In the wake of a tumultuous decade, many consumers are actively voicing a loss of confidence in big business. This cynicism coupled with a heightened awareness around social and environmental issues have placed a lot of companies on the defensive.  Over the past several years, a number of our clients have approached us with a similar challenge:  a need to improve their consumer-facing image to develop emotional connections and build a foundation of trust.

While the core issue was similar for many of our clients, the execution of each engagement varied.  We have worked on innovation, positioning, messaging, and Corporate Social Responsibility (CSR) platform projects, all with this end goal in mind.  The question that remains is whether these efforts resulted in the desired effect of re-engaging a disenchanted consumer.  In order for any efforts to be effective, the approach must be holistic.

Kaiser Permanente re-engages consumers

Kaiser Permanente is one company that has had a successful run at re-engaging consumers. Five years ago, the company launched a new messaging campaign to reposition the healthcare giant in the prevention and wellness space.  The push came as a direct response to falling membership as well as lack of awareness among the general public.  The company believed that the negative opinion held by non-members was largely due to a “lack of a strong and consistent voice in the general consumer market.”  From this need came the “Thrive” campaign, whose focus was not on how Kaiser cares for the sick, but rather how it delivers wellness and enhances the overall quality of life.  Most would agree that this has been a fairly successful advertising campaign.  It clearly resonates with consumers who feel that there is much more to health than healing the sick.  However, is this just a great messaging campaign?

A holistic approach reinforces consumer branding

Kaiser is actually backing up its brand message with a slew of innovations through an institution-wide effort known as KP Innovation.  Their goal is to align every consumer touch point – from the waiting room experience, to the doctor patient interaction, to the way patient information is stored and transferred - with the overall brand positioning.  In 2007, the company began building a Total Health Environment, which involves applying design theory to all aspects of Kaiser’s operations.  A team inventoried Kaiser facilities to identify areas that were not “thriving,” and they drew inspiration for revitalizing these aspects from outside industries like hospitality and retail.  They also spoke with consumers to identify pain-points within their current experience.  They translated their findings into plans that will be used to build new facilities and remodel existing ones.   They are designing greener buildings, increasing the use of natural light, making waiting rooms more welcoming, selecting cozier chairs, making patient rooms more comfortable, and choosing color palettes that are brighter, just to name a few changes.  These changes not only improve the look of the facilities, but they have also been shown to improve overall patient satisfaction.

The healthcare provider has also launched additional innovative initiatives that align with its wellness positioning.  A number of facilities have on-campus farmer’s markets that offer healthy produce for employees and members.  In addition, the provider teaches health and wellness classes that cover many topics including stress relief, smoking cessation, chronic disease management, and even yoga.  For patients that do not want to come to the facility, Kaiser also offers online support tools weight loss, nutrition, stress reduction, pain management, and smoking cessation.  All of these initiatives support Kaiser’s efforts to show both consumers and employees that they are serious about keeping people healthy.

So it looks like Kaiser’s catchy tag line, “live well and thrive,” may be more than just empty promises. Peter Andruszkiewicz, President for the Kaiser Foundation Health Plan of Georgia, Inc., says this about the effectiveness of the KP Thrive campaign:

“In Georgia and nationally, it has successfully increased the number of people willing to consider KP for membership. It has also significantly increased the perception across multiple audiences that KP is serious about proactively keeping people healthy.”

The lethality rate of combat wounds has steadily decreased since the Revolutionary War, due to innovations in battlefield medicine. But what exactly is the nature of this innovation? And can these learnings be applied to a business context?

Atul Gawande first examined the lethality of combat wounds in a 2004 New England Journal of Medicine. He noted that despite the invention and use of even more devastating weapons, the wounded-in-action lethality rate (that is, the rate of death among those wounded in combat) had fallen in every major US war until “settling” at roughly 25% after WWII. Even the Persian Gulf war in 1991 had a lethality rate of about 24%. But then, somewhat inexplicably, the combat lethality rate in Iraq and Afghanistan since 2001 dropped to just under 12%.

The notion that the lethality rate “settled” at 25% after WWII is somewhat misleading. The rate actually follows a somewhat predictable, logarithmic path. If you were a military planner in 2001 asked to estimate the combat deaths of a long war in Iraq or Afghanistan, you would have used this logarithmic model. It would have predicted a lethality rate of 20.5%. The exact rate, of course, could not be predicted with much precision. So it would have been useful to know the range of lethality rates to expect. The model would predict that the actual rate would likely be between 14.2% and 26.8%.  This would have been consistent with an ongoing improvement over the most recent experience in the Persian Gulf in 1991, when the lethality rate was roughly 24% (albeit on a very small base of wounded). It turns out that the rate for the current war, as of January 2010, is only 11.7%, which is much lower than the 20.5% expected and even well below the range of what would be expected. Why?

There are two ways to think about this. The first, explored by Gawande, is that the improvements prior to 2001 were the result of a process of discovery that led to incremental improvements year-over-year. This explains the near-constant decrease in the lethality rate every year since the Revolutionary War. Gawande attributes the significant improvement in the 2001-2010 rate in Iraq and Afghanistan to a change in the basic principles of R&D used by the military. After all, there have been no advances in medicine since the Persian Gulf War in 1991 significant enough to explain the transformational improvements suggested by steep decline in the lethality rate. But what if this seemingly smooth process of improvement is really the result of a series of big breakthroughs? These would lead to significant reductions in lethality followed by relatively flat periods of lethality.

This explanation is plausible. Antiseptics and anesthetics were more widely used after 1800, the use of combat medics was pioneered in the Civil War and amputations were more widely used in the Napoleonic period before WWI. During and after WWII, fields hospitals and MEDEVACs became regular features of combat. These inventions could explain a step-function pattern rather than a smooth process of continuous improvement. In this context, the recent improvements in lethality are simply a result of a significant innovation. Without a significant improvement in medicine to explain the lethality declines, the step-function improvement must be in the systems and processes rather than the quality of the medicine or surgical techniques. Indeed, Gawande outlines several reasons for the recent improvement, which include:

•  More widespread use of body-armor and eye-protection
•  The development of Forward Surgical Teams (FSTs) of leaner and more mobile units of 20 surgeons, nurses, medics and other support personnel who are farther forward, closer to battle
•  A military surgical strategy focused on damage control, not definitive repair:

“Whatever is necessary to stop bleeding and control contamination without allowing the patient to lose body temperature… Surgeons seek to limit surgery to two hours or less, and then ship the patient off to a Combat Support Hospital (CSH), the next level of care.”

These are examples of improvements in the systems and processes rather than the invention of new medicines or surgical techniques. Gawande’s thesis is that the recent improvements have been driven by a focus on systems and process performance. But this transformation is a step-function breakthrough in a series of step-function breakthroughs.

There are two general conclusions from Gawande’s observations. First, true innovation and improvement in disciplines like R&D and Product Development are more often the result of step-function breakthroughs than from continuous improvement. Second, a focus on performance can lead to further breakthroughs as the process of discovery reaches diminishing returns.

Sources: Military Care for the Wounded from Iraq and Afghanistan and Better: A Surgeon’s Notes on Performance