Creating a Culture of Innovation

Michael Schmidt, Managing Director of Strategic Innovations at Orlando Health, discusses creating a culture of innovation across a complex healthcare system on IN CLEAR FOCUS.

In Clear Focus this week: how to successfully create innovation competency and culture. Michael Schmidt, Managing Director of Strategic Innovations at Orlando Health, shares a practical framework for transforming ideas into startup businesses and commercial products. Michael speaks to the challenges of creating a culture of innovation across a complex healthcare system as well as the tangible benefits experienced by internal and external innovators, healthcare professionals, and patient communities.

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Episode Transcript

Adrian Tennant: You’re listening to IN CLEAR FOCUS, a unique perspective on the business of advertising produced weekly by Bigeye. Hello, I’m your host, Adrian Tennant, VP of Insights at Bigeye, an audience-focused, creative-driven, full-service advertising agency. We’re based in Orlando, Florida, but serve clients across the United States and beyond. Thank you for joining us today. Over the past several decades, thanks to improved diagnostic and therapeutic options, healthcare has done much to improve life expectancy and quality of life. And the development of new diagnostic procedures , therapies, drugs and medical devices is something the US has traditionally excelled at. But within the next five years, the cost of healthcare here is predicted to reach 20% of GDP, so technological solutions and new approaches to delivery are of interest to many health systems. Managing systemic change is hard, especially when it comes to creating a culture of innovation. Joining me here in the studio today is someone with hands-on experience of managing just this kind of challenge. Michael Schmidt is the Managing Director of Strategic Innovations at Orlando Health, a network of community and specialty hospitals. Orlando Health is Central Florida’s fifth-largest employer with more than 20,000 employees and more than 3,000 affiliated physicians. Michael has built the Orlando Health Foundry, which develops internal ideas and concepts into startup businesses, or commercialized products, and helps to launch them across Orlando Health and the broader healthcare industry. Welcome to IN CLEAR FOCUS, Mike.

Michael Schmidt: Thank you. Thanks for having me.

Adrian Tennant: Mike, your title is Managing Director of Strategic Innovations. How do you define innovation?

Michael Schmidt: People define innovation and specifically in healthcare a lot of different ways. The definition that has become my favorite. It’s actually from a partner of ours, Healthbox, based in Chicago. And I love it because it’s so simple. It’s “invention adopted.”

Adrian Tennant: And why is innovation needed within an organization like Orlando Health?

Michael Schmidt: So we’re at a really interesting time. 2018 was actually our 100th birthday as an organization so kind of at the same time celebrating the past and everything that we’ve accomplished and what it means to the Central Florida community, but also really looking to the future in the next 100 years. And how do we set ourselves up as a hospital system, caring for a broader community to make sure that we’re meeting the needs that the community has, but also making sure that in the increasingly competitive healthcare landscape, we are well prepared to serve those that you know, that we’ve set out to, to serve.

Adrian Tennant: So Mike, how did you first arrive at the idea that has now become Orlando Health Foundry?

Michael Schmidt: So we’ve had some fits and starts in terms of a formal innovation program. And so for a healthcare system of our size, that was really a gap. So not quite five years ago, David Strong became our CEO and he brought with him from his previous organization, a number of other senior leaders that now they formed the senior leadership team for Orlando Health. And I think pretty quickly realized that an innovation program is an excellent way to engage the workforce, especially the frontline clinicians and physicians who are directly caring for patients. So to not only make sure that we are tapping into the workforce to get the best insights and feedback on where change needs to happen, where product evolution needs to happen, where we need to to change our approach. But also to make sure that the workforce feels they have an outlet for those ideas when they come up with something, whether it’s a new product, purchase recommendation, or a completely new idea that someone’s come up with that solves some problems. And so we collectively surveyed a number of senior folks across the organization and asked the questions, “what would a, a good innovation program look like?” and “how should we include people from across the healthcare system to help us drive this forward?”

Adrian Tennant: Excellent. So in establishing Orlando Health Foundry, what challenges did you face?

