Article and Interview By: Anne Orban
UnitedHealth Group’s Meredith Baratz, Vice President of Strategic Insight and Innovation, shares the strategies and tactics that continue to successfully cultivate innovation at UnitedHealth Group.
In 2011, UnitedHealth Group won the Product Development and Management Association’s Outstanding Corporate Innovator (OCI) Award, which is the only innovation award that recognizes sustained (five or more years) quantifiable business results from new products and services. Having been recognized by the OCI Award, how does UnitedHealth Group continue to sustain and grow its culture for innovation?
On today’s UnitedHealth Group website, innovative programs in four consumer-facing areas are highlighted: empowering consumers, enabling access to quality care, helping the system work better and improving affordability. Each of the 4 areas has 4 to 10 consumer-facing individual programs identified. You could think of these products as the tip of the iceberg being supported by many service process innovations.
Three years since the award citation, Meredith noted that UnitedHealth Group continues to build on the commitment from senior leadership to the strategic innovation imperative. “People really get it,” she said.
Several key activities continue to propel innovation for UnitedHealth Group in the ever-challenging American healthcare market:
- A robust ecosystem of innovation with clear expectations and accountabilities
- The strategic and tactical actions of the Innovation Council and Innovation Champions
- The process and support for idea to launch built on iterative learning
- Specific measurements of the health of innovation at the company, including its Vital Signs Innovation Index
Operating in the midst of a dynamic marketplace, UnitedHealth Group views innovation as essential to its ability to thrive. As a result, each of its businesses is expected to leverage the principals, tools and processes of innovation to bring market-leading solutions to stakeholders. Results are evaluated in the course of annual performance measurement and assessment. As a result, diverse innovation teams leverage common tools and approaches to address the needs of market segments, explore the impact of technology or policy development, and explore new territory.
The Innovation Council is a cross-enterprise group of leaders, sponsored by e company CEO Steve Hemsley, with responsibility for guiding culture, developing innovation capabilities and leading a portfolio of innovations that are increasingly focused on breakthrough opportunities. Initially and for the first 2 to 3 years, the Council was very conscious about wanting to kick-start and grow the innovation portfolio. They decided that there was a lot of hidden value for quick financial return in incremental innovation that was not finding daylight in the normal course of business. So, they needed ways to encourage incremental innovation from employees whose day jobs were not innovation. As the company’s approach to innovation has matured, the focus of the Innovation Council shifted to encourage and sponsor more transformative opportunities. One of the approaches brought to this objective was introducing the tenets of human-centered design thinking to the company. This approach of satisfying very human needs, designing experience and service around that and overcoming customer frustrations has been an important key to unlocking innovation at UnitedHealth Group. Innovation converges around products and process in a human-centered service model that, coincidentally, has significant resonance with the Baby Boom Generation’s expectations for ‘design around me’. Meredith shared, “Happily, innovation is something that most people believe in, and there has been a high degree of receptivity from all our employees.”
Tactically, the company harnessed a community of 30 business leaders who became the Innovation Champions with the very important role of cultivating innovation. The power of grassroots is activated by the 30 business leaders who work hard with the support of the innovation team to create awareness, visibility for participation and opportunities for employee initiatives. Additionally, Innovation Champions serve as a network to connect opportunities and initiatives across business lines.
Through the work of the Innovation Council and Champions tool kits, workshops and activities have been developed along with a 4-stage framework and coaching to move ideas into active programs. Bottom-up ideas may emerge from an ideation and collaboration platform, and top-down concept development may be sponsored within a strategic domain. Once a concept or idea earns resources from the Council, it proceeds to the first stage which involves exploration to flesh out the concept. If it is given approval to proceed, the next step is to build a detailed model as a prototype. In the third stage, the prototype is piloted. In stage 4, with information gathered from the pilots, the program can then be launched into a business and scaled up. At any point along the way, the Innovation Council can make a decision to close a project. When that happens, the commitment to the team that worked on that project is to identify and share lessons learned. Innovation pilots that don’t get launched are definitely not career-ending experiences at UnitedHealth Group.
Measuring the impact of innovation at the company includes both hard-dollar measures of return, as well as softer, but still measurable indicators of impact on culture and the market. Among these is the Vital Signs Innovation Index. Vital Signs is a 100-question, annual survey of all 160,000 employees. Six percent of the questions combine to track innovation, and when compiled, form the UnitedHealth Group Innovation Index. Since 2008 innovation has been tracked in this annual survey and the innovation index has gone up 8 percentage points. Questions measure the degree to which employees view the company as being innovative, as well as the degree to which they feel empowered to think and behave differently “from the way things have always been done”. In addition to the Index, the company tracks active employee participation and engagement such as attendance, in person or on-line, at the annual Innovation Day which has more than doubled over 4 years as well as the number of employees who participate in the annual CEO Challenge as part of Innovation Day.
Key learnings from the ongoing success of UnitedHealth Group’s culture of innovation commitment are:
- It is critical to have ongoing support, resources, structure and program for innovation from top leadership.
- Accelerate culture change to clearly identify company values that are at the foundation of company culture.
- Trust and empower action at the grassroots by individuals and teams.
- Provide a clear process, communicate all the time, and celebrate successes, whether shared learnings from ideas that did not progress through all the stages or from ideas that did.