Unless you’ve been living under a rock for the past two years, it isn’t new to you that the U.S. healthcare industry is undergoing significant change due to Obamacare. As part of this new law, information technology will be injected into the healthcare system — from electronic medical records to purchasing health insurance via an exchange like you do a plane ticket – online – with the ability to view plan and cost options.
With all of these changes taking effect in the next 12 to 18 months, big payers and providers are looking to startups to innovate. And since these payers and providers will need to comply and conform to specific mandates, healthcare IT companies will need to “kick it into high gear” to compete for the business.
How Businesses Scale: Getting Jiggy
When I hear entrepreneurs say they “wear many hats,” I sympathize, remembering my days as the CEO answering customer support calls. As a VC now, I focus on their path from “chief cook and bottle washer” to “scale,” and find that entrepreneurs usually don’t have a mental framework to support this evolution.
“Scale” generally means “what it takes to go from small to big.” Specifically, it may mean changing the revenue model, employee management, technology, operational processes, or customer support… the details of which all depend on industry and business model.
One particular “scale” challenge, however, is common to growth businesses in any industry – expanding beyond the founder(s). Luckily, there is a reproducible way to achieve this.
Only four basic functions drive any organization: Judgement, Ideas, Glue, and Execution. I call this the JIGE framework (with apologies to Will Smith, it’s pronounced like “jiggy”).
Judgement refers to strategy and decision-making, usually fulfilled by the CEO, who may or may not be a founder. This is making the tough calls to prioritize and address urgent hair-on-fire-now problems versus supercritical-but-results-won’t-be-seen-until-later issues.
Ideas refers to creativity and problem-solving, usually by a company founder who may not be the CEO. This role addresses the products, but also marketing campaigns, operational improvements, strategic direction… it’s the magic inspiration that solves business problems. In the worst case, this is an ADHD mad scientist, in the best case, this is Steve Jobs.
Glue refers to making things work together. Like the “glue guy” on a sports team, this role is unglamorous-but-essential for a business to win. The prototypical example is product management: this job is to make the engineers, marketers, salespeople, support reps, senior management, etc., produce something customers want… all without having direct control over any of them. That’s like getting a room of cats, chickens, and toddlers to perform “Swan Lake.”
Execution refers to getting things done. This is a team running through walls to complete a specific job, whereas “glue” is making sure different parts of the business run through the right walls. Execution is coders delivering the next update on time and without a glitch. Glue is determining what the update is, getting it to market, pricing, documentation, training, etc.
“Scale” requires evolving from these functions living in the founder(s), to them living in a senior team of non-founders, and replicating this JIGE framework throughout the organization. Rather than the business being a founder/CEO as a hub with spokes, scale requires multiple hubs.
To be clear, founders may actually be able to do all the functions better than anyone else (all entrepreneurs should be nodding right now). I’m not saying you should abdicate – rather, parcel out parts of the JIGE you’re least good at and give yourself a chance to scale.
There may be more than four jobs on a team, but there are only four core functions. Everyone else should be a “do-er” who extends these functions into specific areas of execution. If an entrepreneur is lucky enough to have a growing market and great product, the core JIGE functions are the lego pieces to scale any company so it can win.