Ecosystem Innovation: Top 3 Lessons Learned

March 18, 2019 / Mauricio Campos Suarez
2nd Annual Digitization In Pharma Summit

Healthcare and Pharmaceutical is going through extremely Volatile, Uncertain, Complex and Ambiguous (VUCA) times due to external and internal factors. As we expand our horizons and we look again into our traditional Pharma Sales & Marketing business models we need to find new effective ways to partner with the ecosystem to unleash more meaningful and sustainable innovation in order to increase the value creation of our solutions and services “beyond the pill”.

“Competitive advantage is built not just by understanding customers’ jobs , but by creating the experiences that consumers seek both in purchasing and using the product or service.” – C.Christensen

Most large corporations have brilliant employees. These individuals are experts in their field able to produce innovative ideas based on their understanding of the customers' needs…. but this is not enough. Increasingly complex and ever-changing environment are pushing the limits for most industries today. In order for innovation to succeed we should be able to find innovative multiparty business models to increase chances to get it right and sustain it.

What is missing?

Traditional enterprise innovation approaches trust on the wisdom of internal employees to come out with novel ideas in service of the business key priorities. What I observed in my 20 years of experience in the industry is that this approach doesn’t necessarily help driving business results. These internal innovation groups find challenging to question the drivers that would make our customers to utilize (or not) our Digital tools & services.

The bigger reason behind this behaviour are our unconscious biases.

Why are we bias?

We evolved over millions of years to limit the amount of information we process. Biases are mental shortcuts that help us making quick and effective decisions. This was great for our species survival but it's not good for innovation by restricting ideation, creativity, and fairly assessing outcomes. Our prior experiences and expertise cause ‘errors’ that limit our ability to thinking divergently and generate new ideas from a subconscious level. This is true for individuals and organizations.

The power of ecosystem innovation

To address these challenges, 3 years ago, we launched the first edition of MSD Innovation Factory. This initiative had the objective of bringing customers and business needs to the center of innovation. By exposing those needs to the ecosystem, we engaged with new partners to coCreate innovative business models with a win-win mindset.

Top 3 Lessons Learned from these 3 Years of experience

1. Fall in love with the problem (Not the solution): When we face a problem our natural tendency is to stop ideating as soon we find an answer. This is called Einstellung effect and it’s extremely useful when we need to find a quick fix. For innovation it becomes a problem. When we face customer pushback/feedback we would rather explain those issues away and continue as planned rather than going back to the drawing board. In my experience, spending enough quality time on defining the problem statement in detail is crucial. This allow us to go deeper into the ‘why’. Creating a clear vision that would align internal and external stakeholders towards a single concrete objective.

2. Coaching and mentoring: One of the adding values of “ecosystem innovation” is the outside-in perspective that partners bring into the game. Thinking unconstrained and OOB about our business challenge is a clear advantage. Nevertheless, external partners might not have the depth and insights of the industry in order to make their proposal tangible enough. Coaching, feedback and mentoring sessions provided by the ‘host’ company are a great tool to avoid this pitfall. It also provides an opportunity for external partners to enhance their business acumen and to evolve the business model in meaningful ways.

3. Secure internal sponsorship beyond pilot: After an idea is awarded the next step is to pilot it. With clear success measures, agile methodology the pilot should constantly listen to the customer feedback. Paying close attention to the partnership and business model evolution in order to keep the energy from all parties focused. Still, the most crucial milestone is the ‘after pilot’ phase. Scaling fast and in meaningful ways help ensuring win-win value creation for all parties. Unfortunately, we found that without strong sponsorship chances are that even with strong positive results we will find difficulties to scale. This situation would create doubts about the purpose of the vehicle moving forward.

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