The mantra for any industry is innovate, innovate, innovate. However, large organizations often lack the agility, lean architecture and culture to compete with start ups. By using technology like a modern day skunk works to test out new ideas, larger corporations can regain the competitive edge.
A low risk way to invent and test radical new products is through a skunk works. Lockheed Martin coined the term skunk works in the 1960’s referring to its top-secret research and development lab. Skunk works are autonomous, functioning apart from corporate bureaucracy, which tends to hinder progress and innovation.
Steve Blank: Skunk Works Need to Die
In the words of Steve Blank, author of The Lean Startup in his 2014 blog post Why Skunk Works Need to Die, skunk works “look much like a start up.” Blank argues modern companies need to have a fully integrated culture of innovation by design rather than by exception. Skunk works are problematic, as often they divide the company into two hostile halves: the risk adverse larger corporate bureaucracy v. the fast-paced, start-up culture.
Blank also argues that bureaucracy is tainting the skunk works. In a blog post June 2016, Blank gives four reasons why larger organizations find it hard to innovate. In summary, the first problem is money, the second status quo, the third is new technology, and the fourth is the threat of very fast acting startups.
Technology is the New Skunk Works
I’d like to explore Blank’s third reason, that of technology being a stumbling block to innovation within large companies. While I agree larger organizations traditionally are late adopters, I also think that has to change. Technology can replace the skunk works in that it allows organizations to:
- create new products alongside core products within one unified system
- gather valuable customer input and feedback into new products and services
- streamline systems and processes
- foster a culture of open communication and collaboration within the company (essential for innovation)
- accurately track and measure outcomes
- quickly scale or even pivot into totally new markets;
- and collaborate and share data with the competition.
The pharmaceutical industry is a perfect illustration of this point.
Technology Will Save Big Pharma
PwC has been looking closely at the pharmaceutical industry for the past few years. In PwC’s 2013 Global Innovation Survey, pharma did not measure up to other industries. The report challenged pharma to:
- Review and refine their innovation strategy.
- Focus on creating the correct culture in place to implement it.
- Get the most from external collaboration.
- Include a variety of innovation approaches.
The Internet claims the industry is due for big changes brought on by new technology: Industryweek.com (Six Tech Trends That Will Shape the Pharmaceutical Industry in 2013); Pharmaphorum.com (10 disruptive technologies that will transform pharma) in 2015, Bio-itworld.com (Gartner on IT Trends in Pharma).
If I cross reference PwC’s list with the technologies disrupting big pharma right now, you will see that therein lies the solution:
Problem: Innovation Strategy
- Cloud computing
- Robust software streamlining processes
- Mobile workforce
Problem: Company Culture
- Robust software unifying silos
- Mobile workforce
Problem: External Collaboration
- Big data
- Industrialized data services
- Standards (CDISC)
Problem: Innovation Approaches
- Context based services (Wearables, Apps, Wireless Sensors)
- Big data
- Social media
- Augmented reality
- 3D Printing
- Artificial Intelligence
In the pharmaceutical industry, we see technology disrupting the entire industry. It’s functioning like the skunk works by speeding up the approval process with big data insights, providing a window directly into the market and fostering collaboration within the industry. Technology can also streamline a large corporation, changing the internal culture and allowing a company to be agile enough to get new products to the market quickly.
Previously, organizations had to build in a safety net in order to innovate by using a skunk works. That approach just doesn’t work in the modern workforce. Not only does a skunk works render innovation an elitist activity and divide the company, large organizations tend to quash their own innovative products out of fear, or they have clunky, outdated processes, systems and business models that can’t make changes happen in a timely enough manner to stay competitive.