In today’s society, the term innovation  has become synonymous with value. Many even call our current global economy the “innovation economy.” There’s no shortage of commercials that convey how innovation is at the root of any given company’s products or services. In the last decade or so, most large companies have established formal innovation roles and functions.
When talking about innovation, it’s important to first settle on a definition.
I define innovation as the structured, multidisciplinary process of developing a new product or service, with an emphasis on the process.
Many people incorrectly view innovation as one of two ends of the spectrum: either they think of it as the invention or really exciting concept, or they think of it as the actual product or service, itself. While many people can come up with great ideas, it takes an innovation process to move it from an idea to an actual outcome.
Healthcare Needs Innovation
The nation’s healthcare system abounds with needs that require innovative solutions. Challenges include caring for the growing senior population, lack of access to quality care due to economics or logistics, and infrastructure concerns related to supply chains or diagnostic methodologies. The COVID-19 pandemic has brought many of these needs into even sharper focus.
Innovation can create improved health and wellness for populations as well as better economic stability for the provider and payer system – not just in South Florida or the U.S., but around the globe.
In the healthcare world especially, innovation  can improve working conditions by creating new products and processes that help healthcare professionals work smarter. Royalties or other income from sale of those products and processes can generate much-needed revenue. Often, entirely new companies spring up from medical advances, contributing greatly to local economic development and job creation.
Steps to Innovation Success
How does an organization lay the foundation for a successful innovation process? I always start with talent. An organization needs expert professionals who are capable of understanding internal needs, capabilities and constraints, while at the same time grasping external factors such as intellectual property protection, investment mechanisms, and legal and regulatory boundaries. Because most innovation functions run lean, it’s important to have a strong and diverse external network of professionals, as well, including attorneys, IT and marketing professionals, and even designers and engineers.
We also need to make sure the risk-reward relationship warrants the investment of time and resources. That means we need to have fair, objective analytical processes in place to quickly critique new opportunities and identify possible winners.
When organizations collaborate with external entities to develop a new product or service, a clear working agreement is essential. In the case of Baptist Health, we might partner with a one-person start-up company, multiple multinational corporations, or nonprofits including universities and other hospitals. In each instance, we start with a template agreement and then customize it. I always seek a champion within Baptist Health who will engage in the project and ensure we’re meeting our end of the bargain.
Challenges to Innovation
I point to several factors that can hinder innovation in the healthcare space:
The unique nature of healthcare: Creating new products and services in a not-for-profit entity committed to the daily care of thousands of patients is not easy. Our professionals are very busy fulfilling their primary employee obligations. It can be very difficult to get time from them, or even mind-share, when seeking their contributions to innovation activities.
Motivating and incentivizing contributors to innovation: It’s imperative that major contributors benefit economically as well as in terms of performance review and recognition. This is why we have established Baptist Health’s’ first intellectual property policy, under which creators receive half of any net income that we may ultimately receive.
The lag in fiscal return from commercialization: It isn’t uncommon for a new innovation function to need five or even ten years to ultimately break even. Being a cost center, especially in today’s medical environment, is not an ideal position. Innovation professionals often struggle with what to measure and how to maintain constituents’ confidence during that critical, years-long period before the final economic outcome is known.
The “innovation valley of death”: The gap between funding available to minimize the financial risk of an emerging product and the funding generally available from investment sources. For not-for-profits, it can be very difficult to attract investment capital at the earliest stages of product development. While it would be great to have a dedicated fund, most hospitals and universities simply cannot afford or defend such an investment relative to other mission-based needs. We mostly rely on bootstrapping to continue early product refinement.
The cost of protecting intellectual property: It costs a lot to apply, prosecute and maintain a patent portfolio. It is not uncommon to spend more than $20,000 for a patent application before it is reviewed and accepted by an examiner.
