BIOPHARMASome case studies in how to grow and still nurture a corporate culture open to new ideas
By Nina Wachsman, President and Founder, Augur Health LLC and
Gerald Mosely, PhD, Founder and Principal, CP&P Development Group
Biopharma companies are founded on ideas and innovative thinking—often started by a group of scientists or entrepreneurs with a common purpose and vision. As a small organization starting up with a new molecule or a new technology, there are less resources available and only the bare minimum of functional capabilities. Thinking out of the box is often a necessity to accomplish all that needs to be done in order to take the innovative ideas and make them a reality.
As a company grows, products and capabilities are added, and there is a need to scale up people, processes and structure. This transition raises the risk of losing sight of the founding vision and spirit. A lack of clarity and direction, increased dysfunction and general organizational malaise are potential consequences of this bureaucratic transformation.
“Innovation has always been one of our values. It was obvious in the beginning. As you grow you may lose the sense of purpose you had in start-up mode. You have to build the company, get the drug throughFDA, face competitors,and satisfy multiple stakeholders.Things get more complicated, and you can get more mired in the day-to-day.”
Bill Fairey, President, Actelion Pharmaceuticals US
Many companies try to “import” innovative thinking by bringing in consultants, experts, and agencies or looking to outside companies to help them with their efforts.
In 2000, Target was just another discount retailer when they approached their ad agency, Kirshenbaum & Bond, to help them build an image as an upscale, trendy retailer to a target urbane audience that was not aware of or did not even think of Target as fashionable. Target was willing to make the commitment to a totally new way of doing business, and approached Kirshenbaum and Bond, which was renowned for its innovative and sometimes brash thinking that radically changed business for its clients. Jon Bond, agency leader, had a number of other clients, fashion designers like Isaac Mizrahi, who were looking for funding. Kirshenbaum and Bond put the two together, introducing high fashion names to a discount retailer, which gave Target a sustainable positioning and business that is still viable today.
Today, Bond, now founder and leader of TomorroLLC, a virtual holding company that operates as a consultancy, gave this perspective on what often happens when companies bring in outside “innovators like his company: “Nothing– the underlying reward structure doesn’t support innovation in most companies. So you end up being just a shiny object.”
What does this have to do with biopharma, and why should a biopharma company care about restoring the spirit of innovation? There are different reasons for a company to support efforts to restart innovative thinking and support their development into new products or services. Many companies feel that building innovative thinking is a necessity, and will help keep the company competitive, while others feel it is a part of its core values and a means to attract and retain the best talent.
SOME SCENARIOS WHERE INNOVATIVE THINKING WOULD BE NEEDED:
• The market landscape has changed: your company is faced with new and increased competition, regulatory constraints or technological advances that present challenges to the core business or to the commercialization of products in development
• The company’s business changes, which would merit a reevaluation of priorities and how the organization will work. Through business development or acquisitions, a company may transition from a one-molecule or one-disease-state company to a multi-product or multi-disease category entity. Or simply through the process of product development, a company may change from an early stage company to a company with product in phase III or ready to launch
• A company’s leadership has changed (due to mergers, turnover, or retirement of founders or other key individuals), resulting in a change of the vision, direction, culture and operating principles. This can leave uncertainty about how the new organization will function and can potentially increase fear of being open with new ideas, or challenging the status quo
“While promotion may win quarters, innovation wins decades.” former P&G CEO Bob McDonald, as quoted in Harvard Business Review, June, 2011.
TO WHAT EXTENT ARE LEADING BIOPHARMA COMPANIES COMMITTING TO INNOVATIVE THINKING?
We conducted a small survey among 17 pharma managers, (with 13 respondents) from multiple biopharma companies in functions including marketing, regulatory, medical and clinical development. We found that despite the biopharma companies’ indication that they are interested in promoting innovative thinking, most have not made strong organizational commitments –such as resources, channels, and official rewards and recognition programs for innovative thinking.
HOW CAN BIOPHARMA COMPANIES CONTINUE TO SUPPORT INNOVATIVE THINKING?
They can start by asking three questions:
1. How are we thinking differently?
Individuals across all functions, from the bench to product marketing, should take the time to look at their business from a different perspective or vantage point. This could encourage them to offer alternative solutions, and challenge the status quo, which can be essential to meet challenges such as a failed trial or a new competitor.
An oft-cited case study of thinking differently is the development of Allegra, fexofenadine. Fexofenadine was the active metabolite of terfenadine, marketed by Hoechst Marion Roussel as Seldane, the first non-sedating antihistamine. After facing a crisis due to the bioactivation of terfenadine, which worked quickly to form fexofenadine but caused adverse cardiovascular effects in vivo, scientists at HMR realized that fexofenadine could be marketed as a drug in its own right. The substance was brought to the market as Allegra in 1996, the year before Seldane was pulled from shelves.
