gddif 2010 managing innovation in pharma sundgren

Towards a new logic for Towards a new logic for managing innovation inmanaging innovation inmanaging innovation inmanaging innovation in

pharmaceutical R&Dpharmaceutical R&DGlobal Discovery & Development Innovation Forum

March 8-9, 2010, Edinburgh

Mats SundgrenMats SundgrenGlobal Clinical Development AstraZenecaGlobal Clinical Development, AstraZeneca

OutlineOutline

1. Reflections from the golden years in life1. Reflections from the golden years in life science innovation • Today's problem statement

2 The (forgotten) precursor of innovation2. The (forgotten) precursor of innovation –organizational creativity in pharmaceutical R&D• Examples of some past cases and current drivers in life science

3. A new model to manage innovation in gpharma? • Destabilize for innovation, implications and demands of leadership and organizationp g

4. Examples of on-going initiatives from AstraZeneca

Mats Sundgren | Global Discovery and Development Innovation Forum 2010 | 8-9 March, Edinburgh 2

Setting the sceneSetting the scene

• The golden age of the industry is gone

The world is full of ideas and the pharmaceutical industry has seen its fair share

• The golden age of the industry is gone• Between 1950 -1980 offered large R&D opportunities

and unmet medical needs for the industry• Science based innovation driven where serendipity• Science based innovation driven where serendipity

played a key role

• The last 20 years, the industry has undergone radical transformation and consolidationradical transformation and consolidation

• Some recurrent issues of today• Managing increased R&D cost and complexityManaging increased R&D cost and complexity• Strategic dissonance, operating metrics clash over

innovation priorities and resources• Rigid business systems focusing on standardization cost• Rigid business systems focusing on standardization, cost

& risk reduction• Obsolete research model and R&D organisational

design


design

Lessons from 60 years of pharmaceutical innovation

Conclusions

Munos B. Nature Review Drug Discovery 2009;8 (Dec):959-68

Mats Sundgren | Global Discovery and Development Innovation Forum 2010 | 8-9 March, Edinburgh

IssuesIssues

What makes a pharma company successful?p y

How can a company secure a strategy to become more innovativestrategy to become more innovative without losing effectiveness?


The precursor of innovation Examples of some past cases and current drivers in life

science

Why is organizational creativity important?Why is organizational creativity important?

• An innovation in the pharma industry is a product recognised after l h

Organisational creativity is what preceeds innovation

launch• Need at every level of the business to build, secure and reap rewards of

innovation• Involves process, infrastructure, organization, leadership, business model etc.

CommercializationCommercialization

R&D Innovation

Realization


Organisational creativity

Two views of creativityTwo views of creativity

Alternative viewAlternative viewMainstream viewMainstream view

Distributed & collectiveIndividual-centered

Creativity as a continuous and connective event

Creativity as discrete delimiting events

Creativity can be managed & leadership

Creativity is outside managed & leadership

plays an intrinsic rolecontrol


Systems view of creativitySystems view of creativityAft C ik t ih l i’ DIFI (D i I di id l Fi ld I t ti ) M d l

CultureSymbol system

CultureSymbol system

After Csikszentmihalyi’s DIFI (Domain Individual Field Interaction) Model

Domains ranging to football teams, music, science disciplines to organisations

H it i t l ‘ i k l d ’ l iy y

DomainDomain

y y

Domain

Has its own internal ‘given knowledge’, logic, rules, pattern of development, etc.

DomainDomainDomain

SelectsNovelty

SelectsNovelty

TransmitsInformation

TransmitsInformation

Field

Organisationalcreativity

Field IndividualIndividualsIndividual or the group that produces the novelty in a domain

Social organizationStimulates

NoveltySocial organisationStimulates

NoveltyGeneric pool of Generic pool of

Must respond to this logic

Social organizationof Domain

NoveltySocial organisationof a Domain

Novelty personal experiencespersonal experiences

Gatekeepers, managers, experts, peers stakeholders, etc.