Engaging potential partnering companies: Each type of company has its own limitations. The largest, most well-known medical brands can become wonderful partners. However, they are often tightly focused on near-term sales and usually don’t collaborate or invest upstream at the very early stages of product development. Meanwhile, privately held firms, especially start-ups, have interests and product designs that align at the very early stages of product development, but often lack the resources to fully execute.
Launching a completely new enterprise: Working with entrepreneurs and investors can be wonderful, but these dealings present their own challenges. Like any relationship, finding the individuals you can work with towards a long-term goal is not easy, and relationships and track records matter when dealing with both investors and entrepreneurs.
Staying true to the organization’s mission: There are times a healthcare organization may question whether a given commercial or entrepreneurial activity is appropriate relative to our principles and ethical obligations. Conflicts of interest aren’t necessarily to be avoided, but they definitely require management. At Baptist Health, our innovation office is part of the institutional conflict-of-interest management function.
Preserving academic and medical values: Medical professionals sometimes question whether commercialization activities are appropriate in terms of their work obligations and career path. This decision is ultimately theirs to make, but I point out that the best innovation opportunities address a strong medical need, and they must weigh that need in terms of the other aspects of their career.
Losing employees to entrepreneurial pursuits: Creating and growing a new healthcare company can subject employees to unprecedented demands on their time. We don’t necessarily want our best and brightest putting in long hours or even leaving their career with Baptist Health just to grow the business. We are aware of the opportunity costs that arise when our people are involved in a new venture, and we try to balance the potential upside of developing an improved future of care with protecting and maintaining our current state of operations.
Building an Innovation Culture
There isn’t any single activity, but rather many ingredients that contribute to the innovation culture at Baptist Health .
To start with, we have strong relationships in play. Because we know that most innovation activities will end in failure – or at least take many years to produce fruits – we work to gain trust and, in turn, we must trust our innovation partners. We want to work with collaborators who share the same expectations if we’re going to produce enough shots on goal to have success.
Similarly, strong relationships, support and shared expectations with the C-suite and the board of trustees are important. At Baptist Health, these individuals also use their position to share the message of just how important innovation is to the organization.
Beyond the relationships needed throughout the organization, Baptist Health’s innovation team relies on special contributors and experts for advice.
I mentioned that we seek champions for any given project. When things are going well, you’ll have a handful of key opinion leaders whom you can bounce opportunities off of, and whose assessment and advice you trust. Some of these people may also become ambassadors for the innovation function. Not surprisingly, many first-time innovators seek references or mentors amongst their own.
It is important to recognize the reality that the innovation function itself does not create the opportunities.
Hopefully, we are adept at responding to opportunity and structuring appropriate projects and collaborations that emanate from other peoples’ ideas. We need our inventors or creators to do their part. I track invention disclosures and meetings to see just how well we’re doing at providing us opportunities. We have also used challenge mechanisms and promotional outreach to ensure that our inventors remember we’re here to work with and for them.
Everyone Can Support Innovation
Every Baptist Health employee, regardless of role, has an opportunity to participate in the ways the organization provides care. You don’t necessarily need to have created the idea, but rather you may contribute to how an idea is developed or modified so that it can create positive impact for many.
I encourage workers to look at their own professional day and think, “what are the pain points? If there were ways to magically improve my job performance, what would they be?” Likewise, patient comments can be a jumping-off point to innovative endeavors.
These innovation principles translate readily to other industries and professions. Contact your local chamber of commerce to tap into innovation resources in your community.
About the Author:
Mark Coticchia, Corporate Vice President for Innovation 
Mark Coticchia is Corporate Vice President for Innovation at Baptist Health South Florida. He recently assumed the new role that will build on three decades of medical innovation at the largest not-for-profit healthcare organization in South Florida. Mr. Coticchia arrives from Henry Ford Health System in Detroit, where he was vice president and chief innovation officer, responsible for driving intellectual and clinical assets through new ventures, corporate partnerships, product development and technology commercialization. Mr. Coticchia received both his M.S. degree in Industrial Engineering and B.S. degree in Civil Engineering from the University of Pittsburgh.