By David Pencheon- Director of the Sustainable Development Unit of the NHS, Zoe Le Grand- Senior Sustainability Advisor at Forum for the Future and Gemma Adams- Principal Sustainability Advisor at Forum for the Future
In 1960, Theodore Levitt argued, that for a company to stay in business, it needs to know what business it is really in. He used the example of the railroads in the USA, which at that time were in decline. He argued that the reason for the decline was not because people no longer needed transport, but because other modes of transport such as the car, had risen. His point was that if you want to stay in business, you need to focus on customer needs not on your assumption of the products needed to meet those needs. Railroads in the USA went out of business because they thought they were in the business of running railroads. If they understood they were in business of meeting people needs to move and communicate, things might have been different.
Successful businesses today, faced with unstable commodity prices, rising raw material costs and greater scrutiny are beginning to look at what business they are really in and how they meet customer needs. For instance, one of our leading partners, Kingfisher, want to “make it easier for customers to have better and more sustainable homes”. At the moment that means selling home improvement products but in the future, Ian Cheshire Kingfisher’s CEO, has talked about renting customers the tools and equipment they need. The needs of customers to improve their homes would still be met but with considerably fewer resources used and less waste produced which is good for Kingfisher and good for the planet.
The lesson is that we ought not to be presuming the product that meets the customer’s need, but focus directly on that need. This relates to, and reinforces another business transition going on currently: the move from a product based enterprise to a service based enterprise. For example, energy companies may be focussed on selling energy, but customers are really interested in warm houses, so maybe the warm house should be the core offer (regardless of HOW it is made warm) – this would stimulate the company to insulate, conserve, renewably generate, etc. rather than just sell.
But what does this mean for public services? What sort of business is the NHS in for instance? Providing healthcare, or improving health and quality of life? Are public services, such as the NHS, trying to meet customer (or service users’) needs? Or is the business model more product (a consultation, a drug, a service package, an operation, a sudden hospital stay) than service (a lifelong commitment to do all that is possible to promote health, prolong life, and when things go wrong to provide care)? And how sustainable is this in the face of the rising cost of everything: from drugs to staff, especially as much that determines health (employment, diet, smoking, alcohol, physical activity) lies outside the control of the NHS? In some countries (examples from China to the US), health professionals/organisations are paid for health outcomes not healthcare interventions. This can radically and sustainably re-align incentives, objectives and outcomes: for health, for money, for the environment: good for the patient, good for the purse, good for the planet.
Forum for the Future has been working with the NHS Institute for Innovation and Improvement to look at what a more sustainable healthcare system might look like. We found that if a NHS service wants to really meet its customer needs now and in the future it should aim to reverse illnesses before they become serious, rather than focusing on urgent treatments. Providing a service to maintain good health rather than a product to cure bad health. People’s health needs are better met by avoiding sickness in the first place; avoiding all the stresses, strains and negative effects on their quality of life. This is also a leaner, lower budget way of providing healthcare.
That’s all well and good in theory but what about in practice? What could these new ways of meeting customer needs look like?
Prescribe a better lifestyle, not drugs: The role that people and patients can play in managing and modifying the causes of illnesses is often overlooked, for example – and opportunities to boost social contact and mental health in the process. Good Gym aims to provide meaningful ways to increase physical activity. It connects people who want to get fit with physical tasks that need to be done, and which benefit the community. Volunteers get together to go on runs that include some element of benefit to the community from shifting rubble, and planting gardens to making deliveries and friendly visits to older people. This innovative approach helps to meet the customer’s need for physical wellness and community as well as benefiting the environment around them. No drugs necessary.
Work together to catch illness at an early stage: when commissioning organisations are designing care they need to link together clinical services and public health and community initiatives. At present, these different ways of dealing with chronic kidney disease, for example, are planned separately and this leads to patients only visiting their doctor when the situation is already serious because they don’t start to feel really unwell until it gets to that point. Dialysis comes at an enormous cost to patients and to the NHS; better to delay (or even avoid it) through understanding and managing its natural history earlier in its development.
Be future ready: understandably much of the focus of health services is a reactive response to the here and now. This immediacy often translates into planning and a lack of preparedness to meet future health needs. Where big corporations like Unilever, brands like Nike and retailers like M&S are seeking to protect their future business by dealing with global resource scarcities and climate change, the NHS is finding it hard to act outside the political cycle to counter long-term health issues like an ageing population, living with multiple conditions. Investment needs to be made in innovation to change tariffs and unlock funds for the future. The Forum for the Future/NHS Sustainable Development Unit project “Fit for the Future” contains four scenarios for the healthcare system in England. Exploring different future scenarios could help to stimulate the new ideas we need.
Using innovative financial mechanisms: Perhaps there are lessons here for how we incentivise, reward, and pay professionals, and those from who we commission and care. If we really want to have a system that is focussed on health and is truly a service, then we ought to truly pay by results not activity or status. Reward those who spend the health budget for improving health outcomes of the population.
With public services facing challenges from all sides - budget cuts as well as changes in the nature and scale of their work it’s time for us all to reconsider “what business are we really in?”