Internal innovation requires more time as the process of developing new product and marketing the new product will take time when compared to purchasing new product from external sources. By reengineering of the business process GSK has given more emphasize on internal innovation and to attain a competitive advantage. Some of the critical implementation issues GSK would face are:
Making choices on how to implement the goals and objectives.
Allocation of resources based on the priority of the unit as some goals and objects are more important that other.
Changing based on the environmental changes and changing technology.
Managing of cross functional team in the DPUs by seeing that there is proper communication and coordination between employees.
Development and training of employees so that they can feel an opportunity of development.
Delegation is critical issue which has to be dealt with effectively so that conflicts would not arise and leaders should also empower subordinates so that leader can work on other innovative issues.
Management of key resources such as Human resource, finance and latest technology.
Organizational structure is also a critical factor; it should be in such a way so that there is clear flow of information to the right person at the right time.
Employees might dislike this process due to fear of loss of power, loss of respect and jobs.
Question 2: With the 70 DPUs working on eight therapy areas for future growth of the company, how might this affect the implementation effort and would the firm need special programs to ensure that implementation was successful?
Answer:
From the 70 DPUs most of them are inside the firm but some are also external to the firm. For implementation of the DPUs there should be proper communication and coordination between the internal and external DUPs. Since GSK has formed these DPUs to emphasize on flexibility, innovation and therapeutic focus following might affect the implementation efforts and the programs to ensure that implementation was successful
Leadership is a critical factor during the implementation in GSK. For innovation to be successful leader should ensure that there is cooperation between employees, a culture of collaboration and cross-functional initiatives. Leader should give flexibility and freedom to team member so that they are creative and ensure that the actions are complete. Supportive environment should be created which clearly indicates to firms' direction; so that the effort supports organization vision and mission. There should be proper coordination and integration between the leader and other units of the firm so that they can avoid paralysis of analysis. Managers can avoid paralysis of analysis by obtaining reasonable amount of information to make a decision. Leaders also need to delegate effectively, they should also empower their subordinates so that the subordinates can feel that there is an opportunity for growth and the leader can work on other innovation tasks. There should be proper mechanisms created for innovation so that knowledge-exchange atmosphere is established to promote innovation. DPU's should be allocated ample resources such as money, time, technology and other resources if the innovation has to be successful.
Engagement is a key implementation issue. This deal with how to get all the DPUs moving in the same direction. Due to the heavy speed of the competition GSK should be flexible and adaptable. Such adaptability is possible only through active engagement within employees. An environment should be created so that individuals believe that they are in part of a system that allows innovation. Potential problem during engagement are:
Disinterest in the change due to the loss of power and disturbance in political relationships
Due to the fear of loss of respect, loss of job innovation process may lead to conflicts and stress
This can be overcome by change management. Change management helps in gaining the trust of employees. This can be done by
Build a culture so that the employees would adapt to that culture.
Training and development programs should be organized so that employees can see that there is an opportunity, place in charge of certain innovation activities and this would help in changing their view on giving information.
Alignment is another critical factor that is involve in GSK internal innovation. All the DPUs goals should be in-line with corporate goals. There will always be limited fund allocated for innovation so the creativity must the targeted and grounded in financial reality of the organization. Proper communication and knowledge sharing across the DPUs would increase effectiveness of the processes. Individuals in the team should be aligning with the innovation and skills required for the process. Proper rewards and incentives should be given to individuals and groups who helped in achieving companies goals. There should be proper structure of the organisation so that there would be communication and coordination between DPUs.
Question 3: What are the special evaluation needs for a company such as GSK, with regards to its internal innovation? What characteristics of GSK do you believe have the most influence on how well GSK evaluates progress toward stated innovation goals?
Answer:
For a firm like GSK which is heavily focuses on internal innovating so have continuous evaluation processes as the competitive environment changes, the assumptions on which goals were based will no longer relevant. For example if a competitor develops a better way of creating a drug that results in improved product or lesser expense, the firm then should not continue with the goals and actions that was established before. Evaluation should be done based on performance measurement and comparing performance to standards as firms that do not adapt to the changes quickly will be in competitive disadvantage.
By following a continuous evaluation GSK would be able to a find gap between what it wants, what is happening and what is likely to occur. If there are addressed earlier, GSK would be able to reorganize and act based on its goals.
GSK should always analyse where there are now when compared to where they want to be, which is done based on the movement from current position to future position. They should always be able to evaluate long term goals based on the current status of the short-term goals and objectives that are progressing towards long term goals. There have to so several key evaluation so that they can understand their current status. They are:
They should always be aware of strategic action of the major competitors and other issues that might affect the industry.