Michael Schmidt: So I think one of the biggest challenges for me was initially I was a one person team. And with such a large organization that’s spread out so much it, it has been a bit of a challenge to get the word out to make sure that people know that we have the Foundry program. And then kind of taking it a step beyond that. What is this program? How does it work? How can people participate, engage with it? What types of ideas are we looking for? Things like that. So it’s been a bit of a learning process. One of the best things we do each Fall is we hold workshops at each of the hospitals. And so anybody’s able to come there. They’re a few hours long so it gives people a chance to kind of settle in, ask me questions, get an overview of what the program looks like, but then get real-time feedback on any ideas that they might be working on. And so I always take a step back and say, “how did you guys hear about this first and are there better ways that we can communicate to make sure that we’re reaching everybody who needs to hear about this program that has ideas?” And so I’ve gotten lots of great insights and feedback over time.

Adrian Tennant: Is the program open only to Orlando Health employees and partner physicians, or is it open to everybody?

Michael Schmidt: That’s a great question. So the way we’ve decided to set up our program is to focus both on the internal and external environment. So the Foundry specifically serves our internal constituents, so employees, which we call team members and our physicians. And so the Foundry is where they can bring ideas for new products or services that Orlando Health can develop and then commercialize and spin out after using them across our system. For our external focus, we actually have a dedicated investment fund, which many large healthcare systems do now. And so we do direct investing into healthcare startups whose products and services we like to use.

Adrian Tennant: Right. So how do people with new product or service ideas generally engage with the Foundry? What does the process look like?

Michael Schmidt: It usually starts at the workshops. And so the program does run on an annual cycle. And so we’ll do an internal kind of marketing campaign around the program invite people to attend the workshops. And so that’s the first chance for them to dip their toes in the water. And oftentimes people sign up but they’re not really sure what to expect. And initially they’re a little hesitant to share the idea. But I think once they understand that, you know, my team is here just to support them, they are, you know, they are my customers. My job is to help them succeed and help them take the next right step with their ideas. It’s always really encouraging to see how the conversation kind of unfolds.

Adrian Tennant: So what can you tell us about the framework that you’ve developed to help innovators either define or refine those initial concepts that they bring to you?

Michael Schmidt: Yeah, so the Foundry program itself, the actual accelerator portion it’s about a two month sprint. So most of the ideas that are brought to us are very early stage. It’s kind of a sketch on a piece of paper or a PowerPoint presentation as to “here’s how this thing could work if we were to build it.” So we realized that people were pretty early in the process in terms of developing a concept. And so what we’ve established in this is kind of Healthbox’s framework is a series of four modules. So we build an internal team. If we’re building a medical device, we’ll bring someone from clinical engineering, we’ll get a frontline clinician who’s actually gonna use the device. We’ll get someone from our IT team just to make sure that we have a well-rounded perspective as we’re developing this project, just to make sure that we’re not missing anything. And so that group stays together throughout the process. And so the first thing we do is kind of take a step back from the product or the idea and we really start to diagnose and take apart the problem that they’re trying to solve. We say, “you have to fall in love with the problem first.” That’s the first big step. And so oftentimes the innovator that’s brought the idea forward hasn’t fully thought through what exactly their idea or their product is fixing. And so we start to pull it apart piece by piece and say, “look at who exactly is this problem affecting what is, what else is happening further down the line, if we don’t fix it today, what happens? How urgent is it? What is it costing Orlando Health? Or what is it doing potentially to patient outcomes if we’re not solving this problem?” And so most of the time, once we’ve gotten that part kind of on paper and thought through fully, we realized that at least some aspects of the new idea don’t address part of that problem. So it’s a good opportunity for us to kind of reframe, make sure that the idea addresses the problem that we’ve diagnosed. And so once we get past that, then start to get into product design, start to look at the market landscape, where would this fit? Just to make sure that we’re carving out a niche for ourselves where we feel we could have some success.

Adrian Tennant: Got it. So moving to market fit. How do you typically determine a concept’s commercial viability and validate the market opportunity beyond just Orlando Health’s needs?

