In recent years, healthcare companies have invested significant sums of money into digital transformation efforts to create new business models, increase operational efficiency, and establish a more direct connection with patients, clinicians, and payers. As a result, “Agile” went from a grassroots movement of software developers to a call-to-action uttered by many healthcare executives, a desire to increase the speed and time to market especially for digital efforts.
However, the promise of faster time-to-market and new revenue streams has scarcely materialized. There is an “Agile Agony” in healthcare: “We have invested millions in consultants and task forces and still can’t get anything done in digital” is a phrase that we hear a lot in the industry.
What is the reason for this gap between expectations and outcomes?
Two Mindsets
We believe that at the core of the Agile transformation challenge in healthcare lies a mindset problem. By mindset, we refer to a prevailing set of assumptions that shape thought and action. In healthcare as in other traditional industries, the dominant mindset is focused on repeatability and predictability. We call this the “Industrial mindset.”
The Industrial mindset is centered around planning and control. Problems in the manufacturing of a drug or a vehicle have severe consequences. You don’t “fail fast” when human lives are at stake. This explains why healthcare companies tend to use extensive planning cycles and documentation, and rely heavily on upfront specification.
However, even the best planning effort cannot anticipate the myriad ways in which real-life projects veer off-course, especially in digital. Customers reject elements of the value proposition. Supporting technologies are not ready in time. The market or the regulatory environment changes. Following the Industrial mindset, new information that emerges throughout the development process is ignored and evaluation of progress is measured against the original plan. The fundamental orientation is backwards: Actual versus planned results. If the plan is at risk, a lot of effort is made to get back to the original course of action. The original plan is sacred.
Conversely, the Agile mindset prioritizes flexibility, speed, and responsiveness to change, over following a plan. The fundamental orientation is forward, not backward. The primary question is not: “How do we meet the original plan in light of new data?” but “How do we generate the most future value based on the newest available data?” Flexibility and outcomes are prized over plan adherence.
Time and again, we have seen that healthcare organizations implement Agile ways of working on top of an Industrial mindset, leading to fragmented and perverted application of Agile principles. A survey among healthcare and life sciences executives revealed that while a vast majority see the need to be more Agile, yet more than half said they are not familiar with formal Agile methodologies and tools. This lack of understanding is a big reason for the “Agile Agony.”
Detailed, inflexible specifications are created at the beginning of the project, violating the core Agile principle that working software should prevail over comprehensive documentation. The development team may work in short two-week cycles called “sprints” but the project approach is not incremental or iterative. The person or department who originally specified the customer needs will vigorously defend the initial conception even when the customer feedback suggests otherwise. Project teams are not empowered to respond to new data and information. A vicious cycle ensues, in which increasingly frustrated teams receive more and more pressure to reach impossible goals. In the meantime, executives across departments will play the “blame game” to divert the responsibility for the project failure.
Five ways to create an Agile Mindset
Agile transformation is more than a process change, but a mindset change. To create this change, healthcare leaders must empower teams to respond to change, and prioritize outcomes over plan adherence. Here are five ways in which they can accelerate the transition to Agile ways of thinking and working in their organisation:
Define a clear Product Owner. The Product Owner is an essential role and foundation for all successful Agile projects. The Product Owner is accountable for maximising the value derived from an Agile team, and is constantly redefining project priorities based on new information. In many healthcare organisations, this role doesn’t exist, or if it does, they don’t have the necessary authority to make decisions.
Establish clear and consistent success criteria. Too often different members of the project team have different incentives and definitions of what project success looks like. The outcomes of each sprint have to be evaluated against the original goals. All team members need to have the same objectives and incentives.
Break down functional silos. Agile teams cannot function if individuals see themselves primarily as a member of a department rather than a cross-functional team. In many healthcare companies, there is distrust between the business and technology teams. Working Agile team members have to leave their departmental “trenches” and develop a shared agenda and perspective, as well as aligned incentives.
Create a “retro” culture. In Agile parlance, a retrospective (retro) is a practice used by teams to constantly improve their results and ways of working. The constant improvement and iteration at the core of the Agile principles only work if new information is taken into account, and assessed honestly and comprehensively. Successful Agile teams need a “retro” no-blame culture to have the means and the resilience to respond to challenges that inevitably arise on a complex project.
Balance Agile with risk management. In healthcare, Agile faces significant intrinsic challenges. Lives are at stake, and regulatory compliance requires extensive documentation and specification — all of which may be in conflict with the Agile idea of putting iteration over documentation. However, we believe that Agile methods can co-exist with the scientific method and the more rigid approaches required for the development of drugs or medical devices. The drug formulation may not be up for a “test and learn” during a clinical trial. However, the services that complement the roll out of a new treatment can be developed and refined in an Agile fashion. Similarly, many of the internal process improvements in healthcare companies benefit from Agile ways of working.
The right lessons from COVID-19
Covid-19 made all healthcare organisations Agile by default. Healthcare leaders had to jump into triage mode, prioritizing a rapid response to the pandemic over established ways of working. Pfizer developed its Covid-19 vaccine in record time, applying core Agile principles such as a “patient-first mentality,” “liberation from bureaucracy,” and “moon-shot challenges that align with the right purpose.” Speed and patient impact were prioritized over protocol without sacrificing scientific and clinical rigor. It was a stunning victory for science and human ingenuity.
We believe that the pandemic has shown that an Agile mindset is not only compatible with the healthcare industry and its unique needs but absolutely essential for its successful digital transformation. Healthcare leaders must draw the right lessons from Covid-19 and the rapid response, setting clear, patient-centric objectives, prioritizing speed and responsiveness over planning, and empowering individuals and teams to make the right decisions.