Magazine Article | November 8, 2017

Don't Have A Chief Innovation Officer? Get One … Now

Source: Life Science Leader

By Gail Dutton, Contributing Writer
Follow Me On Twitter @GailLdutton

Chief innovation officers (CInOs) are poised to become one of the more important executives in the C-suite in pharma just as they are in other industries. As the scope and pace of changes facing the life sciences industry accelerate, innovation must occur faster — not just in R&D but throughout the organization. Achieving fast, focused innovation, however, often requires thinking outside the usual silos and chains of command to foster — and manage — innovation in unusual ways.

CInOs are their company’s chief visionary. Not responsible to individual business units, they have the freedom to watch trends in their industry and in others, and the responsibility to understand open innovation, suggest new ideas and business models, seek out new technologies and new methodologies, remove roadblocks, and help teams go from “Can we do it?” to “How can we do it?” Their role is to inspire staff members to develop disruptive strategies and products.

Plenty of companies have innovation officers for key business units. Fewer have them for the company as a whole. CInOs are particularly sparse in Big Pharma. Yet having someone who regularly reaches across silos to share ideas, ask the “what if” questions, and matchmake among programs can catalyze innovation in ways business unit innovation officers often can’t.

Innovation may be easiest at startups. “Cloud Pharmaceuticals is an early-stage company, so we don’t follow industry conventions,” says Ed Addision, the company’s chairman and CEO. “Rather than draw an organizational chart and find people to fill it, we find good people who can contribute and then create their boxes. We recruit people with a moonshot mindset.”

Cofounder Lawrence Husick fills the CInO box as well as that of in-house counsel. “He’s not the kind of guy to design and develop products, and he’s not a regular operations guy. He’s more strategic,” Addison says. Perhaps most importantly, Husick, who teaches Management of Innovation at Johns Hopkins University, knows that innovation can be taught.

“We are a small company, so the only barriers to innovation are attitude, feasibility, and capital,” Addison says. It helps that Cloud Pharmaceuticals is unencumbered by the large bureaucracy common in many older, larger organizations.

"Creative thinking coupled with pragmatic skepticism in an entrepreneurial setting is crucial to making this approach work."

David Steinberg
Cofounder and CInO, PureTech Health

In practice, this means that Cloud Pharmaceutical’s chief scientific officer guides scientific innovation in its drug discovery work while the CInO takes a broader look at innovation. Husick brings in new technologies for consideration and inspires and motivates staff. “They play different roles,” Addison says.

For instance, Husick identified blockchain technology — a new, secure way to verify and audit transactions — as a potential technological method of tracking IP rights. “We plan to use it once we increase our volume of projects,” Addison says. Another example is the IP strategy Husick is developing to market many of the targets discovered by artificial intelligence during the company’s probes of the entire drugable genome. To handle the considerable computation needs, Cloud Pharmaceuticals is contracting with a data center in Iceland and, in the process, launching a new business model in which it sells data to pharmaceutical companies.

PureTech Health calls itself “the biopharma company of the future.” To live up to that bold claim, it has to innovate as a matter of course. It created the CInO position to help guide and stimulate innovation throughout each aspect of its programs.

“I’m responsible for ‘what’s next’ at PureTech Health,” says David Steinberg, cofounder and CInO. Envisioning what’s next involves working closely with PureTech’s internal scientists and with a broad network of academic labs and companies throughout the world. In so doing, Steinberg tries to remain at the forefront of emerging fields of biology and current thinking so he may “think creatively and holistically about potentially disruptive ‘next’ opportunities.” Such broad, interdisciplinary exposure helps catalyze insights that set the theme for new areas of discovery that lead to first-in-class solutions to major health challenges.

Steinberg has two fundamental approaches to innovation. First, he and his team of internal and academic collaborators identify problems in search of solutions (rather than developing a technology and wondering where it could be applied). Once probable solutions are identified, he says, “My job then is to de-risk or shut down experimental programs early on so each new program has the best chance of reaching an informative clinical outcome. It’s a very nimble and entrepreneurial approach that can yield results with only the right team. And it only can be accomplished proactively and collaboratively.” The company has used this approach for each of its 22 programs, seven of which are in the clinic.

