Luck, Curiosity, Naivete: The Essential Ingredients of Innovation

12/16/08Follow @xconomy

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“I used to be the CFO of Lufthansa, and obviously, you’ve never tried to run an airline.”

On roadblocks to innovation: “You may think I’m being glib when I say this, but I mean every word. One of the keys to innovation is naivete.” He explained that at a large pharmaceutical company, there are always some experienced people who pour cold water on new ideas, saying they’ll never work. Small biotech companies are more willing to concentrate on the positive, he says. He said some of Big Pharma’s innovative success stories happened because they didn’t have very much expertise in the area, and thus were willing to try a more off-the-wall concept. The examples he listed were GlaxoSmithKline’s sumatriptan (Imitrex) for migraine headaches; Pfizer’s sildenafil (Viagra); and Johnson & Johnson’s minoxidil (Rogaine). “Too much knowledge is a dangerous thing when it comes to drug discovery,” Carter said.

Stewart Parker, Former CEO, Targeted Genetics

On inspiration: “Inspiration is the opium, or the morphine, that keeps us doing what we do, because it’s so hard. If it weren’t for inspiration to numb you to how hard your task is, I don’t think you could get it done.”

On the role of luck: “At Immunex, I can remember one point we had about six weeks worth of cash left. The employees didn’t know.” Then she got a call from a writer with Fortune magazine in 1985, who said he had heard about a new drug called Interleukin-2 from one of Immunex’s competitors, Cetus. He wanted to learn more about the Immunex approach. Stewart spent a weekend with the writer and photographer, the story made the cover of Fortune, the stock tripled, and Immunex raised enough cash to get out of the ditch.”We were lucky. We had hope, and we believed in it.”

On President-elect Obama: “Obama is the epitome of change and transformation. That translates into innovation.” She said biotechies need to do a better job of marketing themselves to policymakers, like Obama, to show that the expensive new drugs benefit society, keeping workers’ productivity high, reducing visits to the hospital, and lowering overall health care costs. The problem is that the industry often lacks data to back up this point, she says.

On centers to study innovation: “You can’t institutionalize innovation, because then it becomes something other than innovation.”

Bruce Montgomery, Senior Vice President, Respiratory Drugs, Gilead Sciences

On luck: Montgomery told a story of trying to raise $30 million for the IPO of Seattle-based Pathogenesis in 1996. After a nearly three-week road show with investors, he still needed to raise $10 million in the last day. In a meeting at the Waldorf-Astoria on Manhattan’s Upper East Side, “one guy fell asleep, and the other was looking at the ceiling,” Montgomery recalled. Then, amazingly, they ponied up the $10 million. Why? … Next Page »

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  • srini n

    Inspiring article indeed.

    It is understandable that the CEOs favor small units for being the fountainhead of innovation. Yet, like IBM and 3M do, institutional support (read: funding) for breaking new frontiers in technology and product invention is a sine qua non.

    The idea of hedging by getting VCs with diverse focus is not really new but nonetheless worth repetition.

    The challenge lies in improving the ‘hit rate’ of innovation and the shrinking of the idea-to-application lead time. A combination of these two can reduce the over all costs and make new products/technologies affordable thus setting up a virtuous cycle.