value chain, often placing the importance of those needs above the underlying technologies.
By contrast, the medical device industry has been slower to evolve from technology-centric and intermediary stakeholder-centric models to a customer-centric NPD model, creating opportunities for the emergence of new industry leaders. The medical device industry is not new to customer-centricity when the customer is defined as an intermediary stakeholder or a regulator, hospital, and care provider. An appropriate focus on patients or “end users” has been directed at outcomes and pain management, but there is a long way to go to fully realize the potential impact of pursuing a completely customer-centric model (see Exhibit 1).
Medical Device Expanded Stakeholders
Medical device companies have made great strides in engaging with a wide array of intermediary stakeholders―but they have also used them as proxies for determining patient requirements. This approach is successful in driving healthcare advances, but it limits insights and perspectives that might be better ascertained through direct patient engagement. Some medical device companies, including Boston Scientific and Stryker, have executed direct-to-consumer marketing campaigns in recent years. However, there has been little progress across the medical device industry in establishing complete patient experiences that enable branded and meaningful customer journeys. With the accelerating adoption of digital data, artificial intelligence, and automation/robotics throughout the medical device industry, a shift toward this broader definition of customer-centricity would enable medical device companies to tap into entirely new categories of unmet needs.
Opportunities for early patient engagement
The focus on intermediary stakeholders such as hospitals and physicians is only a start. By understanding the patient’s perception of a procedure upfront and remaining engaged with them throughout the product lifecycle, engineers and upstream marketers can use that knowledge to drive the next generation of product solutions that realize pull-demand from patients to caregivers. Laparoscopic and robotic-assisted surgery is one example in which industrial design turned toward patient feedback might uncover this unique demand. For example, by considering aesthetics from the patients’ perspective in product design, medical device companies have an opportunity to create a procedural environment (and related communications) that evokes a less stressful emotional state. Although successful patient outcomes are the highest priority, how those outcomes are experienced, described, and assessed could be significantly expanded.
In addition to channeling patient experiences into NPD, medical device companies can leverage patient-generated datasets to appropriately inform many enterprise functions. Product pipelines can be prioritized and resourced according to patients’ aggregate intent to proceed with certain elective procedures. Supply chains can quickly flex in response to early signals for surges in product demand. The bottom line is that the more a company knows about its end customers, the more effectively and efficiently they can create novel products and services that improve patient outcomes and ultimately build brand loyalty.
Embracing customer-centric innovation
Like most significant shifts in industry, they are usually precipitated by catalysts for change—and customer-centricity in the medical device industry is no exception. Today’s events facing our world have changed the rules for how patients interact with healthcare providers. Telehealth is only one example of how patients are currently behaving differently. A recent Amwell poll demonstrated that patients utilizing telehealth increased from 8% in 2019 to 22% in 2020. As this technology expands, it opens the door for medical device companies to establish a direct connection with the end customer, no matter what events we might be confronting.
According to a recent study published in Harvard Business Review entitled, “Lessons from the Leading Edge of Customer Experience Management,” companies on the leading edge of customer-centricity are nearly twice as profitable as lagging companies—60% attribute growth generation to customer-centricity and 53% believe customer-centricity provides a competitive advantage. Such statistics from other industries are a leading indicator of what medical device companies should expect. The opportunities are ripe for the medical device industry to continue growing its digital and robotics offerings while also leveraging the vast amount of customer knowledge and insight gained through customer-centric innovation (CCI).
Breaking down barriers to direct customer engagement
According to a McKinsey article entitled, “Reimagining Medtech for a COVID-19 World,”
“Taking steps now to fundamentally reimagine the system, patient journey, and their interfaces and relationships with healthcare providers is critical. These steps could include building more agile organizations, speeding time to market, and aspiring to absolute benchmarks for product design and development.”
Focusing on product performance alone is no longer sufficient in today’s digital world. As patients accord greater value on their experiences with your products than the latest technologies that they provide, it is clear that medical device companies must engage with all of their customers—including hospitals, surgeons, and patients—earlier and in more depth than previously. Reducing the friction experienced during customer touchpoints with your products, services, and even your company’s business processes is paramount. A shift from technology-centric innovation to CCI will ensure that customers’ voices become woven into the fabric of research and development, commercialization, and the supply chain―giving rise to more effective internal decision-making.