Johnson & Johnson doesn’t have a CInO but, in January 2018, William N. Hait, M.D., Ph.D., will take the reins as the first-ever global head of Johnson & Johnson external innovation. This new position covers all of J&J, including its pharmaceutical, device, and consumer products divisions.

“At J&J, we felt we had advantages that could be realized if consumer, medical devices, and pharmaceutical divisions could be harnessed to work together,” Hait says.

“We think of innovation as an energy grid, with clusters of innovation like those in San Francisco, Cambridge, London, and Shanghai [sites of J&J innovation centers],” he elaborates. “To take advantage of those innovations, you must be plugged into the grid. Someone must take the lead in plugging in and drawing innovations from that grid in a focused, sensible way.”

When Hait transitions from global head of Janssen R&D to global head of J&J external innovation, he will lead R&D initiatives across J&J’s innovation centers, JLABS, venture funds, and the World Without Disease initiative. His mission, he says, is to “take on problems that less broadly based companies would have difficulty tackling.”

Creating a world without lung cancer is one example. Oncology products today typically focus on extending remission rates, but “to be curative, you need a group totally focused on cures.”

To create those focused groups, Hait plans to tap the expertise of behavioral scientists in the consumer group who understand branding, engineers who know how to design a range of devices, and scientists who know how to make drugs. “Put them around a table, and it may be possible to cure or prevent a disease.”

J&J isn’t creating a new bureaucracy. Instead, Hait will work autonomously, collaborating with core business units and external partners. He envisions a research group heavily involved in licensing and partnering that is closely connected to core elements across J&J. “The critical role is to see the possibilities that others may or may not see and to invest to bring them to the point where those possibilities are actionable,” he says.

Stimulating and guiding innovation begins with a compelling strategy. “The notion of creating a world without disease seems ridiculous,” Hait says. “But, if you have a compelling strategy, people begin to believe it may be possible. Then it becomes self-organizing.” As J&J fleshed out its approach, employees from throughout the world called and asked to be a part of it.

Be collaborative. Bringing together diverse disciplines and roles sometimes yields surprising insights into the problem as well as the solution. PureTech Health, for example, consults its commercial group in addition to its internal and external medical and scientific experts. “Creative thinking coupled with pragmatic skepticism in an entrepreneurial setting is crucial to making this approach work,” Steinberg says.

"We are a small company, so the only barriers to innovation are attitude, feasibility, and capital."

Ed Addison
Chairman & CEO, Cloud Pharmaceuticals

“Bring me maniacs willing to go all out, because these things aren’t easy to accomplish,” Hait says. He wants risk-takers who can see the possibilities of the mission and are willing to build a new structure, eschewing the sometimes stifling comfort of tried-and-true models and methodologies.

“An entrepreneurial culture that balances creativity with skepticism is vital,” Steinberg agrees. “The same innovative process that works in a small or midsize firm won’t necessarily work in a larger company [despite greater resources] if that entrepreneurial culture is lacking.”

Not surprisingly, C-suite buy-in is imperative. That means gaining not just nodding acquiescence but the informed support that comes from reporting directly to the C-suite.

The CInOs at Cloud Pharmaceuticals and PureTech Health both are core members of the senior executive leadership teams. At J&J, the reporting lines are still being defined, but Hait is likely to continue reporting directly to the CSO and to have direct relationships with others on the senior executive committee. These direct relationships enable them to make timely contributions to the direction of the company that both bolster and focus innovation.

As innovation transitions from a hit-or-miss endeavour to a process that can be directed and managed, the case for a CInO is growing. A proactive chief innovation officer can provide the guidance for enterprisewide creativity, while enhancing an atmosphere that encourages innovations that match the company’s goals and mission.