Posted on January 13, 2020
Leveraging structured problem solving to drive market adoption
As mentioned in my previous post, the Intralase product launch was not without challenges, first of which was economics. We were replacing a $40,000 console with a $475,000 laser, and a $25 blade with a $150 per eye consumable– thereby increasing a surgeon’s cost per case >10x. Regardless of this premium, sales got off to a good with $18M in revenue in 2002. Sales slowed in 2003, below investor expectations; in addition, and more concerning from a financial perspective, customers were not fully converting their LASIK volumes to the new technology.
Also in 2003 the board hired Bob Palmisano, a seasoned public company CEO, to help the Company achieve the next levels of performance. Bob had previously been CEO of Summit Technology, Inc., a company that benefited greatly from a high-performance management system (HPMS), so naturally he brought this process and a few of his senior executives with him, including me as EVP/CCO.
In our first HPMS offsite strategy session together, we identified “Procedure Adoption” as the #1 priority for our shareholders, hence it became one of our “Vital Few” (Step 1 in the Breakthrough Process). Given the high priority and complex nature of the problem, we further agreed to leverage the following structured problem-solving process to breakthrough on this metric:
8-Step Breakthrough Process
Having defined the problem (Step 2), our next step was to form and activate a diverse team that was passionate about the problem/opportunity (Step 3). We selected teammates from each commercial function (sales, marketing, clinical applications, field service and customer support) and from various levels within the organization . We further agreed on a disciplined meeting process that would allow us to complete the project in 30 days.
As the team dug into the current state (Step 4), we first looked at our current customer adoption rates. We learned that a third of our customers were high adopters (>90% of flaps), another third were low adopters (<10% of flaps) and the remaining third somewhere in between.
From there we went “insanely deep”, interviewing and surveying all customers as well as the field personnel that touched them through the customer experience to identify what leads to successful or unsuccessful adoption. From the collected data and comments, we were able to derive a few critical truths, root causes and best internal practices. The team then moved to benchmarking, specifically to the Ritz Carlton customer-facing process, which provided a world-class framework for our desired state (Step 5).
Leveraging what we learned in current state and benchmarking, we then mapped out a “desired state” Rapid Adoption Process and agreed on 85% procedure adoption in 30 days as our key measure of success. We put this new process in place 30 days from the team’s first meeting and, while not perfect, it was immediately effective – taking our average adoption rate from 50% to 95%– a level that was maintained globally for several years afterwards.
In addition to solving a critical financial problem, the new team process delighted customers with some saying they “felt like they were being served in a fine restaurant”; it also improved employee satisfaction, particularly with our field service engineers, who were now part of the process. Remarkably this breakthrough in adoption was achieved with a process change supported by effective change management; it did not require any organizational or structural changes. This process was critical to reaching revenues of $132M and operating profitability in 2006.
This is a powerful example of how structured problem solving can be leveraged to improve critical processes and commercial results. If you would like to learn more about our high-performance management system (HPMS) can help you achieve breakthrough results, please reach out to us.