Case Study Description of Humana's Bold Goal: 20 Percent Healthier by 2020
Beginning in 2013, Humana Inc., headquartered in Louisville, Kentucky, pursued a major organizational transformation, from being an insurance company focused on paying claims to becoming a health and well-being company focused on improving the health of its beneficiaries. The company set a "Bold Goal" of improving the health of the communities it served by 20% by 2020. To achieve this new goal, Humana undertook a multiyear redesign and investment of people, processes, and products in order to gain the trust of consumers and providers, and to partner with communities to improve health. The case focuses on community initiatives, where Humana was developing its new role as "convener of conversations," providing leadership infrastructure and partial funding to spark community planning with a wide range of stakeholders and to design and monitor interventions that were tailored to local health improvement. At the same time, Humana remained a publicly-held corporation accountable to its shareholders for revenue growth and financial return. The case protagonist, Andrew Renda, MD, MPH, Director, Bold Goal Measurement, must design and implement a business plan, including leading and lagging performance metrics, that would measure Humana's progress toward its Bold Goal in ways that supported continued investment in community health improvement in Humana's local markets, while satisfying its traditional business constituents. This case can be used in courses on strategy, community health improvement, the corporate role in public health, and other courses exploring the intersection of business and society. It also offers a rich opportunity to explore the research design and measurement challenges associated with evaluating the impact of public health interventions on local communities.
Swot Analysis of "Humana's Bold Goal: 20 Percent Healthier by 2020" written by Nancy M. Kane includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Humana Health facing as an external strategic factors. Some of the topics covered in Humana's Bold Goal: 20 Percent Healthier by 2020 case study are - Strategic Management Strategies, Strategic planning and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Humana's Bold Goal: 20 Percent Healthier by 2020 casestudy better are - – there is increasing trade war between United States & China, increasing inequality as vast percentage of new income is going to the top 1%, increasing transportation and logistics costs, wage bills are increasing, competitive advantages are harder to sustain because of technology dispersion, digital marketing is dominated by two big players Facebook and Google, talent flight as more people leaving formal jobs,
supply chains are disrupted by pandemic , increasing commodity prices, etc
Introduction to SWOT Analysis of Humana's Bold Goal: 20 Percent Healthier by 2020
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Humana's Bold Goal: 20 Percent Healthier by 2020 case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Humana Health, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Humana Health operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Humana's Bold Goal: 20 Percent Healthier by 2020 can be done for the following purposes –
1. Strategic planning using facts provided in Humana's Bold Goal: 20 Percent Healthier by 2020 case study
2. Improving business portfolio management of Humana Health
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Humana Health
Strengths Humana's Bold Goal: 20 Percent Healthier by 2020 | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Humana Health in Humana's Bold Goal: 20 Percent Healthier by 2020 Harvard Business Review case study are -
Learning organization
- Humana Health is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Humana Health is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Humana's Bold Goal: 20 Percent Healthier by 2020 Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Innovation driven organization
– Humana Health is one of the most innovative firm in sector. Manager in Humana's Bold Goal: 20 Percent Healthier by 2020 Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Ability to lead change in Strategy & Execution field
– Humana Health is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Humana Health in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Highly skilled collaborators
– Humana Health has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Humana's Bold Goal: 20 Percent Healthier by 2020 HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Training and development
– Humana Health has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Humana's Bold Goal: 20 Percent Healthier by 2020 Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Superior customer experience
– The customer experience strategy of Humana Health in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Analytics focus
– Humana Health is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Nancy M. Kane can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Effective Research and Development (R&D)
– Humana Health has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Humana's Bold Goal: 20 Percent Healthier by 2020 - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High brand equity
– Humana Health has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Humana Health to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
High switching costs
– The high switching costs that Humana Health has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Organizational Resilience of Humana Health
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Humana Health does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Strong track record of project management
– Humana Health is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses Humana's Bold Goal: 20 Percent Healthier by 2020 | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Humana's Bold Goal: 20 Percent Healthier by 2020 are -
Interest costs
– Compare to the competition, Humana Health has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Humana's Bold Goal: 20 Percent Healthier by 2020, is just above the industry average. Humana Health needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Increasing silos among functional specialists
– The organizational structure of Humana Health is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Humana Health needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Humana Health to focus more on services rather than just following the product oriented approach.
Capital Spending Reduction
– Even during the low interest decade, Humana Health has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Humana Health is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Humana's Bold Goal: 20 Percent Healthier by 2020 can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
No frontier risks strategy
– After analyzing the HBR case study Humana's Bold Goal: 20 Percent Healthier by 2020, it seems that company is thinking about the frontier risks that can impact Strategy & Execution strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Products dominated business model
– Even though Humana Health has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Humana's Bold Goal: 20 Percent Healthier by 2020 should strive to include more intangible value offerings along with its core products and services.
Workers concerns about automation
– As automation is fast increasing in the segment, Humana Health needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Slow decision making process
– As mentioned earlier in the report, Humana Health has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Humana Health even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Humana's Bold Goal: 20 Percent Healthier by 2020 HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Humana Health has relatively successful track record of launching new products.
High bargaining power of channel partners
– Because of the regulatory requirements, Nancy M. Kane suggests that, Humana Health is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Opportunities Humana's Bold Goal: 20 Percent Healthier by 2020 | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Humana's Bold Goal: 20 Percent Healthier by 2020 are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Humana Health can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Creating value in data economy
– The success of analytics program of Humana Health has opened avenues for new revenue streams for the organization in the industry. This can help Humana Health to build a more holistic ecosystem as suggested in the Humana's Bold Goal: 20 Percent Healthier by 2020 case study. Humana Health can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Building a culture of innovation
– managers at Humana Health can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Strategy & Execution segment.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Humana Health in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
Buying journey improvements
– Humana Health can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Humana's Bold Goal: 20 Percent Healthier by 2020 suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Humana Health is facing challenges because of the dominance of functional experts in the organization. Humana's Bold Goal: 20 Percent Healthier by 2020 case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Humana Health can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Leveraging digital technologies
– Humana Health can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Humana Health can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Humana Health can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Humana Health can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Humana Health can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Better consumer reach
– The expansion of the 5G network will help Humana Health to increase its market reach. Humana Health will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Learning at scale
– Online learning technologies has now opened space for Humana Health to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Threats Humana's Bold Goal: 20 Percent Healthier by 2020 External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Humana's Bold Goal: 20 Percent Healthier by 2020 are -
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Humana Health in the Strategy & Execution sector and impact the bottomline of the organization.
Consumer confidence and its impact on Humana Health demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Shortening product life cycle
– it is one of the major threat that Humana Health is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Humana Health with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Humana's Bold Goal: 20 Percent Healthier by 2020, Humana Health may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Humana Health in the Strategy & Execution industry. The Strategy & Execution industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Technology acceleration in Forth Industrial Revolution
– Humana Health has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Humana Health needs to keep up with the evolution of technology in the Strategy & Execution sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Environmental challenges
– Humana Health needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Humana Health can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Humana Health needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Regulatory challenges
– Humana Health needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Strategy & Execution industry regulations.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Humana Health.
Weighted SWOT Analysis of Humana's Bold Goal: 20 Percent Healthier by 2020 Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Humana's Bold Goal: 20 Percent Healthier by 2020 needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Humana's Bold Goal: 20 Percent Healthier by 2020 is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Humana's Bold Goal: 20 Percent Healthier by 2020 is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Humana's Bold Goal: 20 Percent Healthier by 2020 is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Humana Health needs to make to build a sustainable competitive advantage.