Merck, the world’s oldest operating chemical and pharmaceutical company, as well as one of the largest pharmaceutical companies in the world, has been around for almost 350 years. Its 50,000 employees in 66 countries work together on innovative solutions and the newest technologies. In 2016, the company invested a total of 2 billion euros in research and development.
Our latest interview features Prof. Dr. Klaus Griesar, Head of Science Relations department at Merck whose responsibilities include strategic partnerships and cooperation with leading universities worldwide, start-up companies and research institutes. His portfolio also includes the elaboration and analysis of science & technology based megatrends.
He is a member of numerous scientific and industrial committees (President of the Association of Chemistry & Economics (VCW) within the German Chemical Society (GDCh) and a Member of the Editorial Board of Angewandte Chemie) and author of more than 50 publications in the topics of innovation management, business development and strategy.
How do you define innovation?
Innovation is always driven by the ability to see connections, to spot opportunities and to take advantage of them. Moreover, innovation is a result of curiosity. When one is willing to undertake risks, create change, and “shake-things up” due to curiosity, that will lead to innovation and therefore, unravel new markets. However, innovation is not just about opening up new markets, it can also offer new ways of serving established and mature ones. Consequently, innovation represents the core renewal process in any organization.
Where does innovation stand among your priorities and responsibilities?
Innovation is the key question for management. Every company has its own culture in which they define the level of innovation and the connection between success and innovation. Proper management of innovation will result in building and improving new/current routines over time. It is of great importance to manage and incorporate innovation into daily tasks, responsibilities, and essentially make innovation a part of your routine. Innovation is a process, not a single event, and needs to be managed as such, and therefore the influences on the process can be manipulated to affect the outcome.
What is the relationship between R&D expenditure and new developments?
R&D expenditure exhibits a significantly positive effect on the long term economic growth and therefore, new developments. At the firm level, R&D contributions are associated with the willingness to collaborate and create networks. On the one hand, with increasing novelty of the innovation more R&D input is required, but it is associated with greater market uncertainty. On the other hand, novel innovations are those that bring new developments to the surface.
How important are employees and cooperation for innovation?
Organization of innovation is more than just a structure or a process, it is a cohesive set of components that work together to create and strengthen the type of environment which stimulates innovations to flourish. Innovation is about learning, embracing change, and accepting the risks, costs, and disruptiveness. Moreover, innovation cannot be achieved without the ‘people’, the employees and members of other cooperation. Innovation is increasingly about teamwork and the creative combination of different disciplines and perspectives. Therefore, it is essential to coordinate the right teams together in order to be on the right and most efficient path towards innovation.
What are the major challenges and opportunities facing the chemical industry in 2018 – 2019?
Society experiences a rapid change from an industrial to a knowledge-based focus. For the chemical society, this transformation results in a shift “from materials and molecules to systems and solutions”. Hence, the challenge lies in the incorporation of material with complementing services, or even in creating new business models that back away from being a pure product manufacturer to become a value-creating solution provider.
As the often-cited Harvard chemist George M. Whitesides stated: “This prolific era is over, and chemistry is now facing classes of opportunities, and obligations to society, that are even more interesting, but entirely different.” (“Reinventing Chemistry” in Angewandte Chemie, 2015). With this statement, he predicted the ongoing shift from pure component and material innovations towards integrated system and novel all-in-one solution development. This alteration, of course, involves certain challenges but offers ample potential in re-creating a new chemical industry with the objective to become an integrator of the entire value chain.
Given the outlook of chemicals industry and global mega-trends, what is your strategy to keep and increase your company’s innovative position?
Innovation in our company already takes place on a level of integrated solution creation rather than single component or molecule development. To further amend this process, we need to concentrate on the value proposition of our innovations in an early phase. This can be done by early, strategic segmentation and efficient market selection. Often, the real value of the product is not the most obvious property of the material but a combination of characteristics which is beneficial for a specific market segment. Conducting this segmentation rigorously will help to improve the product’s value proposition and penetrate markets systematically.
What do you think your company should next focus on regarding innovation?
Our CEO, Stefan Oschmann indicated a significant business advantage: “If you think about the healthcare, then we’ve already got everything at Merck that Google would love to have.” (FAZ, July 4, 2016). Trends like personalized medicine, where treatments can be perfectly aligned with the patients’ needs, require novel technologies like Big Data analysis and self-learning algorithms. Also, in the laboratory business, the systematic digitalization will provide pioneering innovations regarding the interconnected workspace. Our mission is to further develop and sensibly apply novel technologies to foster digitalization throughout all our businesses and thereby enable groundbreaking innovations.
Prof. Dr. Klaus Griesar will be speaking at the upcoming CIEX 2017 Conference on September 19-20 in Frankfurt, Germany. He will talk about “The 4Ps of innovation: Old wine in new bottles?“.
Along with Merck, several international brands such as P&G, PepsiCo, BMW, Oriflame are confirmed to speak at CIEX. Together with leading pharma and specialty chemical manufacturers, they will explore innovation strategies and processes across the chemical value chain. Full details of the event can be found at ciex-eu.org.