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 backlash against globalization, increasing commodity prices, increasing transportation and logistics costs, digital marketing is dominated by two big players Facebook and Google, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing government debt because of Covid-19 spendings, technology disruption,
competitive advantages are harder to sustain because of technology dispersion, talent flight as more people leaving formal jobs, 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 -
Diverse revenue streams
– Humana Health is present in almost all the verticals within the industry. This has provided firm in Humana's Bold Goal: 20 Percent Healthier by 2020 case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
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.
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.
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.
Ability to recruit top talent
– Humana Health is one of the leading recruiters in the industry. Managers in the Humana's Bold Goal: 20 Percent Healthier by 2020 are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Operational resilience
– The operational resilience strategy in the Humana's Bold Goal: 20 Percent Healthier by 2020 Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
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.
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.
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.
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.
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.
Cross disciplinary teams
– Horizontal connected teams at the Humana Health are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
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 -
Aligning sales with marketing
– It come across in the case study Humana's Bold Goal: 20 Percent Healthier by 2020 that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Humana's Bold Goal: 20 Percent Healthier by 2020 can leverage the sales team experience to cultivate customer relationships as Humana Health is planning to shift buying processes online.
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.
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.
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.
Need for greater diversity
– Humana Health has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
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.
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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Humana's Bold Goal: 20 Percent Healthier by 2020, it seems that the employees of Humana Health don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Humana's Bold Goal: 20 Percent Healthier by 2020, in the dynamic environment Humana Health has struggled to respond to the nimble upstart competition. Humana Health has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Skills based hiring
– The stress on hiring functional specialists at Humana Health has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
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.
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 -
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.
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.
Manufacturing automation
– Humana Health can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Loyalty marketing
– Humana Health has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
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.
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.
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.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Humana Health in the consumer business. Now Humana Health can target international markets with far fewer capital restrictions requirements than the existing system.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Humana Health to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Developing new processes and practices
– Humana Health can develop new processes and procedures in Strategy & Execution industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
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.
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.
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 -
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.
High dependence on third party suppliers
– Humana Health high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Humana Health can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Humana's Bold Goal: 20 Percent Healthier by 2020 .
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.
Stagnating economy with rate increase
– Humana Health can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
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.
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.
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 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.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Humana Health can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Humana Health will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
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.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Humana Health business can come under increasing regulations regarding data privacy, data security, etc.
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.