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The Challenge of Brash Citizens

The most difficult task for the funding agent+ will be the distribution of new-found wealth across the citizenry. We will often distribute enormous sums of cash.

Your early success and momentum are a result of the full faith and backing you received as a member of the community. You had access to the community Rolodex. You leveraged the financial reputation built up by those who came before you. You leveraged the funding agency infrastructure. There are a thousand little considerations you received that contributed to your eventual success. It’s excusable to forget or diminish some of these benefits individually, but you could not have succeeded without them collectively.

It’s too easy for citizens to point to their own unique contribution as a claim for a greater share of newly-minted wealth. This wealth emerges from the minds of members in our community. The very confidence and brashness we instill into the minds of our citizens often permit them to later claim they could have done it without us, and therefore deserve a greater share in their success. We check this ambition, but in a way that keeps the passion directed toward building even more

Reflection-in-Action

It seems to me that anything that can be taught to another is relatively inconsequential and has little or no significant influence on behavior. I realize increasingly that I am only interested in learnings which significantly influence behavior … [and] the only learning which influences behavior is self-discovered, self-appropriated learning … truth that has been personally appropriated and assimilated in experience. [This] cannot be directly communicated to another. Carl Rogers (1952). As cited in Schön, D. A. (1990). Educating the reflective practitioner

Introduction

You can’t instruct others when the rules have not been written. Ours are Phase 1 industries+, staffed by individuals not overly beholden to the prejudices of today’s industries and practices. These are individuals who simply ignore accepted knowledge and make their own.
Tonic, Lower East Side, NYC, 2005
Tonic was a live music venue which opened in 1998 and closed in 2007. It was self-described as supporting "avant-garde, creative and experimental music."

Knowing is not the same as doing. Knowing is analytic; doing is artistic. We’re industrial R&D, which is doing. You can’t instruct our researchers with books, lectures or online tests. Case studies, an approximation, are often instructionally hijacked to teach knowing and not doing. We must teach students how to do.

We rely on mentor-ship. Humble mentor-ship. We perhaps have heuristics or shared technical skills but the rules are not written. Our mentor is a learning mentor, going deeper into their own understanding of the case-at-hand while learning how to best help others go deeper in their understanding. Mentor and mentee jointly explore the ways to better exploit the raw materials at hand, given the constraints imposed by their physical properties. Our mentor revels in opening up new, unexplored dimensions in the

You Have to See It to Believe It

Introduction

Archimedes Lever. Wall painting in the Stanzino delle Matematiche in the Galleria degli Uffizi (Florence, Italy). Painted by Giulio Parigi (1571-1635) in the years 1599-1600. See here for more information.
Many don’t believe steady share price growth can be sustainable over the long term. I guess you would have had to seen it to believe it, as I have. It’s a very simple concept. You borrow against future earnings or you husband past earnings to tide you over during lean times. It’s a stabilization fund. When times are lean you make a market in your own shares. When times are over-exuberant you dump shares to maintain moderate growth.

Steady share prices require a trusted third party. The above concept often falls apart during generational shifts in management. The new generation doesn’t appreciate the value of steady share prices and questions the productivity of money placed into the stabilization fund. “We haven’t seen that kind of price drop in over a decade!” A trusted third party, outside the reach of creditors, tax authorities, and future generations of ‘smart’ managers, makes a market in our shares using our money. This trusted third party ‘believes’ in the mission of the funding agent+.

We rely as well on trusted sources of funding, investors for our derivative investment vehicles+. We tap into these

Decline of the Pharmaceutical Industry

The pharmaceutical industry is in decline. It’s moving to Phase Three, which today is known as the generics industry. Only this generics industry will be much more competitive and cutthroat; there are no new branded drugs going off-patent to give up-front profits to offset the subsequent years of near-zero profits.1

I was quite upset over the recent massive layoffs in R&D and I vented this frustration in a front page for the website. But in retrospect+ the layoffs make perfect

  • 1. Today branded drugs going off-patent give first-to-market generics manufacturers six months exclusivity under the Hatch-Waxman Act. They get six months of sales at high branded prices, at almost no cost. For a blockbuster+ drug this can translate into over U.S. $500 million in sales at extremely high profit margins. You only need one or two of these a year to show a tidy profit.
    Another way to look at it is to view today's generics industry as in Phase II. Several companies have optimized processes needed to extract monopoly profits as allowed by the Hatch-Waxman provisions. These firms too face a future in a Phase III industry, as new branded products vanish.

World Class R&D Going Forward

Follow the money.

In this month’s Editors’ Picks we discuss in depth the need for new men, new money and new organizational forms. These are the ingredients for successful Phase 1 industries+: industries looking to take new science and put it on a firm commercial footing. For the last ten months across the website, World Class R&D has worked out what is meant by each of these ingredients. In this article we explore the prevalence of these ingredients within Asian cultures.

