In my research and consulting work, I have identified four symptoms that should warn executives that they are stuck on an innovation plateau. I describe this symptom as akin to organizational anorexia. Efficiency is not innovation. Obsession with listening to the customer. Almost all customers want their products to be as inexpensive as possible. So firms try to respond to this by delivering the value that they think their customers want.
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The first round of presidential polls on April 10, , set the stage for a June runoff between the leftist Ollanta Humala, a former military commander, and right-winger Keiko Fujimori, the daughter of a former Peruvian president who is in jail.
Unlike other countries in Latin America, such as Mexico, Peruvians have learnt to innovate on shoestring budgets. To help tackle the problem in the crowded city of Lima, its then-mayor — a doctor who had been the head of the National Institute of Health — decided to orchestrate a solution. Working with several doctors, the city set up a hospital, Hospital de Solidaridad, in a very different fashion.
One, building a hospital is time consuming — it takes around four years in South America — and is capital-intensive. The HDS team decided to eliminate this step and set up the facility in the shells of 23 old buses that were waiting to be disposed off by the city administration. It took just four months to clean out the buses and equip them with water, electricity, drainage, air conditioning, and medical equipment.
The hospital has operating rooms, clinical laboratories, a pharmacy, and provides an array of services, from diagnostics to surgery.
Two, instead of investing in equipment, the founding team invited doctors to buy equipment that they could own, use, and maintain. As many as doctors agreed to do so in order to help the sick in their city, and became investors in the hospital.
Three, hospitals usually offer services from fixed locations. The HDS team came up with a modular design that make it easy to move parts of the facility to where the demand is. Medical teams drive to the poorest places in Lima, starting at 8 a. Finally, most hospitals decide which doctors attend to which patient. The HDS team changed this, allowing patients to choose the physician, the day, and the treatment time so they could act on the recommendations of friends and relatives.
HDS charges U. To fund surgeries, the hospital helps organize pools. HDS charges fairly low prices. It consists of a network of investor-physicians, operating from buses that had fallen into disuse, and offering exactly what people need such that they value it. The doctors asked one simple question: What can we do to help the neediest in Peru in a quick, cost effective, and professional way?
The process starts by acknowledging that perceptions of value differ according to the target market segment and geographical location. This allows managers and policy-makers to play with the attributes of the original offer, eliminating some, modifying others, or inventing new ones. All of Latin America needs to learn from this kind of innovation, and figure out how to enhance the numerator either by enhancing value, like the Colombians did , or by re-imagining value, as the Peruvians have.
Doing that will make all the difference.
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Peru’s Innovation Drive
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