Tag Archives: bold

#1 Affliction Costing Businesses Billions

Preserving the status quo (PTSQ) is repeatedly the cause of lost revenue, missed opportunities and even bankruptcies. The pace of innovation and change in business is accelerating at an ever-faster pace. Organizations with good leadership decide to move forward scared, rather than remain frozen with fear.

Recently, I had the pleasure of spending the day with Peter Diamandis, the founder of X Prize Foundation and the best-selling author of Abundance and BOLD. Diamandis was named by Fortune as one of  “The World’s 50 Greatest Leaders.” He spoke about why we are living in a world of abundance and about how to recognize the future direction of technology and business opportunities. All of his examples and stories were directed at educating the audience on how to stay ahead of the competition and how to create disruptive innovation in any industry. (And, did I mention he graduated from medical school and has very strong opinions about the future direction of medicine? I’ll save those comments for another day.)

See also: 10 Reasons Why Healthcare Varies

His talk on the “6 D’s of Exponentials” was exceptional. It’s a way of thinking about how exponential technologies are affecting our world. He proceeded to describe business examples in robotics, artificial intelligence, 3-D printing, biotechnology, self-driving cars, space exploration and medicine.

So, how is it, in the face of exponentially increasing change and all this business opportunity, that managing healthcare for so many organizations represents a slow, linear decision-making process characterized by rigid thinking, detached leadership and high costs? Even more confounding is that many corporate C-suites have abdicated responsibility of a multimillion-dollar division (healthcare) to internal managers who inadvertently make the problem worse each year. The typical corporate culture talks about innovation, but it only reinforces and encourages business as usual and the preservation of the status quo.

Business as Usual, No Disruption Here

For the majority of mid-sized organizations, healthcare is “managed” as one of the largest operational expenses on the balance sheet —instead of as a strategic asset that delivers a sustainable competitive advantage. Continuing to manage healthcare as an expense while somehow expecting a different result will continue to be costly.

If you don’t disrupt your business practices, then someone will disrupt you. A study from the John M. Olin School of Business at Washington University estimates that 40% of companies in today’s S&P 500 will not exist in 10 years.

The world of healthcare is changing rapidly. The Affordable Care Act was merely a catalyst that has triggered a tsunami of endless change in the future of healthcare in America. The challenge is to recognize new opportunities and to implement them effectively.

In PwC’s latest CEO study, almost 75% of those surveyed said they are concerned their companies lack the skills needed to meet future competition.

Think about all the job duties, responsibilities and competing demands a typical healthcare manager experiences. These day-to-day competing priorities mean a manager must focus time and energy on eliminating the tallest fire first, regardless of the schedule, all while managing the second-largest capital allocation for the organization: healthcare. Is it any wonder that incrementalism, fear of change and choosing the path of least resistance run rampant in corporate America?

See also: Healthcare at the Tipping Point

The C-suite needs to get involved and apply its business finance skills to healthcare. The C-suite must wake up to the fact that linear thinking — like the illusion that vendor size creates market leverage in healthcare — is as outdated as flip phones and fully insured insurers who refuse to substantiate annual billing and rate increases with financial transparency.

According to an AON/Hewitt Survey of more than 1,000 companies, 77% of respondents said the actions of their peers influence their organization’s healthcare strategy. Comparing your results with other organizations trapped by the same poor outcomes of legacy best practices and groupthink is like listening for an echo and expecting a different answer. The survey results should make the C-suite sheepish.

If you’re a CEO or CFO, you have to ask yourself these questions: With all the evidence about increasing change in business, do you honestly believe managing healthcare to preserve the status quo is the prudent thing to do? Can your organization’s stakeholders afford the cost of doing nothing?

Video Alarms Go Mainstream

Video is now the most popular “option” on alarm systems, a fundamental change for the alarm business. Viewing cameras on a smartphone, known as “self-surveillance,” became a standard feature for all but the most basic burglar alarms.  Now, video is actually being delivered to the central station during an alarm event.  This is the next logical step in security, letting the central station operator verify the alarm and improve police response to deliver greater security.

Instead of just viewing a video of what actually caused the alarms, the central station operator can use the cameras to attempt to see why there was an alarm.  In 2004, when the industry standard was created, video verification was reserved for specialized applications.  Equipment was expensive and cumbersome to monitor.  Nearly a decade later, technology has changed, and video verification is moving mainstream.

IP cameras and specialized camera/sensor devices are now well under $100 and easy to install.  The last piece of the puzzle to fall into place was driving down central station monitoring costs.  Over the past couple of years, central stations have developed affordable video verification processes that fit the mainstream alarm business model.  These central station processes can be applied to a broad range of hardware, from IP cameras equipped with analytics to specialized sensor/cameras designed specifically for video verification.  Third party central stations are offering dealers video verification for as little as $5 over what they charge to monitor a traditional alarm.

