June 24, 2017
LinkedIn recently published its Top Companies of 2017 list, comprised of 50 companies spanning 21 industries and employing 3.3 million workers across the U.S. These are the companies where professionals want to work now. Many on the 2017 list are tackling tough problems with a never-surrender mentality, inventing new technologies, and sometimes even creating whole new industries.
Most of the companies that show up high on the list are considered "Category Kings," or market-dominating companies that give us new ways of living, thinking, or doing business, often solving problems we didn't know we had. These companies also end up owning more than 76% of their market valuation, with other companies in their space fighting over the scraps. These are companies like Alphabet, Amazon, Facebook, Salesforce and Uber, which round out the top five. These companies are reinventing the status quo. They are telling a story that says, "We're not a business, we're a movement. Come join us." This narrative is as compelling to the employees as it is to customers.
With technology rapidly advancing, healthcare should arguably be one of the most innovative and exciting industries today, leading the charge to improving the delivery of healthcare and patient outcomes. However, healthcare, which comprises nearly 30 percent of the U.S. GDP, doesn't show up on the list until number 23 with Stryker. So, where is the disconnect?
Today it's all about value-based healthcare, and the physician-centric care delivery model of yesterday will not work moving forward. The industry is evolving into a new ecosystem that operates more similarly to the tech and retail industries. Unfortunately, all too often medical device companies develop a product and then try to figure out the application or problem it solves. Moving forward, whether you're an incumbent or a startup, companies must be purposeful about meeting the buying criteria in the new value-based healthcare landscape. Now, more than ever, marketing and business culture will drive business success along with value-based innovation if they have any hope of becoming a Category King.
Every product or company we love exists because a legendary entrepreneur designed a product, a company and a category—all at the same time. This is called the Magic Triangle and it forms the three pillars of an enduring Category King. If you want to read more about the three pillars, check this out. Legendary leaders intentionally combine company, product and category strategy together to create and dominate the market with an innovation that is like nothing that has come before and solves a big, urgent problem in a new way.
Medical device companies have the power to create this as well. Unfortunately, these companies tend to rely on pulling two levers to drive business: the product and the company. They think if they make a new product, their audience will automatically want to buy it. Then they turn their attention to designing the company or figuring out how it will operate and what it will be like. While they can find success, this approach will never produce a Category King unless they pull the third lever: designing the category. Category design is the intentional creation and development of a new market category, designed so the category will pull in customers who will then make the company its king. In marketing terms, it's the "air wars," teaching the world to abandon the old and embrace the new. Category design builds the profile of the space, or category, while drawing attention to the company creating it. Without doing all three of these things in synchronicity, there are great innovations that end up on the cutting room floor.
As a medical device company, how do you increase your odds of winning with the Magic Triangle?
Product Design: Product design is the purposeful building of a product and experience that solves the problem the customer needs solved. Uncover a market insight about what's missing that could bring meaningful value to the healthcare landscape. Today, these are products or services that improve patient engagement, operational efficiencies, and clinical outcomes, to name a few. Innovation for innovation's sake will lose in the new ecosystem.
Category Design: Category design is the purposeful creation of a new category or market that you can own and dominate by solving an urgent problem in a new way. To win, don't market the product; market the problem. Once people see the world the way you do, they will embrace your new solution and reject the old. Conditioning the market about the problem you solve is imperative; how quickly the market can change its mind to embrace the new solution is directly related to your revenue growth.
Company Design: Company design is the purposeful alignment of a business model with an organizational culture that captures the essence of the category. This must start with the CEO and her leadership team, identifying the type of people you hire and the culture of the company's community, including investors, strategic partners, and board members. This discipline is what sets your company's world-view and makes it crystal clear what you stand for, what you stand against, and why customers should choose you over the rest.
The category design process is a journey and not something that happens overnight. It takes passion, time and commitment. But if you proactively cultivate the three pillars to becoming a Category King and condition the market, the largest piece of the pie is yours for the taking.