Michael Schmidt: Yeah, so the, the review process for the ideas that are brought to us is, is actually a bit of a lengthy process. So of all the ideas that are submitted, we review those internally. And I have a group of about 30 frontline clinicians, physicians, leaders that review all the ideas. And so what we look for collectively is which of the ideas really is something unique that’s not on the market? Or if it’s similar to something on the market, do we think that we could build this in a different way or approach it differently that could impact, you know, first and foremost, how we deliver healthcare at Orlando Health and then would that appeal to the broader market. So we have a lot of discussion around the merits of pursuing each of these things. Some really interesting ideas aren’t pursued because of what the market landscape looks like. Medical devices specifically have a very long runway for development. Going through the FDA is not easy. It’s very costly so we pick and choose the opportunities to pursue those types of projects based on how successful we think we could be. And then I always make sure that we’re not getting too far ahead of ourselves if we develop an idea that at the end of the day really just impacts how we do things at Orlando Health and helps us either improve our outcomes, decrease costs, reduce length of stay – the important metrics for a hospital. That’s fine. If it ends up getting to the market and is successful, that’s, that’s kind of a bonus. Just to make sure that we’re not getting too far ahead of ourselves. The average amount of time from the start of the program to when we anticipate something hitting the market – it’s probably between two to four years depending on what type of idea it is. So we just make sure to pace ourselves appropriately.

Adrian Tennant: Okay. So talking about hitting the market, does Orlando Health automatically become a shareholder in any of the new ventures that have been nurtured through the Foundry framework?

Michael Schmidt: Yeah, that’s a, that’s a great question. Different hospital systems approach that differently. For us, the Foundry program is designed to identify and build Orlando Health’s intellectual property. And so it’s one of the first discussions we have with innovators is helping them understand why Orlando Health needs to assume ownership of, of the IP. And it’s really just how easy it is for me to put resources and structure behind something. And you know, it’s not really about control. We leave the innovator really in the driver’s seat for the project. So it’s, it’s really to, to build up our IP portfolio and then what we do once something is commercialized. So we have a very generous royalty sharing approach with the innovators. So they basically get to benefit in the profits after Orlando Health has, has helped them get to that point.

Adrian Tennant: Got it. Bigeye is a healthcare marketing agency, as you know. How do you approach developing those plans for growth? Particularly go-to-market strategies and those potential external funding requirements.

Michael Schmidt: So it’s different for each project. You know, we really tried to, to start with a templated approach, but when we get to certain points, make sure that we are, you know, kind of designing and building and moving each idea along the right way. So medical devices, you know, we have some good you know, biomedical engineering partners that we work with that that’s their niche. They know how to, you know, illustrate these ideas. Rapid prototype them with three D printing, you know, run a pilot program and then get them through the FDA. So a lot of times those processes are already defined based on the partner. So we feel it’s, it’s really important early in the process to identify who those partners are going to be and then do our best to just kind of follow the process that they’ve used. It’s proven to be successful.

Adrian Tennant: Okay. You mentioned earlier that you typically work in sprints. So have you fully adopted an agile project management methodology?

Michael Schmidt: Yes, we have in some instances. We don’t have a set approach really just because the projects are so different. So the four projects that went through the Foundry in 2019 that are in development right now: we have an iPad app to help patients who’ve lost their ability to speak in the hospital so it can speak for them based on inputs. We have a program that will, through some, some software connected to our electronic health record, will help pediatric patients transition into adult care. We have one that is, it’s really a pilot study to test how, how much we can reduce the risk of infection spreading in certain units by replacing the privacy curtains that are kind of standard fabric curtains with antimicrobial disposable curtains, just to see what the difference is there. And then the fourth one is a medical device which is built to irrigate wounds and the emergency department cuts and lacerations and stuff like that. So wildly different projects, completely different work teams, different partners that are helping us build or design all those things. And so again, it’s back to making sure we have the right team assembled and the right partners, helping us do these things and then figuring out which approach makes the most sense for that project and that team.

Adrian Tennant: Right. And I feel you’re ideally positioned to help them with those go to market strategies, because I know that earlier in your career with Orlando Health, you directed digital media.

Michael Schmidt: Yes.