The medical device industry is only beginning to break down the barriers to direct customer engagement. In 2012, Johnson & Johnson (J&J) announced plans to establish regional innovation centers in major global life sciences communities as part of a new approach to accelerating early innovation and enhancing collaborative opportunities. While J&J’s current approach is undoubtedly a general step in the right direction for the industry, CCI remains uncharted territory. According to Steve Eichmann, Global Head of Industrial Design & Human Factors at J&J Medical Devices,
“In the past, some device companies assumed that complying with user-testing regulations and guidelines was enough to make them user-centric. That might have been true up to a point, but laws and regulations don’t help you keep pace with design innovation, usability, software development, or technology advances.”
Fortunately, recent changes in medical device regulations have enabled better connections to be forged with a more diverse set of customers. Recently, the Food and Drug Administration (FDA) issued draft guidance, Principles for Selecting, Developing, Modifying, and Adapting Patient-Reported Outcome Instruments for Use in Medical Device Evaluation, which expanded regulations to be multi-dimensional. This guidance presents the FDA’s current thinking about the best practices for incorporating patient-reported outcomes throughout the lifecycle of a medical device. The outcomes most important to patients will be assessed and included in medical device submissions. These developments open doors for entirely new approaches to involving customers throughout a product’s lifecycle. However, before medical device companies can capitalize on this new development, they must first assess and optimize their internal processes and methodologies to accommodate total customer-centricity.
An eight-step approach to customer-centric innovation
CCI is a hyper-agile approach to product lifecycle management that breaks down barriers preventing direct customer engagement. Although customer engagement technology is readily available, medical device companies must first transform their cross-functional business processes and internal cultures for customer-centricity to take hold. Based on over two decades of experience working with leading medical technology clients, Accel Management Group has developed a systematic process (see Exhibit 2) to assist medical device companies transitioning to CCI. As companies begin this transformation by fundamentally reimagining how they engage with customers, they will find themselves in a better position to out-innovate the competition and will be more aligned with how regulatory agencies have transformed customer engagement requirements.
Customer-Centric Innovation Model
Transforming to CCI begins by assessing existing internal business processes and evaluating various customer journeys related to the medical device products and services that are currently available in the market. Opportunities to increase customer touchpoints and introduce digital engagement platforms are then identified and integrated into a future-state business model. The steps outlined below provide a high-level overview of the entire transformation process.
- Mapping Customer Journeys
The customer journey begins by characterizing unmet needs by initiating Voice of the Customer (VoC) processes, which provide stakeholders with a deeper understanding of the conditions required to deliver a comprehensive solution. At this pre-charter stage, engineers and stakeholders (e.g., regulators, hospitals, surgeons, and patients) should collaborate to develop product requirements and use cases. Key milestones along the journey are mapped to the phases of the product lifecycle throughout development and beyond product launches to ensure meaningful feedback is captured and integrated. Customer journeys can be considered a parallel customer lifecycle process superimposed over existing product lifecycle phases with aligned gates. This alignment of enterprise-wide business processes is an essential driver in changing the internal culture to embrace customer-centricity.
- Refining Product Lifecycles
Existing product lifecycles (PLC) are excellent product development frameworks, but they often lack proper integration with the VoC. A redefinition of the gate artifacts, including checklists and engineering specifications, required to incorporate customer feedback is essential to the success of the model. Additional documentation requirements must be created to ensure that NPD teams ask the right questions at the appropriate times before, during, and after product development. PLC systems should be upgraded to store critical customer input alongside traditional engineering and marketing specifications. Aligning product and customer requirements will enable teams to track product features and functions back to their intended purpose.
- Refreshing Product Portfolios
Many companies experience product launch delays because their pipelines are filled with line extensions that add little value for end customers. Their cadence of innovation is sporadic rather than predictable and steady. By incorporating customer priorities and expectations into the process and creating an internal drumbeat for product development, companies will better align themselves with market demand and ensure that resources are focused on the most critical unmet customer needs. Innovation velocity is directly correlated with lean product portfolios that are meaningful to customers. Linking each product solution with an urgent need establishes team purpose, prompting them to fully engage and commit their hearts and souls to delivering benefits to the communities in which they live and work as well as to the greater world community.
