Maxwell Health and Agile Healthcare Strategy

Maxwell Health LLC is a rapidly growing company that offers a platform to make it easy and intuitive for employees to manage their employer-sponsored benefits.  It is at the intersection of several major macro trends currently transforming the Healthcare industry:

  • As a marketplace for employee benefits, it is near the center of a shifting US regulatory landscape for individual and small group insurance exchanges
  • As a “Software as a Service” (SaaS) platform it is a poster child for the growing use of clever software to deliver intuitive, efficient and quality healthcare services
  • As a company with the stated mission to “empower the American family with tools and services to achieve health and wealth success” it is leading the charge towards consumer/patient-centric thinking in healthcare

Any one of these trends introduces significant uncertainty. With so many environmental elements in flux at the same time, you would think Maxwell would find it difficult to manage all of this change, but they actually thrive in this environment. In 2015 alone, Maxwell launched a new enterprise platform and doubled the number of employees using their product to enroll in and manage benefits.  As with most success stories, multiple factors contribute to Maxwell’s accomplishments.  However, at least part of their success in this challenging competitive environment comes from leveraging Agile Strategy.

“Agile” is a set of principles and approaches that allow organizations to adjust rapidly to changing environments and market needs. Originally codified in the software industry in the 1990s, it has applications that extend far beyond software development. At Recon Strategy we apply agile thinking at 3 distinct conceptual levels:

  1. Agile delivery process – This is the foundational level describing how these principles are used to complete flexible yet high quality work. For example, at Recon Strategy we run many consulting engagements using an agile delivery approach that allows us to be more responsive to project learning and evolving client priorities – stay tuned for a future post on this.
  2. Agile product and service strategy – This defines how the use of agile principles and delivery can enable organizations to provide products or services that are more successful in the market. The remainder of this post is dedicated to describing Maxwell’s agile product strategy and how they have used it to produce an innovative and successful product.
  3. Agile corporate strategy – This addresses how business units and companies as a whole can leverage agile principles to navigate strategic environments characterized by: 1) high uncertainty about the future; 2) system complexity that makes it difficult to analyze the impact of strategic decisions; or 3) a competitive landscape that is evolving faster than classic strategy can accommodate. You can find out more at this post on agile corporate strategy.

Agile product strategy and the product learning cycle

The goal of an agile company like Maxwell is to institutionalize its ability to learn faster and thus respond to changing market conditions better than competitors. This contrasts with the goals of most classic strategies that seek to either drive unit costs lower than competitors or defend unique assets that support differentiation.  The product learning cycle is a central concept to institutionalize organizational learning, and thus merits particular discussion.  The cycle is shown in figure 1, and its elements are described in more detail below.

Figure 1: The product learning cycle

Product learning cycle

The product learning cycle includes 5 steps: 1) Determine strategic vision; 2) Break strategy into increments; 3) Prioritize increments for delivery; 4) Deliver increment(s) to the market; 5) Collect and interpret feedback to refine the strategy.

  1. Determine or refine the strategic vision – The product learning cycle begins and ends with a compelling strategic vision of what the market wants, as well as alternative scenarios for where the organization thinks the market is going in the future. Unlike classic strategy expressed as 3-5 year plans, however, an effective agile strategy is expressed as a set of key assumptions or hypotheses (e.g. “we believe employees want to access all of their employee benefits in one place rather than in different locations.”) and the planned features, services, and objectives given those assumptions. (e.g. “our platform must support health insurance, life and disability insurance, and other ‘non-traditional’ benefits”)  These assumptions are tested and the corresponding strategic objectives refined on a regular cadence that is much more frequent than with classic strategy.  Maxwell completes a learning cycle with updated product, feedback and minor strategy adjustments every week.  Other companies use a monthly or quarterly cycle.

