The doctors disrupting the hearing aid industry: operations of innovation
Award-winning businesswoman, audiologist and academic Dr Elaine Saunders is disrupting the hearing aid industry as founder and managing director of BlameySaunders Hears, a hearing aid package that eliminates the need for patients to visit specialists. Here she discusses with Samuel Tait the operational side of executing innovation within her business, which she operates with business partner Professor Peter Blamey.
Samuel Tait: How did your experience working at The Bionic Ear Institute lead to your own entrepreneurial endeavors and the creation of BlameySaunders Hears?
Dr Elaine Saunders: What emerged from my initial role and work at The Bionic Ear Institute was the next generation of electrodes for the cochlear implant. I then moved into commercialisation, which is how I met Professor Peter Blamey. The first thing I commercialised was the ADRO processor that he invented. What Peter had invented was a very advanced intelligent amplifier. We entered a business competition – The Melbourne Business School Entrepreneurs Challenge, the inaugural one in fact, and we won it. That was the launching point for our first company, Dynamic Hearing, because we were able to attract additional investment. The company that was formed was owned by venture capital and the Cooperative Research Centre at Cochlear Implant and Hearing Aid Innovation. We sold our technology to hearing aid companies and headset and telephony companies.
Peter and I both felt that it would be much better to be working directly with the customer. As we built the company we got to know the hearing aid industry and felt we could do it a lot better. That’s when we set up our own company, BlameySaunders Hears.
ST: What was the role of the customer in the development of BlameySaunders and your approach to product design and distribution?
ES: Hearing and listening is an interesting mix of physiology, the periphery of the ear, and psychology. From the designer’s point of view, the manufacturer’s point of view, you’re actually trying to deal with correcting a physical problem and counterbalancing that with preferences and attitude and all sorts of other psychological effects. You’ve got to have your mind on all of these things. That really underpins our product in that we’ve given the customer a way to set up their own hearing aid so that firstly – it’s effective. Then secondly, that a customer can set it up so that they like it. You hope those two things are the same thing, but if they’re not it’s more important that they like it.
The role of the customer for us is around trust. That we basically trusted the customer to determine what it is they like listening to. That’s actually quite different to the more common industry approach, which is, “Well, we’ll set it up so that you can hear like we think you ought to”. Then it gets tweaked because people won’t walk out the door with it if they don’t like it. Or not if they take the audiologist’s perspective that it must be right and they, the customer is wrong.
That is why the role of the customer for us is very, very different to what it is in the rest of the industry. We frankly said we trust the customer. We think customers are capable of doing this. If customers feel they are not capable of doing it, then we’ll help you. We’re still going to trust you the customer and if you tell us that something is wrong, then we’ll work with that. It is much more interactive.
A person’s preferences, particularly around something like loudness, are influenced by an awful lot of other things. For example, it turns out that if you had two absolutely identical sports cars going at exactly identical speeds on identical conditions, one was red and one was green, the red one would sound louder. If you hear music that you really don’t like, the chances are you’ll perceive it as louder than some music that you prefer because it’s perceived as more intrusive. It’s a challenge in that you do have to get things so that they’re effective.
You have got to have something that sounds natural and which people are prepared to say, “Yeah, I like that. That it’s comfortable”. As soon as you use the word “comfortable”, two people are not going to say the same thing about what they find comfortable. For example, you wouldn’t ask someone else to set up the volume on your television – it doesn’t make sense. It turns out that the science agrees. If you take an audiologist set up for a hearing aid and the customer’s own set up for the hearing aid, where they have both inputted the same physical settings, the customer prefers the one they set up because they feel more in control of the experience.
ST: How did you work with various external partners in the product development process?
ES: I think that working with partners is a really sensible thing to do actually for a small company because you get to harness a lot of external expertise – you’re working with a team not a person. You can’t hire that kind of diversity in a single person. It’s definitely helped us, I think, working with partners. We’ve actually been suppliers ourselves and also integration partners too in that we were developing software and integrating it into other people’s products. I think that’s really helpful.
We knew we wanted to control the process. I think you’ve got to be clear whether you want to do that or not. It’s not always the case, but in a product development where we had more than one partner involved we wanted to be clear that we were controlling it. We didn’t want an external partner project managing development.
