How does one of the most respected healthcare companies in the world invent breakthrough technologies that can improve our lives? By staying true to a simple formula—talent plus culture plus incentives equals innovation—said Bausch + Lomb President and CEO Brent Saunders at the Rothman Institute’s 7th Annual CEO Innovation Lecture Series, a Dec. 10, 2012, breakfast focusing on innovation strategies practiced by corporate leaders. More than 150 business leaders, entrepreneurs and students attended the event, which was presented by Fairleigh Dickinson University’s Silberman College of Business.
As head of a global healthcare company with operations in 100 countries, Saunders spoke from experience. Since becoming CEO in 2010, he has been credited for driving revolutionary change in Bausch + Lomb’s approach to bringing new products to market.
According to Saunders, innovation is most often about how people come together to create change in the status quo—the ability to do things in a different way. That requires a culture shift that “instills incentives that allow talented people to accomplish more than they believed possible.”
Saunders pointed to Silicon Valley as the most obvious place where the formula for innovation is put to good use. The IT industry, he said, fosters the talent, culture and incentives to make breakthrough innovations come to life. The IT industry also recognizes that failure not only happens, but is an essential ingredient of the innovation process.
Similarly, Saunders described the healthcare industry as one of the world’s most innovative fields, citing as recent examples the development of new medications to treat HIV-AIDS, and the successful mapping of the human genome. Pointing to developments in his own field, he said, “We’ve seen amazing progress. We are now restoring sight to those who were going blind just 50 years ago.”
While Saunders characterized the pace of innovation in healthcare research as robust, he expressed frustration with the industry’s stagnation when it comes to healthcare delivery.
“We’ve seen great strides in medical research,” Saunders explained, “but healthcare delivery hasn’t kept up. Despite the skills of doctors, nurses and lab researchers, healthcare “incentives remain stubbornly stuck in the past” fostering a “dangerously conservative culture, and an industry that is resistant to change,” he added.
In contrast to the culture of Silicon Valley—which rewards speed, openness and sharing—the healthcare delivery industry offers reverse incentives and operates under a Byzantine system of laws and regulations. The result is a culture that is resistant to change, said Saunders.
But the concept of “wellness,” driven by skyrocketing healthcare costs, is creating a new paradigm in which patients are being forced to take responsibility for their own health.
“By offering smoking cessation programs, putting fitness centers in their facilities and removing unhealthy foods from their cafeterias, companies are using incentives to foster a culture of personal accountability and wellness,” said Saunders.
Wellness measures such as these not only create a healthier workplace, but reduce expenses for employers and the healthcare system overall, he explained. In addition to wellness, Saunders suggested that the emergence of electronic medical records (EMR) technology has brought the healthcare industry to the cusp of creating the culture of innovation it so badly needs.
“Adoption of electronic medical records may be the single most important factor to create, treat, diagnose and prevent disease in more innovative ways,” said Saunders. He noted that under the Affordable Care Act, the federal government offers financial incentives for healthcare providers to use electronic medical records to store and protect data, and use it to treat patients in new, more holistic ways.
Driven by EMR technology, a new model of healthcare, the “Patient Centered Medical Home,” (PCMH) may soon enable doctors to improve patient care and outcomes while reducing healthcare costs. Under the PCMH model, a patient’s healthcare is coordinated among every medical provider with whom he or she will interact, from primary care physician, to specialists, pharmacy, hospitals and laboratories. By sharing information, healthcare practitioners can get a complete look at the patient, improve patient outcomes, and reduce trips to the emergency room and the hospital. Saunders called this transition a “simple change” with “huge implications.”
A similar shift in culture is happening at Bausch + Lomb’s pharma and medical device companies, where incentives based on high risk/high reward ventures have kept products locked in the pipeline for years.
“Instead of thinking of R&D,” Saunders explained, “we started thinking about D&R: product development and patient needs should drive research.”
Bausch + Lomb employees are now rewarded as much for killing a product stuck in the pipeline, as for bringing one to market. That shift required an entirely new way of thinking, said Saunders. “Like the patient-centered product flow, this model aligns all resources around a single goal—development of products for patients.”
By following a simple formula—talent plus culture plus incentives equals innovation—Bausch + Lomb’s innovation pipeline is the strongest in its 160-year history. “This allows innovation to flourish in any company,” said Saunders.