Decide what is creative or not

Systems view of creativity in AZ contextSystems view of creativity in AZ context

• Research study in AZ (2001)

• Explored projects in former ICI and Astra from an organisational creativity perspective

• Where creativity can be seen as an emergent property within two companyemergent property within two company cultures that is shaped by multiple forces, including – but not limited to – contributions

f th i di id lof the individual

• Focused on seven projects within the two• Focused on seven projects within the two companies during 1975 – 1985


Systems Systems viewview of of creativitycreativity in AZ in AZ contextcontext (7 (7 projectsprojects 19751975--85)85)

Key aspects:Flexibility, core competence &

endurance

Key aspects:Flexibility, core competence &

endurance

DomainDomain(At company level)

Hässle & ICI, AlderlyTransmitsInformation

SelectsNovelty

Individuals& Teams

OrganisationalcreativityField & Teams

(communities ofpractice)

Stimulates

(Line & Projectorganisation)

Key aspects:Scientific champions, pathfinders & intrinsic

motivation

Key aspects:Scientific champions, pathfinders & intrinsic

motivation

Key aspects:Swift decisions, idle time

& open climate

Key aspects:Swift decisions, idle time

& open climate

NoveltyStimulates

Mats Sundgren | Global Discovery and Development Innovation Forum 2010 | 8-9 March, Edinburgh 11Ref. Sundgren, M. & Styhre, A. (2003) Creativity a volatile key of success: Creativity in new drug development, Creativity and Innovation Management, 12 (3): 145-161.

motivationmotivation

6 Drivers of organisational 6 Drivers of organisational creativitycreativitycreativitycreativity

Based on AZ research

# 1# 1 Balance intrinsic & extrinsic motivationBalance intrinsic & extrinsic motivation

The intrinsic motivation principle of creativity suggests that people will be most creative when they are primarily intrinsically motivated

• It is the engagement to work/science because it is interesting involving exciting

motivated

because it is interesting, involving, exciting, satisfying, or personally challenging without obvious external incentives

• Need to secure the balance since there is a risk of only being concerned by extrinsic motivationmotivation• E.g. the traditional way of evaluating & rewarding

• Crucial driver of organisational creativity & science progress• Or as Robert Sternberg put it “creativity may not only

require motivation, but also generate it ”


# 2# 2 Promote informal networksPromote informal networks

One important answer of the question where is creativity

• Interaction, communication, social contacts, and information exchanges that occur outside an employee’s ordinary line and project organisation• Answers partly the question were is P ti f ti ti iAnswers partly the question were is

creativity• Important translators in different

interfaces of knowledge

61 59

40

50

60

70

scor

e %

Perception of creative action in Networks vs.

Project meetings

interfaces of knowledge• Get ideas rolling between projects and

different functions

2926

0

10

20

30

40

Sat

isfa

ctio

n

• Alternative arena for communicating ideas

• Is primarily driven by intrinsic motivation

Networks Project meetings

IM&KM Survey in AZ R&D (N= 504 & 975)2004 (Mean, N=504) 2007 (Mean, N=975)


p y y

# 3 # 3 Enhance information sharingEnhance information sharing

d l t f i f ti d

A successful transfer of corporate knowledge is the backbone of organisational creativity• Today, a large amount of information and

knowledge sharing reside in silos - the very fuel for creativity is that individuals, groups, y , g p ,projects have access to maximum information

f i i i i• To enable new modes of thinking and association patterns by reusing the organisation’s entire information capital

• Often the “logistics of information” including ownership, values and political aspects poses a real problem of information sharing

• Important link to informal networks


# 4 # 4 Exploit intuition as an organisational resourceExploit intuition as an organisational resource

What defies the day-to-day vocabulary is referred to as intuition; radical thinking

• Broad competence together with extensive experience

• Ability to apply scientific knowledge and to see• Ability to apply scientific knowledge and to see consequences of various experiments before formal proof is acquired

• Play an intrinsic part of the creative process in drug developmentWhil i t iti i t bl f t bli hi it lf• While intuition is not capable of establishing itself as a legitimate resource in organisations because of its place outside of language and knowledge p g g gtransfer


# 4 # 4 Exploit intuition as an organisational resourceExploit intuition as an organisational resource

“Yes, especially on the discovery side, it is like walking in a labyrinth, you face many decision points and the thing is not to jump in the

di ti t tiwrong direction too many times.

The first thing you need is luck, and then it is the other, what people call intuition … And then there is the question: what is intuition?

