lean innovation within unitedhealth group

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Lean Innovation at UnitedHealth Group Presented by Chicago Lean Startup and Pathfinder Software

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Page 1: Lean Innovation within UnitedHealth Group

Lean Innovation at UnitedHealth Group Presented by Chicago Lean Startup and Pathfinder Software

Page 2: Lean Innovation within UnitedHealth Group

A little about

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Page 3: Lean Innovation within UnitedHealth Group

Fortune 17Workforce: 150,00028,000 Physicians, Nurses, and Clinical Practitioners12,000 TechnologistsManages $150B+ in health care spend annually

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Page 4: Lean Innovation within UnitedHealth Group

250,000+ Plan Sponsors85 Million Consumers780,000 Care Providers

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Page 5: Lean Innovation within UnitedHealth Group

OUR HEALTH BENEFITS BUSINESS OUR HEALTH SERVICES BUSINESS

“Health in Numbers” “Good for the System”

Helping People Live Healthier Lives

UnitedHealthcare Community & State UnitedHealthcare Employer & Individual UnitedHealthcare Medicare & Retirement

UnitedHealthcare Military & Veterans UnitedHealthcare International

Making the Health Care System Work Better for Everyone

OptumInsight OptumHealth

OptumRx

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Page 6: Lean Innovation within UnitedHealth Group

What if we used [insert technology] and added [insert core asset] and gave it to [insert market] so that they could [insert something cool]?

INNOVATION MAD LIBS

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Page 7: Lean Innovation within UnitedHealth Group

What if we used smartphones and added our Rx data and gave it to consumers so that they could track their medications?

NEW IDEA

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Page 8: Lean Innovation within UnitedHealth Group

OMG!!

$$ $$

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Page 9: Lean Innovation within UnitedHealth Group

What if we used fancy charts and graphs and added claims data and gave it to consumers so that they could manage medical expenses easier?

NEW IDEA

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Page 10: Lean Innovation within UnitedHealth Group

OMG!!

$$ $$

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Page 11: Lean Innovation within UnitedHealth Group

from to

idea profit

BUSINESS PLAN

FINANCIAL MODEL

PRODUCT MANAGEMENT

WATERFALL ENGINEERING

THE TRADITIONAL PATH

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GO FOR LAUNCH!!

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Page 13: Lean Innovation within UnitedHealth Group

BUT THEN

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Customer AdoptionProduct FeaturesDesignMarketingPartnersSalesCost StructureFunding SupportPrioritiesRevenue StreamsTime

UNCERTAINTY

GREMLINS = UNCERTAINTY

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Page 15: Lean Innovation within UnitedHealth Group

No business plan survives first contact with customers

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Page 16: Lean Innovation within UnitedHealth Group

Innovation at Big Companies:

TypesSustaining (easier)

Breakthrough/Disruptive (really hard)

Driven by core strengthsGrowth Strategy Precedent (M&A, Build)Established R&D, IP ModelsDisruptive innovation combative with CoreNo “one model”

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Page 17: Lean Innovation within UnitedHealth Group

Innovation Antibodies:

Heavy governanceFunctional SilosNot Invented HereLiability, Brand RiskProtecting the Core

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Page 18: Lean Innovation within UnitedHealth Group

Lean Startup to create startups

Portfolio ManagementEntrepreneur-Centric ApproachExperiments and LearningPhases and MilestonesChanging Culture

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Page 19: Lean Innovation within UnitedHealth Group

Portfolio Management

SourcingFilteringMeasuring

throughput

potential

performance

Staged-Risk Funding

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Page 20: Lean Innovation within UnitedHealth Group

INNOVATION PORTFOLIO

ideas

problem validation

problem solution fit

10 customers

100 customers

1,000 customers

scale

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Page 21: Lean Innovation within UnitedHealth Group

Entrepreneur Centric

Founder TeamsEntrepreneurs In Residence (EIRs)Low-Cost Dev, Lean UX/DesignVC-Like BoardCoaching, MentorshipCo-Located Teams