I think you can’t over-communicate. I’m fortunate to work with a partner who communicates very well. I think communication is crucial between partners that you want to know the highs and lows. You actually want to know if somebody’s run into a problem. You’ve got to make them comfortable enough that they know to tell you if they’ve run into a problem. We certainly had many discussions – over deliverables and whether we were getting the right amount at the right time for the right money. Watching the budget is important, and being mindful and practical.
It’s also partly about attitude. You’ve got to be sure that the partner actually wants to be a partner and not just a remote supplier. For example, in the area that our development partner, Planet Innovation, was working with us, design for manufacture and the app development. There were other contenders and we had talked to them, but it just didn’t gel well. It’s either the way that the project proposal was put forward. They way the project was being approached financially. The way the design and interaction was being approached. You just know it’s not right. Not everybody gets that. Planet Innovation, certainly do. We were very explicit about discussing that. I don’t think we went out to say we’ve got to find somebody who’s the right cultural fit, but it comes out in the discussions.
We had the original design done by a medical device designer, Leah Heiss, who’s really a design artist. We worked with her and with Planet Innovation to get to a design for manufacture. That meant including them for prototype development and sourcing the ultimate manufacture. It was very important to us that it was manufactured in Australia so they went with that even though that was not necessarily their first choice. Planet also worked with us on the application side and that was more interactive. We certainly went with them on the second job because they’d done the first job with them as well. Working with us across new algorithms and new ways of the hearing aid fitting got off to a slightly sticky start, but once we ironed out some wrinkles it went very well.
ST: What is the value of having people from different backgrounds working together to solve a business problem?
ES: I think it’s very important, but you’ve got to bring it together. Software engineers and audiologists don’t even speak the same language. You can use a product design and it will mean something completely different for these two groups. That means you have got to be able to bring them together. Engender good communication and work out ways to do that. It’s not necessarily all that easy. Audiologists come from a very highly communicative profession. Engineers tend to be less loquacious.
For the signal processing we did it in-house. We built the team. What we did that I think was uniquely special was put together audiologists and engineers so that we could continue that legacy of expressing the problem properly. We never told the engineers how to solve it, but just what we wanted done. They would often raise their eyebrows and say, “Well, you can’t do that. It’s too challenging”. However they always did deliver. Always. I have this great faith that engineers will always deliver if you can express the problem properly.
In going to the next stage, Peter’s expertise is really more on the software, signal pressing and the algorithm side. On the hardware side it’s not just a plastic case. Hearing aids have to be configured so that they’ll live on the ear, they’ll face the right way, they won’t squeak. We had to bring the software side and hardware sides of the problem together. During the course of Dynamic Hearing, we met Henry Smith, whose company became a customer of Dynamic Hearing. Henry is the hardware equivalent to Peter’s software expertise. In the first iteration of hearing aids for BlameySaunders, Henry’s company is the official manufacturer.
ST: From your experience are there any tools of the trade or specific approaches that help bringing these disparate types of groups and skillsets together?
ES: Mostly I’ve used what I call management by stealth, and sometime a little bit more explicitly when it’s come to specific language issues around problem solving. Soft management skills to bring people together, building up relationships, getting people to communicate with each other. It works with a team up to about the size of 20 people, and once it’s beyond that you’ve got to break it up I think, you need to get people to be mindful of each other. I’ve certainly tried to give people a quite high awareness of each other’s needs. I like to make sure other people are aware of this. If clinicians are having a hard time, I like the others to be aware of that. I really like to build a culture where people see it as important to communicate with each other. You’ve got to build the value of communicating with each other.
You can go and have management courses and learn that people like to be valued. However not just by their bosses. They like to be valued by their colleagues. We’ve had receptionists bring in homemade biscuits. It’s not just, ‘oh I’ve made some biscuits on the weekend’. It’s a statement of trying to look after the engineers. These things, in a way sound silly, but I think actually it’s building the behind the scenes value of communication and that is what brings teams together.
ST: Culture has been an underlying theme across many of your viewpoints, what other aspects do you see as the value of developing the right culture for innovation to succeed?
ES: From a leadership point of view, we tend to lead by example. I think we don’t chase people a lot. We’re not down on their case, but I think they know we expect people to work hard and enjoy themselves on down time. The culture that’s laid in the early stage of the company is going to go forward. It’s hard to change so it’s really important that you keep an optimistic can-do culture. The point that it starts to change away from that I think that’s a bad day.
