Innovation formulation: How to innovate in pharma

Coming up with new ideas when you are running a business of any size is a challenge. Whose responsibility is it to be innovative and where can you find inspiration are just two questions over which business leaders scratch their heads.

However, for most companies the answer is staring them in the face — ideas come from people and from good communication, so you have to engage the army of potential innovators that every company has at its disposal.

Pharma stands out

To all intents and purposes, given its long list of momentous medical achievements, the pharmaceutical industry stands out in innovation terms. What’s interesting, however, is that even now those remarkable successes are often the result of efforts by individuals or small teams working separately, rather than as part of a systematic company-wide innovation strategy.

Pharma is not the only sector in which, despite the implementation of processes to streamline almost every other business operation, innovation is far too frequently the result of a one-off good idea or a fortunate coincidence.

This approach will not sustain the industry in the long-term. Developing a new medication is increasingly difficult, as evidenced by the US FDA approving only 22 new medicines in 2016.

A report by PricewaterhouseCoopers (PwC) into managing pharmaceutical innovation points out that companies will need to ramp up innovation to maintain the level of good results that shareholders demand. It also highlights the huge returns on effective innovation, referencing research amongst c-suite and executive level respondents from the pharma sector, which showed that the most innovative 20% in its study grew at a rate 16% higher than the least innovative.

Where to start?

All too often it’s not the lack of ideas that is the problem, but finding a formula for processing, filtering and seeing them through from suggestion to execution. Implementing an innovation strategy can be daunting, so it’s crucial to set overall objectives that justify the effort being put in. The other important aim is to create an environment in which innovation is part of everyone’s job, in every role and every department, every day.

For pharmaceutical companies, innovation is as likely to be about internal efficiencies as it is about developing new medical products. Whatever the objectives, they do need to be shared with the entire business and all stakeholders, who can give a sharp assessment of the organisation’s innovation capabilities.

Start with quick wins

As with any process change it is important to manage the change and deliver it pragmatically. No organisation should be afraid to fail. This is part of the process as long as it provides useful lessons and the organisation can shake itself off and start again. It’s important to see that the actions being taken will provide a positive impact in a way that will move the company closer to the overall innovation vision.

When choosing the first projects it’s worth considering the working environment. Does it support and enable the innovation goals? If not, there are some ways around this, such as organising an ideation challenge with prizes for successful ideas or perhaps engaging the team to come up with a rapid prototype, or alternatively, get involved in one of the many ‘hackathons’ that are set up to create and test proof of concept solutions.

The next step

The next step is to measure the impact of what is being done as it evolves, and this is quite challenging. It is important to ensure activities are aligned to overall business objectives, to maintain collaboration opportunities and keep employees engaged. As part of the innovation formula, a consistent set of evaluation metrics needs to be put in place that consider all aspects of the innovation process including the culture shift occurring in the organisation.

Some companies set up innovation programmes in-house, others outsource to consultants, but increasingly companies are using idea management software platforms to provide them with the effective formula for innovation success. These platforms deliver a structure to capture, evaluate, prioritise and select ideas, a home for all the creative and innovative thinking, regardless of whether it relates to new drug trials, or to process improvements.

In fact, having the right tools and processes is part of an innovation strategy, providing valuable insight into areas for focus and improvement.

Whichever method and formula is used, one thing is certain, those who get it right will emerge as next generation organisations where real competitive advantage is driven by ‘everyday’ innovation.