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Innovation: Just one element in the wider mix needed for true industry ‘disruption’ 

innovAGEING > Media + Blog > Blog > Innovation: Just one element in the wider mix needed for true industry ‘disruption’ 
Posted by: Merlin Kong
Category: Blog

Fresh models that exploit new ideas can be the catalyst for momentous change.

Many associated with the Australian aged services industry seem to throw around the terms innovation and disruption as if we all know exactly what they mean and as if they are largely interchangeable. While one may lead to the other and the two are inextricably linked, they are not the same thing.

Disruption v innovation: what’s the difference?

In a March 2013 edition of Forbes magazine, Caroline Howard wrote:

“Think of it this way: disruptors are innovators, but not all innovators are disruptors—-in the same way that a square is a rectangle but not all rectangles are squares … Innovation and disruption are similar in that they are both makers and builders. Disruption takes a left turn by literally uprooting and changing how we think, behave, do business, learn and go about our day-to- day … It is at once destructive and creative.”

In an established service industry such as the Australian aged services industry, meaningful innovation needs to have industry-wide application and ultimately adoption, if it is to be truly ‘disruptive’.
The opportunities for the Australian aged services industry to disrupt itself are real and present, but they require a rethink of everything we know: new business models, new funding options, new retail/customer service models, new staffing models, new industrial agreements—in fact, an entirely new industry model.
Australia’s aged services industries (there are more than one) are disparate; some elements provide housing, some services, others healthcare. Even where an organisation may provide multiple offerings, often those offerings are siloed business streams within the broader operation.

There seems to be a prevailing view that the aged services industry is hamstrung by regulation. This is not the case. In fact, we are an industry paralysed by a myopic view of what has to be and what can be achieved. While it might be ideal to operate in a more favourable regulatory environment, it’s not a prerequisite to change.

The Seasons Aged Care model is innovative, but doesn’t claim to be disruptive … yet! Seasons has combined the principles and many of the benefits of: home ownership, community, retirement living, residential aged care, hospitals, and other industries. So what makes it innovative?

Industrial relations

Staff members have negotiated their own enterprise agreement. The business funds an industrial consultant to work with staff, assisting and advocating with them, giving consideration to matters most important to them; clients, family, colleagues, their integrity and reputation.

Accommodation

Residents have a strong sense of ownership, they live in
their own home which they control the key to. Couples aren’t separated, families can visit and sleep over as they please and pets can continue to be their constant companions. Residents also pay for their accommodation, day-to-day costs of the community, and pay a contribution to the maintenance and upkeep of the community.

Service model

Residents choose the timing of services. The model can provide 10 or more residents a 30–60 minute service all at the same time, without loss of productivity. The scale and efficiency inherent in the service delivery model has tangible funding implications. If the industry average ‘administrative’ component on a level 4 home care subsidy package is 40 per cent to 45 per cent as has been reported, under the Seasons model the resident/client will benefit from between $12,000–$17,000 in additional direct service funds.

Benefits
  • The benefits under this model include:
  • a genuine alternative to residential aged care
    no tax-payer funding of accommodation, power and utilities, food and hospitality services
  • no requirement for additional capital expenditure associated with ‘colocated services’
  • open and transparent service provision – the residents and family are continually involved in the assessment, planning and delivery of services. The customer is the lead arbiter of quality and customer service standards, not the quality agency.
  • a rewarding and supportive environment for staff, where application of home care principles allows a degree of autonomy and consistency (staff have their own service schedules, with consistent clients), while at the same time working as part of a supportive team.

To paraphrase the late management thought leader Oren Harari, the electric lightbulb is not the result of continuous improvement of the candle, it is the result of completely new thinking. The discovery of electricity—while a great innovation—wasn’t in and of itself ‘disruptive’. It was the development of new business/industry models that exploited the properties of electricity (the innovation), which lead to disruption of industry after industry on a global scale.

The Seasons model isn’t radical, and it doesn’t need to be in order to be innovative. However, it can be disruptive if its principles are applied as the basis of a new industry model for aged services in Australia.

Nick Loudon is Chief Executive Officer of Seasons Aged Care. For more information go to seasonsagedcare.com.au.