Investigating the Digital Disruption of the Healthcare Industry: Johnson &

Johnson’s Digital Disruption Journey

Introduction

Overview of the topic

Organizations across the globe are being forced to reconsider how they conduct their
operations and keep up with other companies due to changes in the economy,
instability in politics and the speed of disruption in digital activities.

The change which happens when novel and emerging technologies impacts the unique
selling point of already produced goods and services can be seen as digital disruption.
In various industries, the prospects for digital disruption have risen as a result of the
quick growth in use of smartphones both in the workplace and at home.

Normally, innovations (such as machine learning and big data) occur before digital
disruption. The evolution of attitudes and the anticipation of clients can be influenced by
digital innovation. This causes companies to change the way their goods are products
and how feedback is assessed. Another thing worth noting is that a change in digital
strategy happens across all levels.

Digital disruption vs. disruptive technology

In recent times, “digital disruption” is frequently misused to depict the application of

digital tools that will give an organization strong advantage against its competitors.
Digital disruption is wrongly associated with “disruptive technology” which was dubbed
by Clayton M. Christensen, a professor of Harvard Business School. Professor Clayton
defined disruptive technology as a modern innovation which replaces an extant
innovation.

Examples of digital disruption

Below are a few instances of digital disruption:

  The photo processing and photography industry was disrupted by the digital
camera business.

 In the entertainment industry, companies with subscription-based business

models (such as Netflix and Hulu) changed the way media content can be
viewed and monetized.

 Companies like Spotify and LinkedIn relied heavily on strengthening their

brand identity by letting customer try out the free version of their product
instead of paying for it immediately.

 Taxis (which can be seen as a traditional service) was disrupted by on-

demand services like Uber.

 The printing industry was disrupted by the increase in e-reading platforms.

Importance of digital disruption

In order to thrive and compete with their peers, it is essential for businesses to adopt
digital disruption. Digital disruption is a sign that there is a change in the needs of
customer and if businesses want to retain old customers and attract new ones, they
must have a deep knowledge of digital disruption.

Also, businesses have a thorough understanding of the changes in the behavioral

aspects of their customers during a given period. To prevent digital disruptions from
being a threat to an organization, the various measures to follow are outlined below:

 Organizations should be innovators and follow actions that will lead to a

disruption in their industry.

 Strong judgements should be made using the resources on the organization.

 In order to produce special goods and services, the opinions of various

stakeholders must be considered.

 Organizations should use the data of its clients in creative ways.

Digital disruption in health Industry- Johnson and Johnson

The adoption of digital technologies is slow in the healthcare industry, especially when
compared to other industries. This was made known in a study put out by the McKinsey
Global Institute (MGI) at agnitio.com in 2022. The study revealed that there is a massive
potential for profitability if companies in the healthcare industry can bridge the gap.

Agnitio CEO, Lars Diemer, opined that it was really necessary for companies in
healthcare to embrace emerging technologies at a quicker pace.

According to the simple learn digital transformation program in 2022, Robotics, Big
Data, Artificial intelligence (AI), Blockchain, Internet of Things (IoT), Virtual
reality/Extended reality (VR/XR), Platforms, Edge computing, Cloud computing, Drones,
were all identified as digital disruption technologies.

Overtime, the healthcare sector has witnessed different phases of growth and much of
this evolution can be linked to volume of studies conducted due to an increase in
innovations. A meaningful part of rendering excellent healthcare services requires the
patient’s data to be analyzed in a timely and orderly manner. Thus, it is paramount for
professionals in the healthcare sector to have a good understanding as methods
change and becomes specialized.

A lot of work still needs to be done in the healthcare sector as innovations in digital
technologies keep spreading through different industries. Although digital disruption
may cause a serious risk in other sectors, it can lead to more room for growth as Silicon
Valley players and bigger tech companies alike will have issues navigating the complex
governmental and medical procedures in the healthcare industry. This will encourage
cooperation with industry authorities and prevent threats.

