Gsk – Successful Internal Innovation

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GSK – Successful Internal Innovation

Question 1

Based on GSK’s past performance, what do you believe are the critical implementation issues for GSK with regards to internal innovation?

Figure 4, 2, pg 132, The management of technology and innovation (White & Brighton)

GSK key reason of success lies in its continuous radical change, by constantly inventing new drugs. Critical to the implementation issues of its internal innovation are raised below: Leadership
GSK leadership needs to assure a successful implementation of the R & D restructuring as a mechanism that will boost innovation. Key issues to be considered by GSK leadership are cross departmental efforts, procedures and policies, and rewards tight to employee performance regarding innovation and most important empower the persons in charge of their new Development Product Units. Another critical issue to be considered by GSK leadership is allocation of resources considering the challenging number of 70 DPU working on eight therapy areas. In addition GSK has a vital challenge of managing a company with huge vertical integration, starting from invention of product to distribution. Finally leadership has to solve the issue of how to use the existing capacities and structures with regard to the change. After the merger GSK has created CEDD structure giving the necessary importance and focus to innovation, and continued to do so by restructuring again in later stage through the DPU, which where wisely created inside the CEED existing Structure. Engagement

One of the most critical issues regarding innovation implementation in GSK is to achieve engagement of a massive team of 100,000 employees coming mainly from 3 different cultures (US; UK; New Zeeland) and lead them through change (change management). In addition because of the restructuring there might be issues with disengagement because of interruption of past power and political relations have changed. Extension

Due to the fact that GSK future relies on inventing new products, it is of vast importance to build a culture of knowledge sharing between departments so that they can build on each other’s knowledge and create new products. In addition important issue to be monitored is competencies in this fast moving industry to assure they are up to date. Alignment

GSK degree of innovation is radical change, thus a main issue to be addressed is to assure a Flat Organizational Structure with many communication links, cross functional teams and establish a good monitoring of competitors. Product Portfolio

GSK has a difficult choice of what products to include in its portfolio being that its efforts are implemented in 3 broad areas. The critical question for GSK is what to produce now and what later? 1. Treatment of the 3 key diseases identified by World Health Organization 2. Medicine that treat asthma, viruses, infections, mental health, diabetes s and digestive conditions 3. Treatments of various types of cancer

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.

Having 70 DPUs has given GSK a competitive advantage since this units completely focused on R&D have made possible the completion of 21 new drug discoveries in 2008 fiscal year which is a considered a great achievement in the pharmaceutical industry because typically before coming to a new product there is a huge number of product failures. On the other hand managing 70 DPU on eight therapy areas at the same time comes along with 4 main challenges of implementation: Allocation of resources

GSK need to assure hiring individuals with the right set of skills and create cross functional teams of scientist, marketing specialist and other functions in the...
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