On Innovation Part Ii Fostering Innovation

Thinking about Life Sciences: On Innovation Part II: Fostering Innovation ...

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Thinking about Life Sciences http://blog.aesisgroup.com Tuesday, October 02, 2007 On Innovation Part II: Fostering Innovation In this second part of a three-part series on innovation, we discuss the key elements involved in fostering innovation. The third part will focus more on accelerating development. The previous installment of this series explored three basic points: 1. Innovation is different from invention 2. Innovation is the realization of invention 3. Innovation often results from a combination of inventions In this regard, fostering invention – which is often done in places like basement university labs and garages – involves creating an environment of relatively unbridled freedom. To some extent relative isolation from the exigencies of the real world (and hence influence from conventional paradigms) is also beneficial. Ironically – as the phrase “necessity is the mother of invention” would indicate – globs of money are not required, and can actually inhibit, the process of invention. Because innovation involves the integration of multiple inventions and interdisciplinary combinations the factors involved in fostering innovation are quite different and in some ways almost opposite those that stimulate invention. Obviously this is a complex topic, but here are a few high points. Invention needs to be left free; innovation needs to be managed It has often been said that invention abhors management and to some extent this is true. However, because innovation is intrinsically an interdisciplinary process, this is something that needs to be managed. There must be management (or something euphemistically similar to that) which needs to bring together different disciplines coherently and effectively. Of course, innovation management itself needs to think innovatively – namely to think broadly about what pieces need to be brought together and to conceive of the unusual combinations that make products successful. The development of the drug-eluting stent at button-downed Johnson & Johnson, for example, is a case in point. Much of the role of management was actually involved in crossing the cultural barriers between the pharmaceutical and device sides of the company and in moving past administrative hurdles in order to make that project successful. The process of bringing in innovative process also needs to be managed. Whether this is done in-house (as in the J+J example) or, via external partnerships (with the IBM PC project in the early 80’s) all this requires management. Invention is often isolated; innovation is connected Invention often proceeds in isolation from the outside world. In fact, it can be argued that being influenced by conventional paradigms is a disadvantage for those seeking invention. Einstein was one of the most inventive physicists in history and he developed his most revolutionary ideas away from the leading academic centers of the time. In fact, while he chafed at being “banished” to oblivion as a lowly patent clerk, it may very well have been as a result of being in such academic purgatory that he was able to come up with special relativity, the quantum mechanical explanation of the photoelectric effect and the description of Brownian motion in terms of atomic theory in one miracle year.

11/17/2008 12:34 AM

Thinking about Life Sciences: On Innovation Part II: Fostering Innovation ...

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Innovation, however, requires almost the exact opposite. In order for inventions to make sense in the market and to be commercially viable, they need to be connected to reality. This is often the fallacy of corporate programs that aim to foster innovation in that by confusing invention with innovation they produce products that are recognized in their closed circles as being “brilliant” but nevertheless fail miserably in the market. This holds true for all manner of invention – including, for example, software development. To some extent, this phenomenon – among other factors of course – was an underlying reason for the dot-com bust. Software engineers were so enamored with their creations that apart from a disconnect with basic business principles there also lacked an appreciation for what worked with the market and consumers. Innovation, therefore, requires the innovation management team to be highly attuned to the needs of the market and indeed, society more generally. Whether it be through attending conferences (especially those outside their field), customer focus groups, tapping into one’s diverse contacts, exposure to the media, etc. – all of these are elements of fostering innovation. To this extent then, the notion of being connected to the outside world, leads to the importance of marketing in fostering innovation … Marketing: For invention product is key; for innovation product, placement, and promotion all need to be brought together The classic 4P’s of marketing are product, placement, promotion and price. G. Pascal Zachary recently published a great article “The Unsung Heroes Who Move Products Forward” in the New York Times just this past week highlighting the importance of process innovations which complement and enable the inventive products they are built around. At first blush, the iPhone from Apple, the new microprocessor family from Intel and the ubiquitous Google search engine have nothing in common. One is a gadget, one is an electronic part and one is a service. Yet all of these products — much acclaimed for their creativity — depend on obscure process innovations that, while highly complex and lacking glamour, are an essential part of establishing a winning edge in commercial electronics. Indeed, the success of Apple, Intel, Google and scores of other technology companies has as much or more to do with their process innovations as the products that inspire loyalty among fans and admiration from foes. This is so true. The iPod for example, was to some extent, as an MP3 player a fairly unimaginative product. MP3 players had been around for quite a while so what was innovative about the iPod was primarily it’s user friendly design features and, very importantly, the development of the iTunes service (think placement and promotion) which enabled customers to actually use their iPods. Fostering innovation, therefore, requires full engagement with marketing – not in the banal sense of advertising – but in terms of fundamentally reshaping or adapting the underlying inventive “product” into a package that truly meets the need of the market. This example, then, highlights the importance of innovation as a process which must be engaged with the outside world and one which the various disparate parts must be managed in order to be brought together productively. Some of this may seem common-sense. And, indeed, that’s a good thing because ultimately innovation – if it is indeed the commercial realization of invention – must, however, revolutionary the underlying invention may be, make sense. Ogan Gurel, MD MPhil [email protected] http://blog.aesisgroup.com/

11/17/2008 12:34 AM