Based on GSK’s past performance, what do you believe are the critical implementation issues for GSK with regards to internal innovation?
Currently, GlaxoSmithKline has one of the most developed R&D departments probably in the whole pharmaceutical industry; it is out of these R&D research initiatives that have so far enabled the pharmaceutical giant to continue manufacturing innovative drugs. An important feature of the GSK R&D department is its leadership orientation which has made it possible to have a work environment that supports and nurtures the environment. Currently, the GSK R&D department is adequately financially supported with more than 10% of its revenues being channeled towards research efforts in addition to having a skilled human resource that is critical for driving the innovation. Thus, what GSK lacks so far are three other elements that have been identified as critical to the implementation of internal innovation; engagement, Alignment, and Extension (White and Bruton, 2007). Engagement refers to the process of developing a “knowledge-based culture”, employee training, and mentoring which GSK does not have currently. On the other hand, alignment involves developing mechanisms that incorporate reward programs with high achievement to strengthen the organization. Finally, GSK should go a step further and ensure that lessons are well documented, ensure it appraises its innovation capabilities, and regularly keeps exploring opportunities.
With the 70 DPUs working on eight therapy areas for the future growth of the company, how might this affect the implementation effort, and would the firm need special programs to ensure that implementation was successful?
The process of implementation as far as internal innovation is concerned involves three key issues; the activities to be undertaken, resource requirement, and plan of the actual implementation of the activities (White and Bruton, 2007).
Because GSK has a diversified range of research areas on which to focus which are eight in total, it is paramount to have an expanded number of small teams that focus on particular sections of these different research areas, which are referred to as DPUs. While these large number of DPUs are effective in streamlining the various research initiatives that the Company pursues it also ends up complicating the process of implementation of these innovative ideas for several reasons.
One, because of the large number of teams that are focused on researching various ideas, the logistical issues involved in ensuring that the necessary resources are provided for each team to be able to effectively implement their idea becomes very challenging. This is more so when you consider the need to have the four elements of internal innovation implementation, which must ideally be present before innovation ideas can be converted to products. Secondly, the organizational restructuring that is needed to create an environment that facilitates the implementation process of these ideas must be undertaken with all the 70 DPUs in mind, which would mean that a lot of foresight and planning will be necessary.
As GSK strives to research and discover innovative products some of the challenges that it is likely to experience due to its large number of DPU teams include the following. First, it will need to integrate all the focus areas of research being done by these DPUs with the organization’s vision and mission statement as articulately captured by the strategic business objectives of the organization. Indeed, this is one of the areas that the Company is facing difficulties since some of the research ideas that the DPUs are pursuing are not within the context of the eight focus areas of research. Another challenge that the organization is likely to experience is a lack of appropriate and adequate human resource personnel with the desirable skills set, this is because the availability of adequate R&D personnel is vital to the process of implementation. Finally, GSK might have to decide on pursuing continuous change innovation as opposed to radical change innovations despite its advantages of being strategic with high impact because it is not externally aligned.
What are the special evaluation needs for a company such as GSK, with regards to its internal innovation? What characteristics of GSK do you believe have the most influence on how well GSK evaluates progress toward stated innovation goals?
Ideally, the evaluation process for an end product of innovation consists of five steps; establishment of objectives, the establishment of standards, performance measurement, performance-standard comparison, and corrective measures (Slack and Chambers, 2007). Based on these standards we can compare and establish the weak and strong points that GSK faces from the case study. There is no doubt that GSK has a well-elaborated objective that is perfectly matched with the core areas of the research that the firm desires to focus its research efforts on which are encompassed by the eight areas of research. The company has also put in place standards that ensure the end products of innovation are of high quality, it does this through outsourcing and maintaining high skilled R&D workforce, restructured the organization to nurture and support innovation, ensure DPU teams are made up of multi-skilled and put in place a mechanism of assessing the most viable innovative ideas to pursue and which not to pursue. I believe this is the most outstanding feature of GSK as far as evaluation of innovation progress is concerned.
However, what GSK still needs to incorporate into its evaluation processes include strengthening its performance measurement standards and undertake a regular comparison of innovative products against established performance standards.
For GSK the evaluation issues that it needs to clarify more clearly include a reassessment of its strategic objectives, development of contingencies, the definition of its short-term and long-term R&D goals, and outline the desirable goals that it needs to achieve.
Identify and explain the kinds of control systems you suggest GSK employ to manage innovation?
There are three types of control systems that GSK can utilize in the management of its innovation processes i.e. financial, strategic, and cultural control systems (Slack and Chambers, 2007). For each of this control system, it has its inherent weaknesses and strengths, thus the trick will be to adopt a framework that integrates all of the above. The financial control system has the advantages of being accurate, verifiable because it is in figures, and easy to understand since it is straight forward. One of the best ways that financial control systems can be reliably utilized by GSK to monitor the innovation process is through annual financial statements that can be interpreted to determine the impact that R&D efforts have on the overall financial performance of the organization.
Another control system that GSK can rely on in the management of innovation processes is referred to as strategic; the strong point of this control system is that it incorporates the organizational strategic objectives within itself. Thus, the strategic control system will enable GSK to be able to rely on qualitative information to obtain a pretty good assessment of the impact of innovation processes within the organization. One of the advantages of relying on a strategic control system is that it facilitates the ability of an organization to understand the wider environment of the industry and thereby enable it to increase its market share. Finally, GSK can adopt a culturally oriented control system that relies on assessing the overall organizational behavior and cultural changes and how they are linked to the innovation processes.
This approach of innovation management is limited by the lack of a framework that can effectively monitor cultural behavior changes which can be accurately linked with the innovation progress.
References
White, M. and Bruton, G. 2007. The Management of Technology and Innovation. 2ns Ed. New York: Thomson South-Western.
Slack, N. & Chambers, J. 2007. Operation Management. 5th Ed. Washington DC: Prentice Hall.