They should always analyse whether their distribution is maintained and they should also analyse the quality and external linkages.
There should be proper communication process present so that right information to the right person at the right time is available. This helps in eliminating paralysis of analysis.
Structure and process of the firm should be analysed so there would be coordination and involvement in the firm so that it allows emergence of useful innovation.
In evaluation of the current status should be more involved, firm should follow richer evaluation than just comparing its goals to outcomes to see if the goals and objectives of the firm ate met. For an organization like GSK which as 70 DPUs there should be constant evaluation on each DPUs so that they can maintain a balance between DPUs goals and goals related to the firms strategy.
GSK should also evaluate on what lies ahead that can affect either negatively or positively, this information can be obtained by scanning changes in the environment as it shapes the goals that are generated for the firm. Following are types of measures for innovative strategy for future evaluation are:
Measures of specific outcomes that have competitive advantage in the future such as patents as these measures indicate effectiveness of innovation process.
Measures of outcome that impact future competitiveness as it indicated the potential for future growth.
Measures of future strategic capabilities of the firm is being enhanced or maintained.
Progress of the above things indicates the firms' positive future outcomes. GSK should build capabilities that are ahead of competition so that it has a competitive advantage and have better chance of long-term success.
GSK should always evaluate where they would end up following the current path and is it the path for which plan was developed. During this evaluation GSK should also look for different paths that may have emerged during the process and that have not been specified in the path before as this can open new doors that have not been considered before. Obtaining these opportunities on the focuses therapies can give a competitive advantage to develop new knowledge and should be ensured that it is shared throughout the organization.
Question 4: Identify and explain the kinds of control systems you suggest GSK employ to manage innovation?
Answer:
Control system plays a vital role in success of an organization like GSK. Control system suggests the changes that have to be taken based on the evaluation conducted base on firms' current status. There should be a control posed on all the DPUs based on the current status so that it can be in line with the corporate strategy.
Financial controls should be set so that the gap between the desired financial outcome and the current produced by the firm can be analysed. GSK can employ methods such as cost reduction for the improvement of financial results. Financial results are quantitative and they cannot always judge the performance as for certain process it may take longer time and it way also result in analysis paralysis and it can become narrowly internally focused. But this is to be considered as at the end of the day firm has to reply to the shareholders.
For GSK due to the changes in R&D process implementation strategic control plays a critical role in controlling success. R&D cannot be measured only by financial controls as it is long term strategy and the benefits of the process cannot be measured based on the current status. Investing in R&D is critical for long-term growth of the firm. Strategic control looks for gaps in the strategic goals of the company and adjusted them towards company strategy. This control and adjustment would also help the in expanding the firms' innovation effort to develop a new product and improvement of the process. This would help the firm to be successful in obtaining their strategic goals to grow a diversified global business, deliver more products of value and simplify the operating mode.
Cultural control in GSK is very important due to reengineering cross-functional teams with different cultures (assumed as it is an MNC) have been formed. GSK must also make employees understand that the cultural has changed and help individuals act in a manned desired by the firm. Culture of the organization helps the individuals to exchange the idea and actions that are critical to the success of innovation efforts and implementation. Cultural control help ensure value creation environment that nurtures creativity.
If there are any gaps found in between goals and performance adjustments must done by the organisation such as reengineering so that they can be more cross-functional, improve the process by redesigning, empower those involved with the innovation process to take decisions, check whether firms goals match with the capabilities and adjust the goal. Control is responsible at each level of the organization and nature of control is different for each level.
Control sees that all the levels of the firm are sync with each other i.e with the level above and below them. Control mechanism frame work is formed base on the vision given by Board of Directors. Board should focus on major gaps that occur and address whether a different direction is needed for the firm. Top management sets the control action into motion that implementing the strategy given by board and they design the mission. Based on the Mission Divisional managers decide what control action should be take, when to take and how to complete the control process successfully by strategies. Department managers and team leads set the goals and objectives for the team members so that the strategic goal can be achieved. Finally team members work on the actual tactical actions that implement the goals and objectives.
Control concerns should impact all the units of the business. Quality control department is the one that is directly affected by the changes in the firm. Due to the quality expectation for technology based goods, strategic control is an essential part of strategic approach in innovation. Quality control should see that proper information is provided to the units and quality output is produced. Quality control in GSK should focus on
Quality should be a continuous process.
Provide training so that employees know how to do their job.
Encourage change by drive out fear by showing the opportunity of growth and development.
Institute leadership so that problem or conflicts can be resolved.
Break down the barriers in the firm so that quality output is given to other department which leads to quality product.
