How to Foster Organic Product Innovation in Mature Healthcare Companies

By Jordan Silvergleid, entrepreneurial product leader

Straight out of a Clayton Christensen case study, many mature companies find it difficult to radically innovate. Not because they don’t have good ideas (although they might not), but because the vast majority of their capacity is committed to serving the current needs of the business – i.e., dealing with the “tyranny of the urgent.”

Consequently, leadership teams that are anxious to innovate will often pursue M&A. While that can be effective (and I’ve seen companies whose growth/mojo has been given new life via an acquisition), the odds of great success are low, with research showing that more than 70% of all acquisitions fail to live up to expectations.[1] Indeed, acquisitions often come with hidden issues that diligence didn’t uncover, as well as integration efforts that spawn years of unglamorous, non‑differentiating work. As a result, the core business gets more complex, but not meaningfully more innovative.

So what’s a leadership team to do, especially as many who deploy traditional software see AI-native start-ups threatening their value proposition?

Here is a five-step, product-oriented approach: (1) Vision, (2) Sequencing, (3) Funding, (4) Structure, and (5) Guardrails

Vision

First, establish a clear product vision, even if it’s not obvious how you get there. This should not be done in an isolated conference room (or home office), but by spending time directly with customers and users: clarifying what enables their business to be successful (which may be evolving) and the jobs that need to be done to drive that success, probing on their unmet needs, and then reimagining how you can serve them in a world where AI enables remarkable new possibilities.

With all respect to Steve Jobs and his famous skepticism about asking customers what they want, I have found thoughtful clients to be incredibly helpful in sharpening and validating that vision, especially if you can show them working prototypes (much easier to do these days).

Sequencing

Once you know where you’re heading, you obviously have to get there. While every situation is a bit unique, three rules of thumb usually apply:

1. Prioritize important capabilities that add incremental value to your existing solution (if adjacent) or that can be immediately deployed (if more transformational) to help with funding and momentum
2. Pull forward anything that is both critical and uncertain 
3. If your business is not already reinventing its software development lifecycle (SDLC) with AI, use the innovation initiative as an opportunity to do so; frontier technologies and models should meaningfully change your approach and level of effort  

Funding

Unlike many venture-backed startups, most mature companies can’t prioritize growth and innovation over margins. As such, it’s important to be brutally honest about what level of investment is possible and for how long, to add a healthy buffer to any development estimates, and to sequence the work to drive early value.

If possible, try to find ways to subsidize R&D with increased revenue so that it won’t be seen as a drain or, sometimes worse, “discretionary.” For example, secure customer commitments for incremental (if discounted) fees in exchange for early access and the ability to help shape features. And/or sign up new customers based on the new functionality, while giving yourself time to work out the kinks in advance.

Structure

Assuming the vision is more than modestly incremental to your existing solution, it’s generally more effective to create a walled-off team that is able to focus exclusively on design and development. Particularly now, it can be valuable for many companies to disintermediate themselves with AI-native approaches before it is done to them. That work is hard to do if a team is also balancing day-to-day operational demands.    

For companies that can’t support such a dedicated investment, however, it’s still critical to protect capacity within your existing teams. Select and allocate an uncomfortable (but not untenable) percentage of development time that should be used for specific innovation projects and measure it continuously. For many teams, this will be in the 25-30% range.

Overall, assuming you have A+ talent on this innovation work, align on what success looks like, and give it appropriate executive support and visibility (prerequisites that are hopefully obvious), progress will happen. Just make sure success criteria and intermediate milestones are concrete enough that you can see when to adjust course—or step on the gas.  

Guardrails

Finally, I recommend keeping three sets of guardrails in mind:

1. Cultural:Anticipate and preempt the risk that your teams may resent a walled-off innovation group getting to do “all the fun work.” But don’t keep it a secret either: be transparent about the initiative and its importance, allow others to provide input, and give clarity on when they will be able to participate/contribute more directly. Consider using rotations as development opportunities and to cross-fertilize. Shared rituals and visible recognition of core roadmap work will also help.
2. Architectural: If the innovation needs to interoperate with your existing solutions, set clear technical requirements so the work doesn’t become an unmaintainable one‑off stack. Require API‑first thinking, shared data models, and an integration plan from the outset (side benefit: this can give other teams opportunities for involvement).
3. Integration: Define possible “exits” for the effort: fold into the core, spin out, or shut down. If the first, align incentives so core teams have a reason to adopt and scale what the innovation team creates, and ensure success is measured on real customer and business impact.  

Making Innovation a Habit

Ultimately, while a mature company may need a kick-start, the goal should be to make innovation an ongoing discipline. With a customer‑validated vision, a funding model that gives oxygen to new bets, a structure that protects them, and the right guardrails, organic product innovation can become a repeatable practice rather than a one‑time case study.

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[1] The M&A Failure Trap: Why Most Mergers and Acquisitions Fail and How the Few Succeed (pgs 8-9)

About the Author

Jordan Silvergleid has more than two decades of experience driving product innovation in healthcare and is known for pairing big‑picture vision with hands‑on execution to bring impactful healthcare ventures to life. He most recently served as Chief Product Officer at Evolent, leading solution strategy, AI‑enabled transformation, and roadmap execution across a $2B+ technology‑enabled services portfolio. He previously co‑founded Centivo, a primary care‑centered health plan for self‑funded employers, and spent more than a decade at The Advisory Board Company building and scaling software and analytics businesses for hospitals and health systems. He advises founding leadership teams on product strategy and commercialization and will be joining Luminai, an AI platform for health system operations, next month as head of strategy.