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Henley offers scholarships to investigative journalists
Henley offers scholarships to investigative journalists

5 trends that can keep the South African MBA relevant
5 trends that can keep the South African MBA relevant

We need to realign government, business and civil society
We need to realign government, business and civil society

Life as a full-time MBA student
Life as a full-time MBA student

Brexit delay provides breathing space for SA
Brexit delay provides breathing space for SA

MSA joins the ADvTECH family
MSA joins the ADvTECH family

SA plunges to 117 out of 149 in gender wage equality
SA plunges to 117 out of 149 in gender wage equality

UCT’s Executive MBA recognised for its distinctive approach
UCT’s Executive MBA recognised for its distinctive approach

GIBS Executive MBA programme debuts in top 50
GIBS Executive MBA programme debuts in top 50

Can Africa fill the glass?
Can Africa fill the glass?

YALI AFRICA launch at Unisa
YALI AFRICA launch at Unisa

The fake resurrection of South Africa
The fake resurrection of South Africa

Don't panic: The digital revolution isn’t that unusual
Don't panic: The digital revolution isn’t that unusual

Why Agile works
Why Agile works

How firms can avoid the mediocrity trap
How firms can avoid the mediocrity trap

How a 100000-strong company is relearning how to innovate
How a 100000-strong company is relearning how to innovate

The changing shape of the MBA
The changing shape of the MBA

Adding climate change to curriculum is a top priority
Adding climate change to curriculum is a top priority

The MBA should turn you into a business disruptor
The MBA should turn you into a business disruptor

Innovation in SA organisations driven by C-level support
Innovation in SA organisations driven by C-level support

UNISA SBL a torch-bearer of training for military veterans
UNISA SBL a torch-bearer of training for military veterans

Scaling up the MBA for relevance in the 4IR
Scaling up the MBA for relevance in the 4IR

Moody's: SA not out of the woods yet
Moody's: SA not out of the woods yet

GIBS manufacturing-focused MBA kicks off in Durban
GIBS manufacturing-focused MBA kicks off in Durban

Henley’s Makhoalibe selected for sought-after programme
Henley’s Makhoalibe selected for sought-after programme

Personal potential, a source of power
Personal potential, a source of power

Reach your business leadership potential with a MBA from WBS
Reach your business leadership potential with a MBA from WBS

MPC: SA needs a period of stable interest rates
MPC: SA needs a period of stable interest rates

SA’s energy problems just the tip of the iceberg
SA’s energy problems just the tip of the iceberg

What's really driving disruption?
What's really driving disruption?

Why has there been such a failure of leadership?
Why has there been such a failure of leadership?

Steinhoff: Exactly where does responsibility stop and start?
Steinhoff: Exactly where does responsibility stop and start?

The cure for the loneliness of command
The cure for the loneliness of command

How to survive in the age of digital transformation
How to survive in the age of digital transformation

New MBA timetable starts in 2016
New MBA timetable starts in 2016

EVENTS
Henley MBA & PGDIP Preview Day
Henley MBA & PGDIP Preview Day
29 May 2019,
Pretoria

UCT GSB MBA Information Sessions
UCT GSB MBA Information Sessions
15 October 2019,
Johannesburg



04 MAY 2019
How a 100000-strong company is relearning how to innovate
by Julian Birkinshaw, Enrique de Diego, Monika Lessl, Henning Trill and Julia Hitzbleck

Innovation in painkillers, polyurethanes, selective herbicides, antibiotics and anticoagulants are among a long list credited to pharma giant Bayer over its 150-year history. It still employs 14,000 people in research and development alone.

However, management has recognised that while this commitment to scientific progress remains essential, it is not enough. The world of life sciences is changing even more rapidly today than in previous generations. Innovation isn’t just about new technologies and new products – it also means developing new services, new business models and entirely new ways of working. Bayer used to see the other big pharma and crop science companies as competitors; now it is Silicon Valley start-ups like Verily and 23&me that are threatening market disruption.

Bayer’s reinvention began five-years-ago, it looked at how to problem solve, how to come up with new ideas and how to drive them forward into services and products. It has rethought and expanded innovation – so that people across the company, in whatever function, can identify and act on opportunities to do things differently. Bayer needed to operate in a more agile way. The pace of change inside the company needs to match the pace of change outside.

Choosing the right innovation model

Delivering an innovation agenda is challenging, more so in a company of 100,000 individuals, and the closer executives looked at models, which had worked elsewhere, the more challenging it looked.

From the start Kemal Malik, Member of the Board of Management with responsibility for innovation, knew the company could not simply replicate a proven solution: “We cannot be like Google, but neither do we want to be. We need to plot our own path.”

Inspired by John Kotter’s dual-operating structure model, an agile network was developed, a volunteer group of many hundred people, still working primarily in their day jobs within the established hierarchy, but with between 5% and 10% of their time devoted to innovation.

A network working on fast-cycle, informal project cutting across the silo-based structure. The agile network has become a spine of innovation ambassadors and coaches running through the entire company, taking on collective responsibility for innovation and transmitting new innovation culture.

To be successful two questions needed to be answered: How to build the network? And what should these innovation roles jobs look like?

