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Grassroots Innovation: A Promising Innovation Paradigm for Pharmaceutical Companies

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Innovation and Marketing in the Pharmaceutical Industry

Part of the book series: International Series in Quantitative Marketing ((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.

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Notes

  1. 1.

    In the remainder of this chapter, for parsimony, we always refer to Merck KGaA, Darmstadt, Germany as Merck KGaA.

  2. 2.

    We consider implementation of a grassroots innovation process to be successful when the business objectives that led an organization to invest in such a process are achieved. Even such objectives are firm-specific, they typical fall in one of the three major categories: (1) development of new business (increased revenues), (2) identification and development of human talent, and (3) stimulation of an entrepreneurial culture in the organization.

  3. 3.

    http://www.tva.com/abouttva/history.htm.

  4. 4.

    Goals that Werner Wenning, Chairman of the Board of Management of Bayer AG in 2006, was confident were already being achieved by Triple-i’s first edition, see Bayer Annual Report 2006, p. 7. Available in http://www.bayer.com/en/gb-2006-en.pdfx, last accessed on March 3rd, 2013.

  5. 5.

    Bayer, Sustainable Development Report 2010, p. 31. Available in http://www.sustainability2010.bayer.com/en/online-supplement-to-the-sustainable-development-report-2010.pdfx, last accessed on March 3rd, 2013.

  6. 6.

    Waghorn, T. 2010. “How One Company Gets Its Employees Innovating.” in Forbes.com, March, 15th. Available in http://www.forbes.com/2010/03/15/bayer-employee-innovation-leadership-managing-engagement.html, last accessed on March 3rd, 2013.

  7. 7.

    Bayer News Channel (2011), “Record Participation in Triple-i,” April 20th. Available in http://www.bnc.bayer.com/bayer/bnci.nsf/id/F3EF9641170DB993C12578770026A87C, last accessed on March 3rd, 2013.

  8. 8.

    By innovation-intensive firms we mean firms in sectors characterized by frequent product, service, process, or business model innovation and firms with high innovation-related expenditures and/or high R&D intensity. Hence, we believe that our framework is applicable and valuable R&D-intensive firms, such as pharmaceuticals, but also to firms in sectors—namely services—that may have lower levels of formal R&D but depend on frequent process, service, or business model innovation.

  9. 9.

    www.merckgroup.com.

  10. 10.

    In 2009 when innospire started Merck had total revenues of € 7.7 billion and approximately 33,000 employees in 61 countries.

  11. 11.

    www.merck.com.

  12. 12.

    And there were also some participants who submitted more than one idea.

  13. 13.

    Established in 2003 by Bio-IT magazine, the World’s Best Practices Awards recognize “organizations for their outstanding innovations and excellence in the use of technologies and novel business strategies that will advance biomedical and translational research, drug development, and/or clinical trials,” see http://www.bio-itworld.com/2012/04/25/bio-it-world-announces-winners-2012-best-practices-awards.html.

  14. 14.

    http://www.cphi.com/pharma-awards.

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Authors and Affiliations

  1. Merck Serono, Merck KGaA, HPC: F131/401 Frankfurter Straße 250, 64293, Darmstadt, Germany

    Ulrich A. K. Betz

  2. Erasmus School of Economics, Erasmus University Rotterdam, Burgemeester Oudlaan 50, Room H15-09, 3062 PA, Rotterdam, The Netherlands

    Nuno Camacho & Stefan Stremersch

  3. Technology Office Chemicals of Merck KGaA, HPC: C010/102 Frankfurter Straße 250, 64293, Darmstadt, Germany

    Michael Gerards

  4. IESE Business School, University of Navarra, Av. Pearson, 21, 08034, Barcelona, Spain

    Stefan Stremersch

Authors
  1. Ulrich A. K. Betz
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  2. Nuno Camacho
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  4. Stefan Stremersch
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Correspondence to Ulrich A. K. Betz .

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Editors and Affiliations

  1. Smeal College of Business, The Pennsylvania State University, University Park, Pennsylvania, USA

    Min Ding

  2. The Wharton School, University of Pennsylvania, Philadelphia, Pennsylvania, USA

    Jehoshua Eliashberg

  3. Department of Business Economics, Erasmus School of Economics, Erasmus University Rotterdam, Rotterdam, The Netherlands

    Stefan Stremersch

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Betz, U.A.K., Camacho, N., Gerards, M., Stremersch, S. (2014). Grassroots Innovation: A Promising Innovation Paradigm for Pharmaceutical Companies. In: Ding, M., Eliashberg, J., Stremersch, S. (eds) Innovation and Marketing in the Pharmaceutical Industry. International Series in Quantitative Marketing, vol 20. Springer, New York, NY. https://doi.org/10.1007/978-1-4614-7801-0_4

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