Despite the fact that many healthcare companies are lagging behind in the race towards
digitization (chart below), attempts are being made by top pharma and medical
technology companies like Johnson & Johnson to rebrand themselves, adopt emerging
technologies and improve the experience of their patients.

In the case of Johnson and Johnson

Johnson & Johnson, which was established in 1886, is an American pharmaceutical

and consumer packaged goods manufacturing company that has operations in over 250
countries. Recently, Johnson & Johnson has transformed into a disruptor in a lot of
ways[i].

The company has used their vast experience in the field of medicine to produce
different technologies that assist patients on their fitness journey[ii]. For instance,
Remote Assessment in Rheumatoid Arthritis is a smartphone application which can tell
if a particular treatment is effective by gathering fitness data such as heart beat, joint
pain level and length of rest.

Another application called One-touch Reveal aids patients who have been diagnosed
with diabetes to keep an eye on their sugar levels with ease and by linking with J&J’s
One-touch glucometer, their sugar level can be known and a report can be sent to
healthcare professionals.

A fascinating area currently explored by J&J is surgical robotics. Formed in 2015 with
partnership from Google Verily, Verb Surgical is on a mission to create superior and
affordable surgical robots which will be used for performing clinical operations. These
surgical robots are still in development and will not be available to the public until
2020[iii].
According to Verb’s CEO, “Every year, around 20 million surgeries are conducted, but
just 5% are carried out with robots, we believe it should be around 90%.”[iv] Almost all
operations are conducted using a machine called Da Vinci, however, the aim of Verb
goes past physical tools, it seeks to also incorporate digital surgery. In order for this to
succeed, the use of big data to aid medical specialist in making strong judgements on a
timely basis and use of five technologies which includes visualization, data analytics,
will be implemented. This, according to Verb, is the next evolution of surgery[v].

There are lots of ways in which surgical robotics can be used to create value:

 Through the platform, surgeons and other medical practitioners will be able to
obtain timely facts, perform operations that could not have been done previously
and better explain what is found when inspecting patients[vi].
 The platform will lead to higher results because of the opportunity it has at
making operations affordable and easily available to the public.
 Lastly, the internet has made it possible to link various robots with ease thereby
fostering the exchange of knowledge between them. This can result in an
 increase in their skillset and the way they show support. Also, healthcare
productivity may rise in the long run as surgical robots under go mechanization.

The notion of disruption did not garner enough attention until an article on the ‘critical
perspectives on disruptive innovation and energy transformation’ (Wilson and Tyfield,
2018) was published in Energy Research and Social Science. Even though links to
sustainability transitions was not present (Geels, 2018a), research on disruptive
innovation was mainly used by the article. As seen in this research, we examine the
usage of sustainability transitions (cf. Köhler et al., 2019), and its relevance to
academia.

Critical Analysis

Disruptive innovation, which is contained in innovation management books can be

traced to the 1980’s and 90’s. A key part of entrepreneurial initiatives that leads to
variations in sectors is referred to as disruptive innovation (Tushman and Anderson,
1986; Christensen, 1997). This was made known by Clayton M. Christensen. He saw
disruptive innovations as goods produced and services rendered which performs lower
that existing goods but benefits and extends to new customers (e.g. Christensen, 1997;
2003). Conversely, minor changes made by mature organizations that provides higher
efficiency when compare with the past can be seen as sustaining innovations
(Christensen and Rayner, 2003). According to Christensen and Rosenbloom (1995),
innovation in emerging technologies results in the decline in sales, market dominance
and anticipation of customer of organizations that slowly responds to these changes.

Abernathy and Clark (1985) separated the impact of disruptive innovation on production
and the relation of organizations to customers and markets. This separation was
between individual or group skill and the usage of products as well as the understanding
require to use it. They were of the opinion that variation in procedures is caused by
disruptive innovation which sets rules that current resources and knowledge bad
satisfies. This in turn decreases the worth of current capabilities and makes it outdated
(Abernathy and Clark, 1985:6). Based of this, when current linkages are disrupted, new
specialties can be formed. On the other hand, when current capabilities are disrupted, it
may have radical impact.

