Principal Perspectives: Why We Should Thank BlackBerry

ECG_Principal Perspectives_HeaderIn December 2013, we unplugged ECG’s last BlackBerry server.  Just 2 years earlier, at least 75% of our consultants used BlackBerries; today, not a single employee.  And ours is certainly not the only firm to move on from BlackBerry. The handheld device maker has lost 95% of its value from its peak – a stunning reversal for a company whose industry-defining success and confidence in its brand led it to be dismissive of competition and slow to respond to changes in the market.

The story of BlackBerry is a remarkable one that provides valuable lessons for all industries – including healthcare – that are experiencing disruptive and revolutionary change.

The BlackBerry was the first smartphone to achieve mass adoption, and it transformed the way we communicate and conduct business.  Just as laptops unchained people from their offices, BlackBerries unchained people from their computers.  By the early and mid-2000s, these first-generation smartphones became bastions of business, fastened to the tool belts of corporate America.  BlackBerry’s momentous success, market stranglehold, and assumed allegiance from its customer base (corporations, carriers, government agencies, and IT departments) created an aura of invincibility around the company.

But that perception distorted leadership’s recognition of emerging competition, evolution in the marketplace, and rapidly changing consumer demands.  BlackBerry leadership naively mocked the introduction of the iPhone and other consumer-oriented competitors as toys, fleeting fads of entertainment.  Instead of evolving with market changes, the company sat behind its false wall of security feasting on past success, eventually eating away its ability to innovate and deliver a competitive product.  At the height of its popularity, BlackBerry was the giant of the smartphone market.  Now, it struggles to reach 10% of iPhone sales in any given quarter, and the company’s value and brand strength have tanked.

There are a number of parallels that can be drawn between BlackBerry and healthcare organizations that are slow to react to the imminent changes demanded by reform.  The response from many hospitals and health systems has been glacial, indicative more of a wait-and-see approach than proactive positioning.

For instance, we hear self-proclamations of systems being “clinically integrated networks,” though a significant portion of these networks have yet to implement substantive strategies for gaining payor contracts, enhancing care coordination, leveraging resources, and exercising population health management.  Further, even as the payor mix shifts and innovative payment products are brought to market, the response by many systems has been neither urgent nor decisive.  In some markets, leading healthcare institutions have been excluded from exchange networks – despite their scale, high quality, excellent brands, and strong reputation – due to their reluctance to align their costs of care with changes in market conditions.

BlackBerry fell victim to its perceived imperviousness and inability to respond to changes in the marketplace.  It remains to be seen whether new care delivery and alignment arrangements, like narrow networks, will take hold.  But if they do, they have the potential to disrupt and recast how we think about the delivery and payment of care, becoming the healthcare equivalent of the iPhone.

BlackBerry was not up to the challenge.  Are you?

This entry was posted in Clinical Integration, Healthcare Reform, Hospital-Physician Alignment, Strategic Planning and tagged , , , , , , by Kevin Kennedy. Bookmark the permalink.

About Kevin Kennedy

As a consultant since 1990, Kevin has assisted dozens of hospitals, health systems, and medical groups with solving their strategic, financial, and operational problems. He has particular expertise in operations improvement, hospital/physician relationships, and physician compensation planning. His most recent client experience includes assisting hospitals with service line and enterprise-wide strategic planning, working with health systems to define the operational relationships with member hospitals, and facilitating multiple transactions, including hospital/hospital and hospital/physician acquisitions. He is a frequent speaker before industry associations and has received the Yerger/Seawell Article of the Year award for outstanding contribution to professional literature from the Healthcare Financial Management Association (HFMA). Kevin holds a bachelor of science degree in business administration from The University of Arizona and a master of business administration degree from The University of Chicago.

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