Choosing your direction of travel

In the past week or so, I have been looking a little harder at the Chemical and Pharmaceutical Industry relating to innovation, it left me a little frustrated.

I felt that warm and fuzzy feeling, as I read all too often those comforting words or platitudes of how “innovation is vital to us” and one of the “highest areas of focus.” Yet as you then listen to the voices of the very leaders within these industries in interviews, or read on blogs, or in discussing what are the challenges they face, it does seem somewhat hollow. You know they are nowhere at the point of really understanding the potential of the changes that could take place within adopting a broader view on all aspects of innovation.

Nearly all in these current companies making up the Chemical and Pharmaceuticals sectors are well past their prolific era, the discovery part is bogged down in slow growth, expensive development costs and regulatory conditions. Blockbusters seem a thing of the past but perhaps they don’t need to be with a very different innovative approach.

You do get tired of hearing “we are looking to become a value-creating solution provider”, yet the willingness to really create collaborative networks is still stuck in the “us and them” mentality. The thinking through on the contribution around innovation needs to be changed.

The two industries are struggling in finding new operating models to adapt to a different, changing world. They are not yet tuned into those more integrated systems of collaboration, where platforms and ecosystems are critical to making improved progress, advanced by multiple contributions to the discovery and exploration stages, where there is a new potential force of collaborative breakthroughs. So from what I can see so far, change is highly constrained:

Evolution is slow, revolution is seemingly non-existent due to narrow vested interests.
You get the impression that all seem to be struggling with the ongoing pockets of internal silo’s, knowledge trapped or buried, determined that everything still must be invented inside and stay locked up inside.  The existing model of the continued pursuit of the one-to-one partnerships, where they, expecting to be the dominant player, can dictate the terms and conditions severly constrain breakthroughs to happen. You breed risk adversion. The established players, all global in reach and size, seem to lack the understanding of how innovation has changed in recent years. Innovation has really opened-up through highly collaborative approaches explored through relationships, using a more holistic ecosystem approach and exploiting concepts and ideas on common platforms.

There is certainly a clear buzz and appeal for more novel solutions, based on more rigorous evaluations through increasing the field of data analysis, leveraging a greater discovery of Molecular sciences and finding these different combinations that stretch existing products and patents. Yet this seems emerging, one that can be a prelude to opening-up a far more cross-disciplinary field that studies molecular materials, structures and systems and their application to real-word problems than any one company possesses the complete insight to own it. Hence my return to platforms and ecosystems for more open-collaborations to explore this area as it holds the potential of exciting new discoveries and breakthroughs.

Struggling with legacy and old models

The idea of opening-up into a broader integrated solution, collaborating and co-creating is a tough call to make, when patents and scientific investment has been borne by the one company. I was reading that drug development costs can be up to $2 to 3 billion and can be taking a process of up to 14 years. How can these companies slash these costs but improve the safety of the drug they are developing? It can’t come from extracting from operating within a limited selected partnership, that has been the area of focus for years, it needs a different model to push discovery across new boundaries and collaborations. We need to engage differently. For instance, earlier engagement with governments, with research institutes, publishing new findings in more open ways, less restrictive on a sharing data all might allow the communities to search for a different model of discovery to commercialization. A radically different productivity model, more collaborative and open, more interacting across the communities that make up the broader ecosystem.

We need to engage differently. For instance, earlier engagement with governments, with research institutes, publishing new findings in more open ways, less restrictive on a sharing data all might allow the communities to search for a different model of discovery to commercialization. A radically different productivity model, more collaborative and open, more interacting across the communities that make up the broader ecosystem.

Yet it does seem in both industries, there is a considerable lag in transforming through digital, when you compare this to other industries, where collaboration across the broader ecosystem requires this to deliver a more efficient and effective value chain. Industry 4.0 as a concept seems to be lagging perhaps in these industries, it is failing to really connect-up and leverage all that is within the “collective” ecosystem of scientific knowledge, it is safeguarded and protected behind closed doors and patents. Can this change?

Trapped with the four walls is holding any new growth potential back.

