Friday, October 23, 2009

R&D for the rest of us

Something happens when you put on a lab coat and safety glasses. You have the immediate ability to explore concepts and ideas that may, or may not, become new products. And your time horizon shifts dramatically. Many people in primary R&D are examining technologies or molecules that won't become products for many years.

The question we as innovators should ask ourselves, and our companies, is: why is this kind of thinking and investment committed solely in technology R&D? Why, in a pharmaceutical company, is there a team that is actively investigating new compounds and molecules that may become new drugs, but no one that is actively investigating new business strategies, new organizational hierarchies, new management philosophies? Why is innovation confined to the "R&D" wing of the business, and walled off from all the other things we do to add value to a business?

Certainly, R&D in a pharmaceutical firm is very important. It offers the chance for the discovery of a "blockbuster" new drug that could cure diseases or extend the life of seriously ill individuals. But I think we can all agree that a pharmaceutical firm (and by extension, any firm) adds tremendous value beyond primary product or service research. There are opportunities to dramatically innovate the business model (which health care reform may require), process or service delivery, customer experience and so many other factors or functions of the business. It's as if all critical, exploratory thinking is confined to R&D, while the rest of the business is restricted to cost-efficient, process-oriented, short term thinking.

Where are the guys and gals in lab coats who are researching the long term disruptions of their business model, or service delivery model? Who is responsible for thinking about and generating new ideas about the relationships a pharmaceutical firm has with physicians and hospitals? Don't you think these relationships and experiences are likely to change over time? Can we safely assume that these functions will remain the same over time, and all we have to do is find ways to cut costs? Just as Travelocity and Expedia decimated the travel agent industry, could other similar offerings radically change the interaction between a pharmaceutical company and its customers?

Gary Hamel points out in The Future of Management that most firms have some measure of product innovation underway at any point in time, and may have some inkling about service innovation or customer experience. Few, if any are innovating around business models or organizational structure, yet these are the places where competitive advantage is sustained over the long run. It's time to assign a few more people to lab coats and safety glasses, and have an R&D team investigate all the aspects of the business where we believe we can add value. Just like Festivus, innovation is R&D for the rest of us.
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posted by Jeffrey Phillips at 7:37 AM


Anonymous Shaun Abrahamson said...

Couldnt agree more. There is too much focus on catching fish versus how to fish better. Sometimes your learn how to fish better, but simply trying to catch fish, but unless you stop to consider how you are doing what you do, the process doesnt get better.

It feels like there have never been so many opportunities to test new ways to do create new products, find new ways to deliver services etc. And customers seem more willing than ever to join in and help.

10:28 AM  
Anonymous Anonymous said...

Hi Jeffrey, love your article and thought it was spot on. The notion of Service Innovation and Service Design appears to have been lost among a lot of companies over the past decade. It is important for Service Companies to bring the same or greater intent that manufacturers being to products, to the design and execution of their service and consumer touchpoints, in other words, their service product.

Damian Kernahan
Proto Partners Service Design

11:06 PM  
Anonymous Anonymous said...

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9:21 PM  

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