The pharmaceutical industry is highly innovation-driven, but breakthroughs tend to happen slowly.
And in a world where tech giants like Google, Apple, and Amazon are emerging as potential disruptors, slow simply doesn’t cut it.
Two of the largest pharmaceutical companies in the world, Bayer and Johnson & Johnson, have made innovation non-negotiable in their organizations - and are finding success with distinctly different approaches.
While Johnson & Johnson has concentrated on looking outside the organization for transformative ideas, Bayer has made cultural change the focus of their efforts.
We compared their innovation journeys, as shared on stage by Amkidit Afable (Johnson & Johnson, during Innov8rs Singapore) and Julia Hitzbleck (Bayer, during IntraCnf Toronto) and this is what we found.
Johnson & Johnson’s formula for innovation
Founded in New Jersey in 1886, Johnson & Johnson is the largest global healthcare company, with over 76 billion in revenue. Though they are a household name, they felt their brand was losing ground with consumers. This led to a big question, a question that has driven their innovation initiatives since: How can we transform a 130-year-old company into a 130-year-old startup?
Amkidit Afable leads the development and deployment of new go-to-market strategies, innovative business models and strategic partnerships to drive increased access to Johnson & Johnson’s portfolio of innovative medicine in Asia Pacific. At his Innov8rs Singapore session, he shared the company’s 5-part formula for re-invention and innovation.
1. Supercharge the core
Johnson & Johnson continues to place big and outsized innovation bets on healthcare – with a strong focus on areas where there are still high unmet Medical needs.
“One of our goals is to be a transformational medical innovator,” says Amkidit. “We don't want to be another me-too product, offering another medicine that has incremental value to a patient.”
For them, focused investments in high unmet need areas, like cancer and Alzheimer’s, are what leads to transformational medical innovation.
2. Be customer obsessed
While innovation was happening at Johnson & Johnson, it was too narrowly focused. “Typically we innovate where we’re comfortable already - for us, that meant incremental innovation from a product perspective.” For truly transformational innovation, Amkidit says, you have to think outside your comfort zone and start from the customer’s needs and pain points.
For Johnson & Johnson, that means leveraging the convergence of adjacent industries - health, digital technology, insurance, finance, and mobility - to create new healthcare models, and better patient experiences and outcomes.
3. Render yourself obsolete
Johnson & Johnson has a pretty big goal: a world without disease. To them, that means operating in a way that renders themselves obsolete. “In the healthcare industry, our consumer model hasn't changed in the past 20-30 years. It’s time for a change.” says Amkidit.
“Disruption is already coming from the outside. With AI, for example, we can help a doctor make better, faster, more accurate diagnoses and treatment plans. We have to force ourselves to ride with the tide.”
To that end, the company is moving from healthcare to health; shifting from medication-focused to early disease interception and prevention. “We’re trying to move from being a healthcare company to a health company, period.”
4. Embrace collaboration and the long game
At Johnson & Johnson, collaboration is the new innovation. And with more and more companies jumping in to the healthcare sector, it’s become more important than ever. Amkidit says “Either we fight these new companies getting involved in healthcare, or we collaborate with them. And that's what we're trying to do.”
The company has a family of complimentary teams - incubation facilities, early-stage investing, venture funding - to help partner with startups, entrepreneurs, established companies, and global public health organizations and achieve breakthrough innovations. Their JLABS model, now present in over ten cities around the world, gives emerging companies access to research labs and business support with no strings attached - they can focus on developing breakthrough healthcare products without giving up equity or IP.
5. Let your people lead
Though Johnson & Johnson actively seeks outside ideas and partners, they understand that in-sourcing is just as important. “Don’t forget your people,” says Amkidit. “They are the most important component of innovation. Ideas can come from anywhere, and change has to be led by people.
And don’t forget about the people on the fringes: introverts, people in support roles. Make sure you expand your net wide when you’re in-sourcing for innovation.”
Bayer’s Innovation Framework
Bayer is one of the ten largest pharmaceutical companies in the world. Founded in Germany in 1863, Bayer operates in consumer health and pharmaceuticals, and is a world leader in crop science and animal health. Two years ago, they realized that in order to remain relevant, innovation had to move from the sole purview of R&D and become an organization-wide mandate. How to embark on such a huge cultural shift? Get the scientists to teach everyone else how to experiment, and make ‘Innovate in what you do’ the new company mantra.
Dr. Julia Hitzbleck is the Director of Innovation Strategy at Bayer. In her IntraCnf Toronto session, she shared the company’s framework to help shift the culture and enable everyone, from R&D to sales, to innovate in what they do.
1. Inspire
Bayer began by creating awareness and opportunity around innovation. In the first year-and-a-half, they held innovation days in 20 countries with over five thousand people participating. They also set up a YOUniverse innovation portal where, in addition to learning about different methodologies and tools, participants could post about their projects and learn from one another.
A customer-focused innovation contest held over the summer went viral, with 25 thousand new users joining the platform in over 65 countries. “We’ve learned that you have to start by creating awareness,” says Julia. “When people see that they have an opportunity to get involved, they take it, and they like to share and connect with others who are doing it too.”
2. Learn
Bayer knew they needed to educate their people in strong innovation methodologies. They decided to start with an ideation tool called Systematic Inventive Thinking and, rather than just put it up on the platform for online learning, they began training local coaches - over 600 worldwide, and growing. These coaches, in turn, run ideation workshops in their countries. Over four thousand people have taken part so far, and they are eager for more. “We recently announced an e-learning program around design thinking, and within a week we had more than 1400 applications,” says Julia. “That wasn’t just people clicking a button to say they were interested - they actually had to write a short paragraph saying why they wanted to take the training, because there were limited spots.”
Additionally, Bayer worked with their HR departments to implement a common innovation language and mindset in all existing leadership training. Their training efforts earned them a Brandon Hall Award for learning excellence.
3. Collaborate
Bayer launched a platform called WeSolve, where they invited employees to tackle various innovation challenges. Says Julia:
“Often, challenges we post are not solved by someone from that department or function, but from someone in a totally different division. It’s really helped us tap into our knowledge pool, and get into the spirit of working together rather than experts sticking to their own area.”
They also set up a Life Science collaboration platform to allow all of their researches across the world to work together on breakthrough technologies. The focus on collaboration is paying off for Bayer - their 5x5 Startup Challenge, where five teams of five people work full-time on a problem for five weeks, has resulted in four patents so far.
4. Connect
Bayer asked country and global function heads to nominate a person they wanted to work with to define their own local innovation roadmap. That has led to 80 ambassadors around the world who connect via a global network and define, in conjunction with coaches, their particular needs and goals. “Accounting, procurement, sales...they all have different needs, but we want them to have a common language,” says Julia. “They build roadmaps, run innovation workshops, engage their local colleagues, and make sure things are actually happening. So far, we’ve had over a thousand ideas generated by these local change agents.” And these ambassadors and coaches make sure innovation is powered by people.
“It’s not just corporate coming in and telling you what to do. The coaches contribute to the overall network and help make innovation sustainable, and it’s really helped us create positive energy and affect positive cultural change.”
