Innovating in a Highly Regulated Industry Like Health Care

Some companies operate in highly regulated environments where, at first glance, innovation can be expected to be constrained. Health is a regulated area of activity to protect the health of citizens by securing the marketing of medicines. Have a look if you are interested in the pharmaceutical sector!



When I was Chief Innovation Officer at Boston Children’s Hospital, I often felt that my title should have been Chief Innovation Communication and Relations Officer. In any firm, an innovation program cannot be effective without building bridges within the firm. But, in highly regulated industries, such as healthcare delivery, pharma, banking, and insurance, good relationships and effective communication are especially vital.


Innovating in highly regulated industries can be challenging. But it is necessary, because even firms in these industries must innovate to gain competitive advantages and thrive. For innovation to flourish despite legal and regulatory obstacles, you must address innovation barriers head-on. Here are a few tips based on my experience:


1. Build relationships proactively with internal regulatory and legal folks. That’s right. Seek out—don’t avoid – the staff responsible for legal, regulatory, and compliance within your organization. Innovators sometimes think they are better off steering clear of these gatekeepers and guardians for as long as possible. That’s a big mistake. You can’t avoid working with these folks, and if you don’t find them, they will come and find you.


Talk to your legal, regulatory, and compliance colleagues early, well before your innovation is ready. Discussing your project at the beginning of the innovation lifecycle, when the stakes are still low, gives them time to digest the new idea and provide input and guidance while the idea can still be shaped into an innovation.


When I was Chief Innovation Officer at Boston Children’s Hospital, my team realized our doctors could use videoconferencing to care for critically ill patients in small community hospitals. Our legal department, however, greeted the idea with scowls and skepticism. The lawyers were worried about patient consent, physician licensure, medical liability, and a long litany of other legal and regulatory concerns.

Eventually, after many intense conversations, they came on board. In fact, once our “Teleconnect” program launched, the attorneys actually became some of the most enthusiastic internal advocates for the program.


Sometimes, however, resistance is strong. When that happens, should you circumvent the lawyers and appeal to the CEO? Going above the lawyers can break an impasse. But it also can damage relationships, and make it harder to gain legal or regulatory approval the next time around.


Instead of doing an end-run around your legal and regulatory people, continuously emphasize to them why and how your innovation is important to the business. Explain that killing the project isn’t a good option because it hurts the organization. When the lawyers understand the benefits, they will find ways to drive the innovation forward.


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