Editor’s note: This article is an update on modelH, the dynamic co-creation forum created by Kevin Riley and Associates, Innovation Excellence, and Batterii where healthcare innovators from around the world are building a foundation for new business models in healthcare. Their goal is to co-create an open source business model canvas that applies specifically to the US healthcare system.
Learnings on Experience for the Business Model Canvas for Healthcare (modelH)
We just wrapped up our 11th business building block sprint on Key Activities. In summary, the sprint for Project 1.11 on Key Activities completed two objectives:
- Questions to ask on the canvas for the Key Activities
- Explanation regarding how to define and stick to only the necessary Key Activities
1. Questions to Ask on the Canvas for the Key Activities Block
We defined the questions that should be added to our business model canvas for helping practitioners define their Key Activities.
- What Key Activities do our Value Propositions require?
- What Key Activities do our Channels require?
- What Key Activities do our Customer Relationships require?
- What Key Activities do our Revenue streams require?
2. Do Only the Right Key Activities
The first part of this sprint is about defining the work tasks you need to do to deliver your Value Proposition. However, there are a lot of ways you can waste time doing the wrong things as your work scope begins to creep. So how do you go about keeping to only the right actions that you defined in the Key Activities block? I advocate that you apply the rigors and methods of the Lean Startup to your healthcare business model – including all technology, process, and business functions.
By definition, Minimum Viable Product (MVP) is the version of a product that is made through one cycle of a ‘build-measure-learn’ loop, done as quickly as possible. Accordingly, the work tasks (Key Activities) that are required for a build must include only those that meet the minimum viable product. Although this methodology was first applied to the world of software engineering, I recommend using it across the board for all work tasks.
The term Minimum Viable Product gives some people pause. Many default to the adage that in order to deliver value, we must give our customers the maximum product, not the minimum. Sometimes our attempt to provide maximum value results in bloated or inconvenient products loaded with useless features that diminish, rather than enhance, the value of the product. Think of a product in its two basic value points: form and function. Stylistically speaking, function is what a product does and form is how it does it. We discussed the need to build an “expected” form, or what we call Experience, in our building block on Experience. This expected form also implies Key Activities on your part. Be prepared to collect necessary information and build it into the Key Activities in your business model.
But at the same time, when it comes to function we advocate that you only need to do the work to build the minimum viable version. This reasoning examines your Customer Relationship, built on the premise that you have a Value Proposition that will solve your customers’ Job-to-be-done (JTBD). Your Value Proposition should do that and no more than that, otherwise you are throwing energy and resources after an unknown. If you agree with this logic, then you must apply this rigor to what work tasks, or Key Activities, you set out to do as part of the functional delivery of this Value Proposition. Focus on function rather than form. The basis of your trust relationship with the customer is a two-way exchange of value. If your product is all style and no substance then you will lose your customers. If your substance far exceeds your customers’ needs, then you are similarly doing more harm than good, as the extra value is unrealized. An even worse case is that customers end up confused drop it altogether. Ultimately, only do what is necessary to build your MVP.
Do not forget that you are running a business and that there are laws around compliance, fillings, and finance that you must follow. These are part of your Key Activities. If you do not list the work on these core operational fronts, you have an incomplete picture of the workload and resources required, which will inhibit you from determining the Key Resources and Key Partners you will need for a concise delivery. Therefore, as is often the case, you will find out too late and it will either shut your business down or cost you an exponential amount to resolve.
In conclusion, we advocate that you identify your Key Activities by identifying your MVP, and adding in the other required business tasks you needs to remain compliant with laws and financial transactions. By only building what is deemed most valuable to the customer, and progressing through iterative builds, you ensure speed to market and successful releases. When you are wrong, you fail fast (and cheap). MVP assumes iterate until you find the ideal solution. Start small and gradually add on, based on your customers’ needs.
Take time to incorporate these approaches into the Key Activities block in your business model canvas. Regardless if your business model is aimed at Patients, Providers, Payers, and or Purveyors, defining the Key Activities will keep you focused on doing on what is relevant to your Customer Segment’s Jobs-to-be-done and your Value Proposition. Anything else is a distraction and will lead to straying from your business model.
What is Next?
I will be publishing the leaning from 1.12 Key Resources and 1.13 Key Partners over the next few weeks. Next up on the modelH Co-Creation Forum, we are going to do a short two-week sprint on Costs and Revenue.
Interested in what we are doing?
Step up to the plate an become involved. We have just a few key modules left to discuss in the proposed modelH canvas. Please join us, make your contribution, and be recognized for helping to develop a sustainable future for the US healthcare system.
- Click here to learn more: http://www.modelh.org/modelh.htm
- Click here to join: http://bit.ly/modelH_joinup
- Follow us online at: https://twitter.com/ModelHForum
image credits: Kevin Riley & Associates, modelH Business Model Canvas for Healthcare, drawings by Mike Werner; modelH.org
This was cross-posted from Kevin Riley & Associates BLOG – http://bit.ly/modelhkeyactivities
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Kevin Riley is an entrepreneur, healthcare executive, and business model innovator who works with start-ups and legacy companies across the healthcare industry. He founded and was CEO of a national health care retail company, has played leadership roles for national retail health start-ups, and served as the first Chief Innovation Officer of a major insurance plan. In 2006 he started Kevin Riley & Associates Health Model Innovation to help companies with the convergence of health care and the consumer.