“If you buy it, I’ll build it” – 5 things healthcare and life sciences can learn about innovation fr
- Stephan Loose
- Sep 6, 2017
- 5 min read
The 1970’s saw the beginning of a revolution in global travel thanks to a unique collaboration between an aerospace firm and an ambitious airline. As life sciences firms and healthcare systems embark on a period of innovation and disruption, what can we learn about collaborative innovation from Boeing and Pan Am as they transformed the world as we know it?
In the mid 1960’s, Juan Trippe, Chairman of Pan Am, was fishing with his friend Bill Allen, then CEO of Boeing, discussing ambitions to make air travel accessible to the general population –a luxury reserved for the few and privileged at the time. However, Pan Am lacked the required aircraft and tools to create the capacity they would need. Boeing CEO Bill Allen was quick to see the opportunity for an “Everyman” airliner, supposedly offering Trippe “If you buy it, I will build it”.
This conversation would mark the informal beginning of the Boeing 747 – an aircraft that would go on to revolutionise aviation for decades to come.
Little did both parties know the immense challenges would lie ahead for the joint project – immense technical and design challenges, rigid regulatory and passenger safety standards and certifications, policy and political negotiations, even redesigning and adapting airport infrastructure to accommodate the larger aircraft.
History however would provide the clearest evidence that a collaborative relationship with customers can yield incredible results
Pan Am would increase their passenger miles over three-fold in the 10 years thereafter
Boeing dominated the wide-body aircraft segment from 1970 until the introduction of the A380 over 35 years later
Significant reduction in costs made global travel accessible for millions of passengers around the world
This close collaboration between Pan Am and Boeing serves as a case study for how two organisations -a primary customer and supplier - can create impactful, transformative new products that create benefits for all stakeholders involved. So, what can the life sciences and healthcare sectors take from this experience?
1. Focus first on the buying customer and their pain-points
Bill Allen and Boeing clearly understood who their buying customer was and what ambitions (accessible travel for the masses) and pain points (limited passenger capacity) were.
Similarly, it is critical for life sciences firms to understand who is making the buying decision for their products, what they aim to achieve and what is preventing them from doing so. Developing this deep understanding of the buying customer should be the starting point for anyone developing new innovations in healthcare.
2. Design for users and consumers
Overcoming significant technical unknowns and a rigid regulatory framework were only some of the challenges Boeing and Pan Am had to conquer. The aircraft also had to be easy and reliable to fly for pilots, it had to be safe, quiet and smooth for passengers, it had to be easy to load and unload for luggage crews and so forth. The success of the 747 laid not just in the benefits to the buyer, but also to the users and consumers of the aircraft.
Things are not too dissimilar in life sciences – products must be easy to prescribe for clinicians, easy to use with few side effects for patients, have the right end-points and evidence for regulators and HTA authorities and so on. New health technologies cannot be created just for buyers, but must be designed with the users and consumers along the buying journey in mind– whether they are HTA’s, prescribers, patients or regulators.
3. Trust and relationships matter
An important element of the collaboration was the trusting professional relationship between Allen and Trippe, (Pan Am had previously been the launch airline for other Boeing aircraft). The relationship was an important foundation for not just starting such an ambitious, disruptive innovation, but also for seeing it through to the end.
Many consider this aspect the most significant challenge for the life sciences in building such innovation-focused partnerships. A history of often distrustful, adversarial relationships between healthcare buyers and life sciences firms is already being reshaped through smaller collaborative projects that deliver aligned benefits for both sides. Firms must continue to invest in building trusting relationships with their customers – they are the required foundation co-creation and joint innovation development.
4. Customer co-creation can create new markets
Many might worry that co-developing a product with a single customer might create a highly specialised, niched product that might have limited success with other customers. However, Boeing and Pan Am had closely aligned interests in solving a structural problem for the airline industry at large – limited passenger capacity. By solving this challenge, they inadvertently created and captured a new market that had been previously unattainable.
While Life science firms have historically taken advice from its buyers and users (and recently also consumers), they have rarely taken the leap to co-develop products specifically with an individual buying customer, such United Healthcare, NHS England or Barmer Ersatzkasse. While the fears of commercial limitation are comprehendible, life sciences firms must also consider the financial, relationship and innovation gains that might result from dedicated product development programmes for important single customers.
5. Supplier partnerships create better products
A critical element to this partnership was Pan Am’s commitment to collaborating with one of its suppliers on the design of a new product. An almost symbiotic relationship - where both customer and supplier where dependant on and committed to each other - allowed the firms to overcome the many political and technical design challenges that faced the development of the 747. If Pan Am had just put out a tender for a new jet liner, the 747 may never have come to fruition.
Willing and collaborative suppliers can only do so much on their own. Healthcare buyers must be willing to develop such exclusive, collaborative relationships with their suppliers if they want to have their specific challenges and problems solved. If trust or rapport has not been built, buyers should consider creating small projects to allow a trust-based relationship to develop. If a committed and able life sciences firm is standing at the door wanting to collaborate, give it a chance.
The future today
Some would argue that these types of collaborative buyer - supplier relationships already exist in the life sciences and healthcare sector. Indeed, there are a growing number of examples of how healthcare systems and providers are partnering with life sciences firms to solve common and aligned problems.
One of the best examples is immunisation programmes in the UK and around the world, where Public Health teams have an almost symbiotic relationship with vaccines manufacturers. With limited public-sector buyers of vaccines, Public Health officials are frequently willing to collaborate with their suppliers to ensure that new and existing products meet the requirements of their programmes. Vaccines manufacturers in return develop custom uptake programmes, data tracking and evidence and sometimes change a product itself to better meet the requirements of their customer.
Many other life sciences firms have already started partnering with providers and healthcare buyers to develop custom tools to track patient outcomes and redesigning treatment pathways in an effort to create more efficient and effective outcomes for the end user – not too dissimilar to developing a new aircraft that liberalised the skies for the masses.
Healthcare and life sciences will always have their own challenges and nuances. None the less, interesting lessons can be learned from other sectors – especially when they create such noticeable change in the world, as the Boeing 747 has.
It is testament to how co-creation, not competition, between suppliers and buyers can create an incredible, transformative impact on the world.
If you like what you have read, please feel free to contact us.
Stephan Loose – Managing Director
Sloose@oldstreetstrategy.com
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