Just reading this article's title might've raised your blood pressure thinking about the disaster that was flying over the holidays: tens of thousands of flights canceled and holiday plans ruined. But one airline stood out for how long it took to finally get planes back in the air: Southwest Airlines.
You may be wondering what this has to do with healthcare, but I think Southwest's fall from "beloved brand" to the "grinch who stole Christmas" has important lessons for healthcare leaders — disrupters and incumbents alike.
Southwest was founded with the express intent to disrupt the airline industry. They set themselves apart from competitors with cheap fares (as low as $13 in the 1970s) and non-stop commuter flights between smaller cities. They did this by keeping planes up and costs down: turning around flights quickly and saving money by ditching meals and paper boarding passes among other tactics.
This business model plus their fun, spunky culture won them many loyal customers. But they aren't just a beloved brand, Southwest has been a profitable company too — avoiding bankruptcy unlike many of their larger rivals.
Southwest's impact on the airline industry reminds me of the many, many disrupters trying to do the same in healthcare: tech-enabled start-ups, out-of-industry giants, M&A-hungry retailers, and more. Like the airline industry, healthcare is expensive, entrenched, and far from consumer-friendly — making it a prime target for disruption.
Here's what healthcare leaders can learn from Southwest's holiday meltdown — and my advice on what it means for both incumbents and disrupters moving forward.
1. Disrupters are only as good as their operations.
Since the holidays, we've learned more about Southwest's antiquated scheduling platform. Employees had rung the alarm bell that the system, which requires crewmembers to call in, needed updates. Even disrupters with grand plans to transform an industry aren't immune from the basic blocking and tackling needed to run a business.
For healthcare leaders, this means focusing on the fundamentals like org structure, supply chain, and yes — scheduling. Your strategy is only as good as the operations that underlie it.
2. Workforce, not weather, broke Southwest.
While winter weather was initially to blame, workforce issues are what prevented Southwest from getting back up and running as quickly as competitors. In part due to its point-to-point flight model, crews and planes were scattered across the country. Simply put: Southwest didn't have the right people in the right places.
The parallels to healthcare are obvious. Healthcare executives must view workforce as the rate-limiting business challenge that it is and consider more transformative changes to staffing models, role design, and work environments.
Disrupters: Get your operational ducks in a row. Healthcare moves fast but don't let your strategy move faster than operations can keep up. Invest in up-to-date systems and processes so that the equivalent of a historic winter storm (I'll spare you a pandemic reference…) doesn't stop you in your tracks.
Incumbents: Don't underestimate your incumbent advantage. Disrupters will keep bringing new ideas and business models. But legacy providers are closer to the physician engagement, patient relationships, and operational processes needed to succeed. This deep experience can be a barrier or incumbent advantage depending on whether you use it to rest on your laurels or propel your business forward.
Competition continues to grow in healthcare delivery as more and more out-of-industry players enter the arena.
The Radio Advisory podcast team took a deeper look at some of the disruptors poised to make significant changes in the healthcare world and ways leaders can respond.
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