The Innovation Show
EP530 Building an Ecosystem Playbook with Christine Griffin
Developing an Ecosystem Playbook for Corporate Innovation with Best Buy Case Study In this episode, we delve into the strategies corporate explorers need to develop successful partnerships and co-innovate to deliver value propositions to their consumers. Our guest, Christine Griffin, shares a six-step process for creating an ecosystem playbook, using Best Buy's expansion into the home health market as a compelling case study. We examine how Best Buy transitioned from a retail giant to an orchestrator of home health services through strategic acquisitions and partnerships. Additionally, we explore the importance of understanding value creation, identifying market breakpoints, mapping ecosystem players, and assessing financial flows. This episode also highlights the critical roles of scaling path, capabilities, capacities, and customer access in achieving business success. Special thanks to our sponsor, Wazoku, for supporting corporate innovation. 00:00 Introduction to Corporate Innovation 00:39 Sponsor Acknowledgment and Guest Introduction 01:52 Overview of Best Buy's Home Health Strategy 03:16 Best Buy's Acquisitions and Initial Footprint 03:55 Building Partnerships in the Healthcare Ecosystem 05:12 Mapping the Ecosystem and Identifying Break Points 10:04 Understanding the Players and Their Roles 12:35 Evaluating Incentives and Profit Pools 15:12 Developing a Scaling Path 18:03 The Importance of Stakeholder Involvement 19:46 Conclusion and Further Resources Corporate Explorers, Innovation Strategy, Innovation Ecosystems, Best Buy Case Study, Christine Griffin, Scaling Startups, Corporate Innovation, Business Ecosystems, Strategic Partnerships, Innovation Show, Wazoku, Sustainable Innovation, Hubert Joly, Ecosystem Playbook, Technology Adoption, Corporate Explorer Series, Corporate Strategy, Innovation Tools, Best Buy Health, Business Development, Innovation Leadership, Change Logic, Healthcare Innovation, Digital Health, Startup Scaling, Entrepreneurship, Business Growth, Market Strategy, Innovation Mapping, Corporate Transformation Find Christine here: Find Wazoku here:
- Duration:
- 20m
- Broadcast on:
- 25 Jun 2024
- Audio Format:
- mp3
The purpose of today's session is to help corporate explorers develop the strategy and structure through which they can act with partners to co-innovate and adopt an innovation to deliver a value proposition to the end consumer. Our guest today will describe six steps corporate explorers need to take to develop their ecosystem playbook. We'll then bring these steps to life by using the case study of the major US retailer Best Buy. And if you like Best Buy, don't forget we had Uber Joly on the show. A few months, probably a year ago now, in an absolutely excellent episode on his book. Before I introduce today's guest, I want to thank the sponsor of the corporate explorer series Wazoko. Wazoko helps large organizations create sustainable innovation ecosystems that accelerate efficiency gains and new value growth. It does this through intelligent enterprise software that connects and harnesses the power of employees, suppliers, startups, universities, and the unique Wazoko crowd of 700,000 global problem solvers. Wazoko calls this "connected collective intelligence" and I'm so glad so many of you listeners to the innovation show have reached out and got in touch with Wazoko and if you are interested in their tools, I'll connect you straight to the source CEO Simon Hill. You can find Wazoko at www.wazoko.com. Speaking of ecosystems and connected collective intelligence, today's episode is called ecosystems, building an ecosystem playbook for scaling a new venture and we are joined by the co-author of the corporate explorer Fieldbook, a colleague of Tushman O'Reilly, Bins and the whole nine yards. Christine Griffin, welcome to the show. Thanks, Satan. I'm glad to be here today. But we'd give an overview of this chapter, Christine, and give context to this case study of Best Buy and then unpack those six steps. I'll tell you up here because you say Best Buy's footprint in home health expanded as a result of acquisitions like Great Call, current health, biosensics, and others, but nevertheless Best Buy rapidly realized that acquisitions were only one part of the story. Best could involve building partnerships with payers and providers, such as Anthem, Athena Help and Geisinger. Let's share the six lessons derived from this Best Buy story and indeed the context that any corporate explorer can apply to increase this odds of success within the ecosystem. Let me start with this story about Best Buy and then we'll get into the steps. In 2018, Best Buy set its sights on the home health market. They wanted to provide home health to 5 million people within five years. Their plan was to deliver, install, and activate the technology that was needed to enable the care at home and they realized that they couldn't do it alone. Health care is a really complex ecosystem. It has many providers, payers, regulators, suppliers of medical equipment, pharmaceutical companies, and Best Buy knew that they couldn't do it alone. However, they decided that they wanted to create a footprint in this market. They did that initially through acquisitions. They purchased a company called Great Call, which sold the personal emergency response devices that they had in their store already. If you remember, there was a commercial in the U.S. a while ago that said they pushed the button on something they wore around their napkin and it said, "I've fallen and I can't get up," and the help was dispatched. They also purchased a company called Critical Signals Technology, which was