Embracing disruption

Sometimes change is messy

In 2000, a little known CEO, Reed Hastings, approached a well known CEO, John Antioco, with a business proposition. Mr. Hastings had a simple idea that he had put into the market - allow people to pick DVDs and have these DVDs sent to their home. He saw Mr. Antioco’s company, Blockbuster, as the ideal company to use such a service. After all, Blockbuster was doing exceptionally well in the market with sales growing each year. It made sense. Mr. Hastings was proposing that he and his company run the online side of Blockbuster.com in essence bringing their unique mail order model to a highly successful enterprise. The cost for such an acquisition? $50 million. Mr. Antioco was a big no. After all, what did a multi-billion dollar company need with a two year old start up?

There’s likely been times in your life where you wished you would have done something. Taken advantage of a moment.

“I should have bought that house.”

“I should have sold that stock.”

“If only I had known that they were going to be successful, I would have invested more.”

These small moments of opportunity often surprise us and leave us in a place where we are looking back in the rearview mirror wishing we had done things differently.

Innovation is like that. It takes us by surprise. For many, when we see something that’s different, we don’t immediately think, “That’s the thing for me.” But here’s the thing, innovations are necessary for growth. Companies and organizations who stay stagnant in their vision, business model, or even staff structure, usually don’t grow or succeed the way they could.

Blockbuster was a massive enterprise. It was the foundation for the entertainment industry, and not just a place that rented you DVDs, but an experience. No one thought that they could fall as hard as they did. Too bad they didn’t see the innovation swelling up around them. Ten years after that meeting where Mr. Antioco told Mr. Hastings no, Blockbuster went under, declaring bankruptcy. That little $50 million dollar mail order business? Today it’s worth over $140 billion, several times more than Blockbuster ever was. Yes, Netflix had humble beginnings and now is a dominant force in the entertainment world.

This case study has been written about extensively. It’s a lesson in many things at once, including the importance of recognizing the trends around you and being responsive to those trends. I have used the Netflix/Blockbuster story several times over the years as a challenge for the mental health field. And yet, we still have a field, a way of approaching delivery and financing, that remains relatively unchanged. I see this as a problem. A logjam of massive proportions that is just waiting for someone to come and break.

Silicon valley and the multitude of start ups have certainly tried to do their part to disrupt. But as we have seen from the data, many of these apps don’t get used once the shininess wears off. More broadly for mental health, we have seen attempts at innovation in our states, with our payers, and even in the federal government.

But are we in a place where the system is actually at risk of being disrupted? Are we close to a Blockbuster moment? Sadly, I am not so sure and here’s why. Health care, and by proxy mental health, is a morass of competing business interests. For some, their business model is predicated on keeping you well, while others don’t get paid unless you are sick. Unlike renting a DVD, there are a multitude of factors that go into our mental health making us have to be much more strategic in what we disrupt, when, and how.

To this end, I keep going back to the trends I have seen - the spaces I see the most unique opportunity for disruption.

Workforce: I wrote about this a few weeks ago here, but remain convinced that if we only go about creating more clinicians we are going to miss a massive opportunity to expand and enhance the capacity of our workforce. I can’t imagine a better place for there to be disruption for mental health than a rethinking of who does the care. For this to happen though we have to loosen a bit of our group think that only licensed clinicians are the answer. Watch this space as I anticipate a great deal of disruption to occur here.

Clinics: While we continually tinker with what we expect from our mental health clinics and how we pay them, for the most part, clinics themselves remain unchanged. Sure, they might get a new piece of art or some fresh paint, but they haven’t really changed much at all. And in fact, some of these facilities do not encourage hope and healing and can be downright discouraging to look at or visit. Rather than simply use some evidence-based design principles to build a new clinic, we could think about reassessing the role of a clinic altogether. Why don’t we bring more care to where people are? Who is not more comfortable in settings like their home? Feels like a good area for some disruption.

Employers: Imagine you are the CEO of a fortune 500 company and you know the data about how much mental health costs you each year. What do you do? Well as it turns out, employers are doing a lot more. It seems that those who pay us for work care deeply about seeing us healthy if for no other reason than we are more productive for them and have fewer days off. Google “employer mental health” and look at the countless companies vying for their attention. There’s a reason for that. This space is hot, and is only going to get hotter with unemployment rates as low as they are and the need for employers to do all they can to retain a high quality and healthy workforce.

The late Clayton Christensen described disruptive innovations as occurring when a small business, targeting overlooked customers, slowly moves upmarket to challenge those often thought of as industry leaders. But he was quick to point out that not all innovation is disruptive. When Reed Hastings approached John Antioco, Netflix wasn’t a threat to Blockbuster. There was no way that a DVD mail service could give you the latest greatest releases like Blockbuster could. What became disruptive was when the Netflix model moved to an on-demand streaming service, which began to take away Blockbuster’s customers before they could respond. And by the time they did respond, it was over.

Applying this formula to mental health, and the above opportunities I describe, I believe we are not far from seeing some shifts in our field. There’s too much opportunity “targeting overlooked customers” in the mental health space for someone to not begin to rise to a position of disruption. It feels like this is the time for that moment to occur.