Adrian Tennant: Does your experience with digital marketing influence or has it influenced how you approach the development of the Foundry?

Michael Schmidt: Yeah, it does. And you know, I think a lot of people that I talked to say, gosh, your career path has been so strange. But I really feel like it has prepared me for this, this role, this job. One of the benefits is I always have kind of the branding product, marketing hat or lens that I’m looking through. You know, which isn’t always obvious to someone who runs in an innovation program, but just kind of having that lens to look through as we’re developing, knowing how we should position and market these things once they do get to market to help them be successful. Even to the point of being able to help with website design and development, video production, to make sure that we are most effectively communicating how these things work. The other thing that’s been really integral to our approach is just how much we combine storytelling, and effective communication into the innovation process. I think one of the aspects of the Foundry that surprises our innovators is how much we focus on their pitch and how they communicate. Their idea, the problem it’s solving, things like that. I think they feel like it’s kind of ancillary. They’re ready to get into actually building the product and “let’s go test this thing.” One of the things we helped them understand is, “you’re going to have dozens, at least or probably hundreds of conversations about this product from now until it gets to market and you’re going to have to talk to all kinds of people about all kinds of things. The more effective you can be at that, the more successful your idea’s going to be.” And I’ve seen how infusing storytelling, really powerful storytelling, into that process just helps everything else be that much more impactful and meaningful. And by the time we get to the end of developing pitches and actually having people practice, you can see the dots start to connect in their head and they can see that they’ve become really effective at sharing what their idea can do and what they hope to accomplish.

Adrian Tennant: Staying with your digital media background for a second, and Bigeye’s experience in medical device marketing. As you know, consumers are increasingly concerned about the potential misuse of their personal data, in part because of the Facebook and Cambridge Analytica scandal. Yet, at the same time, it seems as consumers we’re quite happy to share data via our Fitbits and Apple watches if we think that data will support our health and wellness. So working in a healthcare organization under HIPAA, which sets strict rules around the use of patient information, how do you balance HIPAA regulations with innovations in digital? And I’m thinking primarily about data-driven technologies.

Michael Schmidt: It’s a great question and it’s something we talk about frequently and it’s something we take very seriously. I feel like every week I see some headline about another hospital system that’s sharing data or doing something and they end up getting into hot water because of how they managed it or because of how their, their patients or the public kind of perceives what they’re doing. That’s another aspect to it too. So kind of on a case-by-case basis, depending on what the project is, we think through what are the inputs that the patient may have here or what is it going to need to access. And then we make sure that we are talking to everybody internally who needs to have a say in how that’s managed, how it’s stored, how things are connected to one another. We’ve got a review process internally for software applications that need to talk to one another, things like that. And in general, I try to steer clear of getting into too much stuff that’s HIPAA-protected unless we absolutely need to. If there’s a way to test something without gathering and storing all those different identifiers, that’s the path that we try to pursue. But it is kind of a moving target and you know, people worry about some things too much and don’t worry about other things. Like you said, they don’t worry about ’em enough. And so consumers and patients aren’t always thinking about every bit of data that they’re sharing and where it’s going, but it’s, it’s kind of an ongoing conversation for us.

Adrian Tennant: How do you create and nurture that culture of innovation within such a large organization?

Michael Schmidt: Yeah, it’s, it’s a challenge. You know, I think my goal selfishly is that this program and our team grows continuously over the next few years just to make sure that we’re kind of meeting the demand that our team members have brought forward in terms of ideas that they have. For now, we’ve had to balance the volume of projects and the type of projects that we take on to make sure that we’re doing justice to the ideas that we’ve taken on to make sure that they have the budget and support that they need. But over time, I would love to have some kind of parallel work streams that can simultaneously tackle different types of projects. So software has its software and apps have their own work stream to kind of get the attention and support they need; medical devices; and so on. And that each of those would kind of have a dedicated team that’s continuously reviewing ideas that are brought forward. At some point too, we would love to have a physical space where people can come either just to start white boarding and thinking about ideas, you know, bring a team that’s working through something, really print a prototype or just get feedback as they’re working on stuff. I think that would really help bring the right kind of traction that we’re looking for across the organization. And then as we grow, it’s important that myself and my team continue to just make sure we have a presence at the other hospitals and not be so focused on the main campus. That’s one of the reasons that we do workshops at the hospitals, just to make sure that at least a few times a year people have an opportunity where they work to come sit and talk with us.

