Advertisement

Grassroots Innovation: A Promising Innovation Paradigm for Pharmaceutical Companies

  • Ulrich A. K. Betz
  • Nuno Camacho
  • Michael Gerards
  • Stefan Stremersch
Chapter
Part of the International Series in Quantitative Marketing book series (ISQM, volume 20)

Abstract

Pharmaceutical firms face a period of unparalleled turmoil. Major societal, technological, and regulatory challenges require firms to quickly respond to a rapidly changing environment. In particular, the issue of how to improve R&D productivity is considered the key challenge faced by the pharmaceutical industry nowadays. The core thesis of this chapter is that grassroots innovation programs—structured processes aimed at stimulating employees in all corners of the organization to contribute to innovation efforts—may be an essential complement to pharmaceutical firms’ more traditional and top-down stage gate processes. However, academic research to guide pharmaceutical firms in the implementation of grassroots innovation is scarce. This chapter discusses an in-depth case study of a grassroots innovation process (Innospire) at Merck KGaA, Darmstadt, Germany. The process design and implementation was based on theoretical derivation, to facilitate the transfer of knowledge to other firms and contexts. Hence, we also discuss our conceptual framework, grounded in self-determination theory, which managers at other pharmaceutical (or any other innovation-intensive) firms can use to design their own grassroots innovation processes. We also discuss a multitude of possible future research directions in this area, with high dual impact to both academia and business.

Keywords

Intrinsic Motivation Corporate Entrepreneurship Pharmaceutical Firm Business Model Innovation Business Idea 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