In order for “thinking differently” to happen, management must convey that there is opportunity for innovative thinking and new ideas to be brought to the table. Consider what happens to someone who brings new thinking or innovative ideas to the company: are they rewarded or thwarted? Is “thoughtful risk taking” encouraged and supported across the organization for key learnings brought to the organization without the fear of consequences of failure?
Two important considerations for thinking differently:
• What channel exists for individuals to bring to new ideas and new thinking about in the organization, or its products to the table for consideration?
• Are people able to carve out time from their day-to-day responsibilities in order to think differently and be innovative?
2. How we are collaborating?
How can new ideas or innovation be implemented to make a difference in the company’s productivity if the innovation is not embraced by all the functions that would be necessary to make it happen? Even if new ideas and new thinking are encouraged, is it likely that a new idea can come to fruition if there isn’t a collaborative effort across functional teams? A company needs to consider whether there is an appreciation and an adequate understanding of the roles and contributions of one functional area to the other in order to bring a new idea to reality. What level of trust exists between functional groups? Has the organization defined or enabled the development of common goals, rewards, and consequences? If part of bringing a new idea to fruition involves external partners and alliances, has the organization established shared goals, rewards and consequences with them?
At SmithKline Beecham Pharmaceuticals in the mid-90’s, a new high dose formulation of amoxicillin-clavulanic acid was developed in response to increasing global rates of Streptococcus pneumonia to beta-lactate antibiotics. A well-coordinated, collaborative effort and the cross-functional commitment of resources from marketing, medical, R&D and regulatory functions, as well as the input of external infectious disease experts, generated an option to address a rising global concern. In addition to this contribution, the potential consequence of declining product usage was addressed.
3. How are we operating?
Executing on ideas or innovative thinking will require translating them into collaborative and rigorous operating plans. Just like any other effort in the organization, there should be a systematic way to measure and track actions as well as communicate progress. If you don’t have a plan of execution, the idea will remain an idea and never become a project or a product. A reward or recognition system that considers innovation as a measure of leadership or achievement in the organization can help to make innovative thinking and planning a priority rather than an afterthought.
In an effort to make innovative thinking part of the organization, companies may recognize that they need to consider more than functional skills when hiring. In fact, the organization may want to assess whether they have the right people—people with the right values, goals and motivation to think differently, and the ability to collaborative to bring innovative ideas to fruition.
Alexion, number 3 in Forbes’ ranking of 2015 of the World’s Most Innovative Companies, describes its corporate culture, and the people it is looking to hire: “We’re looking for people to join our team who challenge conventional thinking, collaborate to solve complex problems, pursue new challenges and are willing to be held accountable to the patients they serve.”
TERMS OF INNOVATION
Radical innovation: An idea so different that it becomes market changing or shaping. Radical innovation creates an entirely new business, something new to the world, or a departure from existing process, status, or a disruptive technology.
Incremental innovation: leverages existing capabilities and improves or reconfigures something that already exists. Incremental innovation can deliver significant, measurable results, and is often targeted to specific needs or areas of growth.
—According to Harvard Business Essentials (2003)
Disruptive Innovation (2006): A term coined by Clayton Christensen; describes a process by which a product or service takes root initially in simple applications at the bottom of a market and then relentlessly moves up market, eventually displacing established competitors.
If a company wants to support or champion “innovation,” whether radical or incremental, there needs to be a commitment to resources, as well as a defined plan and process to channel ideas into innovative products or projects. As Actelion Pharmaceuticals found, with the commitment to and an investment in resources, there must also be an investment in time. It takes time to build the trust, the collaboration, the training and the processes that will allow s innovative thinking to flourish.
Nina Wachsman President and Founder Augur Health LLC
Prior to founding Augur Health over 10 years ago, Nina managed business units at some of the largest advertising agencies, such as Interpublic Group (IPG) and Grey Healthcare group. Nina’s experience goes across therapeutic categories from oncology to pulmonary arterial hypertension, and her expertise ranges from market research, patient marketing strategy and analytics to KOL engagement and digital marketing. Nina began her career as a creative director working on P&G’s flagship brands Pampers and Crest.
Augur Health is a healthcare agency that specializes in innovative marketing solutions across a wide range of therapeutic categories and audiences—from HCPs to patients. Along with its subsidiary, Augur Digital Media , with a full staff of developers and digital designers, Augur Health brings innovative marketing strategy together with digital expertise to achieve business goals in today’s digital environment.
Gerald Mosely,PhD Founder and Principal CP&P Development Group
With over 20 years in the pharmaceutical industry, Gerald has held a variety of roles including sales, marketing, medical science liaison and country management across multiple therapeutic areas with GlaxoSmithkline. As a General Manager for Baxter Global Anesthesia & Critical Care, he led the commercial and technical/scientific teams as well as cross functional-matrix teams globally. Gerald has led multiple initiatives involving organizational design, involving structure, standards and strategy, as well as multiple product launches in different international markets.
CP&P Development Group is a leadership development and strategy practice that assists corporate leaders and teams achieve their business objectives, with a primary focus on the people oriented leadership components impacting organizational health.