Driving Innovation Through Networks

M03Driving Innovation Through Networks

WCQI Concurrent SessionMonday, May 21st, 2012, 1:30pm – 2:30pm

Mr Alexis GoncalvesMr. Alexis GoncalvesDirector, Innovation Catalyst, Pfizer Inc.

ASQ Fellow, ASQ Director at Large 2008-2012

• Discuss four operating principles that enable Innovation Networks to prosper

• Present the different roles necessary to ensure the success of Innovation Networks

Session Objectives

• Overview of the day-to-day operation of Pfizer’s Innovation Networks

• Discuss how a company can establish a culture of knowledge sharing

Internal platform launched by Pfizer in early 2009

20,000+ users visited

12,000+ ideas submitted

Innovation Communities (IC) at Pfizer

36,000+ comments on ideas

Operating principles:1. The Wisdom of Crowds2. The Medici Effect3. The Long Tail of Innovation4. Network Behaviors

1. The Wisdom of Crowds

2. The Medici Effect

3. The Long Tail of Innovation

Four Operating Principles

4. Network Behaviors

1. The Wisdom of Crowds

2. The Medici Effect

“In Italy for 30 years under the Borgias they had warfare, terror, murder, and bloodshed, but they produced Michelangelo, Leonardo da Vinci, and the Renaissance.

* Graham Greene wrote the book and screenplay. Orson Welles ad-libbed just one line -- this, the most memorable one of the film.

In Switzerland they had brotherly love - they had 500 years of democracy and peace, and what did that produce ?

The cuckoo clock.”

The Third Man* on

Innovation

3. The Long Tail of Innovation

The Long Tail was popularized by Chris Anderson in an October 2004 Wired magazine article, in which he mentioned Amazon.com, Apple and Netflix as examples of businesses applying this strategy. Anderson elaborated the concept in his book The Long Tail: Why the Future of Business Is Selling Less of More.

weekly sales

The best sellers that Barnes & Nobles will have in stock.

hundreds that sell many each

The “long tail” that only iT A

3. The Long Tail of Innovation

rank of song or book

sales iTunes or Amazon can afford to deliver.tens of thousands that sell a few each

the Tail is made possible by dropping carrying costs 10x,

the Head is defined by the point where the revenue per book drops below the cost of carrying it.

3. The Long Tail of Innovation

rank of song or book

weekly sales

cost of carrying a

book

100x, or more.

Internet technology is the big enabler.

• Someone has a business problem.

• The people “nearby” are good & have useful ideas.

3. The Long Tail of Innovation

• Someone has a business problem.

• The people “nearby” are good & have useful ideas.

• By reaching “farther out”, the density of people with useful

3. The Long Tail of Innovation

ideas goes down…

• Someone has a business problem.

• The people “nearby” are good & have useful ideas.

• By reaching “farther out”, the density of people with useful

3. The Long Tail of Innovation

ideas goes down…

• ..but the total numbergoes up. This is the long tail of new ideas.

• It is the low cost, huge reach, and diversity of content that make the Long Tail practical and valuable.

Reaching out brings more, and more diverse voices.

your local team

internal customers and

Not just more, but more diverse

Scale and risk rise, but can be readily managed.

stakeholders

your sales force

external customers

• It’s nothing like a bell curve

• Classic statistics is useless.

S l

3. The Long Tail of Innovation – Pfizer 3 Years Data

1,500

2,000

2,500

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ple

ente

ring

n 5-

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Ideas + Comments Received,Pfizer Idea Farm, 2006-2008

1,500

2,000

2,500

1,500

2,000

2,500

n it

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ple

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n 5-

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Ideas + Comments Received,Pfizer Idea Farm, 2006-2008

• Some people enter no ideas, some enter hundreds. The range is huge.0

500

1,000

0 100 200 300

ideas per author

how

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eth

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any,

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500

1,000

0 100 200 300

ideas per author

0

500

1,000

0 100 200 300

ideas per author

how

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linear graph

Log log plots show

log-log

100

1,000

r aut

hor

200 challenges, 12,700 ideas, 3180 authors

100

1,000

r aut

hor

200 challenges, 12,700 ideas, 3180 authors

3. The Long Tail of Innovation – Pfizer 3 Years Data

Log-log plots show the tail clearly.

A straight line on a log-log graph has the form y = Cx-b , a power law.

1

10

1 10 100 1,000 10,000

author rank

idea

s pe

1

10

1 10 100 1,000 10,000

author rank

idea

s pe

The “area under the curve”, the cumulative total of all entries, reminds us how many people are in the tail.