References

  1. Abbey A, Dickson JW (1983) R&D work climate and innovation in semiconductors. Acad Manage J 26(2):362–368CrossRefGoogle Scholar
  2. Amabile TM (1997) Motivating creativity in organizations: on doing what you love and loving what you do. Calif Manage Rev 40(1):39–58CrossRefGoogle Scholar
  3. Amabile TM (1996) Creativity in context, 2nd edn. Westview, Boulder, COGoogle Scholar
  4. Anand N, Gardner HK, Morris T (2007) Knowledge-based innovation: emergence and embedding of new practice areas in management consulting firms. Acad Manage J 50(2):406–428CrossRefGoogle Scholar
  5. Baer M, Oldham GR, Cummings A (2003) Rewarding creativity: when does it really matter? Leadersh Q 14:569–586CrossRefGoogle Scholar
  6. Barringer MW, Milkovich GT (1998) A theoretical exploration of the adoption and design of flexible benefit plans: a case of human resource innovation. Acad Manage Rev 23(2):305–324Google Scholar
  7. Betz U (2005) How many genomics targets can a portfolio afford? Drug Discov Today 10(15):1057–1063CrossRefGoogle Scholar
  8. Betz U (2011) Portfolio management in early stage drug discovery—a traveler’s guide through uncharted territory. Drug Discov Today 16(13/14):609–618CrossRefGoogle Scholar
  9. Bikhchandani S, Hirshleifer D, Welch I (1992) A theory of fads, fashion, custom, and cultural change in informational cascades. J Polit Econ 100(5):995–1026CrossRefGoogle Scholar
  10. Birkinshaw J, Bouquet C, Barsoux J-L (2011) The 5 myths of innovation. MIT Sloan Manage Rev 52:52–59Google Scholar
  11. Birkinshaw J, Robbins P (2010) Ideas at work: sparking innovation. Bus Strat Rev Q2:7–11CrossRefGoogle Scholar
  12. Burgelman RA, Sayles LR (1986) Inside corporate innovation: strategy, structure, and managerial skills. Free Press, New York, NYGoogle Scholar
  13. Burroughs JE, Dahl DW, Moreau CP, Chattopadhyay A, Gorn GJ (2011) Facilitating and rewarding creativity during new product development. J Mark 75:53–67CrossRefGoogle Scholar
  14. Camacho N, Verniers I, García-Pont C, Stremersch S (2012) Alcatel-Lucent: marketing the cell phone as a mobile wallet. IESE Case Study M-1279-E, JanuaryGoogle Scholar
  15. Cohen WM, Levinthal DA (1990) Absorptive capacity: a new perspective on learning and innovation. Adm Sci Q 35(1):128–152CrossRefGoogle Scholar
  16. Collins MA, Amabile TM (1999) Motivation and creativity. In: Sternberg RJ (ed) Handbook of creativity. Cambridge University Press, Cambridge, England, pp 297–312Google Scholar
  17. Condry J (1977) Enemies of exploration: self-initiated versus other-initiated learning. J Pers Soc Psychol 35:459–477CrossRefGoogle Scholar
  18. Damanpour F (1991) Organizational innovation: a meta-analysis of effects and determinant and moderators. Acad Manage J 34(3):555–590CrossRefGoogle Scholar
  19. Deci EL (1975) Intrinsic motivation. Plenum, New YorkCrossRefGoogle Scholar
  20. Deci EL, Ryan RM (1985) Intrinsic motivation and self-determination in human behavior. Plenum, New YorkCrossRefGoogle Scholar
  21. Deci EL, Koestner R, Ryan RM (1999) A meta-analytic review of experiments examining the effects of extrinsic rewards on intrinsic motivation. Psychol Bull 125(6):627–668CrossRefGoogle Scholar
  22. Deci EL, Ryan RM (2000) The ‘what’ and ‘why’ of goal pursuits: human needs and the self-determination of behavior. Psychol Inq 11(4):227–268CrossRefGoogle Scholar
  23. Demerouti E, Bakker AB, Nachreiner F, Schaufeli WB (2001) The job demands–resources model of burnout. J Appl Psychol 86:499–512CrossRefGoogle Scholar
  24. Dougherty D, Hardy C (1996) Sustained product innovation in large, mature organizations: overcoming innovation-to-organization problems. Acad Manage J 39(5):1120–1153CrossRefGoogle Scholar
  25. Eisenberg R, Cameron J (1996) Detrimental effects of reward: reality or myth? Am Psychol 51(11):1153–1166CrossRefGoogle Scholar
  26. Fisher CD (1978) The effects of personal control, competence and extrinsic reward systems on intrinsic motivation. Organ Behav Hum Perform 21:273–288CrossRefGoogle Scholar
  27. Gagné M, Deci EL (2005) Self-determination theory and work motivation. J Organ Behav 26(4):331–362CrossRefGoogle Scholar
  28. Garnier J-P (2008) Rebuilding the R&D engine in big pharma. Harv Bus Rev 86:69–76Google Scholar
  29. Gassmann O, Reepmeyer G (2005) Organizing pharmaceutical innovation: from science-based knowledge creators to drug-oriented knowledge brokers. Creat Innov Manage 14(3):233–245CrossRefGoogle Scholar
  30. Gibbons R, Murphy KJ (1992) Optimal incentive contracts in the presence of career concerns: theory and evidence. J Polit Econ 100(3):468–505CrossRefGoogle Scholar
  31. Grant R (2008) The future of management: where is Gary Hamel leading us? Long Range Plann 41:469–482CrossRefGoogle Scholar
  32. Griffin A, Hauser JR (1996) Integrating R&D and marketing: a review and analysis of the literature. J Prod Innovat Manage 13:191–215CrossRefGoogle Scholar
  33. Gumusluoglu L, Ilsev A (2009) Transformational leadership, creativity, and organizational innovation. J Bus Res 62:461–473CrossRefGoogle Scholar
  34. Gupta AK, Raj SP, Wilemon D (1986) A model for studying R&D-marketing interface in the product innovation process. J Mark 50(2):7–17CrossRefGoogle Scholar
  35. Hamel G, Breen B (2007) The future of management. Harvard Business School, Boston, MAGoogle Scholar
  36. Hofstede G (2001) Culture’s consequences: comparing values, behaviors, institutions and organizations across nations, 2nd edn. Sage, Thousand Oaks, CAGoogle Scholar
  37. Hornsby JS, Kuratko DF, Zahra SA (2002) Middle managers’ perception of the internal environment for corporate entrepreneurship: assessing a measurement scale. J Bus Venturing 17:253–273CrossRefGoogle Scholar
