The Lessons We Can Learn from RadioShack
I’ve written before about lessons the healthcare industry can learn from the general business community. The story of the eventual collapse of 94-year old RadioShack, as posted by Becker’s Hospital Review, is another great lesson we can learn – and a cautionary tale for us all. As Tamara Rosin wrote:
RadioShack, like all businesses, is not immune to the impacts of changing technology and evolving consumer forces. Adaptability, business savvy, connectivity with consumers and strong leadership are critical for sustaining in a fast-paced market.
Ms. Rosin then goes on to list some key lessons to prevent your hospital from going the way of RadioShack. Highlighted below are those I found most important.
Don’t assume today’s business model will last forever
RadioShack’s business model did not meet the changing market’s demands and significantly contributed to its collapse. While it had been a successful company for close to a century, it had not turned a profit since 2011.
The healthcare analogy is the historic shift in reimbursement from a fee-for-service model to value-based purchasing. Smart healthcare organizations are evolving their business model with an eye on the near-term changes to ensure they are ready and delivering value-based care so they are prepared in 2016, when 30% of Medicare payments will be based on how well patients are cared for, and when that increases to 50% in 2018.
Continue to innovate
Innovation means recognizing that today’s business model won’t last forever. RadioShack became obsolete and irrelevant as consumers turned to shopping online and purchasing phones through wireless providers or directly from manufacturers.
The challenge to hospitals is similar. Nowadays, patients are also consumers and that means they are literally “shopping around,” looking for their best hospital/health system. With the rise of urgent care centers as well as retail clinics, patients have many options. Hospitals that don’t innovate and use marketing to win those consumers will lose.
Look for leaders willing to make tough decisions
Strong leadership is probably the most essential aspect of business success. And in my opinion, strong leadership means a team at the top that can identify opportunities and recognize current risks. Leadership teams that are willing to make some tough decisions can remain competitive.
As we in healthcare work to adopt traits of successful businesses, we will also find value in learning from those that failed.