Yet, lying within the walls of these large Pharmaceutical and Chemical companies is such a rich dataset that stays behind their ‘closed’ walls. They are not yet at the point of being digitally effective to turn what they have into real competitive advantage as they lack the capabilities in big data analysis and those algorithms that reveal ground-breaking innovations, Are they hanging on in the belief they will become digitally transformed eventually or just deluding themselves?  There needs some radical transformation to occur but this means significant investments in connecting ‘everything’ up, firstly, internally and then externally to exploit the potential of greater synergies.

The ability to open-up the industries to accelerating real change in personalised medicines or more tailored treatments requires a greater collaboration, from the doctor or health system providers into the combined organizations that can deliver a better holistic solution. Until there is this recognition that greater collaboration is required between traditional past rivals, tailored treatment remains constrained due to the existing business model emphasis on “ownership” and not “co-ownership”. Having more open platform that focus on combined treatment to tackle cancer, Alzheimer or numerous other challenges where the flow of data from the patent, from the solution provider can be evaluated, explored, mixed, matched and worked up on in a much broader way, limits future growth and breakthrough solutions where collectively, sharing data might be found.

The Sustainability Pressure Is Occupying Industry Attention.

A further big buzz in both industries is tackling the sustainable pressures and be seen as having the right customer credentials, of being good for society and the environment has been finally increasing the pressures to change. Monopolies are being broken down. Industries that are known too over-supply, over-specify and have had limited regard for the final consequences needed to shift. Today the work has been in reducing individual footprints and controlling pollutants and gradually coming to grips with assessing the complete life-cycle. Presently efforts are highly individual, driven by the belief this might give a competitive edge in the eyes of the consumer but there is this growing need to have a more ecosystem awareness that would be more significant in understanding true cost of impact, and from this understanding, deliver real sustainability credentials. Individual actions, however noble, does have other consequences pushed down the value chain. Are they any better in the whole chain’s cost?

Presently efforts are highly individual, driven by the belief this might give a competitive edge in the eyes of the consumer but there is this growing need to have a more ecosystem awareness that would be more significant in understanding true cost of impact, and from this understanding, deliver real sustainability credentials. Individual actions, however noble, does have other consequences pushed down the value chain. Are they any better in the whole chain’s cost?

Consumers are certainly demanding more products that they believe has benign environment impact, safe to use and having a clear understanding of all the side-effects or consequences. Plastics, Polymers for example, as well as Medications all need growing customer credentials by giving a greater clarity on explaining their effects on society and the individual.

A time for seeking more radical change, ditching the outdated Innovation Models

How can these two massive industries across Chemicals and Pharmaceutical move beyond their outdated models of innovation, based on one-on-one or limited relationships that fits their self-interested needs and not the ‘greater’ needs that have greater societal good? We have a real powerful ability to truly transform established business models by our abilities to connect digitally and by working across multiple platforms to deliver these real breakthroughs that we, as society, are clearly in need of. Those that actively work to solve environmental issues, improve the ability to degrade or be even more recycled, as well as offer medical solutions that rapidly change some of our biggest disease issues of the day.  Solutions are far to complex to still be worked upon at individual level, they need collaborative effort and while we lack this recognition at industrial level any efforts remain marginal in impact.

There is a future that can be different but will these industries embrace it?

Let me offer some of the parts that need to be explored and changed, to radically update the innovation effect within the Chemical and Pharmaceutical Industries and allow for a different scope of discovery, engagement and exploitation.

  1. Digital connections and technology platforms.

So many organizations are not internally connected-up as they should be. The project and portfolio management, the life-cycle management, integrating the supply chain, quality assurance and corporate sustainability all are work-in-progress. Product innovation from discovery to market is still the biggest drag on industry performance. The parts are not digitally connected-up.

Before companies think about new business models they do need to connect everything up internally. The productivity release and efficiency gains radically alter the cost structures. The whole dynamics of collective scale brings together today’s scattered knowledge islands.

2. Big Data, Artificial Intelligence, Analytics and Algorithms beckon hugely

We know that the tantalizing effects of artificial intelligence, data analytics and these algorithms need to be built into internal systems to make it a systematic digitization process of innovation discovery to realization built on data science and innovation understanding. Yet are we seeing the type of change within the industries occurring? Are trained date scientists the established norm or the notional few?