  38. Huston L, Sakkab N (2006) Connect and develop: inside Procter & Gamble’s new mode for innovation. Harv Bus Rev 1–9Google Scholar
  39. Huy QN, Mintzberg H (2003) The rhythm of change. MIT Sloan Manage Rev 44:79–84Google Scholar
  40. Jouret G (2009) Inside Cisco’s search for the next big idea. Harv Bus Rev 43–45Google Scholar
  41. Jung DI (2001) Transformational and transactional leadership and their effects on creativity in groups. Creat Res J 13(2):185–195CrossRefGoogle Scholar
  42. Jung DI, Chow C, Wu A (2003) The role of transformational leadership in enhancing organizational innovation: hypotheses and some preliminary findings. Leadersh Q 14:525–544CrossRefGoogle Scholar
  43. Kahn WA (1992) To be fully there: psychological presence at work. Hum Relat 45:321–349CrossRefGoogle Scholar
  44. Kelley DJ, Peters L, O’Connor GC (2009) Intra-organizational networking for innovation-based corporate entrepreneurship. J Bus Venturing 24:221–235CrossRefGoogle Scholar
  45. Knight KE (1967) A descriptive model of the intra-firm innovation process. J Bus 40(4):478–496CrossRefGoogle Scholar
  46. Kriegesmann B, Kley T, Schwering MG (2005) Creative errors and heroic failures: capturing their innovative potential. J Bus Strat 26(3):57–64CrossRefGoogle Scholar
  47. Kuratko DF, Hornsby JS, Naffziger DW, Montagno RV (1993) Implementing entrepreneurial thinking in established organizations. Adv Manage J 58(1):28–33Google Scholar
  48. Lakhani KR, Wolf B (2005) Why hackers do what they do: understanding motivation and effort in free/open source software projects. In: Feller J, Fitzgerald B, Hissam S, Lakhani KR (eds) Perspectives on free and open source software. MIT Press, Cambridge, MAGoogle Scholar
  49. Munos B (2009) Lessons from 60 years of pharmaceutical innovation. Nat Rev Drug Discov 8:959–968CrossRefGoogle Scholar
  50. Nakata C, Im S (2010) Spurring cross-functional integration for higher new product performance: a group effectiveness perspective. J Prod Innovat Manage 27:554–571CrossRefGoogle Scholar
  51. Osborne R (2013) Fresh from the biotech pipeline—2012. Nat Biotechnol 31:100–103CrossRefGoogle Scholar
  52. Paul SM, Mytelka DM, Dunwiddie CT, Persinger CC, Munos BH, Lindborg ST, Schacht AL (2010) How to improve R&D productivity: the pharmaceutical industry’s grand challenge. Nat Rev Drug Discov 9:203–214Google Scholar
  53. Peters TJ, Waterman RH (2004) In search of excellence: lessons from America’s best-run companies. HarperCollins, New York, NY, First Published: 1982Google Scholar
  54. Pinto MB, Pinto JK (1990) Project team communication and cross-functional cooperation in new program development. J Prod Innovat Manage 7:200–212CrossRefGoogle Scholar
  55. Quinn JB (1979) Technological innovation, entrepreneurship, and strategy. Sloan Manage Rev 20(Spring):19–30Google Scholar
  56. Roberts EB, Fusfeld AR (1981) Staffing the innovative technology-based organization. Sloan Manage Rev 22(3):19–34Google Scholar
  57. Ryan RM, Deci EL (2000) Self-determination theory and the facilitation of intrinsic motivation, social development and well-being. Am Psychol 55(1):68–78CrossRefGoogle Scholar
  58. Schaufeli WB, Bakker AB (2004) Job demands, job resources, and their relationship with burnout and engagement: a multi-sample study. J Organ Behav 25:293–315CrossRefGoogle Scholar
  59. Selznick P (1949) TVA and the grass roots: a study in the sociology of formal organization. University of California Press, Berkeley, CAGoogle Scholar
  60. Stremersch S (2008) Health and marketing: the emergence of a new field of research. Int J Res Market 25:229–233CrossRefGoogle Scholar
  61. Stremersch S, Van Dyck W (2009) Marketing of the life sciences: a new framework and research agenda for a nascent field. J Market 73:4–30CrossRefGoogle Scholar
  62. Stremersch S, Lemmens A (2009) Sales growth of new pharmaceuticals across the globe: the role of regulatory regimes. Market Sci 28(4):690–708CrossRefGoogle Scholar
  63. Sykes HB (1992) Incentive compensation for corporate venture personnel. J Bus Venturing 7:253–265CrossRefGoogle Scholar
  64. Terwiesch C, Ulrich K (2009) Innovation tournaments: creating and selecting exceptional opportunities. Harvard Business School, Boston, MAGoogle Scholar
  65. Tellis GJ, Prabhu JC, Chandy RK (2009) Radical innovation across nations: the preeminence of corporate culture. J Market 73:3–23CrossRefGoogle Scholar
  66. Verniers I, Stremresch S, Croux C (2011) The global entry of new pharmaceuticals: a joint investigation of launch window and price. Int J Res Market 28:295–308CrossRefGoogle Scholar
  67. von Hippel E (2005) Democratizing innovation. MIT Press, Cambridge, MAGoogle Scholar
  68. von Hippel E (1988) The sources of innovation. Oxford University Press, OxfordGoogle Scholar
  69. Wuyts S, Dutta S, Stremresch S (2004) Portfolios of interfirm agreements in technology-intensive markets: consequences for innovation and profitability. J Market 68:88–100CrossRefGoogle Scholar
  70. Zahra SA (1993) Environment, corporate entrepreneurship and financial performance: a taxonomic approach. J Bus Venturing 8:319–340CrossRefGoogle Scholar

Copyright information

© Springer Science+Business Media New York 2014

Authors and Affiliations

  • Ulrich A. K. Betz
    • 1
  • Nuno Camacho
    • 2
  • Michael Gerards
    • 3
  • Stefan Stremersch
    • 2
    • 4
  1. 1.Merck Serono, Merck KGaADarmstadtGermany
  2. 2.Erasmus School of EconomicsErasmus University RotterdamRotterdamThe Netherlands
  3. 3.Technology Office Chemicals of Merck KGaADarmstadtGermany
  4. 4.IESE Business SchoolUniversity of NavarraBarcelonaSpain

Personalised recommendations