by Philip Boxer
Everyone is collaborating these days. Collaboration has come to mean any working together by some team of specialists around a common goal. But is there something different about a collaboration that is edge-driven? When a number of individuals come together from different organizations in order to manage the care a person receives over time, is it different from specialists collaborating within a single organization?
The answer put forward here is “yes”, because of differences in both the required approach to governance and in the nature of the object around which the collaboration takes place – edge-driven collaboration is essentially a learning process in which there is co-creation, something more than the sum of the parts emerges. For example, collaboration under terms dictated by a Health Care Trust is of a different nature to collaboration between independent care specialists coming together around the treatment of the complex long term condition of a particular patient.
Why this answer? A two-by-two helps to explain:
- An organization that operates with a particular business model defines its boundary in terms of the capabilities it uses over which it has direct control, and in terms of its perimeter if it includes the capabilities over which it has contractual control. For example, the perimeter of a primary care practice will include the physiotherapists and psychologists on contract to support its patients, while its boundary will only include those directly employed by the practice.
- An organization that defines its relationship to demand in terms the variety of products and services that its business model is designed to supply takes up a symmetric relation to demand, which it will define in terms of the markets it has chosen to serve. A ‘market’ is thus some aggregation of individual demands for its products or services, for example the market for hip replacements, defining a symmetric relation to demand.
- If then we consider any individual patient presenting such a symmetric demand, and consider what is not satisfied for that patient by the product or service (in this example providing a hip replacement), then it defines a value deficit – something still left to be desired by the patient. For example, not included might be the way the patient subsequently uses their hip replacement as a result of the way they walk. If the supplying business was to include this value deficit as part of what it was trying to satisfy, it would make the demand asymmetric to their business model. Such an asymmetric relation to demand defines an edge.
The following puts these concepts together, with movement towards the bottom-left corner involving increased North-South dominance; and movement towards the top-right corner involving increased East-West dominance:
Within this space, a business model that ignores asymmetries of demand and brings capabilities in-house or under contractual control (the two green arrows) is able to keep control of the way it defines collaborations of value to the business. For example, the practice might decide that it would be more efficient to treat diabetics as a separate market, setting up treatment protocols to define the collaborations managing their care pathways.
The difficulty arises because of accelerating innovation in products and services and because of patients’ conditions becoming increasingly complex, making demands increasingly singular and heterogeneous (the two red arrows). The effect is to increase the size of the top-right quadrant and make the scope of the bottom-left approach increasingly limited.
Which brings us to what is different about edge-driven collaboration. Its governance is different because the collaboration constitutes the business itself, ‘outside’ its supplying businesses. And its object is different because it is defined by the (demand-side) value deficit experienced by the particular patient.
Who pays for edge-driven collaboration? The starting position here is that the patient pays, potentially with the quality of their life when dealing with health care. Its costs are the costs of aligning all the individual suppliers’ products and services to the particular patient’s demand. Value for the supplier can be generated by reducing these costs of alignment.
Studies have so far shown that these costs of alignment can be 30% to 50% higher than they need to be if suppliers focus on the business of edge-driven collaboration in its own right. But this means focusing on the performance of the business ecosystem rather than on the individual business. Not easy.