3. The opening-up of huge databases of scientific understanding and customer awareness

The investment of prior clinical trials, the application of patents, the exploring of material components, combining and exploring characteristics in more open, collaborative ways can radically alter the existing dynamics of these industries. Currently with narrower vested interests we lock away knowledge that might allow for radical discovery. How can this be unlocked?

4. Both the Chemical and Pharmaceutical Industry are knowledge-based

Much of the knowledge is internal to the people who work within their islands of specific responsibility. Digitalizing and knowledge mapping offer ways to open this up and share this across the wider community that can contribute new insights and thinking. By mutually collaborating on society issues, knowledge can be extended and shared with the greater potential of new insights from these knowledge sharing opportunities.

5. Unleashing the talent, changing the cultures

The talent and the culture are still caught in old paradigms of these two industries understanding. Technology is still not being fully embraced, putting to use the enormous power of data, medicines or science that sits inside these organizations. Internally many of these companies still do not have the interconnected workspace to find better ways to collaborate internally. Team profiling can bring together the best available resources to work on problems or challenges. In diverse global organizations unlocking the knowledge within such a pool of highly qualified talent remains elusive, yet it clearly should not in providing a more open-minded culture of enquiry, sharing and learning.

6. Digital Productivity Revolutionary Outcomes Beckon.

When you think about how technology can bring the customer inside the walls, it offers up an exciting and potential collaborative space. Build that on the collaborative platform where institutions, government, regulatory and other industry players can participate what can this unlock?  The acceleration of trials, of experimenting, of learning, of understanding impact, exploring pricing, spotting segmentation opportunities, using data and science in radically different ways, speeding up trials or simulation and scenario planning all can release existing ‘spent’ energy by finding different productive outcomes through digital mapping. We see the industrial digital ‘twin’ but are there digital twins within the Chemical and Pharmaceutical industry to design products to be more effective and connected?

7. Building differently the pillars of innovation as essential

Can those within these industries step back and rethink innovation. Most operate with out-of-date innovation processes and models. If new collaborative models take hold then innovation needs to be designed totally differently. We need to ask: What future capabilities and competencies will be needed in a different operating model? What would be different if we explored and extended our business out onto platforms and greater partner ecosystems, what would need to be different? How do we specifically look to build our digital talent and our need for a more open culture? How do we learn from all this connecting up and exchanging to spot new and exciting new business models? What is required to become more agile, adaptive and exploratory beyond our scientific communities? How do we build the engagement with customers on a lasting platform of ongoing exchange, response and provision?

8. Embracing Digital Innovation with a more extended ecosystem.

How can the fostering of new capabilities be balanced with the existing core competencies built up over many years? Striking the right balance is critical. Established innovation capabilities of the focus on the individual product needs to be replaced with a greater process orchestration. Internal innovation needs to become far more externally driven. Control of the established project and portfolio management process has to give way to increased flexibility and external contribution that can absorb and translate new knowledge quickly back into the system, to feed new insights into a more open system integration that connects scientific innovation processes, new incoming data and external knowledge contributions to evaluate changing outcomes. A very different stage gate process, changing the common one found in these industries, needs to be re-designed and thought through. One to be replaced by a more adaptive, looping back design, permitting digital insights to fuel the innovation activity and scientific understanding, requiring flexibility and constant new predictive modeling showing impact understanding.

9. It has to be a step-by-step process, internal first, external second all connecting up.

Step-by-step means the need is to fix the internal operations within your one organization first. This needs to be fully digitally connected up.  The aim is in building the operations agility in data, insights, seen improvements and cross-collaborations that get you to the point of repeatable outcomes and scalable options, seeking out higher level of productivity, driving down costs. Then you are in the better shape to collaborate externally. It is only then you can experiment with new business models as you have achieved a higher level of clarity of your position.

We do need a new radical innovation redesign to take hold?

By rethinking the Innovation design through digitally connecting-up the parts there is a real potential to unleash discovery and breakthroughs in these two industries. To achieve this transformative state, we do need a dramatically different open innovation era to pervade beyond the walls of our chemical and pharmaceutical companies. One based on exploring and exploiting the wider ecosystem and built on highly collaborative platforms, digitally designed.

A dream or within the realms of reality?  I believe it is within the realistic if those within the industries concerned decide it has become necessary as change continues to bear down on them from managing within a very out of date business model.

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