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Experiments and Learning

Customer DevelopmentGetting Used to FailureDesigning ExperimentsMVPsInterpreting Results

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Page 23: Lean Innovation within UnitedHealth Group

Phases and Milestones

Problem - Market FitProblem - Solution FitProduct - Market Fit

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Page 24: Lean Innovation within UnitedHealth Group

HIGH LEVEL STAGES

Goals

Methods

Outcomes

Validate the CustomerValidate the Problem

InterviewsField ResearchSecondary Research

Establish PatternsMarket Size, Sales ModelEarly Adopter ArchetypeProblem Importance

Validate the Solution

Minimum Viable Product (MVP)Cohort AnalysisA/B TestingCustomer Acquisition Testing

Paying CustomersDistribution ModelsRevenue Models

Validate the Business

Sales/Marketing FunnelCustomer Acquisition OptimizationCustomer Acquisition CostsLifetime ValueChurnPricingCost Structures

Validated Business ModelPosition for Scale/Growth

Stages Problem-Market Fit Problem-Solution Fit Product-Market Fit

Funding Strategy Leverage Op-Ex Cap-Ex Cap-Ex Follow On

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Page 25: Lean Innovation within UnitedHealth Group

Changing Culture

Getting Used to FailureRecognizing and Managing UncertaintyResourcingComfortable Being UncomfortableBe Bold and Pioneering

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Page 26: Lean Innovation within UnitedHealth Group

GARAGE PROGRAM

tools

Facilities Resources Mentorship Process Tools Metrics

Idea

Entrepreneur

Idea

IdeaIdea

Idea

Internal Idea Sources:• Idea capture systems• Innovation Groups• Business Segments

EIR Sources:• Dedicated Entrepreneurs In

Residence (EIRs)• Segments can provide (but must

dedicate full-time or provide sabbatical)

Entrepreneur

Entrepreneur

UHG’s Garage is a service focused on identifying, nurturing and accelerating the commercial viability of innovative internal business ideas. The Garage manages a small, discreet portfolio of seed-stage business ideas through a disciplined, entrepreneur-centric process designed to rapidly de-risk ideas

in the market, and provide paths for commercialization, follow-on and exit.

Garage Mission:• Build and sustain a culture of experimentation that

enables the growth and scale of new health businesses, products and services

• Reduce the cost of innovation• Increase innovation portfolio throughput through

staged-risk funding, rapid iterative development• Diversify portfolio through option value

• Off-grid space• Collaborative

culture• Casual

environment

• EIRs• Developers,

Designers• Data/Analytics

Experts• Clinical• Regulatory,

Legal• Program

Management

• Advisors, Mentors, Coaches

• UHG Leaders and SMEs

• External SMEs

• Learning-Driven Process

• Lean Startup• Customer

Development• Staged-Risk

Funding• Business

Model Validation

• Highly Adaptive Agile Development

• Lean UX• Infrastructure• Continuous

Deployment

• Innovation Accounting

• Cohort Analysis• A/B Testing• Validation of

business model assumptions

• Financial analysis

EIRs are matched to Ideas based on domain knowledge, passion and entrepreneurial talent

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Page 27: Lean Innovation within UnitedHealth Group

Some Results

60 pipeline candidates12 “projects” started373 Customer Interviews Conducted7 closed in Phase 1 < 3 months25% move to Phase 2

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MVPs

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Page 31: Lean Innovation within UnitedHealth Group

Key Learnings

Create air coverAlign to top strategic risksBring Legal inRegular coaching!Ask for forgiveness, not permissionStart “lean”, experiment and iterateMeasure everythingFind the right people

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Page 32: Lean Innovation within UnitedHealth Group

THANK YOU

Kunjorn Chambundabongse (KC)

kunjornchambundabongsekunjorn

Todd Wyder

Pathfinder Software

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