While packing for our first foray as a family to Disney World, I noted the “irrational exuberance” of my wife and children in advance of blowing thousands of dollars on one of the greatest marketing campaigns ever. Though less enthused at the downstroke required to fund the effort, I remain awed by the organizational devotion to customer experience and the role of Imagineer in continually rejuvenating and extending the brand. Value here greatly exceeds price and has for generations. Organizations across many industries send their Innovation Teams to Disney for the express purpose of understanding this model and the value it creates.
Warren Buffett once stated, “price is what you pay, value is what you get.” Pretty interesting statement, but – out of context – so what? Isdell of Coca-Cola fame referenced this in a 2004 speech before a European industry conference. His take on value was pretty remarkable. He delineated the core considerations of value for his organization as relating to choice, information and goodwill. “So the essential question for us is what consumers want for their health and nutrition today, and what they’re going to want in the future.” One could supplement nutrition for surgical services or quality of life and change the entire context of this sentence to relate to healthcare. Not unique to healthcare, with a bit of thought, it likely applies to any industry.
Isdell also cited Joseph Schumpeter and his “creative destruction” analogy; wherein a new technology displaces an older one and creates value. A front page article in the WSJ Weekend Edition (November 21, 2009) spoke of the growth in medical tourism to India and the creation of a new paradigm in deliverying quality medical care. The author provided an interesting insight, “what healthcare needs is process innovation, rather than product innovation”. Think on that a moment. Many of us on the innovation wagon trust in creating value through new products and services. How many consider process in that equation (Henry Ford, anyone?)? Also, Isdell immediately found favor in my little world when quoting holy writ from the Austrian School of Economics.
The subject of value and its creation through innovation holds my interest. Consider Product Differentiation and Economic Progress (Holcombe, 2009) as an example of a recent treatment on the subject. Academic and a bit lengthy, it covers value and innovation quite nicely, tying process innovation to product, to Isdell’s remarks back to Buffett (well, in my head anyway).
As a gentle warning – peeking into my mind urges a cautionary statement in quotation of Nietzche “when you look into the abyss, sometimes the abyss looks back into you.”
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