lean innovation within unitedhealth group
TRANSCRIPT
Lean Innovation at UnitedHealth Group Presented by Chicago Lean Startup and Pathfinder Software
A little about
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Fortune 17Workforce: 150,00028,000 Physicians, Nurses, and Clinical Practitioners12,000 TechnologistsManages $150B+ in health care spend annually
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250,000+ Plan Sponsors85 Million Consumers780,000 Care Providers
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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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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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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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OMG!!
$$ $$
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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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OMG!!
$$ $$
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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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BUT THEN
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Customer AdoptionProduct FeaturesDesignMarketingPartnersSalesCost StructureFunding SupportPrioritiesRevenue StreamsTime
UNCERTAINTY
GREMLINS = UNCERTAINTY
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No business plan survives first contact with customers
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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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Innovation Antibodies:
Heavy governanceFunctional SilosNot Invented HereLiability, Brand RiskProtecting the Core
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Lean Startup to create startups
Portfolio ManagementEntrepreneur-Centric ApproachExperiments and LearningPhases and MilestonesChanging Culture
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Portfolio Management
SourcingFilteringMeasuring
throughput
potential
performance
Staged-Risk Funding
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INNOVATION PORTFOLIO
ideas
problem validation
problem solution fit
10 customers
100 customers
1,000 customers
scale
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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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Phases and Milestones
Problem - Market FitProblem - Solution FitProduct - Market Fit
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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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Changing Culture
Getting Used to FailureRecognizing and Managing UncertaintyResourcingComfortable Being UncomfortableBe Bold and Pioneering
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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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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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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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THANK YOU
Kunjorn Chambundabongse (KC)
kunjornchambundabongsekunjorn
Todd Wyder
Pathfinder Software
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