Assignemnt for 4642 innovation

MBA 4642 – Products and Processes ASSIGNMENT 1 – UNIT 2 Course assessor: Dr. Okan Geray Submission Date: Jan 23rd 2011 Word count: 2200 Submitted by: Name: Anuradha Vyas MISIS: M00 340 061 Q 1: Based on GSK’s past performance, what do you believe are the critical implementation issues for GSK with regards to internal innovation? Justify your answer. (3 marks) Sol: To implement the internal innovation strategy, GSK needs to evaluate their present status, decide what they want to achieve and how they will achieve it. Following are a few critical issues GSK needs to focus on while implementing their innovation strategy. Culture: With the increased size and new structure of GSK’s R & D division, Leaders need to cultivate a culture of collaboration, sharing ideas, concerns, solutions and knowledge among leaders and employees. Dropping of 35% of the projects at R & D, in 2008, might create a fear in the mind of those involved with current pipeline projects. Efforts to help the individuals overcome that fear and actively share ideas are needed. Employees should be empowered to take risks and decisions to encourage internal innovation. Employee Incentives: It becomes important to have system of rewarding the innovation on the basis of past performance as well as the efforts towards innovation by exchange of ideas and knowledge. Extension: With many of the GSK’s patents expiring in coming future, leaders need to focus on extension activities. Also the firm has introduced relatively few new drugs in the last 10 years (Whalen, 2010). GSK needs to constantly understand the product and market competencies and accordingly should focus on looking for new opportunities and new product development. Organizational Structure: With a network of around 99,000 people in over 100 countries, leaders need to focus on building a fit among the various systems of organization. As GSK goes through an innovation of continuous change, it is critical to encourage the team coordination and idea sharing among peers. An effective reporting system and two way communication, formal as well as informal, should help employees understand organizational goals and efforts required on their part to implement innovation strategy, and at the same time help them communicate their ideas, concerns, suggestions and knowledge with those concerned Resources: GSK should focus on hiring, training and retention of right number of employees with desired skills. Now as the DPU’s face a timeline bound (3 years) evaluation policy of the projects they are working on, timely and adequate allocation of financial resources to DPUs will be crucial for the success of strategy. Whom to allocate and what to allocate becomes a critical issue. Q2: With the 70 DPUs working on eight therapy areas for 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? (9 Marks) Sol: As 70 DPUs work on eight therapy areas, this can have varied affects on the implementation process and firm needs to work on special programs to address those concerns. ,[object Object]

Fear: The DPUs are already half way through their three years budget they were given in 2008, the clock is ticking on their scientists (Whalen, 2010); it may create fear of being sacked and affect their morale and performance. Contrastingly the contextual confrontation may give a boost to innovation also.

Inertia: Individuals who are used to a bureaucratic system and an old mind set may find it very hard to take ownership of decisions in the new set up of small autonomous DPUs. Perry Nisen, a cancer research chief at Glaxo, said in an interview “everyday people come to me and say, “what do you think I should do? Everyday for me, it’s ‘well that’s your decision. What do you want to do?” (Whalen, 2010). Changing the mind set of people to overcome the inertia and accept change will remain a challenge with management.

Bureaucratic systems: Now as the CEDDs are further divided into small units of DPUs, it forms one more layer in the already bureaucratic structure of GSK. Hence making the implementation and reporting process even more complex.

Staff Retention: The revised structure of DPUs is similar to those of small Biotech firms. However, according to Denise Anderson, a healthcare analyst at SIT investment associate in Minneapolis, “Problem with big companies trying to act like biotech is that people who like the really entrepreneurial culture of a biotech go to biotech”. This may also be due to better incentives offered by small companies (Whalen, 2010). It poses a serious problem to GSK in staff hiring and retention.

Communication: As the DPUs work on different parts of the pipeline associated with the production of a drug, the smooth flow of information following coordination among them becomes crucial. Duplication of work needs to be avoided at the same time sharing of knowledge and ideas to be encouraged. A compound discovered in one unit might not be useful for them but may be useful for another unit’s research process and may leverage breakthrough in another therapy area.

Confidentiality of research outcomes: As the DPUs consists of GSK’s own staff as well as outsourced staff, the confidentially of the data and information becomes a serious issue.Special Programs: To address the concerns raised above, special programs which encourage a culture of innovation through knowledge and reward systems like restructuring and reengineering can be introduced. This may involve the integration and better use of support and staff functions of the organization (White/Bruton, 2007, p.35) Q 3. 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? (9 marks) Sol: The special evaluation needs for a firm like GSK with regards to its internal evaluation can be broadly stated as (White/Bruton, 2007, p.159): A closer examination of these, leads to specific evaluation needs like following ,[object Object]

Customer and Supplier network: Examining the network with customers, suppliers, regulators etc is also critical to GSK’s success. In pharmaceutical industry the prime customer is the doctor who prescribes the medicine. The quantitative and qualitative level of the network with doctors, suppliers and regulators needs to be evaluated on regular basis.

Assignemnt for 4642 innovation

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