Walk the campus of any life sciences company and there’s one word you’re almost guaranteed to find displayed in a prominent location. Whether boldly painted down the corridor, stuck to the wall of a team room in three-foot vinyl clings, or hanging on a banner in the cafeteria, the word “innovation” has become something of a magic talisman that offers hope against aging pipelines and lagging sales. If only it were so easy…
In reality, innovation is a process, and some commercial teams have spent considerably more time painting walls and hanging banners than they have on the hard work of establishing and maintaining a sound process. Over years of focusing on commercial innovation, including opportunities in EHRs and other HIT tools, our process was born of necessity, and we’ve used it to help others establish and improve their own commercial innovation efforts. Here’s some of the most common advice we share with clients. It’s far from an exhaustive list, but covers three of the most important things to keep in mind if you want to put some meaning behind that wall art.
1. Take a Portfolio Approach
The biggest mistake we see is the “one-hit wonder” approach to innovation, where resources all go to one shiny idea, rather than to a series of ideas. It’s easy to fall in love with a sexy new project, but like a good investment portfolio, innovation should be managed as a group of opportunities. Pursue some ideas that are likely to generate returns in the next year or so, another set designed for 12- to 36-month returns, and another set that may take three to five years to mature (these are the truly new). Too many life science companies make commercial investments for only one budget cycle, and then wonder why their innovation efforts don’t pay off. There are many things you can do that take 12 or fewer months to implement, but it’s incredibly difficult to drive much more than incremental change in that period of time. Balance these short-term improvements with projects that are more ambitious, and your portfolio won’t fall behind the innovation curve.
2. Invest in Your Centers of Excellence
The second biggest mistake we see is treating innovation like another brand initiative. The industry swings back and forth from COE-centric to brand-centric approaches to innovation, and we’re in a brand-centric cycle right now. We’re hoping things swing back soon, as it’s largely been a disaster. The reason for these failures? Brand teams have one objective: Grow the brand as fast as possible. They have to focus almost exclusively on tactics that start to show results immediately, and that’s almost never conducive to innovation. Even the greatest new ideas need time to be developed, tested, and revised before they start to produce returns.
A better way to deal with this is to establish a cross-company Center of Excellence (COE) designed to foster innovation. Brand teams collaborate with this COE and invest relatively minor amounts; the COE serves as the incubator for ideas that can be tested and refined before they become part of a brand team’s core marketing efforts. In a “top 50” life sciences company, brand teams need invest only a small portion of their marketing budget toward the COE (we often suggest 4% to 8%, depending on the situation). In return, they get the benefits of innovation even as they significantly lower their risk and resource requirements.
Brand teams that have access to a COE but insist on managing their own innovation are generally setting themselves up for lackluster performance. The demands of the known and trusted tactics prevent the investment of time and energy necessary to get a new, innovative idea off the ground and working well. Similarly, companies that have drifted away from Digital/Innovation COEs because they “didn’t produce” should take a closer look at how those COEs managed their resources before giving up entirely on the idea of centralized innovation efforts.
3. Garden and Prune. Ruthlessly.
Good gardeners figure out which plants to nurture and which plants to pull to make more room. They know when and how to prune each plant to encourage the right kind of growth. They use the seeds of only the most productive plants to grow the next generation.
A successful innovation portfolio is one treated much like a garden. You have to plant far more innovation projects than you intend to harvest, prevent over investment into any one project, and be willing to thin out any project that can’t be saved. We recommend quarterly reviews of each project and at least twice-yearly reviews of the entire portfolio between the COE and its sponsors (often senior management). The innovation team should be ready to recommend projects that need to be stopped, those that require revisions, those that warrant additional investment, and any new projects to be “planted” at each of those meetings. We find that this review cycle also helps teams and companies avoid the dangers of investing only within a 12-month budget cycle because the approach focuses on a longer horizon while recognizing short-term successes.
If you want to discuss these ideas in greater detail, drop me an email. Commercial innovation is essential to an effective digital strategy, and having a solid approach will pay dividends into the future of your company and your career.