telehealth and medication management. Finally, another of their biggest acquisitions was Current Health and that was a care at home technology platform. They established for themselves an initial footprint in this market, but they realized is that they needed to win the hearts and minds of the providers and of the payers in this system. When you talk to Deborah DeSanso, who's the CEO of Best Buy Health, she'll tell you that they have carved out their specific role in this ecosystem again as someone who will deliver, install, and activate the technology needed to enable care at home. Deborah says, "Boy, all the CIOs and the people at the payers and providers are very happy because they didn't have to have the headache of going into a customer's home and helping them install the technology and understand how to use it and help better it up." They took that headache away from those providers and the payers in their ecosystem and they also made it clear that they were not there to provide the care. That would have been seen as a competitive problem in the ecosystem. What you've seen them do is identify what activities are going on in the market. They have identified the players in the market and the potential partners and the potential competitors in that market. They have started to build this ecosystem play where the value is being delivered to all of the partners in the ecosystem, but also to that, and consumer, which is the person who really desires to have care at home. What I'd like to do is talk you through some of the steps that you go through when you're trying to figure out, what is this ecosystem that I'm operating in and how's that I participate in the ecosystem? Christina, I absolutely love the story of Best Buy Health and it's a story in many people that know when they think of Best Buy, they think of it as this big box retailer. But I absolutely love that story. I grabbed it from the library behind me, Uber, Jolie's story, with this heart of business book about how we did it from a purpose perspective, creating purpose, and really a heart within the business. You reminded me of a brilliant friend of the show, Charles Kahn, and Charles Kahn is speaking out, are reinvented somewhere in 2025 as well, and I cannot wait, Charles is also the chairman of caragonia. He wrote this book, The Imperfectionist, and he talks about this, how really clever companies, they don't just jump in, they take these steps, these clever steps, into a new arena, just like Best Buy did. He talks about Amazon, and I just wanted to share, because I'll share the links to those two shows for people who are interested in this ecosystem building, because this is becoming increasingly the role of the corporate explorer to be the orchestrator of this as well. This chapter is so important for corporate explorers. Over to you, Christine. I'm going to share on the diagram where you bring us through the steps, and I'd love you to take us through the steps, now through the lens of what you described with Best Buy. So the very first step of mapping an ecosystem is to think about a value creation journey. What's going on for that consumer, that end user in the ecosystem? You'll see that you start with the innovation, and the innovation that Best Buy had in mind was this FDA-cleared care-at-home platform of products and services, both digital and physical. What they wanted to do is help the end user connect effortlessly with the care team to recover safely at home and to have privacy. This idea of healthcare information being electronically transferred is highly regulated and very important for privacy, and so this platform that Best Buy has is HIPAA-certified. In this first step, you map the value creation journey. In each step, for example, you need to engage the person at home in the program. You need to help them install the solutions to monitor what's going on in the home, to coordinate that care and to provide insights and analytics. Understanding the flow of where do people find a value in the exchange of care at home is the very first step, and so taking time to map that and understand it is pretty important. The next thing you want to do is think about where are the break points in this program? Where do users struggle? Where do providers of these services or suppliers struggle? For example, in the healthcare system, technology may be too complex. Maybe people are struggling to try to use a heart monitor or a blood pressure monitor at home, and they need help figuring out not only how do I install and use this, but how do I plug it into a place where the data can be reported remotely to other people? If you're coming home from a hospital and to care at home, you're already in a pretty vulnerable state of mind, and so being able to identify the break points in a system. Another one that happened for Best Buy is that urgent events need first responders to come so when you press that personal alert that I've fallen and I can't get up, there needs to be somebody on the other end who says, "Okay, I'm coming. I'll be there in a minute," and so that idea of identifying break points. That's really the first critical part of this thing. It's so interesting how I know as myself as a corporate explorer, you're so eager to achieve something, to get going, to build this bias for action that you often skip these steps, and they are absolutely crucial. They'll always come back and buy in the ass if you skip these steps, and the other thing that dawned on me, I'm preparing a show for proximity with Cheyenne Crippenorff and Rob D. Walcott, and they talked about how many of these innovations, it's so difficult to get somebody to try it the first time, and sometimes you need the benefit of a Christ like the pandemic to get us to even use tools like Zoom and Microsoft Teams, and I'm using a squad cast here. Many, many people didn't use those tools until the Christ had pushed them, and then they had no choice but to use that. I think that's really interesting to realize, is there a break point there where people just won't? It's not good enough for them to have to change, so they'll just use a lesser version of what you have to offer, even if yours is way better. These are things that you only really get to blame out that allows and go through these steps. The next thing to think about is who are the players who are participating in this ecosystem? These are players who can get in your way, they could block the adoption of your innovation, or they can help, or they could be competitors. You have to really think about who are the different players, and we identify these as a set of different classifications. The customers, part of your ecosystem, the producers, so the people who are providing and supplying complementary product or channels, there's regulators that you have to think about particularly in this example of healthcare. There are intermediaries who are people who are in between, so they could be someone who's selling your product. It could be a wholesaler or a distributor who is selling your product to someone. It could be an integrator, so somebody who puts all the pieces together to deliver some value to that end-user, and it could be an orchestrator. That is someone that, a rule that Best Buy talks about playing. They have this platform, this digital, head-bust certified platform that they use that enables all of the participants to come onto that platform and coordinate the care. Data is exchanged, services are exchanged, they have omni-channels, you can go to a store to buy some products, you can go online to buy product. Napping the players, and then also understanding what is your interface, or what's the interface between those players? Are you selling through them? Are you selling with them? Are you co-innovating in the case of Best Buy Health? They are working closely with Anthem, and they're working closely with Mass General to be sure to be able to deliver care in an integrated way, so they're co-innovating side-by-side, they worked through pilots, and then they ended up scaling farther into the market. So this idea of really understanding who are the players, what role are they playing, and how are we interacting with them? And then here's the really important thing. Show me the money. I was like, "Show me the money." I'll show on the screen as well, Christine, because this, for those people watching us, you can, by the way, watch it now on YouTube, and Spotify, I've reached out for what's on the Innovation Show to feature us as a video supplier, which is just absolutely fantastic. So I can share that on those people who are watching Spotify as well. Video is now available on Spotify. Christine will talk us through this. This is a brilliant diagram, so useful to be able to map where the value is in your ecosystem and where do you play and derive value. So it's important to evaluate the different players, assess what is their motivation, and why do they want to participate in this? And so if you look at this template, the ecosystem evaluation template that we use, you identify the player. Think about the capabilities. What are they doing that helps you deliver value to the end user in this ecosystem? And what are their incentives? If you think about some of the pieces of the Best Buy ecosystem, you think that there are payers who want to reduce the cost that's being incurred, that they have to cover. If you think about the providers, they want compliance. They want compliance from different patients who are at home. They want compliance with the processes that they're trying to use or install. And so think about the incentives. And most often people want cost control. They want some kind of health quality. They want the quality of services. And they are getting paid for their preference, those dimensions. Because there are players who the innovation poses a risk for them. Maybe it's not in this case, well controlled, the quality is not well controlled, or maybe the innovation is going to compete directly with some of the services that players provide themselves so they see the innovation as a risk. And you think about like, so where is money in this flow and how much is it? And one time I was mapping a system with a client and they map the system and they said where they played, and then they realized that all the money was being made in the other part of the value chain. And they're like, well, I'll tell you though, isn't it? Because if you're, what would be the worst thing to happen? You don't do the work. You get there and you realize, oh, now we've built this entire thing and there's no money here. And it all comes to blame them for the corporate store. Maybe they'll be spectacularly, geodescent from the organization as a result of that. So this is the value of this. And I know also, again, Christine, I'm sure you see this. So many of us don't want to throw it away. We fall in love with our own ideas sometimes and we don't want to go through this because we don't want to prove it long, but it is part of the process. It is just to be careful and just think through all of these different parts before you gel head first. And another thing I'll make another goal of the profit pool is that you can't have all the money for yourself. You need to be able to figure out how do you distribute value across the ecosystem and to motivate those partners to participate, to support the adoption of your innovation and to share in the value