Intuition is probably just that, of having a very incomplete, a very p y j g y p yfragmentary basis and of being able, despite only having fragments, to see a pattern that leads your decision in a certain direction”direction”

(Arvid Carlsson, Nobel laureate in medicine)


# 5# 5 Secure political entreprenurship Secure political entreprenurship

The creative process in organisations requires understanding, patience, and an awareness of organisational politics

• Political entrepreneurship is not aimed at gaining individual power, • but it requires the ability to operate in an organisation combining• but it requires the ability to operate in an organisation, combining

skills with enabling activities such as intervention in political processes

• On a practical level political entrepreneurship may involve:• Managing political relationships for ensuring the legitimacy of new

ideas • Increasing the possibility to get a fair evaluation of creative ideas

Skill i ti l i d b i bl f d ti h /hi• Skills in rational persuasion and being capable of advocating her/his ideas within a field of competing choices and objectives characterised by scarce resources

• Enhancing the creative output


g p

# 6# 6 Enhance leadership capabilitiesEnhance leadership capabilities

Control comes from the Latin “contra rotulus”, which means against what is rolling; one has to understand that if R&D is to develop new ideas and solutions and get them rolling

• Need to revise & adapt traditional management training for R&D environment to include

ideas and solutions and get them rolling

gunderstanding of organisational creativity dynamics

• Leadership training for organisational creativity• Leadership training for organisational creativity deals with:• Promoting a balance between intrinsic and extrinsic motivation

Understanding the dynamics between daily operations and• Understanding the dynamics between daily operations and innovation

• Understanding and seeking possibilities, handle ambiguities and paradoxes,

• Ability to generate discussions and concrete action to support organisational creativity

• Ability to engage & inspire


Destabilise for a more innovative company?company?

New governance model for innovation

StabilisersStabilisers

• Stabilisers are needed in all organisations to ensure uniformity, reliability, and predictabilityy, y, p y

• Stabilisers can be seen as established fixed repertoires of behaviour programes over time, and many grow too rigid and insensitive to environmental changesenvironmental changes• Reduces slack; reduces the opportunity to make unplanned

activities • Filter away conflicts ambiguities overlaps and uncertainty;• Filter away conflicts, ambiguities, overlaps, and uncertainty; • They suppress many relevant change signals; and kill initiatives to

act on early warnings


DestabilisersDestabilisers

• Destabilisers can be seen as an umbrella term of activities, factors, phenomena that in different ways p ychallenge the conventional way of doing things in an organisation

• Destabilisers are dynamic, and catalysts for change, organisational structure, behavior, abilities, or technologies etctechnologies etc.

• Represent new practices & radical thinking,p p g

• To see the destabilisation as chaos is misleading, • what is needed is to create space and support for

activities that stimulate creative action


Organisational creativity Organisational creativity – a syntethes of both dimensions

Destabilisers(d i di t bl )

Stabilisers( t ti di t bl ) (dynamic, unpredictable)

Radical change

(static, predictable)

Contious, stepwise change


Ref. Sundgren, M. & Styhre, A. (2005) Managing Creativity in Organizations (Palgrave)

One IllustrationOne Illustration


Implications for leadershipImplications for leadership

• Balance between stabilisation & destabilisation is achieved through effective communication and dialogue on the vision & objectives

• Become more open to innovation change and swiftly• Become more open to innovation, change and swiftly contribute to the revision of the governance mechanisms

• Capacity to support both polarities & create dynamic balance between the two dimensions

• Requires a leadership that is characterised by:• understanding of business & science, • understanding of organisational creativity & innovation,• engagement & courage,• nurture intrinsic motivation


Manage the paradox?Manage the paradox?

• Cost efficiency, lean processes and control are necessary, y,• but on the other hand, they are also a threat to

innovation and change

• The real challenge is to create an organisation that can constantly "be on its toes“; in fullthat can constantly be on its toes ; in full readiness to innovate

• Managing organisational creativity is about being able to destabilise an organisation “in the right way” to make change possible and secureright way to make change possible and secure innovation


Some organisational typesSome organisational types

ilisi

ngD

esta

bD


Stabilising

The challenge of not becoming rigidThe challenge of not becoming rigid

• Organisational creativity must continuously be maintained & nurtured

• Daily management of organisations, consciously, or unconsciously, choose the lean option, namely to focus on short-term rationalisation• This may create too rigid bodies; in short it becomes “over y g

stabilised”

• Destabilisation is change dynamicsDestabilisation is change dynamics• Reflect on factors for stabilisation and destabilisation; what

it mean and what it does• The goal is NOT to “rock the boat” but to identify the right• The goal is NOT to rock the boat but to identify the right

path of activities• and be able to handle both dimensions at the same time


Translating the model into practicepractice

Examples of actions Examples of actions (i.e. destabilising the current ways of working)(i.e. destabilising the current ways of working)