The U.S. market will not embrace your ideas. Head to Asia like Deming. Head of Clinical for Major Pharmaceutical Company (2011). Personal Communication.

If we need “new money” and “new men” for our new industry, then can we consider a change in venue to Asia? Can we follow the U.S. dollar in its flight to the Far East?

The Asian market is flush with U.S. dollars and bright new PhD’s from top tier universities (U.S. and otherwise). Japanese industry, as one example, has had notable successes in pharmaceuticals (e.g., including Kirin beer’s financing of Amgen – see especially the ending comment by Carlos). Ten of the top 40 pharmaceutical companies (by revenue) are Japanese. Visit any major research facility and you see an unmistakable over-representation of Asian culture and enthusiasm for the

Government Response to Pharma in Decline - Editorial

We know individuals and firms who suck at the government teat are infinitely creative at gaming any regulatory regime. So we design our governmental approach employing the same behavior fundamentals+ we advocate for World Class R&D: competition, legalism+, other people’s money+, etc. The work required to design and sell this regime to the voting public is enormous, and will not be addressed in this article. Instead we provide an overview of what governments should and shouldn’t do, and leave the details to other more audacious strategists.

The key question to be answered is how government policy can unfreeze the money in today’s pharmaceutical industry so it can move into new industries. We’re witnessing the decline of an industry that was for decades the source of great jobs, life-enhancing products and economic growth. What government policies can allow current money to be extracted from today’s operations and redirected to the next industrial base?


What To Avoid

Luddites will ask for protections for the existing industry, for patent extensions on existing products, or for regulators to give a ‘stamp of approval’ to dubious biomarkers for ...

What We Learn from McD

Early in my career I had the opportunity to work at the McDonald’s headquarters in Oak Brook, Illinois, just outside of Chicago. I was of course familiar with the operations of a McDonald’s franchise, a tidy small scale operation of high efficiency. I was very much taken aback by the amount of infrastructure I found at the McDonald’s HQ.

The reason each franchise runs so efficiently is not an accident. There is an immense effort that goes on behind the scenes which allows each franchise to be a model of efficiency. This effort is not just about infrastructure and consumables – it’s about every detail of procedure, behaviors and technology in the franchise that makes the McDonald’s experience identical globally. There are even mock-ups of restaurants on site to test out new approaches to increase efficiencies. Managers of a franchise live and die in adherence to The Blue Book of operations.

A similar dedication to detail is needed for Investible Units to be successful. It’s clear why most research units fail – the sheer magnitude of the corporate effort needed to make them successful is often lacking. Think of it in these terms: corporate Read more

Tyranny of Efficiency

I stumbled across an old chart constructed for a 1996 proposal to ‘fix’ a major finance organization. This was in the heyday of Michael Hammer’s (MIT) Business Process Re-engineering a “great idea” that swept across American industry in the 90’s. The idea was to look at any organization as a ‘process’ that could be optimized, harmonized, homogenized, pasteurized, etc. As shown on the chart, the three mantras were cost, time and quality1 (i.e., you want it cheaper, faster and better).

  • 1. Quality was measured in terms of reduced errors or rework. It was rarely considered in terms of the value of the financial advice available to the corporation.

Gestalt

Gestalt. It’s all we really have. If you think you can line up the work, issue commands and drive researchers into finding innovative products, then you’re delusional. Objective evidence is only so objective. Much more important for innovative work are the subjective and political dimensions of thinking: tiers of evidence+. We put in protections against self-interest, bias, the Three C’s+, insecurities of the highly educated+, etc. and we rely on our professionals. What do they think? What do they feel? Set aside the observational data for a moment. It’s rarely detached from your deeply held beliefs anyway. I pay you well so you tell me what you think, not to tell me what you think I want to hear. Of course, we refer here to stage two researchers+. They’ve already demonstrated a mastery of the subject area and of themselves.

Here we refer to models of the scientific world, and to models in the managerial world. What we seek is a way to gain access for gestalt in our research and in the way we manage our research. John Tukey, with his Exploratory Data Analysis gave researchers an intermediate step. He was the father of many of data visualization ...

World Class R&D, Take III

How do you know if what you’re about to do will be effective? You won’t know until you’re done. If it takes 10-15 years to finish, which is not uncommon in R&D for some industries, then you can waste a lot of time and effort for nothing. Instead we look for interim measures of effectiveness. How do we know along the way whether or not we’re eventually going to be effective? That’s a question the management sciences have been wrestling with for decades, with varying degrees of success. That’s the answer you now have for the first time in World Class R&D.

It cannot be repeated enough: this is not faux effectiveness+. You are not being effective if you free up the time of your people (i.e., through Early Kills+). You are not being effective if you allow your people to do twice or ten times as much as they could do before (i.e., through automation). You are not effective even if you are World Class in any particular R&D activity. Effectiveness in R&D means getting valuable product out the door. Effectiveness is systemic – everyone must be effective together.

How do you know if you’re getting better at being effective; that you’re