Early literature has been faulted for its universality, particularly in relation to the various
kinds of disruptive innovations and the differences between the patterns in regards to
modern technologies and product disruption, as a relationship can be found in terms of
disruptiveness to authorities (Markides, 2006). Another thing worth noting is that all
capabilities of an organization may not be disrupted by innovations (Ho and Chen,
2018). This tells us that a particular sector may be disrupted by innovation while others
won’t (Tait and Wield, 2019).

A culture that invests in healthcare innovation

“The difficulties of the pandemic caused unusual strength and digital changes in big
organizations”. This was statement made by Johnson & Johnson’s Enterprise CIO Jim
Swanson at the recent Health+Wealth of America, hosted by CDX, Techonomy,
and Worth. He was of the opinion that at Johnson & Johnson, “great science, great
data, great mission in association with the urgency of COVID-19, paved way for novel
opportunities to utilize technology with empathy to advance human health and health
equity and how a company can come together with similar goals and results was a
wonderful thing to see”.

Though the speed of digital acceleration may decline in the future, the reaction to the
pandemic has “really opened the space as to what’s possible,” he continued. He
emphasized that most persons have been excited to use new technologies in providing
solutions to critical healthcare problems, protect workers and contribute their quota to
the society.

Using technology to solve complex healthcare challenges

As nations shut their borders during the pandemic, the supplies that were essential for
the disbursement of medical equipment, PPE and other life-saving machines began
shutting down. There was a strong dependence on artificial intelligence to guarantee
swift delivery and discover new channels. These tools have been key in ensuring that
the safety of workers is catered for.

Augmented reality tools like Google Glass have been utilized by J&J to assist
supervisors in producing and virtual reality solutions to help in training of physicians.

According to Swanson, the shift to telehealth and adoption of technology by customers

and healthcare specialists was caused by the pandemic. The advantage of electronic
operations is that it elevated the ability of doctors to scale their reach, providing them
with ample time for every patient and allowing them study modern processes in a quick
and timely manner. Swanson went ahead to observe the changes through which the
physicians and patients find the balance to enhance relationships in healthcare: “I think
we’re really starting to rethink how we see [health care] – it doesn’t replace the in-
person visits but improves it and I think we’ll actually be able to lead better quality of
care.”

The essence of machine learning in solving a wide range of issues in the organization
was also highlighted by him. For instance, AI and robotics can be used to perform
surgery digitally after gathering facts from common processes, this can significantly
affect the final result of the process in the future. In the pharmaceutical industry, a
simulated software of real-life networks which allows various paths to be tried out for the
purpose of tweaking performance and enhancing outcomes. Johnson & Johnson calls
this digital twinning and this assisted them in the production of COVID vaccines. Also,
the organization released Neutrogena Skin360, a skin health app that let users take
pictures and get instant response about treatments.

Committed to advancing health equity

Johnson & Johnson established a campaign called Race to Health Equity aimed at
eliminating racial discrimination and unfairness in the society as a threat to public health
by pledging $100 million to aid programs meant to eradicate inequalities in health for
minorities. According to Swanson, to fight the increasing gap which has worsened
unequal access to healthcare, emphasis must be placed on connections and ease of
use with technology. The organization is ensuring that solutions and technology
modifications are provided which places health in the hands of minority groups. A good
example is the maternal mortality dashboard. A new interactive tool in New Jersey
created by the organization which sums up different sources of public information in
order to give a full picture of complicated challenges. The organization can then use
those data points to give information to the populace which will enhance public health in
less developed communities.

Johnson & Johnson is also improving access and partaking in medical trials through the
use of artificial intelligence. This assures that distinct communities are well represented
for the most effective results. The campaign is also meant to attract different and
inclusive manpower through scholarship opportunities.

Swanson aforementioned that the central part which drives the organization is the need
to provide for the communities, patients, medical specialist and according to him, this
isn’t novel and has always been the case for the organization. He further added that it is
possible to conduct activities previously thought to be unattainable and future prospects
are great for Johnson & Johnson, the healthcare industry, and other industries to utilize
technology morally and for the benefit of the society.