Adrian Tennant: And just remind me – how many hospitals are there now in the system?

Michael Schmidt: We have 10 hospitals and then a number of freestanding emergency departments. You know, a number of outpatient facilities, primary care practices, things like that.

Adrian Tennant: Right. And I’ve seen, down by ChampionsGate, I’ve seen the sign, there’s something coming there as well.

Michael Schmidt: Lots of new stuff popping up. We’ve been very busy on that front, so that’s exciting.

Adrian Tennant: Alright, so working with startups in the Orlando Health Foundry, what has been the most rewarding experience for you so far?

Michael Schmidt: For me it’s, it’s, it’s sitting down with someone who has an idea and the most consistent sentence I hear from people is, “I just don’t know what to do next.” They’ve had this idea sometimes for years talk to a number of people and just are kind of paralyzed because they’re not sure what to do beyond kind of sketching out what that idea looks like. So being able to help them take a step back and then give them a roadmap to follow step-by-step and just seeing the progress happen. You know, the first time someone gets ahold of, of their idea or see the, you know, the, the first rendering of what an app is going to look like, that joy and fulfillment that you can see on their face and you can hear in their voice, it is really rewarding. And for them just to know that they’re continuing to drive this thing forward and, and that’s what’s going to make it successful that they kind of stay in the driver’s seat. That’s really encouraging for me too.

Adrian Tennant: Now, I think for me it would be a challenge to be seeing these other people making their ideas manifest. Do you have a little book somewhere of ideas?

Michael Schmidt: No. And my wife is a pharmacist. She actually has several ideas that she’s talked to me about. So at some point we would love to make those happen. Yeah, I don’t know. I feel like just helping everybody else work on their ideas scratches the creative itch that I have. I’d like to do a lot of different stuff. And so working on the variety of projects that we do and helping people in so many different ways I feel is so fulfilling. I have yet to really come up with something completely unique on my own, but at some point…

Adrian Tennant: Okay,

Michael Schmidt: Well, we’ll see.

Adrian Tennant: Well, we talked a little bit about how sometimes a career doesn’t appear to be a linear progression necessarily and yet each previous experience in some way contributes to the next and perhaps in retrospect you see an arc of some kind.

Michael Schmidt: I don’t know. It’s been a fun journey so far. I’m anxious to see where it leads.

Adrian Tennant: Great discussion, Mike. Thank you. If our listeners want to learn more about the Orlando Health Foundry, where can they find information?

Michael Schmidt: Orlando health.com/foundry is our Foundry website and Orlandohealth.com/innovation is kind of our landing page for the formal innovation program as a whole.

Adrian Tennant: Got it. Mike, thanks very much indeed for joining us on IN CLEAR FOCUS today; really appreciate your time.

Michael Schmidt: My pleasure. Thank you.

Adrian Tennant: Thank you. What stood out to me from today’s discussion with Mike: innovation has really gone from being a nice-to-have to a necessity in an increasingly complex healthcare landscape. But creating a culture of innovation within Orlando Health has really helped attract and retain talent within the organization. And while concepts may differ wildly, it is possible to develop a framework to ensure efficient, successful exploitation of really life-changing innovation in healthcare. My thanks to Michael Schmidt, Managing Director of Strategic Innovations at Orlando Health. You can find links to the resources we discussed on the IN CLEAR FOCUS page at bigeyeagency.com under “Insights.” Please consider subscribing to the show on Apple Podcasts, Spotify, or your favorite podcast player. And if you have an Amazon Echo device, you can use the IN CLEAR FOCUS skill to add the podcast to your Flash Briefing. Thank you for listening to IN CLEAR FOCUS produced by Bigeye. I’ve been your host, Adrian Tennant. Until next week, goodbye.