Benefits

Contrary to common perception, video verification’s value is not primarily to reduce false alarms. From the property owner’s perspective, false-alarm reduction is more a side effect that “reduces a negative” rather than creating value with additional security.  Consumers looking to purchase “security” want the best security they can afford, and they typically equate this with fast police response.  Video verification delivers faster police response.  Because of historical issues, traditional alarms typically receive a “Priority 3” response from law enforcement.  In contrast, video verified alarms typically receive a “Priority 1” response and are treated as “in progress” calls by responding officers.  The difference in response times between a 1 and 3 is significant.   In Fairfax County, the affluent area around Washington, DC, a video-verified alarm receives response more than 12 minutes faster than a traditional alarm.  From a property owner’s perspective, a lot can happen in 12 minutes in a commercial burglary or home invasion.

Jurisdiction Video Verified Traditional Alarm Response Differential
Boston, MA 7:38 21:00 13:22
Charlotte, NC 5:10 13:30 8:20
Chula Vista, CA 5:05 19:18 14:13
Watertown, MA 4:00 23:00 19:00
Fairfax County, VA 6:00 18:02 12:02
Salinas, CA 2:54 39:25 36:29
Amarillo, TX 10:06 19:24 9:18
Barrie, ON 8:02 16:02 8:00

With reductions in municipal budgets affecting many jurisdictions across the US and Canada, law enforcement has downgraded response to non-verified alarms in an effort to save money.  Sometimes this means a “broadcast and file” policy, where the alarm is broadcast over the police radio and officers can respond if they have nothing more important to do.  Sometimes, police refuse to respond to non-verified alarms at all.  But these same financially stressed jurisdictions all continue to respond to video verified alarms.

The benefits of video verification extend beyond priority response.  A well-publicized court case recently sent shock waves through the alarm business when an industry icon was forced to pay a multimillion-dollar judgment to a woman who was assaulted after she entered her home.  The alarm system had worked.  The motion detector triggered at 10:00 AM, and the central station, after failing to reach the owner, dispatched the police. They found nothing amiss.   Throughout the day, the motion sensor sent in four additional alarms, but the central station was unable to reach the owner on these, as well.  After this rash of alarms, police told the central station that they would stop responding unless the keyholder met them at the home.  That evening, when the owner returned home after work, she was assaulted by an intruder who had been inside her home throughout the day.  This horrific incident simply would not have happened if the central station had been able to see the intruder who triggered the alarms.  Video verification means greater security because the central station operator becomes a remote eyewitness to the alarm event.

Monitoring

VideoWhen the industry standard for video verification was created in 2004, self-surveillance on smartphones was not even on the radar. Apple’s first iPhone did not even hit the market until 2007.  The early video verification process required the central station operator to manually access a camera/DVR when an alarm triggered and download the video for review.  This often required working with static IP addresses, firewalls and video management systems that were isolated from the central station automation software that ran the business.   All of this required specialized operators who were trained to manage video and operate multiple video systems remotely.  Technology changed all this.  Video verification is now done by the typical operator in the central station.  Central station automation like MAStermind, Bold, Dice, MicroKey, SIMS, and others have integrated video verification into their standard alarm processes.  In addition, there are third party solutions like I-View Now that enable any central station to do video verification without changing their automation software.  These central station solutions work with a wide variety of hardware, from IP cameras to specialized camera/sensors devices designed specifically for video verification.  Just as smartphones and mobile apps changed the lives of consumers, the central station solutions for video verification have made monitoring video alarms simple and inexpensive for the typical alarm dealer.

Market Penetration

Self-surveillance and home automation have created a paradigm shift in the alarm business affecting even the most basic alarm offering.  Declining video hardware and monitoring costs mean that video verification now fits the competitive business model of $99 down and a multi-year contract that finances the hardware/installation.  Commercial applications have been the first to embrace video verification.  The newest generations of hardware and monitoring services have finally reached the pricing level necessary to move into the competitive residential market.

Partners

Grand Prairie PoliceThe alarm business is built upon a partnership with insurance industry and law enforcement.  The insurers encourage their policy holders to install alarm systems to reduce claims and prevent loss.  The alarm industry depends upon law enforcement to respond to their alarms and protect their customers in the event of a burglary or intrusion.  Video verification is already strengthening this partnership. The insurance industry has taken notice of priority response and what it means to them in terms of reduced losses.  In January 2013, Pharmacists Mutual Insurance published the results of a five-year study that linked arrest rates and losses experienced to police response times.  Other major insurance companies like Hanover, CNA, Allstate, and State Farm are working on updating policies to encourage their policy holders to move to video verification.  While this is a slow process, the insurance industry has begun to turn the rudder, and the ship is in motion.

In the past decade, video technology has fundamentally changed law enforcement with cameras in patrol cars and on highways and even portable cameras worn by officers.  Law enforcement depends upon video, and video verified alarms are another step in this direction.  While law enforcement understands video verification means fewer false alarms, they also know that video verified alarms mean more arrests.   Officers have always been motivated to “catch the bad guys,” and video verification helps make this happen.

As Chief Steve Dye of Grand Prairie, TX, explained to the IACP committee on Community Policing in a recent presentation, “From our perspective, we see no difference between an eyewitness calling to report a crime and a central station operator calling to report a crime they have seen on video.  In fact, the fact that a video exists of the actual event could mean the central station call could even be considered stronger.”  Chief Dye is promoting priority response to encourage his citizens to install video verified alarms to help him in the battle against property crime.  It is making a difference. Currently, the response time for a video verified alarm in Grand Prairie, TX is less than two minutes.