Building an Innovation Center - Assignment Example

1. In 2000, Pfizer became the world’s largest drug company and was flushed with cash. Their Gorton R&D site had quadrupled in the past 15 years and this site housed 45,000 scientists. The head of research at Pfizer wanted to expand and envisioned entering into the field of biotechnology. The idea behind the new RTC was to focus on the technologies and tools related to the gene family approach and the emerging biological advances. This approach could disturb the tradition R&D teams under the same roof. At the same time, if a specialized group worked on a different project at the same site, they could be ostracized by the traditional teams. The new team set the goals that the small site could support the company with its innovative scientific discoveries. John Smith, who envisioned the new center, can be compared to an entrepreneur-innovator. He was looking at new technology and he aimed to revolutionize the research system focusing on the gene family approach. He wanted to use new resources, new site, new approach, and recruit a different set of scientists altogether. Had this been a small organization, this approach would have been ideal but the new team was a part of Pfizer and was governed by the same set of rules and regulations. Any innovation should contribute to the expansion and growth of the organization. The RTC, till date, has not made any significant contribution of discovery of any drug that could justify the setting up of such a center in one of the most expensive locations. Any innovation should be based on market study. Smith adopted the approach without considering the demand in the market and the success or failures of other pharmaceutical companies in the gene family approach. To manage innovation requires scientific and technological knowledge. Smith did attempt to attract the existing scientists at Pfizer but met with little success. This was because the goals of the new center were ill-defined and the facilities in the initial stages were not comfortable enough. Most of the scientists, hence, were recruited from external sources. Moreover, there were specialized biotech companies focusing on the gene family approach. Thus the reasons for setting up the RTC are not convincing for an organization as large as Pfizer. It appears to have been initiated for personal reasons rather than in the larger interest of the organization. The unit could not contribute to the parent company. The scientists and the staff at RTC formed their own small groups and remained clustered together. For an innovative center to be successful, the members have to be a part of the team and share information and experiences. At RTC there was lack of coordination and cooperation between members. Moreover, the scientists at their other three centers were deprived of an opportunity to contribute to the organization they had been working for. The new discoveries could have been initiated at the existing research centers. 2. RTC innovation system enjoys autonomy as far as day-to-day operations are concerned. They simply inform the headquarters at the beginning of each year about their goals set for the year. However, it has the backing of the resources of the company. Under Frank Drake’s regime the teams were reorganized around scientific disciplines. He tried to introduce a model different from the other R&D sites. This was deemed necessary because the scientists worked alongside other scientific partners in Greater Boston area. Product development that revolved around drug safety and metabolism required technological, scientific, as well as organizational innovations. It was thus felt that RTC needed to focus on scientific expertise. Relationships with the local government and scientific leaders were strengthened. They also needed to develop alliances with universities and laboratories which would help them with recruitment. RTC receives funding through the corporate budget rather than through individual R&D sites. The development of technical solutions and supporting the project team at other sites, are available free of charge to any team within Pfizer’s innovation network. The RTC monitors its own activities through quarterly scientific reviews. Projects that do not meet Pfizer goals are stopped with the support of the staff involved. The team leaders have been entrusted with the responsibility to motivate the team members and communicate the progress with RTC and Pfizer leaders so that their technologies and drug candidates would be accepted. Scientists can be involved in different projects simultaneously and could be the team leader for one project while being a team member in another. There is focus on delivering tangible results and the senior executives closely monitor the progress. Two groups – the Strategic Alliances group and the 11-member Research Informatics team – reported directly to the headquarters even though they were housed at the RTC. The informatics team work at projects anywhere within Pfizer and do not restrict their activities to RTC. Meetings at RTC are usually issue-driven. The mode of communication is through email and not telephones or meetings. Brainstorming sessions are encouraged and a separate area is allotted for it. The dress code and working hours are flexible although scientists usually arrive in the mornings and work through the day. Thus, RTC has autonomy while still receiving funds from the corporate budget. However, being a part of Pfizer, they do have to adhere to the compensation policies of Pfizer. This creates problems in recruitment and retention of staff as they are unable to offer stock options like other biotech companies. Cash incentives too are forbidden at Pfizer and hence RTC gives non-monetary rewards while recognizing achievements. Promotions are based on peer-based input and not on the science managers. Motivation was provided to the individuals to be innovative but there is no time for personal research. RTC offers an open research environment and the culture at RTC is one of team work. The new hires are selected based on their ability to work in teams. This is in line with Pfizer’s broader goals. RTC has been unable to attract scientists from its other sites due to lack of a well-defined charter and because of lack of facilities at the new center. Cost of living being high at RTC location, not many from other R&D sites are interested in moving to Cambridge. The RTC has no structure with only the key researchers knowing what was going on. Tribalism prevails where researchers from the same field clustered together even during breaks. Although RTC enjoys autonomy, when they wanted to push its technologies to other sites, they were not given the expected reception. Thus, autonomy was enjoyed on both sides. The location creates hurdles in communications for the informatics team but it also facilitates recruitment as they were in the vicinity of some of the world’s best universities. Overall, RTC has not been able to deliver what it aimed to. 3. As it stands, RTC appears or at least gives the impression to other sites that are in direct competition. The very purpose of setting up the center has not been served. Only when an innovation becomes a commercial success, can the organization reach a competitive level but this has not been achieved by the RTC. Managing innovation requires technical and scientific knowledge. According to a Glaxo executive, “No emerging or established pharmaceutical company is large enough, or smart enough to meet all of its knowledge needs in isolation” (Galambos & Sturchio, 1998). It is not possible to bring- in-house all research capabilities even by the largest pharmaceutical firm. Growth and prospects of biotech are immense but collaboration with a biotech firm would provide greater insights into the technical and managerial know-how. Drake should develop this as an Innovation and Technology Center but with a model different from the current one. Learning takes place through different sources – through experience, through competitors, through communication and training, through customers and suppliers and through firm-specific competencies (Vieira, Lima & Fensterseifer, 2000). RTC is isolated from the corporate office leading to lack of communication and coordination with the scientists and other people of importance necessary for the center to develop. The first important strategy should be to shift the RTC to some other location, perhaps, Gorton, which is one of their biggest research sites. This would immediately make all the research staff motivated, belong and work for the RTC. Proximity to world class Universities is not a major advantage because talent would be attracted to any location. This strategy would make it easier for them to leverage the knowledge and resources from other research centers. However, a portion of the existing staff at RTC may not be happy with this shift but in the larger interest of the unit and the company as a whole, this is advised. This strategy could also have implications on employee motivation and reward system. Pfizer could have a different set of rewards and incentives for all their research scientists so that the RTC employees are not the privileged ones. This would serve to motivate the current employees at other research sites and they could extend their cooperation as well. It would also enable vertical integration leading to coordination of the different stages of research and a systematic hierarchy can be maintained. Another implication would be on the hours and timing of work. Scientists in general prefer to work to their individual moods and convenience. This flexibility should be permitted at all research sites within Pfizer. Unless, RTC moves to a different location and has better coordination with the corporate office, its existence is meaningless. References Galambos, L., & Sturchio, J.L. (1998). Pharmaceutical Firms and the Transition to Biotechnology: A Study in Strategic Innovation. The Business History Review. 72 (2), pp. 250-278 Vieira, L.M., Lima, M.A.B., & Fensterseifer, J.E. (2000). Technological Innovation As A Strategy Of Growth: A Case Study Of A Brazilian Small Dairy Company. Retrieved October 4, 2010 from http://www.iamot.org/paperarchive/111A.PDF Read More