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Thinking about Life Sciences

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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 fosteringinnovation. 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 theexigencies 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, andcan 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 differentand 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 ma naged

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 bemanaged. There must be management (or something euphemistically similar to that) which needs tobring 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 andto 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 inpoint. 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 tomake 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 80s) all thisrequires management.

Invention is often isolated; innovation is connected

Invention often proceeds in isolation from the outside world. In fact, it can be argued that beinginfluenced 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 theleading 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 tocome up with special relativity, the quantum mechanical explanation of the photoelectric effect and thedescription of Brownian motion in terms of atomic theory in one miracle year.

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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 ofcorporate 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 failmiserably 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 underlyingreason 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 themarket and indeed, society more generally. Whether it be through attending conferences (especially those

outside their field), customer focus groups, tapping into ones 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 p roduct, placement, and promotion all need

to be brought together

The classic 4Ps 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 N ew York Times just

this past week highlighting the importance of process innovations which complement and enable theinventive products they are built around.

A t first blush, the iPhone from A pple, the new microprocessor family from Intel and the ubiquitous G oogle search

engine have nothing in common. O ne is a gadget, one is an electronic part and one is a service. Y et all of theseproducts much acclaimed for their creativity depend on obscure process innovations tha t, while highly

complex and lack ing glamour, are an essentia l pa rt of establishing a winning edge in commercial electronics.Indeed, the success of A pple, I ntel, G oogle 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 its 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 intoa 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 variousdisparate parts must be managed in order to be brought together productively.

Some of this may seem common-sense. And, indeed, thats a good thing because ultimately innovation if itis indeed the commercial realization of invention must, however, revolutionary the underlying invention

may be, make sense.

Ogan Gurel, MD MPhilgurel@aesisgroup.comhttp:/ / blog.aesisgroup.com/

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