Lucien Engelen is one of my top favorite thinkers when it comes to healthcare innovation and strategy. His impressive track record at, among others, Deloitte’s Center for the Edge, Singularity University and the REshape Center at Radboud University Medical Center proves that I’m not the only one who feels that way. Always eager to speak with radical minds about industry trends, I decided to interview him about the seismic shocks in his sector. Having become an almost obsessive collector of corporate reinvention stories ever since my latest book “The Phoenix and the Unicorn”, I also had to ask him what his favorite phoenix in healthcare is. Spoiler alert: it’s DSM, one of my own favorite phoenixes of all time.

Patient innovation

It’s no news that healthcare has been under heavy pressure for the past few years. There’s the ‘small’ matter of the COVID-19 pandemic, of course, which increased that pressure and catapulted the industry about 10 years forward, but the tension existed long before that. From a shortage of skilled personnel and a big rise in healthcare demand, to a huge pressure on budgets: all of these challenges have been with us for years. COVID-19 only enhanced them.

According to Lucien, how healthcare innovates has changed a great deal over the past years. The industry used to innovate for patients, then evolved to innovate with the patients and now we’ve moved into an era where patients all around the world are innovating for themselves. They have access to all this new and amazing technology and there is so much scientific literature freely available to them. The result is that in some cases the patient is an even bigger expert than the doctor.

Lucien believes that we will come to see a time that, via devices like the Apple watch, patients will be able to centralize all of their personal medical information, from all the different doctors and specialists that have examined them. This means that they will own more personal medical data than the individual health experts. Who knows, one day they might even offer data subscriptions to doctors, instead of the other way around.

A broken user interface

Another stressor, and an opportunity, in the health industry is how the big (tech) companies like Apple, Walmart, Amazon or Ping An are moving into the experience gaps that have been left behind by traditional healthcare players. And many they are, these gaps: lack of transparent information, long waiting times, unnecessary travel, expensive fees etc. Lucien calls this the flaws of the user interface of healthcare: “I used to believe that this user interface was broken. But inspired by Amanda Gorman’s beautiful inauguration poem for president Biden, I now truly believe that it’s just unfinished.”

According to Lucien, the recent development of new players entering the industry will never result in a total privatization of healthcare. He feels that healthcare will remain a group effort, driven by both the private and public sector. “Some really basic parts of the industry will remain in the hands of public healthcare, like emergency surgery for instance. I feel it wouldn’t be beneficial for these services to be driven by market and competition dynamics. On the other hand, about 80% of healthcare services is simply a matter of logistics which have very little to do with healthcare’s core: transporting medicines or patients or even data from A to B. This is where the danger lies for many traditional healthcare players: if they don’t offer a better experience, a better user interface in all of these segments, someone like Apple or Walmart will and that will be the end of them.”

This UI and experience gap is just as much a danger as it is an opportunity, of course. This is the place where phoenixes can be reborn. Speaking of which: Lucien also offered the splendid example of DSM, which is a rather extreme story of reinvention, and therefore almost awe inspiring.

DSM: from a coal mine to a chemical phoenix

DSM, formerly known as Dutch State Mines, was formed by the Dutch state in 1902 to mine coal reserves in Southern Limburg in the Netherlands. But at the end of the 20th century, it became clear that coal mining was losing its relevance and DSM had no choice but to prepare everything for a major transition. By the time that the Dutch government forced the last mine to close in 1973, DSM had already diversified into commodity chemicals and petrochemicals.

Today, it has grown into a multinational corporation active in the fields of nutrition, health, materials and sustainable living, employing no less than 23K people in about 50 countries. It offers anything from animal and human nutrition and health to medical devices, solar technology, bioenergy, sustainable plastics and even the world’s strongest fiber.
As if this transition from a coal mine to a chemical concern wasn’t impressive enough, they have now become obsessed by sustainability, actually weaving the UN’s Sustainable Development Goals into their strategy. Their commitment goes pretty far, explained Lucien, even towards the last mile, checking every last supplier on for instance the origin of their materials or their commitment to the circular economy. What many other companies perceive as a drag, a cost, DSM transformed into a real opportunity, which is a perfect example of a phoenix mindset. The sustainability promise in fact resonates through all facets of their offering: from food supplements that make sure that bread stays edible for a longer time to the cow medicine Bovaer that reduces methane emissions by 27 to 40 percent.

Strong leadership drove DSM’s transformation throughout the years and Lucien explained that, among others, Feike Sijbesma (CEO from 2007 to 2020) played an instrumental role in the latest transformation of DSM: changing it from a rather loose conglomerate of companies into a tight chemical concern and taking some hard and sometimes (at first) unpopular decisions to drive the company’s sustainability strategy. Today’s President of DSM is ex-politician Edith Ingeborg Schippers, who was the former minister of healthcare, which shows the big ambitions of the company in that area.

This story may be a pretty radical one, of course, making the transition from a polluting coal mine to a sustainable concern specialized in health, nutrition and materials. But the great news is that phoenixes come in all shapes and sizes, like McDonalds reinventing its services with its kiosks or Microsoft making the transition to SaaS.

If you want to learn more about how Phoenix companies are able to keep reinventing themselves in order to stay relevant, check my book The Phoenix and the Unicorn.