World Class R&D and Early Biotech

The World Class R&D Institute is the result of a four year study into what it would take to push industrial R&D toward much greater levels of productivity. The answer was elegant, internally consistent, comprehensive and of high explanatory value for today’s R&D behaviors and lack of productivity. It may be too late.

Exhibit 1: Typical Sequencing in New Industry Formation. In the history of any new science platform, assignment of Intellectual Property Rights (IPR) looms large. Industries moving into Phase 1 must build upon a solid IPR foundation, established during the introduction of the new science. This can take as long as a decade.
The Powell & Sandholtz study analyzed the early biotechnology industry and found an organizational form quite analogous to that identified by World Class R&D. Many World Class R&D recommendations (e.g., innovation in finance, innovation in the act of research) would have fit quite nicely into the early biotechnology industry. Have we simply reinvented the biotechnology organizational form at World Class R&D?

The similarity in findings between the two efforts is not surprising. Both the Powell & Sandholtz article and World Class R&D covered the same topic: the launch of new industries. New industry launches follow a typical sequencing as shown in Exhibit 1:

  • basic-science discovery,
  • recognition of the commercial value of the discovery with an ensuing frenzy to stake out Intellectual Property Rights, and
  • development of new organizational forms to exploit the new science platform.

This is essentially the same sequencing seen in the 19th century Steel industry described by Morison. This is sequence codified in the World Class R&D website.1 This sequencing of new industry formation is found in most Phase One industries+.

World Class R&D focused on new organizational form(s) for R&D generically. Ingredients for that new form (e.g., 30-70 Rule, Independent Evaluation+) were deliberately chosen to be in sharp contrast to practices seen in today’s R&D, to show there were ‘new ways’ to tackle old activities. We did this with the intention of reversing the current slump in much of industrial R&D.

The Powell & Sandholtz article focused on the ‘new’ in the Biotech organizational form, and although the ingredients were different, it was pleasing to find the overall categories were the same (e.g., innovation in research methods, innovation in finance, innovation in staffing models). Our generic solution now can point to a specific historical instance of its application.

World Class R&D was not an exercise-at-a-distance: a historical review. World Class R&D (“The Institute”) was never intended as an academic exercise . It was founded on concrete experience (mostly in the pharmaceutical industry) and aimed at practical solutions that could be ‘plugged into’ today’s industry. Its contributors and its collaborators are still fully steeped in the daily grind of industry. What binds our efforts, if anything, is a common sense of conspiracy. What does it take to undermine the existing social structures (i.e., organizational forms) so newer, more epistemologically- and physiologically-sound ones could arise? Biotech was a new industry born out of academia. It needed merely to ignore existing organizational forms. World Class R&D (originally) aimed for a rebirth of existing industries: a means of redirecting current R&D toward new and more productive forms.

There is a strain of micro-economic theory that explains today’s organizational form for an industry as a result of many thousands of compromises and work-arounds taken by individuals on-the-ground and charged with making daily progress. Today’s employees know the minutia and are constantly weighing new approaches against this knowledge. It takes years to build up an understanding of the minutia, and so broad brushstroke changes need years of study to show they addressed the minutia.

World Class R&D looked at the broken R&D models of today’s industries and asked a different question: What if we set aside the minutia? Is there a better way forward? Can we change R&D by not being beholden to today’s Three C’s+ (paying homage to a few uncontested obstacles)? We were successful in finding a solution. Unfortunately it now appears the World Class R&D solution is too much a change from today’s models to allow its adoption. The built up inertia in many industries from past compromise is seemingly too great to be overcome (or we’re too late). New organizational forms are now seen to require new industries: stage three industries apparently cannot be reborn as stage one.


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