We wanted an environment where people are smart and kind and look after our clients; deliver a great service, and do clever things. That’s the environment I want now. I think that’s the environment the company needs going forward. It is my vision, my goal, and it’s Peter’s as well. I think people learn a lot about themselves in a startup. They may not actually evaluate it there and then, but the startup environment is not for everyone. To people who like to see their desk tidy at the end of the day, being in a startup environment just stresses them totally out. People come in and it’s a smallish company and often startups have got a flashy structure. They certainly have at the beginning. Then, for the person who wants to come in and be the head of a software team in a year, they’re probably not going to be able to. We want people who are really bright, quite ambitious, and really nice.
If you take care of your staff and you’re leading by example, they will also see that it’s important to take care of each other.
ST: Why is getting the people part right so critical?
ES: You’ve got to implement a vision. You’re a leader. You’ve got to have people following you in your team and you can’t afford any dead wood. You’ve got to have a team of people around you where you’re working together trying to deliver on this vision. You’ve got to have a team of people around you who can deliver in a way that you want to deliver.
You also have got to be careful because the wrong people can take you the wrong way. I think you need to stay very, very strong to your vision. I think you’ve really got to make sure that your people are trained to do the job. If I’m hiring technical people, and this company is less technical than the previous one, but we really put them through a third degree of technical interview and I might sit and watch and listen. I wouldn’t ask the questions, but they’ve got to be able to do the job as well as to fit into the team. Putting that right team in place is absolutely crucial and I think you’ve got to be really persistent. You’ve got to hang in there. If you have an ambition to succeed in our particular industry, and this gets a bit controversial. People will say, ‘fail quickly’. I think it really depends what you’re trying to do. For another internet businesses, perhaps you do want to fail quickly, but if you’re doing something like we’re doing… we’ve been building towards this for about 15 years.
We’re very mindful of this long-term view and it is why we include people to the level at which they want to be exposed. One could go to an extreme and say, “Look, we’ll have half a dozen people fully exposed to all the finance of the company”. It’s a nice idea, but actually not everybody wants to be. It’s about bringing people into projects and giving them a bit more rope and a bit more challenge and something special to do in a slightly controlled way. I don’t want to say it’s like bringing up children, but in a way it is. We’re very mindful of it all the time. Building knowledge and increasing exposure to things, but while hoping not to burden people and giving them too much. It’s like when you think that people are ready, giving them a project to go on lead and they’ll learn from that experience whether the outcome is good or bad. They’ve got to feel that it’s okay to make mistakes or to say the wrong thing. Some people don’t want to say the wrong thing. We actually had an improvisation workshop. It was partly about development skills. It was partly about watching people in that environment. It’s really clear in that environment that we had people who if they couldn’t say the right thing they wouldn’t say anything and that’s not great for them or our business.
ST: What are the biggest challenges you’re facing at the moment as you move forward into 2016?
ES: I guess the biggest challenge we’ve got is we are now at the point where we either tick over at the same rate or we try and be more ambitious and grow. We’ve decided to take the path to be more ambitious and grow, so the biggest challenge is getting that right. Being an industry disruptor we can expect that not only do we have the challenges of growing and getting that right, but that bigger players will look at us and where we’ve got to. There is a wise saying, “Where there’s a margin someone else wants it.”
That means we are going to raise money. We won’t raise an enormous amount by investment standards, but we do want to raise some money in order that we can accelerate our growth hopefully without the downside of trying to do that on too little money. Accelerating is important. Our judgment is that the risks of accelerating are less than the risks of not accelerating because of increased competition. We’re looking to increase growth by looking internationally, and by looking to have a number of physical centers across Australia.
ST: What advice would you give to people looking to succeed with their own innovation programs?
ES: My answers might be really boring. I think you have got to be sure your products are right. You want to be making something that does meet some kind of need; otherwise no one’s going to buy it. I think a really good example of that is Flow Hive, the people who made the flowing bee hive and promoted it on indiegogo and raised US$12 million. By the way that the public responded, they obviously hit a mark because you can’t actually buy bees at the moment. Everyone’s ordered bees because everyone’s waiting for all these hives to be delivered. I think getting a product that does fit a market need is critical.
I do think getting the right people in place is absolutely crucial. Again, that’s talked about tritely, but I subscribe to other people’s viewpoints that if you have the wrong people, get rid of them, they’ll bring you down.
In case you missed the first part of this interview, check out Insights on innovation from industry disruptor Dr Elaine Saunders to get an overview of her experience at The Bionic Ear Institute, the role and impact of disruption and some of the biggest challenges in building a business disrupting the audiology and hearing aid industries.