Pharmaceutical Executive Europe - January 2008 - (Page 16) 16 Corporate Strategy January 2008 Pharmaceutical Executive Europe ● Separate innovation from its parents. Understand that innovation is not the same as creativity and is about the application, not the creation, of knowledge. Many firms try to manage innovation when they need to manage creativity and vice versa. ● Know what kind of value you are looking for. Understand where in the value chain you are trying to innovate and whether you seek radical or incremental innovation. Many firms miss opportunities to create value by equating innovation with radical technical change when incremental business process change would create better outcomes. ● Characterise the innovation you are trying to manage. Understand what risks are inherent in your innovation and how they might be managed by spreading, delaying or ‘chopping up.’ Many firms see innovation management as a technical challenge when it is in fact a risk management problem. ● Use the right model. Understand that there is no single best way to manage innovation, only a best way in a particular case. Many firms live in hope of a panacea model when they should be seeking a contingency approach to managing each innovation. These fundamentals of innovation cannot, of course, make it a riskfree undertaking. They can, however, reduce the risk inherent in innovation such that they are justified by the returns and the innovation creates value. It is that line that separates successful and unsuccessful innovation. About the Author Dr Brian D. Smith is an author, researcher and consultant in the field of pharmaceutical marketing strategy. A research fellow at the Open University Business School (Europe’s largest business school), Dr Smith consults widely with global pharma companies and is the author of almost 100 books, papers and articles on the subject, which can be downloaded at www.pragmedic.com. He welcomes comments on brian.smith@pragmedic.com. Table 1 Six approaches to innovation. Innovation model Incrementalism Mechanism Works by ‘chopping up’ risk into manageable pieces. Advantage Requires innovations that can deliver benefits in stages. Removes cultural barriers. Disadvantage Doesn’t cope with market complexity or turbulence, which disable comparisons and learning across cases. Creates diseconomies of scale and reduces synergies within the organisation. Usually requires additional business streams to provide funds and spread overall risk. Can be expensive, bureaucratic and slow until more is known. Not viable if the innovation needs large, indivisible, start up investment. Works only when value can by captured in non-IPR way (e.g. branding or distribution strength). ‘Skunk works’ Works by detaching innovation from host organisation culture. Works by accepting large risks. Works by delaying risk. Works by limiting investment and enabling learning to reduce risk. Works by spreading risk amongst several investors. ‘Big hairy audacious goal’ Galvanises organisation and enables strong leadership. Manages complexity well by sub-dividing risk. Requires scaleable innovation that can be introduced step-wise. Requires innovation that can be dispersed easily across multiple organisations. Stage-gate Piloting Open models http://www.pragmedic.com
Table of Contents Feed for the Digital Edition of Pharmaceutical Executive Europe - January 2008 Pharmaceutical Executive Europe - January 2008 Contents From the Editor News and Analysis Calendar Corporate Strategy: Walking the Line Executive Profile: The Pharmacist’s Friend Q&A: An End to Drug Counterfeiting Healthcare Cost Assessment: Ready to Make NICE? Pricing and Reimbursement: Through the Reimbursement Barriers Generics: India Inc. The Mix: New Models of Excellence Last Word: Mid-size Matters Pharmaceutical Executive Europe - January 2008 Pharmaceutical Executive Europe - January 2008 - Pharmaceutical Executive Europe - January 2008 (Page 1) Pharmaceutical Executive Europe - January 2008 - Pharmaceutical Executive Europe - January 2008 (Page 2) Pharmaceutical Executive Europe - January 2008 - Contents (Page 3) Pharmaceutical Executive Europe - January 2008 - From the Editor (Page 4) Pharmaceutical Executive Europe - January 2008 - From the Editor (Page 5) Pharmaceutical Executive Europe - January 2008 - News and Analysis (Page 6) Pharmaceutical Executive Europe - January 2008 - News and Analysis (Page 7) Pharmaceutical Executive Europe - January 2008 - News and Analysis (Page 8) Pharmaceutical Executive Europe - January 2008 - News and Analysis (Page 9) Pharmaceutical Executive Europe - January 2008 - News and Analysis (Page 10) Pharmaceutical Executive Europe - January 2008 - News and Analysis (Page 11) Pharmaceutical Executive Europe - January 2008 - Calendar (Page 12) Pharmaceutical Executive Europe - January 2008 - Calendar (Page 13) Pharmaceutical Executive Europe - January 2008 - Corporate Strategy: Walking the Line (Page 14) Pharmaceutical Executive Europe - January 2008 - Corporate Strategy: Walking the Line (Page 15) Pharmaceutical Executive Europe - January 2008 - Corporate Strategy: Walking the Line (Page 16) Pharmaceutical Executive Europe - January 2008 - Corporate Strategy: Walking the Line (Page 17) Pharmaceutical Executive Europe - January 2008 - Executive Profile: The Pharmacist’s Friend (Page 18) Pharmaceutical Executive Europe - January 2008 - Executive Profile: The Pharmacist’s Friend (Page 19) Pharmaceutical Executive Europe - January 2008 - Q&A: An End to Drug Counterfeiting (Page 20) Pharmaceutical Executive Europe - January 2008 - Q&A: An End to Drug Counterfeiting (Page 21) Pharmaceutical Executive Europe - January 2008 - Healthcare Cost Assessment: Ready to Make NICE? (Page 22) Pharmaceutical Executive Europe - January 2008 - Healthcare Cost Assessment: Ready to Make NICE? (Page 23) Pharmaceutical Executive Europe - January 2008 - Healthcare Cost Assessment: Ready to Make NICE? (Page 24) Pharmaceutical Executive Europe - January 2008 - Pricing and Reimbursement: Through the Reimbursement Barriers (Page 25) Pharmaceutical Executive Europe - January 2008 - Pricing and Reimbursement: Through the Reimbursement Barriers (Page 26) Pharmaceutical Executive Europe - January 2008 - Pricing and Reimbursement: Through the Reimbursement Barriers (Page 27) Pharmaceutical Executive Europe - January 2008 - Generics: India Inc. (Page 28) Pharmaceutical Executive Europe - January 2008 - Generics: India Inc. (Page 29) Pharmaceutical Executive Europe - January 2008 - Generics: India Inc. (Page 30) Pharmaceutical Executive Europe - January 2008 - The Mix: New Models of Excellence (Page 31) Pharmaceutical Executive Europe - January 2008 - The Mix: New Models of Excellence (Page 32) Pharmaceutical Executive Europe - January 2008 - The Mix: New Models of Excellence (Page 33) Pharmaceutical Executive Europe - January 2008 - The Mix: New Models of Excellence (Page 34) Pharmaceutical Executive Europe - January 2008 - Last Word: Mid-size Matters (Page 35)
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