Towards a new logic for Towards a new logic for managing innovation in managing innovation in managing innovation in managing innovation in pharmaceutical R&D pharmaceutical R&D Global Discovery & Development Innovation Forum March 8-9, 2010, Edinburgh Mats Sundgren Mats Sundgren Global Clinical Development AstraZeneca Global Clinical Development, AstraZeneca
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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
Mats Sundgren | Global Discovery and Development Innovation Forum 2010 | 8-9 March, Edinburgh 3
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?
Mats Sundgren | Global Discovery and Development Innovation Forum 2010 | 8-9 March, Edinburgh 5
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
Mats Sundgren | Global Discovery and Development Innovation Forum 2010 | 8-9 March, Edinburgh 7
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
Mats Sundgren | Global Discovery and Development Innovation Forum 2010 | 8-9 March, Edinburgh 8
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.
Mats Sundgren | Global Discovery and Development Innovation Forum 2010 | 8-9 March, Edinburgh 9
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
Mats Sundgren | Global Discovery and Development Innovation Forum 2010 | 8-9 March, Edinburgh 10
Systems Systems viewview of of creativitycreativity in AZ in AZ contextcontext (7 (7 projectsprojects 19751975--85)85)
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
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 ”
Mats Sundgren | Global Discovery and Development Innovation Forum 2010 | 8-9 March, Edinburgh 13
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)
Mats Sundgren | Global Discovery and Development Innovation Forum 2010 | 8-9 March, Edinburgh 14
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
Mats Sundgren | Global Discovery and Development Innovation Forum 2010 | 8-9 March, Edinburgh 15
# 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
Mats Sundgren | Global Discovery and Development Innovation Forum 2010 | 8-9 March, Edinburgh 16
# 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)
Mats Sundgren | Global Discovery and Development Innovation Forum 2010 | 8-9 March, Edinburgh 17
# 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
Mats Sundgren | Global Discovery and Development Innovation Forum 2010 | 8-9 March, Edinburgh 18
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
Mats Sundgren | Global Discovery and Development Innovation Forum 2010 | 8-9 March, Edinburgh 19
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
Mats Sundgren | Global Discovery and Development Innovation Forum 2010 | 8-9 March, Edinburgh 21
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
Mats Sundgren | Global Discovery and Development Innovation Forum 2010 | 8-9 March, Edinburgh 22
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
Mats Sundgren | Global Discovery and Development Innovation Forum 2010 | 8-9 March, Edinburgh 23
Ref. Sundgren, M. & Styhre, A. (2005) Managing Creativity in Organizations (Palgrave)
One IllustrationOne Illustration
Mats Sundgren | Global Discovery and Development Innovation Forum 2010 | 8-9 March, Edinburgh 24
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
Mats Sundgren | Global Discovery and Development Innovation Forum 2010 | 8-9 March, Edinburgh 25
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
Mats Sundgren | Global Discovery and Development Innovation Forum 2010 | 8-9 March, Edinburgh 26
Some organisational typesSome organisational types
ilisi
ngD
esta
bD
Mats Sundgren | Global Discovery and Development Innovation Forum 2010 | 8-9 March, Edinburgh 27
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
Mats Sundgren | Global Discovery and Development Innovation Forum 2010 | 8-9 March, Edinburgh 28
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
Mats Sundgren | Global Discovery and Development Innovation Forum 2010 | 8-9 March, Edinburgh 30
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
Mats Sundgren | Global Discovery and Development Innovation Forum 2010 | 8-9 March, Edinburgh 31
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
Mats Sundgren | Global Discovery and Development Innovation Forum 2010 | 8-9 March, Edinburgh 33
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
Mats Sundgren | Global Discovery and Development Innovation Forum 2010 | 8-9 March, Edinburgh
Source: The Innovation Project in AZ R&D (2010)
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
Mats Sundgren | Global Discovery and Development Innovation Forum 2010 | 8-9 March, Edinburgh
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
Source: The Innovation Project in AZ R&D (2010)
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
Mats Sundgren | Global Discovery and Development Innovation Forum 2010 | 8-9 March, Edinburgh 38