To be clear, this definition of strategic vision does not mean throwing formal strategy out the window or swinging wildly back and forth every week between different competing strategies based on minor customer feedback.  The key is to use evidence-based techniques to resolve uncertainty and reduce risk while staying true to the core of the overall strategy.  For example, Maxwell’s original version of the hypothesis above was “we believe employees want better access to services that help them take incremental steps toward improving their health.” To test this hypothesis, they released an early version of the product that offered enrollment in basic insurance products with a strong emphasis on wellness programs via fitness devices and mobile tracking.  But early results suggested the original hypothesis was not correct. According to Director of Marketing, Sara Hopson, “Our initial vision emphasized wellness and overall personal health rather than simple plan enrollment, but when we tested an initial product, we discovered customers weren’t ready for the advanced wellness approach because they were still wrestling with more fundamental problems of understanding and enrolling in their employer-sponsored benefits plans. We used this insight to shift product focus more on the enrollment experience and benefits management for employers and their employees. We also modified our distribution focus from direct sales to broker-led sales.” Maxwell updated their strategic hypothesis and started selling an easier enrollment platform for current insurance providers and brokers while staying true to their core vision of consumer empowerment and driving health success.

Significantly redirecting the product scope after only a few months may seem disruptive, but consider the alternative…what if Maxwell had invested 18 months to develop a traditional product generation and only then discovered that one of their core strategic assumptions was wrong!  As it was, they significantly reduced the risk of their product strategy with minimal targeted effort.

  1. Break the strategy into smaller work increments – In order to be able to produce rapid generations of the product that can generate new feedback and evolve quickly, an agile company needs to break its strategy into work increments that can be delivered independently of each other. For example, while Maxwell’s ultimate strategy involves providing multiple employee benefits through several channels on one platform, they broke the work associated with this into separate work increments like “deliver basic health insurance enrollment”, “add ability for employees to manage health insurance benefits”, “add more intuitive interface for HR staff to manage whole groups”, and “build interface for brokers to support client administration”. By breaking the strategy into independent incremental steps, Maxwell is able to deliver new functionality with every new generation of the product that customers can actually use and for which they can give meaningful feedback. Implementing the strategy elements sequentially rather than all at once also allows Maxwell to incorporate feedback into the plan for subsequent increments before they have committed to a particular direction, when it is still relatively inexpensive to change course.

This part of the product learning cycle can be challenging for people. (which increases the sustainability of agile strategy for those who can master it)  We are used to thinking of products or projects as a single unit, where planning, design, execution, testing and delivery each happen once in that order.  It takes a shift in mindset to think of a product or service as a basket of individual features and capabilities. It takes even more discipline to clearly define the boundaries between these different increments, so that each delivered generation of product is high quality and complete for the included functionality.

  1. Prioritize delivery order – One enormous benefit of breaking strategy into smaller increments for independent delivery is that it creates a whole new strategic lever for companies to optimize. Unlike classic strategy where the finished product is delivered all at once at the end of the project, the agile strategist can decide which increment of functionality to prioritize first and which to hold for later.  Thoughtful prioritization delivers high value functionality faster and resolves key risk reduction uncertainties earlier than traditional approaches. As a small startup, deliberate initial prioritization allowed Maxwell to get a first minimally functional product into the market and generating much needed revenue in only 4 months.  Each subsequent product release added the incremental functionality judged to be either most valuable to users or that drove the most learning for the company.

A common objection to this approach is the claim that “we can’t release our product with anything less than the full functionality we ultimately want!”  In some cases this may be true (such as where long lead commitments backed by large investments are the only way to proceed) but the agile strategist values accelerated learning over the additional effort of breaking work down and potentially not meeting all of a customer’s possible needs from day one.  Many companies that initially believed their product was indivisible have found on closer inspection that they could release product will less-than-complete functionality.