being created for the end user, ultimately. So after you figure out the money flow, you start to build your scaling path. And we talked in the beginning about deciding what your entry point is. And for Best Buy, it was this personal emergency services. When they acquired that position, they acquired the technology, the call centers to support it. And they started to think about, now, what are the other capabilities that we need? Who are the customers that we need to serve? How can we broaden our reach beyond people who are just using these personal emergency service? And how can we capacity? They started with this acquisition having a certain number of call centers. And then they ended up building more of their own call centers in order to support network. When you think about this, when you think about the idea of a scaling path, you're trying to start from what is our, what's the entry point, and what are the steps that we take? Aiden, I think you'll put our link path. The capacity is about this ability to manage volume. So it's around fulfillment, manufacturing, customer call centers, and customer service. The other thing to think about is, what are the capabilities that you need to draw on? What are the technologies, the products, or the even business models that you need? Maybe you need to move from a fee for service subscription model, or what different things that you need to be able to do, like customers. Are your customers just the original end user? Are they the suppliers that are helping provide that service and really thinking about how do you get access to our customers? And that's the way, that's the fundamental steps of building a scaling path. It's so important that, Christine, I was thinking about this, again, a great guest we've had, become a great friend, a great Paul Nunez, I'm sure you know, he talked about that. When we talk about S-curve, most people think of the organization getting to the South BS curve as it no longer a need for their products or service, but actually so too does your capability. It starts to wane, and if you're going to jump to a new S-curve and create a new business, you will need new capabilities, and I say that to say, I'm sure you see this work with ChangeLogic, where when you're working with organizations, oftentimes you're hired by strategy or by innovation people will inside the organization, but I really, truly believe L&D and HR, they need a seat at that table because they too will have to bring in new leadership programs and find budget to be able to train people in the new mindset, and also HR might realize actually, you know what, we need to hire new people inside the organization. This is somewhere that's so often overlooked, and because of the style of nature of large organizations, they overlook this crucial step. Yeah, it's important to think about the stakeholders from the very beginning and getting them involved, particularly around the step, around scaling. So if you think about the three disciplines of innovation, and it is ideate, incubate, and scale, scaling is one of the most overlooked disciplines in innovation. Everybody's all excited about ideation and incubating. They're like, "Oh, great." But part of it is preparing those stakeholders very early in the process to be able to understand what it's going to take to scale this so that you don't want to show up someday with a multi-billion dollar reward cluster investment. You want to hold their hand and bring them through the journey with you. Therefore, it's important to think about what your scaling path is from the very beginning. Have a hypothesis about where this might go, and it may be multiple different hypotheses that you have about how you're going to scale this business. And that can be, are you going to build some of these parts? Are you going to partner with other people? Are you going to buy it? And what are the customer's capabilities and capacities that you're going to need? So set that frame early on, and you all give people a heart attack. When you ask for money, because when you get to scaling, you're probably asking for a lot more money than you have in the past. So your points, if I do that, and I surprise people, or I often what happens as many corporate explorers know is we'll blame the organization and go, "Those dinosaurs, they don't get it." And you're kind of going, "No, but you had a lot to play on that. You didn't bring them on the journey. You didn't make them feel that it's their idea, too." And I get that because you want to take credit for these ideas because you get so little credit as a catalyst for change. Christine, fantastic job bringing us through the stages and indeed the case study of basketball. Again, I highly recommend that they're behind me on the shelves, the corporate explorer field book. And indeed, the first book, the corporate explorer, absolutely brilliant read. Christine, for people who want to find you, find out more about your work, maybe lean into this area of expertise you have about building ecosystems. Where's the best place to find you? Best places on ChangeLogic's website. You can do changelogic.com. And you can also reach me through LinkedIn. That's probably the best place at Christine Griffin. Before I'd finish, thanks again to our sponsor of the corporate explorer series was Alco. Recently, was Alco acquired inauthent of the company that I've studied for many, many years. They've also acquired change in Colombia, Mindpool, IdeaDrow, and most recently Hostor Lab. And Wuzoku now offers a great idea ecosystem. You can find Wuzoku on www.wuzoku.com. It was a pleasure to join you today and host our guest, Christine Griffin. Thank you for joining us. Thanks. It was great to be here.