• Put innovation on the agenda

Examples of low level deExamples of low level de--stabilisersstabilisers

Put innovation on the agenda• Engagement from the top to start a dialogue in the organisation • Create a shared language and understanding

• New leadership p• Introduce/revise understanding of innovation/creativity in leadership training

• Practices/Infrastructure• Improve information & knowledge sharing• Support networking• Identify appropriate de-stabilisers• Revising performance measures in the organisation (e.g. local alt. KPIs)

• Skills development• Skills development• Improve creative action skills in teams/individuals• Combine skills training with in context/@site problems• Secure time for regularly meetings, Think tanks settings, facilitators

fi• Evaluate benefits


Examples of actions Examples of actions (i.e. destabilising the business model)(i.e. destabilising the business model)

• Organisational design

Examples of high level deExamples of high level de--stabilisersstabilisers

• Reduce complexity • Simplify decision making

• Business model• Revise strategy, services & products (drugs &

device, managing health in partnerships)

• Revise R&D model• New models for bridging connections for

innovation and adaptation to open innovation

• CollaborationIPR l t d P i t P bli P t hi ith• IPR regulated Private Public Partnerships with precompetitive focus (e.g. IMI)

• Infrastructure, Skills & Technology• Technology in sourcing• Technology in-sourcing • Information interoperability & new approaches of

transparency in communicating and sharing information & data

• Redefining Knowledge Management


Redefining Knowledge Management

Examples of on-going initiatives from AstraZenecafrom AstraZeneca

The Innovation Project in AZ R&DThe Innovation Project in AZ R&D

• The project was initiated in 2009 to ensure that AZ R&D can rise to the challenge of fulfilling AstraZeneca’s core mission in the next years to come

• The project is running over 4 years (2009-2013) with a core project team of 15 persons representing all key areas in R&D

• Analysis from culture assessment in Discovery and Development, and interviews with stakeholders

• Developed framework for innovation and recommendations for change

• 2010 - starting to communicate and gimplement signature actions for supporting innovation in AZ R&D


Source: The Innovation Project in AZ R&D (2010)

Courageous innovationCourageous innovationinnovation . . .innovation . . .

What will it take?What will it take?. . . What will it take?. . . What will it take?

Mats Sundgren | Global Discovery and Development Innovation Forum 2010 | 8-9 March, EdinburghSource: The Innovation Project in AZ R&D (2010)

Opportunities of moving forward for change to embed a culture Opportunities of moving forward for change to embed a culture of “courageous innovation”of “courageous innovation”

Ri kAli d t i Risk taking

Aligned metrics and rewards

Inspiring leadership

Courageous conversation

Collaboration



Framework for Innovation in AZ

Behaviours and science that ignite the passion of our peoplepassion of our people

Liberate theLiberate thePotential

Empowered decisionTransformation

in value & innovation

decision making by people who know how to

Learning from experience to generate

Principlesnot Rules

LearningOrganisation

know how to deliver benefits to patients

gbusiness value


Source: The Innovation Project in R&D (2010)

We need to leverage our strengths and transform our We need to leverage our strengths and transform our cultureculture

Strengths to build on Focus for future culture growthStrengths to build on Focus for future culture growth

▪ Dedicated, passionate and loyal:P l itt d t AZ it

▪ Courageous leadership - Fostering l d h i i fid i th iPeople are committed to AZ, its success

and the purpose of finding medicines for patients

▪ Hard working and execution-

leaders who inspire confidence in their staff through trust, coaching andcontinuous development

▪ Innovation - Creating innovative ways focussed: People are driven to meet milestones

▪ Process-orientation: Processes have brought structure and discipline and

of working, being open to challenge and new ideas, with the knowledge that we are helping to treat diseases, more than simply discovering and developing brought structure and discipline and

productivity measures have increased▪ Science-driven: People are passionate

about science and rigorous in their work

medicines▪ Collaboration - Inspiring and

connecting people, who actively collaborate across traditional

▪ Caring for people: R&D is a good place to work with an emphasis on valuing people

collaborate across traditional boundaries to share knowledge and expertise to the benefit of our customers


Organisations, large or small, who strive for innovation - is like a FRENCH DRESSING,

they must be able to accommodate sweet and salt, t d il t th tiwater and oil; at the same time
