SLOANREVIEW.MIT.EDU FALL 2019 MIT SLOAN MANAGEMENT REVIEW 67
electrocardiographs, and CT scanners, and to repo-
sition itself as a health care solutions provider.^5
But these efforts are heavily dependent on what
Philips’s customers — many of whom are health
care providers — are ready to buy and use. Health
care providers have habits that they are not always
willing to change, even when the benefits of doing so
seem obvious to others. For instance, while sending
some patients home using remote monitoring might
help them recover faster and is more efficient, it also
reduces hospitals’ immediate revenues by freeing up
a bed early. Philips’s efforts are further hampered by
the complexity of an industry in which providers
(hospitals and health care practitioners), payers (in-
surance companies and government agencies),
patients, and policy makers have divergent agendas.
These challenges led Philips to invest substantial
resources into customer cocreation workshops. The
intention of the multisession workshops, which op-
erate under the name HealthSuite Labs, is to learn
about customers’ most pressing problems and figure
out how to solve them — in other words, to learn
what customers are likely willing to pay for. Manu
Varma, business leader for Wellcentive and Hospital
to Home at Philips, told us, “We don’t always know
what customers’ challenges are. They don’t know
what they want.” HealthSuite Labs is a consultative
process designed to enlighten both sides.
Workshops typically bring together providers, pay-
ers, and patients from the same facility or medical
group — 12 to 40 people who are not usually in a posi-
tion to talk together about their respective needs. “In
the past, we had talked a lot about patients, but I never
actually met a patient until we started pioneering
HealthSuite Labs,” said Mark van Meggelen, business
leader of Healthcare Information and Connected Care
for Philips in Benelux. “The way they are supported is
far from optimal.” The multidisciplinary and collabor-
ative approach of the workshops helps groups come up
with ideas to improve the overall health care system
rather than just the outcomes of a single stakeholder.
Cross-Functional
Development Teams
Many ideas fail because product development teams
follow traditional routines, relying on their own
perspectives, data, and insights to create the best
product and then expecting salespeople to pursue
customers and counting on support teams to keep
them. But invariably, a new solution can solve a need
only if the customer is willing to act differently —
change purchase decision-making patterns, disrupt
power structures, and act on new data.
Because of uncertainty around how customers
want to be engaged and how they view their needs,
the development of digital offerings involves con-
stantly identifying new ideas and testing their
viability quickly with customers. Companies that
do this most effectively assemble cross-functional
development teams. Teams of design, product
management, technology, sales, and service experts
can pool their accumulated customer knowledge,
anticipate customer issues, and deliver more tar-
geted solutions than single-function teams.
ING Direct Spain, a financial services subsidiary of
Dutch-based ING Group, relies on cross-functional
teams to ensure that new offerings address a cus-
tomer’s needs end to end.^6 Roles such as product
management, marketing, operations, IT, credit risk,
and operational risk work together at a very early
stage of product definition. The teams bring to-
gether different perspectives, which encourages
members to challenge one another’s assumptions.
This mutual challenging mitigates the risk of de-
signing offerings that the company cannot afford to
support or that create unanticipated customer has-
sles rather than a great experience.
It also helps ING Direct Spain limit unnecessary
business complexity: “Any idea that survives thatWHERE DESIRE MEETS CAPABILITY
Successful digital offerings are created at the intersection of what customers
want (and are willing to pay for) and what digital technologies make possible.SOURCE: DESIGNED FOR DIGITAL: HOW TO ARCHITECT YOUR BUSINESS FOR SUSTAINED
SUCCESS (THE MIT PRESS, 2019).CUSTOMER
DESIRESDIGITAL
OFFERINGDIGITALLY
INSPIRED
SOLUTIONS