Commercialization Overview

What are you going to tell me that every other management consultant hasn't already said? Pharmaceutical Industry Colleague (2009). Personal Communication

The discussions on commercialization+ for this month have never before been seen. Effectiveness rules. Today less than one-in-ten prototypes make it to a blockbuster+ commercial status. In World Class R&D we focus on improving this ratio, and to-the-devil with the hundreds of other tricks played on you to get you take your eyes off the ball. Costs, time-to-market+, efficiencies, etc. all have a time and a place, but are very much subsidiary to the task at hand. Industry veterans can probably not now see how the items in Table 1 have anything to do with commercialization. Come back and revisit this table after finishing the seven articles on this month's home page.

Table 1. Effectiveness in Commercialization. List of key ingredients for building effectiveness in Commercialization. This is not your typical recipe.
Of all the investment categories+, commercialization is the most complex and fraught with emotion. Commercialization is the largest spend in terms of immediate outlay, and often in terms of overall outlay. There are many diverse types of team member, each with their own agenda. There can be hundreds of millions of U.S. dollars at stake in service fees. We not only struggle with effectiveness, like in the other investment categories, we also struggle with getting everyone on the same page. Many of the team members will be employees of large service providers with little care for World Class R&D. Greed will be found front-and-center at the negotiations; and Greed can be a fickle partner.

Don’t get lost in the details behind the recommendations in this month’s articles. Focus on the people. We don’t tie your hands. We align the financial incentives (e.g., pay-for-performance+). We align the emotions (e.g., regret management+). We give you a dope slap when you can’t see Mother Nature has left the building. This month you’ll read about ratcheting royalties+, pay-for-performance, commercial equation+, ties that bind+, and a half-dozen other management techniques for increasing effectiveness. Don’t let the terminology get in the way of your understanding the intent of our approach. Keep in mind the underlying focus on people and all will become clear.

First, a definition. Commercialization takes a prototype and makes it ready for commercial sales. This includes making it an attractive product from the standpoint of the consumer (e.g., market testing) and of our manufacturing colleagues (e.g., production design). Commercialization can also include making the product attractive from the standpoint of government regulators. In World Class R&D we discuss commercialization of blockbuster products sold to consumers. For now we set aside discussions about commercialization of sub blockbuster+ products, or products for industrial sales.

Table 2. Commercialization Team Members. Table listing major players in commercialization and their roles at a summary level. This is not a comprehensive listing. It is used to orient the reader to the players as they are introduced in the article.
Names of participating departments vary by industry, but for purposes of this month’s home page articles, Table 2 gives the generic designations we will use for key team members:

In the pharmaceutical industry, the team includes Discovery aka Research, Pre-Clinical (e.g., Toxicology, Clinical Pharmacology), Clinical, Pharmaceutical Sciences (e.g., Analytical Chemistry, Formulation), Sales and Marketing, and over a dozen other contributing departments. More team members will be introduced as the discussion proceeds. For example, special treatment is given to commercialization activities needed for FDA approval (e.g., Regulatory) in this article.

How do we increase the effectiveness of commercialization?

  • We give you a rich basket of opportunities from start to finish
  • We build tribal loyalties (e.g., ties that bind)
  • We align everyone’s interests: both financial and emotional
  • We pay attention to special management needs during a shutdown
  • We strongly foster creativity aligned to our blockbuster goals

 

Why and how we seek these means to effectiveness is the discussion for this month’s home page articles: these constitute World Class R&D measures of success for commercialization.

 


Table 3. Commercialization Milestones. Table listing key milestones in commercialization. These terms are not specific to any industry, and are defined here to orient the reader as they are mentioned in the text.
Commercialization sits within a series of milestones that runs from prototype build to commercial success. Each milestone provides the opportunity to inject our means to effectiveness into the management of commercialization. For example, during Prototype Build, we find ways to inject changes that make sure the delivered prototype package doesn’t tie our hands in later commercialization work. We increase effectiveness by reviewing how we do shutdown (e.g., Regret Management), and how we declare success (e.g., Ratcheting Royalties). Over a dozen new management recommendations across these milestones are described in this month’s website. See here for a sampling.

Success at commercialization means billions of U.S. dollars will exchange hands. It pays to get this right. Get your bean counters out of the room. If you get a product worth U.S. $1 billion per annum, what does it matter if you’re up or down by $100 million in the cost of its commercialization? Recall we’re no longer dealing with today’s dismal one-in-ten success rates. Squeeze too tightly and success will slip out of your hand. Talented individuals join our franchise to be as successful as they can be. Doing commercialization well is integral to that formula.


This month’s home page gives you all you need to be effective at commercialization. But follow the instructions like a recipe and you’ll fail. The implicit knowledge+ behind these recommendations runs deep. You need help from someone who is World Class R&D certified. Don’t poison the well by trying this alone, and failing.


Home Page September 2010