Why do businesses fail.

One of the main reasons for existing business to fail is often neglect, in all kinds of variations. Neglect to (re)act on the change they see surrounding their branches or company. Neglect because they want to keep things as they are, not accepting there is a 'new order' coming up.

History has some strong examples like Kodak, who by neglecting the fact that the market was ready for digital photography (which they themselves had invented by the way) but their business model wasn't yet, and their slowness to enter the digital era has put them out of business. In the end of the day they had to file for chapter 11 bankruptcy protection. Meanwhile this example is commonly referred to a" a Kodak Moment" based on their marketing tagline, to photograph life event, as this was their own 'life-event'

There are many more cases where this is true as well, from big tech companies not willing to let go of their business model like selling digital (topset) boxes, while services that deliver the same are coming from the wall (socket).

We all are witnessing the birth of such a Kodak moment IMHO, looking to what is happening with Uber. While the existing taxi-company try to hold back Uber from entering the market with existing (old) legislation and methods, the company already has more cars driving with their service than Taxi companies worldwide.

I called the typical "neglect" phase the 'pre-gap' whilst many people, media and policymakers clearly see the change coming up, the existing companies are trying to keep up the status quo, often adviced to do so by formal departments within the company. During that, the newcomers in the market gradually keep growing, and profiting from the free publicity, even though that not always has a positive taste. They often do not have the burden of longtime personell that weren't able to look what's happening 'outside'. While the existing companies try to 'innovate' from a linear perspective, newcomers tend to take the exponential route and change the business 'overnight'.

Then, when things get tough and lawsuits, strikes and are won by the 'opponent', some start to migrate into this 'new reality', trying to secure their income and jobs. Especially when the see the easy of use and benefits for them, encouraged by the public.

When after all the pivoting point comes and the establishment tries to reshuffle 'the post-gap' and to set up opponent-like models, their almost always to late, says Clayton Christensen. He is a Harvard professor that did a lot of research to what is happening in these cases, and has seen over and over again that newcomers in a market almost always win. We've indeed seen it in Travel Industry, in Music, Retail and even banking. For that i often refer to the current era as the 5th democratization.

Something that has been seen a lot of times in different branches and i really think that health(care) in next. I really do hope it is not too late for this branche to reset their heading and they will be able to re-align, otherwise this could become a real nightmare like the one i had the other day.

For that we did what i always advice institutions and companies in these days : start your own competitor INSIDE your own company, but without ANY constraints and directly reporting to the top level board. Not only that will encourage speed, but also an easy way into innovation from a different paradigm.

Because if that happens then health(care) will go the way the Dodo did i'm afraid. Current (new) models and partnership are being created to combine knowledge from different angles and we at Radboudumc' REshape Center for Innovation are trying to work our way through, like described in this recent Harvard Business Review on our partnership with Philips and SalesForce.

We all created a small cell IN the company to set up alliances that might look un-conventional but make sense looking to the world of 'tomorrow' . At Radboudumc with our REshape Center for Innovation, in Philips Jeroen Tas created their Digital Accelerator and at Salesforce Marc Benioff launched their Ignite program.

PwC did a great study on the top health Industry Issues of 2015 :

Issue 1: Do-it-yourself healthcare
US physicians and consumers are ready to embrace a dramatic expansion of the high-tech, personal medical kit. Wearable tech, smartphone-linked devices and mobile apps will become increasingly valuable in care delivery.

Issue 2: Leap from mobile app to medical device
A proliferation of approved and portable medical devices in patients’ homes, and on their phones, makes diagnosis and treatment more convenient, redoubling the need for strong information security systems.

Issue 3: Balancing privacy and convenience
Privacy will lose ground to convenience in 2015 as patients adopt digital tools and services that gather and analyze health information.

Issue 4: High-cost patients spark innovations
The soaring cost of care for Medicare and Medicaid “dual eligibles,” aging boomers and patients with co-morbidities will foster creative care delivery and management systems.

Issue 5: Putting a price on positive outcomes
With high-priced new products and specialty drugs slated to hit the market in 2015, we will see increasing demand for new evidence and definitions of positive health outcomes.

Issue 6: Open everything to everyone
New transparency initiatives targeting clinical trial data, real-world patient outcomes and financial relationships between physicians and pharmaceutical companies will improve patient care and open up new opportunities.

Issue 7: Getting to know the newly insured
2015 will be a revelatory year for the US health sector as a portrait of the newly-insured emerges, fostering better care management programs and shifting marketing strategies.

Issue 8: Scope of practice expands
Physician “extenders” are becoming the first line of care for many patients, as doctors delegate tasks, monitor patients digitally and enter into risk-based payment models.

Issue 9: Redefining well-being for millennials
As the economy rebounds and baby boomers retire, employers and insurers look for fresh ways to engage, retain and attract the next generation of health consumers.

Issue 10: Partner to win
Joint ventures, open collaboration platforms and non-traditional partnerships will push healthcare companies out of the comfort zone in 2015 toward new competitive strategies.

So, what do you think about how to keep your company out of this pre-gap, that is dominated by a neglect-phase ? Do you recognise this from within your own institution, and how would you tackle this ? Share your thoughts down here.