- Structuring Customer-Centric Teams
Properly structured NPD core teams are the lifeblood of any innovative company. They typically consist of cross-functional teams from the research and development, marketing, finance, supply chain, quality, and regulatory divisions. When available, Marketing takes the lead on translating VoC input into customer requirements. Product specifications are usually based on market requirements derived from competitors’ offerings and the latest technological advancements. Customer representation is minimal at best. CCI core teams add representatives responsible for engaging with customers and managing their journeys. As the customer evangelists, they are the primary conduit for characterizing unmet needs and ensuring that they are channeled into product specifications. Creating these new roles within marketing departments sends the message that “customer-centricity is how we operate” to the rest of the organization.
- Creating Customer-Centric Boundary Agreements
Boundary agreements (BA) are project contracts established between core teams and governance bodies. BAs document and measure critical success criteria, including key schedule milestones, financial targets, product specifications, and operational requirements, to ensure alignment across all functions. They empower core teams to make decisions quickly and build confidence and trust with executive sponsors. Product specifications are often recorded as indications or claims that differentiate the product from what is currently available on the market. Customer-focused BAs add an element that defines the target customer’s unmet needs. This approach ensures that the VoC is front and center during the product development process. To dive deeper into boundary agreements, learn how to get leadership out of the way.
- Integrating Business Unit Cultures
Many contemporary global companies are an amalgamation of small acquisitions made over time. Some standardization between the individual businesses might occur, but aligned processes are usually limited to financial reporting. Customers often experience a single disjointed company with separate channels and customer service approaches. CCI strives to create a shared experience throughout the customer’s journey, regardless of the specific product or service. Integration of company-wide business processes, such as PLCs, improves customer engagement and builds a shared customer-centric culture. Apple is an excellent example of a company that creates a unified customer experience. Although several of Apple’s product lines were introduced through acquisition, the customer experiences the same processes, service levels, and commitment to quality regardless of the specific product.
- Measuring Customer Experience
It is common practice to measure customer satisfaction; however, this is just one small aspect of customer experience. CCI-focused companies must expand not only their assessments but also their channels for collecting feedback. Each customer touchpoint along the customer’s journey with your products is an opportunity to collect data and course-correct by targeting actionable questions that can inform current business processes. Companies that do this well create moderated online communities where customers can share their experiences and collectively guide the company toward valued improvements. Transparency with problematic areas that need improvement helps forge trust with customers and injects fresh ideas into the internal dialog. The key is identifying friction points that detract from the customer’s overall experiences and target opportunities to improve their journeys.
- Incorporating Customer Feedback
With meaningful and actionable customer data in hand, companies can populate and prioritize continuous improvement project portfolios. The technique of process mapping helps companies visualize friction points within their existing processes and identify gaps that make customers feel abandoned. Process handoff points between internal functions are typically the largest contributors to poor customer experience. Companies with high levels of customer engagement and satisfaction typically create end-to-end processes monitored on the corporate level by a dedicated operational excellence team. Dashboards aggregate data across large enterprises and enable executive teams to make timely investments into resources to improve performance.
Leading the medical device industry into the next decade
As leading medical device companies become increasingly customer-centric, laggards will face ever-growing challenges. Patients engaged early in a brand’s total CCI will display ardent loyalty. Converting brand-loyal patients into customers will grow more difficult with each passing year, creating a significant differential distance between medical device winners and losers. By taking steps to meaningfully engage existing and potential patients’ needs, medical device companies can start building deeper patient relationships that drive innovation and solidify brand loyalty.
For additional information on CCI or to request a rapid assessment of your company’s internal processes, please contact us.
About the Author
John Maculley is a principal with Accel Management Group. In this role, he helps clients grow their companies and improves their operational efficiencies by designing and implementing customer-driven innovation and product development frameworks. Maculley brings more than 20 years of high-tech industry experience, enabling him to deliver innovative methods to improve time-to-market, reduce costs, advance performance, and increase revenue.