PharmExec Blog

Leniency and Flexibility: The Optimum Conditions for Innovation

Leniency and staff reward/recognition are key to improving R&D and product innovation, according to the first of three new Economist Intelligence Unit reports. Innovation Imperative in Biopharma focuses on the how to curb wasteful R&D spending and how to strengthen innovation abilities. The study is based on a survey of 282 senior executives, each of whom rated their firm’s R&D and innovation strategies and explained how they are encouraging innovative thinking in R&D.

The report shows that many pharma companies are currently unsure of the quality of their current innovation strategies. Less than half of respondents believe their R&D strategy adequately meets the firm’s requirements, and 49% claimed their R&D programme is, at most, only moderately successful. However, one in five firms described their innovation strategies as “very effective”. These companies typically concentrated on boosting employee motivation, esteem and morale, creating the correct work environment, identifying and rewarding excellent work effort and reducing penalization of failure.

Rewarding and recognizing employees is a substantial part of encouraging innovation, the report says. To encourage research and innovation, 67% of companies were most likely to create a culture that encourages free thinking and responsible risk-taking, 57% collaborated with external scientific researchers, and 53% financially rewarded employees who contributed to innovation. But at 22%, implementing “blue sky” research was regarded the least effective of the research and innovation strategies.

Dr Peter Andersen, Executive Vice President for Research at Lundbeck, added: “Leaders have to understand that innovation comes from the individual who is working in the organization, and they should create a space around people [to think].”

Overall, respondents identified the top three key obstacles preventing product innovation as regulatory restrictions, cost and time required to develop the drug/product. Additional impediments included lack of necessary research or talent, cultural attachment to current approaches and company structures that interfere with collaboration.

Beth Kennedy

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