100

1,000

r aut

hor

60%

80%

100%

ent o

f ide

as

200 challenges, 12,700 ideas, 3180 authors

100

1,000

r aut

hor

60%

80%

100%

ent o

f ide

as

200 challenges, 12,700 ideas, 3180 authors

3. The Long Tail of Innovation – Pfizer 3 Years Data

1

10

1 10 100 1,000 10,000

author rank

idea

s pe

r

0%

20%

40%

cum

ulat

ive

perc

e

1

10

1 10 100 1,000 10,000

author rank

idea

s pe

r

0%

20%

40%

cum

ulat

ive

perc

e

100

1,000

r aut

hor

60%

80%

100%

ent o

f ide

as

200 challenges, 12,700 ideas, 3180 authors

100

1,000

r aut

hor

60%

80%

100%

ent o

f ide

as

200 challenges, 12,700 ideas, 3180 authorsThe people “in the tail” contribute 80% of all ideas and value.

The top 1%(30 of 3180) contribute 20% of

3. The Long Tail of Innovation – Pfizer 3 Years Data

1

10

1 10 100 1,000 10,000

author rank

idea

s pe

r

0%

20%

40%

cum

ulat

ive

perc

e

1

10

1 10 100 1,000 10,000

author rank

idea

s pe

r

0%

20%

40%

cum

ulat

ive

perc

econtribute 20% of all ideas.

Jane Pete

4. Network Behaviors

Jane and Pete have the same number of colleagues in their networks, but these colleagues are connected in different ways.

Who is likely to have more good ideas? Why?

++

Innovation Communities: Decentralizing Innovation

“White spaces” are best explored by networked communities

Bridging silos to leverage diversity promotes maximum performance

Network

Leaders can “pull” ideas by linking challenges to strategic objectives

Networks will mobilize in areas of need

Strategic Challenges

Toolkits and templates to assist in solution building

Learning and training to build individual capacity

Visibility of activity with reporting and metrics

Process and Support

Network and Form Communities

Challenge for Solutions

Suggest Ideas

What can you do on Innovation Communities?

Sponsor Ideas DevelopBusiness Cases

Form Teams

The Different Roles

Engage with colleagues

Learn about and contribute to the business

Be recognized for delivering value to Pfizer

Colleague

Form high-performing teams quickly

Help teams collaborate and deliver value

Be a more effective manager by knowing more about your team members

Manager

Gain visibility and track ideas

“Pull” ideas for strategic challenges, bridge white spaces

Communicate strategic challenges to targeted communities

Engage and award

Senior Leader

How Does “Pat” Use Innovation Communities?

Pat is a Pfizer employee with lots of ideas,

energy, and passion for Pfizer

She logs onto

IC.Pfizer.com

Fills out her profile and

joins the e-Health community

Pat networks and engages with others

e-Health community leader

poses a challenge to solve patient compliance

using e-Health

Pat proposes an

idea and discusses it with community members

She shares the discussion with her boss and network of contacts

Pat assembles cross-functional teams

Pat receives community encouragement to

promote her idea into a project and form a team

Recruits a colleague with finance i d k t h texperience and a market research expert

to further develop the business case

Pat’s team develops a compelling business case and a BU leader

sponsors the team

Pat finds sponsors to test her ideas

The team receives some funding for

primary research to validate the

business plan

The sponsor approves a pilot with additional funding, and directs Pat to more

internal and external partners

The team runs the pilot and

reports the results to the sponsor through the platform

Pat’s sponsor uses ICs to grow his business

This is Pat’s sponsor

He uses a dashboard for visibility and tracking status of the most interesting teams

When he finds a promising project like

Pat’s, he suggests improvements

to the team, connects the team to

other experts, or funds pilot programs

Pat creates value for Pfizer using Innovation 2.0

The sponsor recommends the team for

the annual “Innovation Excellence Award”

Pat presents the pilot results with her team at the BUresults with her team at the BU annual off-site and receives more positive responses to develop an operating business plan

Pat, her team, the sponsor, and Pfizer

are all winners!

“Pat” Innovates Today for Pfizer’s Tomorrow

1

2

3

Connect and engage

Propose ideas

Collaborate in teams and communities

4

5

communities

Launch projects, develop business cases, and seek sponsorship

Innovate and be rewarded

A Transparent Innovation Tracking Platform

Staging Discovery Scale-upDevelopment

Minimize duplication of ideas and projects

Prioritize top opportunity areas

Encourage activity in addressed opportunities

Transparent tracking along the workflow stages

Filtering by Business Unit, Community, Geography

Visibility at Colleague, Manager and Senior Leader level

• Discuss four operating principles that enable Innovation Networks to prosper

• Present the different roles necessary to ensure the success of Innovation Networks

Session Objectives

• Overview of the day-to-day operation of Pfizer’s Innovation Networks

• Discuss how a company can establish a culture of knowledge sharing

Q&AQ&A

SEE MORE INSIDE THIS BOOK

Book “Innovation Hardwired”Available at

AuthorAlexis P. Goncalves

Join my Networkhttp://www.linkedin.com/in/goncalves

M03Driving Innovation Through Networks

WCQI Concurrent SessionMonday, May 21st, 2012, 1:30pm – 2:30pm

Mr Alexis GoncalvesMr. Alexis GoncalvesDirector, Innovation Catalyst, Pfizer Inc.

ASQ Fellow, ASQ Director at Large 2008-2012