Problem solve Get help with specific problems with your technologies, process and projects.

Health insurer crowdsources new business model with innovation software

Company leadership has a vision for where the business should be headed. The new direction diverges from what made the company successful. It will require new business models, new financial models, a new business psychology — it calls for innovation. How does leadership make it happen?

Don’t overlook innovation software, said Mohan Nair, who spoke to me recently about his experience with Spigit software. “You can’t do it the old-fashioned way.”

Nair is the chief innovation officer and a senior VP at Cambia Health Solutions, a Portland, Ore., not-for-profit that got its start nearly a century ago selling insurance to loggers and mill workers in the Pacific Northwest. In recent years, Cambia has moved beyond insurance into consumer healthcare and technology. Today, the health insurer, which has 2.5 million members and employs 5,500 people, comprises some 25 companies, many of them aimed at helping people become more involved in their healthcare decisions through online, mobile and digital technologies.

Nair, who was trained as a computer scientist and went on to run software companies, was recruited in 2003 to Cambia, then known as The Regence Group, to help the company’s then-new CEO, Mark Ganz, engineer a “total transformation of the business from the bottom up, not top down.”

Unleashing vs sanctioning innovation

The bottom-up transformation started at the top with the CEO’s vision to make Cambia a more customer-centric company — a radical viewpoint in the health insurance industry at the time, Nair said — and with leadership’s conviction that innovation be seen as a company value.

“You don’t say, ‘Let’s have a lab and you guys are going to get all this innovation after the smart people think it through. You make innovation a responsibility and a requirement.”

But saying that henceforth innovation is a company value doesn’t make it so. “It’s not that easy,” Nair said. It’s important that innovation is not something seen as “allowed” by the company. “That’s not what innovation is about. There is a renegade quality to innovation and you should unleash it, not allow it.”

One thing that helped unleash new ideas at Cambia, Nair said, is the innovation software from Spigit he introduced five years ago.

“It allows for true bottom-up crowdsourcing in a somewhat disorganized way. Anybody at any level can say, ‘I challenge us to solve this problem. I challenge us to identify solutions in this area,'” he said. “Technology has no emotion, but the design of the technology can allow emotion to manifest itself.”

While Cambia’s organizational structure — who reports to whom, the various paths up the corporate ladder — is the “backbone of the company,” Spigit’s innovation software “is like the nervous system of the organization,” Nair said.

“It’s all about how ideas flow from one part to another, where redundancy could be good and where focus can be the enemy of new ideas,” he said.

Measure — but not too soon

It’s also important that innovation be measured. To that end, Cambia employees are surveyed quarterly on their bosses’ ability to “absorb and understand” new ideas. The company also measures how many ideas are coming through the system, identifying which people are getting more ideas going than others and what techniques they are using to make that happen, Nair said. The company has also found a correlation between people who submit ideas and their performance rating — people with high performance ratings tend to contribute more ideas than their lower-performing peers.

But, he cautioned against imposing metrics too early in the process. “I never put those measurements in place until I felt we had reached a tipping point, which is about 28% of the company submitting, viewing or contributing new ideas,” he said.

While the aim of the innovation software is to generate ideas that bring business value, companies should not fixate on business results too early, he said. “When we were at 5%, 8%, 10% participation it was about loving the idea less and encouraging the people with the ideas more.”

The innovation scorecard

Indeed, it takes about four or five years for the technology-enabled innovation model to “mature,” Nair said, who rattled off Cambia’s latest

Mohan Nair, chief innovation officer, Cambia Health Solutions

Mohan Nair, chief innovation officer, Cambia Health Solutions

milestones:

  • 29% of employees engaged in innovation
  • 1,276 ideas generated
  • 5 companies created (two from crowdsourcing)
  • $171 million in contributed revenue

“The most recent company we are about to launch will be a very dramatic transformation. It is in the area of pharmacy transparency and came from a pharmacist who submitted his idea into the crowdsourcing toolkit,” Nair said. “Others latched on it — and eight months later he is founder of a company.”

Join the conversation

28 comments

Send me notifications when other members comment.

Please create a username to comment.

Brilliant move to drive cloud workloads. Coupled with Apache CloudStack, organizations can setup a private cloud on open source, then license it and get support before going to production.
Cancel
Sell VMware(EMC) stock now...
Cancel
Smart Move
Cancel
The hypervizor is a commodity - its the value organizations can leverage on top of the virtualization layer - The VMware portfolio is unrivalled in that regard
Cancel
Fantastic News. All the features that small shops need to let their sysadmins actually sleep peacefully at night. I can't thank the XenServer team enough!
Cancel
We just moved from FREE to ADVANCED, now with 6.2 it means we have even more at our command. Thanks, looking forward to putting into production.
Cancel
Good idea!
Cancel
Other open source hypervisors will continue to push all the vendors toward free hypervisor stacks. Each will have to discover ways to add value and charge for it at other points in the business computing supply chain.
Cancel
Nice initiative.
Cancel
I think it will revolutionize the cloud strategy. I feel it will really put pressure on other providers to opensource or to reduce cost substantially.
Cancel
All should give away ALL of the software and updates, but charge for just the support. Market Capitalization is all they're going for any way.
Cancel
XenServer is a solid product but Citrix failed in not leveraging the open source model and community the way Red Hat does and because of this lost too many ground in he Hypervisor market. They also failed to partner and market on the fact that the biggest cloud provided of all --Google and Amazon -- are based on the Xen Hypervisor. By technical merits alone, no one should even be considering VmWare instead of Xen. Now let's see if Citrix know how to play the open source game, and if it's too late for that.
Cancel
Sounds like a good move, but perhaps a bit late to the game. Citrix is desperate for business and sees their market share shrinking.

Consider also that Linux KVM solution already provides what business needs to rock and roll with enterprise virtualization--with solid industry backing and support. Includes VDI support with SPICE. Add OpenStack and you have a scalable cloud infrastructure ready to go. All provided via the **GPL**, unrestricted, free.

Go grab a free download CentOS or Fedora and check it out. Totally incredible Linux/KVM up and running in minutes!
Cancel
Hyper-V is a new player.
Cancel
Citrix has been "slower" than VMWare. Together with a third vendor - Proxmox, virtualization is a growing field. And I know I am going to get this software up on my existing xenserver ...
Cancel
Microsoft did right with Hyper V server great product with many features others will charge for.
Cancel
I was looking for quotes on vmware but now...point me to the Xenserver download page.
Cancel
Yikes!
Cancel
Really glad to see this. Xen has always had a strong footprint in the desktop virtualization world.
Cancel
...
Cancel
I hope they will learn from the mistakes made by VMWare.
Cancel
Well done citrix
Cancel
I think it is great news, but I have recently moved all of my servers to Hyper-V and did not even really consider Xenserver so they still have an upward hill to climb.
Cancel
Good
working for some time at xen
in OS and Dual svn

marcsievers@home.nl
Cancel
Very CLEVER
Cancel
good for those who are learning citrix
Cancel
To little to late
Cancel
VMware must adapt
Cancel

-ADS BY GOOGLE

SearchCompliance

SearchHealthIT

SearchCloudComputing

SearchMobileComputing

SearchDataCenter

Close