NPD Trends and Practices
Part 1 of 2
The story of Eli Lilly’s open innovation journey—how one company developed a mature model Kevin Schwartz Bret Huff
Kevin Schwartz, Director, PrTM (email@example.com), and Bret huff, VP of Chemical Products r&D, Eli Lilly and Company, (firstname.lastname@example.org)
Over the last decade, the giant pharmaceutical companies have moved away from their reliance on “blockbuster” drugs as a basis of earnings and toward other models. Part of the shift has required going outside the “just invented here” Research & Development model that these corporations embraced in the past. In this article, the first of a two-part series, the authors describe how Eli Lilly moved into “open innovation”—using partnerships and alliances to find new products—and how the process has evolved to one of “mature” open innovation. In the second part of the series, the authors will explain how to apply these techniques to other companies and industries and where leading companies may be going next with the open innovation concept.
ver the past 15 years, Eli Lilly and Company has embraced a culture of open innovation—moving from the traditional thinking in the pharmaceutical industry (“just invented here”) to a new model that has paid big dividends and today could be considered Level 3 in the maturity model in Exhibit 1 on page 20. Like other leaders in open innovation practices, the company has evolved an extensive and powerful network of Research & Development partnerships that adds to its internal capabilities and helps it drive new revenues and more rapEli Lilly’s senior management idly bring new products to market (see Exhibit 2 team made a conscious decision on page 21). However, open innoto invest in building a worldvation can mean many class capability for collaborative things to different people and even leading product development.” companies vary in how they pursue the concept. As the open innovation paradigm has become more and more firmly established, a variety of models have started to evolve for describing the levels of maturity that companies move through as they adopt practices. In this article, we’ll use the model shown in Exhibit 1, which presents three main levels of open innovation maturity: • Level 1: Externally Aware • Level 2: Fully Integrated • Level 3: Ecosystem Orchestration In Part 2 of this series, we’ll discuss in detail how this model for open innovation maturity can be applied to different companies as a guide for moving forward, what hurdles must be overcome along the way, and even where leading companies are starting to push the envelope beyond Level 3 maturity. But in this article, we will focus on using the example of Eli Lilly and Company to bring this maturity model to life—exploring why Eli Lilly embraced open innovation, how it built its open innovation model, the stages it moved through, and the successes it has gained from it. PDMa Visions Magazine
The growth of Eli Lilly and company Eli Lilly and Company was founded in 1876. Since then, the company has grown to be the 10th largest pharmaceutical in the world. Today, it has approximately 40,000 employees around the globe and its medicines are marketed in 143 countries. Lilly has major Research & Development facilities (R&D) in eight countries and conducts clinical trials in more than 50 countries For over 130 years, the company has created medicines that improve the health of people around the world. Lilly was the first company to mass produce penicillin and offer a number of other important medicines, such as Prozac and Zyprexa. Like most other companies in the early and mid-1900s, internal R&D was the primary driver of Lilly’s production of new medicines. The company turns to collaborative product development However, in the early 1990s, the company’s thinking changed. ...
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