A point of view on culture change

One of the first mass-participation initiatives was an online idea forum. Most large companies have tried some version of this, but with mixed outcomes. Bayer’s first effort, Triple-I (Inspiration, Ideas, Innovation) was launched in 2010 but it never really took off – it lacked focus, and no-one seemed to feel any responsibility for following up on ideas.

Learning from those mistakes, WeSolve was launched in 2014, which asked employees to contribute solutions to specific technical or commercial problems, rather than come up with unsolicited ideas. It focused on existing challenges and built a network of 40 WeSolve coaches, people across the company who were excited by the initiative and prepared to devote some discretionary time to the project.

These people helped identify and simplify challenges, so they could be posted on WeSolve and encourage others to contribute. Meetings were held once a year for these coaches, to inspire and involve them further. In year one, WeSolve attracted 1650 contributors, and 23,000 Bayer employees visited the site.

The success of WeSolve was confirmation of the power of an informal network for shifting behaviours in a large company. But it was felt to be just scratching the surface of a bigger change.

An Innovation Committee of 14 top executives was added into the mix, to ensure there was real ownership at the top of the company, with a full-time Innovation Strategy team of five people, orchestrating the portfolio of specific initiatives, or Innovation Enablers, as they came to be called. It was part of a strategy to pick to drive ‘personal activism’.

To incentivise the project, innovation bonuses were considered but it proved impossible to design in a fair way, and, most importantly, it didn’t develop people’s intrinsic interest in making a difference. Instead, a qualitative measure was added to people’s annual performance review (what have you done to support innovation this last year?) and - it provided visibility to senior management.

It was an approach designed to excite and engage people rather than steering them in an overt way. Most employees want to do a good job and want to fit in; therefore, the way they behave on a day-to-day basis is driven largely by the informal stimuli and cues they receive from the people around them.

Therefore, one key priority was to inspire people, using informative and exciting stories of people across the company who had been successful in their innovation endeavours. Based on their experience, many were interested to learn more, so Bayer offered new innovation methodologies like Systematic Inventive Thinking, which fosters creativity and customer-centricity.

Building an agile network

Getting the right body of people to champion innovation across a company the size of Bayer is no easy task. Senior executives may not have time to do the job well, while lower-level employees may lack influence or gravitas. Moreover, you need people with motivation and capability to send the right message, and to devote the necessary amount of time to this discretionary activity.

In early 2016, country and function heads were asked to identify Innovation Ambassadors who would be the central contact for innovation in that country. Initially 80 were appointed, typically functional heads within a country or business unit, people who were enthusiastic about innovation and senior enough to make things happen.

During 2016 and 2017, the Innovation Ambassadors appointed more than 600 innovation coaches (these people stayed in their existing roles, and worked between 5% and 10% on innovation).

So what do the innovation coaches actually do? One popular activity is the fast session – a short, structured workshop to address a specific problem. A manager might be struggling with a poorly-selling product, an overly complex process, or a new digital competitor. The innovation coach would quickly assemble a team of four to six people to address the problem.

After a while, Bayer started counting these activities. More than 1000 fast sessions took place across the company in the last three months of 2017, a level of effort, which has continued through 2018. The fast sessions quickly became the focal activity of the innovation coaches, and doing them helped spread the word about all the other parts of the innovation agenda.

To reinforce the efforts of the innovation coaches –and to deepen their expertise – an advanced course for those who had run at least ten fast sessions was launched. By late 2017, 49 people had completed this additional course.

Extending the agile network

This volunteer army of innovation ambassadors and coaches, were able to make dramatic progress in developing other aspects of Bayer’s innovation agenda.

In 2017 the CATALYST fund was created, it deployed a combination of professional support (using Lean Startup principles) and money to explore larger business opportunities across the company. It sought to further activate the network and foster Innovation projects that would make a real impact.

Within two weeks, 120 specific challenges and opportunities were put forward for consideration. The central team did an initial prioritisation, then the ambassadors voted on the short list. €50,000 was put behind 28 of these challenges, 11 received a further €100,000, and by early 2018 Bayer had three pilots: a new business model in animal healthcare, a digital solution for clinical operations, and a gamified education app.

Knowing that innovation cannot be prescribed, nor delegated, Bayer’s agile network recognises that innovation is everyone’s job, and that it takes resilience and patience to flourish.

Key takeaways

  • Build your own solution, and experiment as you go. Best practices are usually context-specific - there aren’t any ‘hidden secrets’ to innovation.
  • Innovation is a social activity, and connectivity is an asset. Innovation happens in teams, in cross-functional workshops and through many people’s involvement.
  • The dual-speed model needs a new mindset. Fast-cycle work is about experimentation, tolerance of ambiguity, and openness to failure, and these qualities do not come naturally to those who have spent their entire working lives at Bayer. This isn’t a challenge the company has completely resolved. It is still working on defining the right metrics, putting the right leaders in place, and building the necessary level of understanding across the company.
Source:

Business Strategy Review
Business Strategy Review analyses and interprets contemporary research on strategic management and the wider business environment, publishing articles which combine disciplines and cross cultural boundaries. Leading business thinkers from around the world, both academic and managerial, come together in Business Strategy Review to debate current issues and present cutting-edge research and ideas. Visit our website.

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