Medtech Innovation Needs a Digital Upgrade

Medical devices are vastly more sophisticated today than they were a decade ago. They are increasingly digitized and able to capture, process, and communicate far more information, leading to better efficiency and improved outcomes for patients, providers, and health care systems. However, innovation and development processes for medical technology (medtech) products have not kept pace. Many companies still think of development in terms of discrete products, with a clear start and finish line, rather than evergreen platforms with a more iterative innovation cadence. This must change.

Leading technology and industrial goods players in sectors ranging from agriculture to aerospace have already made this transition and re-engineered their businesses. They are now equipped to continually improve their products—both hardware and software—and release upgraded versions to customers over time. Those firms’ success points to four clear priorities for medtech device and technology companies that want to apply a similar approach to innovation and product development.

Shift from individual products to evergreen platforms. First, medtech firms need to adopt a platform approach that focuses less on isolated product launches and more on consistently updating and improving products after they get released. This approach lets companies monetize products across their full life cycle. For example, Apple’s iPhone is not a single product—it’s an ongoing platform, with new devices released roughly once a year and iOS software upgraded regularly. Apple doesn’t think of product launches as the finish line but merely the first step in a life cycle of continuous product innovation. It’s not a coincidence that the company outperforms customer expectations and has benefited financially as a result.

This is a major mindset and strategy shift for medtech companies, with product development treated as long-term journey during which platform teams are accountable beyond the initial release. Several aspects can help:

• Modularize product design. A key aspect of this change is breaking products up into individual modules, each of which can evolve independently on its own timeline. These modules can be deployed and reused across multiple product lines and generations of devices. Design teams should be tasked with continually improving the most important and common components across the entire product portfolio as an ongoing endeavor. A key aspect of doing this is reallocating resources and shifting investment priorities to focus on modular designs.
• Establish clear guidelines for interfaces across subcomponents and products. To make subcomponents (modules) work together and create reusability, companies need to be proactive about designing their interfaces, both for data flows and for physical connections. Interfaces need to be clearly defined and closely governed, with all design and innovation teams adhering to the determined parameters, both within the company and among third parties such as suppliers.
• Evolve R&D funding models. Capital allocation needs to support the use of reusable and scalable modular designs while still holding business units accountable, informing portfolio decisions, and improving ROI. To accomplish these needs, organizations must establish new approaches to funding R&D. Firms must also identify, elevate, and fully fund larger programs and technologies that can generate benefits across the entire portfolio.
• Adjust incentives to drive reuse. Building a library of proven and ready-to-use modules requires up-front investment, but companies that can do this will reap the rewards. To help aid the transition, medtech leaders should create incentives for teams to develop modular designs and then set expectations that those designs will be used by teams that develop subsequent products (adhering to reestablished guidelines). There should also be clear disincentives to build one-off components unless absolutely essential. For example, companies should create more-stringent design reviews or senior approvals if a department wants to incorporate nonstandard components.

Innovate more closely with end users. Second, top-performing medtech companies must adapt their design control process to engage with customers early, often, and at fixed intervals. They can start to do this in some of the following ways:

• Embed user testing into iteration sprints. User testing for medtech products has traditionally been treated as a milestone event that only happens at a few key junctures in the development process. Instead, innovation teams should work with customers regularly to gather and incorporate feedback. The easiest way to do this is to build user demos into the regular sprint cadence—typically every two weeks for software and monthly for hardware. This kind of fixed cadence increases not only the frequency but also the consistency of user input, and it prepares teams for a continuous-release cadence when products reach market.
• Ensure user feedback is fully incorporated. Too often, end-user feedback is only considered for minor tweaks to engineering specs or slight improvements to the user experience—and it’s the R&D team’s responsibility to address any issues. This is a missed opportunity. A few medtech companies are starting to leverage end-user feedback to continually reprioritize which features are needed for a product’s initial release and which ones can be pushed to subsequent upgrades (or canceled entirely). By incorporating these changes earlier in the process, not only can companies ensure that products meet the needs of their target market, but innovation teams can accelerate their launch schedules. Success requires that R&D and marketing teams collaborate closely. It’s also essential that program leaders stay engaged to help teams evolve beyond the initial concept for the product.

Redesign innovation processes for speed. Third, medtech companies need to redesign their legacy innovation processes to be faster and more iterative. Automating repetitive processes in the development life cycle will help, along with several other measures:

• Streamline product documentation and regulatory filings. Just as end products can be broken down into modular components with their own design teams and innovation timeline, product documentation and regulatory filings can be simplified and streamlined. Companies can then isolate the documentation updates and retesting required for each release and focus only on those components that were meaningfully changed. This approach not only improves speed between releases but also helps reduce costs and keep resources focused on higher-value tasks.
• Enhance development and machine learning operations (DevOps and MLOps). Medtech companies have invested significantly in their processes for quality and product life cycle management. However, those processes are often suited for hardware intended to be released once and updated infrequently. In a more iterative and software-enabled world, medtech firms need strong DevOps and MLOps capabilities that enable ongoing releases and upgrades. Often this means creating overarching standards to make software code more portable, building out shared libraries and testing suites with blocks of code that are proven and well-documented. Companies can also invest in standardized tools for software development so engineers can collaborate more seamlessly across projects. Creating this type of environment can generate huge dividends in terms of speed. One medtech firm we studied was able generate its regulatory and quality documentation directly from its code base, keeping code, tests, and product documentation in sync at all times.

Develop the talent base. Fourth, medtech companies need to apply the management strategies of tech organizations by empowering forward-thinking leaders to govern the strategy for the portfolio and the evolution of the underlying systems. Product managers should be made accountable for the success of products both during development and after they’re in the market. These managers should own the systems engineering function of the organization and be responsible for getting individual components completed and ready for use in end products. Such changes require top-line talent and leaders who put those people first. There are several ways to do this:

• Create product owners who are fully accountable to outcomes. Many medtech companies traditionally work in a very cross-functional way, with decisions largely made by committee. Instead, they should designate a leader who can own each product; make decisions about trade-offs with features, design, and costs; and have sole accountability for results—all based on a strong understanding of both the business and technology aspects involved. Notably, these owners retain their responsibility beyond the initial launch; they are accountable for the ongoing success of the product after it enters the commercial phase as well as for future releases and upgrades.
• Build the right capabilities. Medtech firms need to build up organizational capabilities in areas like robotics, software engineering, and AI and machine learning. Upskilling initiatives can build up these capabilities among current employees, but companies will also need to hire new talent, which means they will often be competing with other industries that are digitizing. To gain an edge in this highly competitive market, medtech players need a talent strategy for digital. This often starts with being clear on the skills that will be needed in the future, upgrading key elements of the employee value proposition, and rethinking location and talent sourcing strategies.

Digital technology is transforming health care. Medtech innovation must evolve to take advantage of this opportunity. By focusing on the four priorities we have identified here—most of which have been proven in other industries—medtech companies can get new products to market faster and more efficiently and ensure that they are fulfilling their mandate of improving patient lives.