  1. Deliver product incrementally – To achieve the benefits of adaptive strategy you must be able to deliver functioning work increments independently and on a regular cadence. Maxwell uses a variant of the software industry’s most popular product management framework (called Scrum) to coordinate project teams.  This framework uses a few lightweight rules of engagement to allow small self-directed teams working together to deliver regular increments of product.  While a detailed discussion of this and other agile product management methods is beyond the scope of this blog, you can learn more at  For now, suffice it to say that agile delivery methods are a mature discipline with a 20+ year track record of successful implementation in software and other industries well beyond.
  1. Leverage targeted feedback to update strategy – Closing the product learning cycle and incorporating that learning back into the product strategy is the critical, but often overlooked, culmination of the product learning cycle. For most companies, getting feedback is not the problem…if anything there is a surplus of feedback and the challenge is separating the meaningful signal from the noise.  Fortunately, because the agile strategist framed their strategy as an explicit set of hypotheses that need to be tested or questions that need to be answered, distilling strategic insight is principally a targeted activity and not a random fishing trip. In most cases, the metrics to track and the definition of “confirming” or “disproving” a strategic hypothesis are decided up front.

For example, the original Maxwell platform included a core feature where members could select a fitness device to support their wellness goals.  Lack of uptake for this option disproved the original “employees want better access to tools that help them take incremental steps toward improving their health” hypothesis. Subsequent customer conversations highlighted the bigger opportunity to streamline the enrollment process. Maxwell’s Head of Product Strategy, Inessa Lurye, says she would like to be even more deliberate about pre-defining outcomes for strategic hypotheses.

While targeted hypothesis testing is the primary use of market feedback in adaptive strategy, innovation-based companies also need to keep an ear out for unexpected insight that could inform the strategy.  These “unknown unknowns” often result in more fundamental strategic shifts than the incremental evolution of hypothesis-based strategy. Some capacity should be designated to looking for feedback that falls outside the expected models. In Maxwell’s case, one of their larger partners asked if they could add a co-developed retirement benefit to the suite of available options.  Maxwell was open to this type of “emergent” product design even though it was outside the strict health and wellness focus, and the new option has developed surprisingly strong momentum with customers.

Agile strategy in practice

While increasing strategic agility may seem easy, like any defensible strategy it is harder in practice because it requires making conscious and self-reinforcing investment decisions about what to do and-more importantly-what not to do.  In order to execute the product learning cycle effectively, an “agile” competitor invests in specific areas that would harm a classic “low cost” or “differentiated” competitor, and chooses to not invest in areas that would typically support these strategic approaches. (we will address the question of when a company should prefer an agile strategy over a classic one in a future post)

Specifically, an agile competitor would:

  • Invest in the elements of the product learning cycle, (see fig 1 above) and deliberately over-build connections between product modules so they can handle a greater variety of configurations – which a low cost competitor would consider wasted investment
  • Deploy continuous process improvement efforts to eliminate sources of waste (particularly costs to change product) – which a differentiation competitor would not bother with

On the other hand, an agile competitor would not:

  • Invest in high-throughput production equipment or processes like a low cost competitor, since high throughput typically comes with higher changeover costs
  • Conduct extensive and lengthy consumer research for each new generation of product like a differentiation competitor, because this would actually slow down their ability to release frequent product generations that yield more concrete customer insight

In Maxwell’s case, they invest more in building relationships with strategic partners and their clients because these relationships represent a key channel for product improvement feedback. On the other hand, they consciously do not invest in lots of market research or focus groups because it is faster to just build the product and see how customers use it. Aligning the entire organization on the highest priorities for each subsequent product release still requires tremendous focus and effort. This remains the key area where Maxwell is refining its process and hiring more “product managers” to extract insight and refine work increments and prioritization. Finally, Maxwell releases a new iteration of its product each week, and after struggling with the time it takes to test, package, and distribute each new iteration of quality product they decided they need to invest more in testing automation to reduce the “cost to make change” inherent in their current product release process.


Many of the healthcare executives Recon speaks with worry about how they will adapt to increasing consumerization in healthcare and keep up with the accelerating rate of industry change.  For at least some, these concerns may signal the need to adopt an agile product/service strategy for all or part of their organization.  In that case, it is some comfort to know that companies like Maxwell have been able to turn the traditionally onerous imperative of change into a source of sustainable strategic advantage.

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