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UNIVERSITY OF LODZ

FACULTY OF MANAGEMENT

FIELD OF STUDY – MANAGEMENT

Natalia Bednarek

320250

BACHELOR THESIS

Organization Design as a Tool for Fostering Innovation

Projekt organizacji jako źródło innowacji

Thesis written in the Department of

Knowledge Management

Under the supervision of

Dr. Jerzy S. Czarnecki

ŁÓDŹ (2014)

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Executive Summary

Organization can produce an innovation thanks to organization design. Pfizer Inc. has a

global structure – a world-wide network of Pfizer people is an asset that can be used to

foster innovation. Chances to innovate depend on the number of resources engaged in

the process, designed space and capability to establish connectivity around

information. Pfizer has elaborated communication channels that can be modified to fit

the new model of an innovation process. Brainstorming mode can be used as a catalyst

to ways of thinking and perception, which results in increased learning ability of the

organization, enhanced learning process and its rate. Tools used in the process are

designed to invite resources to share their problems, stories, knowledge.

Brainstorming should be introduced in places where there is a need for innovation

either manifested in products or services or in the functioning and organizational

processes. Both classes of problems can be solved with the help of brainstorming due

to feedback and evaluation causing ideas to multiply and perspectives to change,

hence adding value and increasing competitive advantage.

Projekt organizacji jest źródłem jej innowacji. Pfizer Inc. to korporacja mająca globalną

strukturę – ogólnoświatowa sieć interesariuszy jest wartością, która może być

wykorzystana w celu wspierania innowacji. Szanse na innowacyjność zależą od ilości

zasobów biorących udział w procesie, projektu przestrzeni organizacyjnej i zdolności do

znalezienia spójności między danymi. Firma Pfizer ma wypracowane kanały

komunikacji, które mogą być zmodyfikowane w celu dopasowania do nowego modelu

procesu innowacji. Technika burzy mózgów skłania do komunikacji i wspólnoty

działania; służy, jako katalizator sposobu myślenia i percepcji, co podnosi zdolność

nauki organizacji, wzmacnia jej proces i tempo. Narzędzia używane w procesie są

zaprojektowane, aby zapraszać interesariuszy, którzy tworzą korporację, do dzielenia

się swoimi zasobami, problemami i wiedzą. Technika burzy mózgów powinna być

zaimplementowana w obszarach gdzie istnieje zapotrzebowanie na innowacyjność –

objawiającą się w produktach bądź usługach, lub też w sposobach funkcjonowania

organizacji. Obydwie klasy problemów mogą być rozwiązane za pomocą burzy mózgów

dzięki ocenie i informacji zwrotnej, która powoduje zmianę punktu widzenia i

mnożenie się pomysłów tworząc tym samym dodatkową wartość dla korporacji i

zwiększając przewagę konkurencyjną.

Keywords: Organization design, design thinking, strategy, Pfizer, innovation,

information, knowledge, learning organization, pharmaceutical industry.

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Table of contents

Introduction .................................................................................................................. 4

1. Design and Strategy ............................................................................................... 5

1.1. Design as a tool for changes ................................................................................. 5

1.2. Strategic mindset .................................................................................................. 6

1.3. Form follows function ........................................................................................... 7

1.4. Plan to execute aspirations ................................................................................... 8

1.5. Collaborative capacity ........................................................................................... 9

1.6. Stakeholder balance ............................................................................................ 10

1.7. An integrated whole ............................................................................................ 11

2. Pfizer Company ..................................................................................................... 13

2.1. Access to information ......................................................................................... 13

2.2. Global R&D network ........................................................................................... 15

2.3. Ready for an opportunity .................................................................................... 16

2.4. Pfizer people ....................................................................................................... 18

2.5. Business strategies .............................................................................................. 20

3. Learning for Innovation ...................................................................................... 23

3.1. Seeking a germ of an innovation......................................................................... 23

3.2. Inspiration from outside ..................................................................................... 24

3.3. Processing and evaluation inside ........................................................................ 26

3.4. Design pulls innovation ....................................................................................... 28

3.5. Learning ability .................................................................................................... 29

Conclusion ................................................................................................ 32

Bibliography .............................................................................................. 33

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Introduction

The following paper discusses the problem of transforming information into

knowledge in organizational settings. The investigated field is pharmaceutical industry,

specifically Pfizer Inc. - an American multinational pharmaceutical corporation.

Pharmaceutical industry is characterized by explosion of data that’s why processing

information and utilizing it for the benefit of a company is a challenge. Analyzing Pfizer

Inc., recommendations are made in order to improve its innovation process and

learning abilities. Researched concepts based on which the content was created are

organization design, strategy and innovation process.

The structure of the paper consists of three chapters. The first chapter presents a

theoretical view of above mentioned terms to provide background for further problem

analysis. It narrows down to define a model of a knowledge organization with

organization design as a fundamental tool for stimulating innovation.

Second chapter refers to Pfizer company and aims to illustrate the theory presented in

the first chapter; it examines Pfizer Inc. from this perspective and identifies

characteristics of the model in the corporation’s organization design and strategy.

Third chapter proposes an innovation process based on the brainstorming technique

that could be implemented in Pfizer in order to enhance its learning ability and foster

innovation – all in accordance with Pfizer’s current organization design, strategy,

people, vision etc.

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1. Design and Strategy

1.1. Design as a tool for changes

Design starts with a need to solve a problem, it is a process which begins with an aim

and ends with a result. However, at one time it is completed and functions well,

whereas in the future design may turn out to be incomplete, hence design does not

have an endpoint. As a general concept design shapes

environment and it occurs in an environment. The

activity is focused on human behavior and the quality of

life. Design is present in all spheres of life, it lacks

boundaries, and has therefore many levels of meaning

and a wide spectrum of understanding. Design thinking process starts with an idea,

which is then transformed into an image using mental abilities, tools like sketches,

diagrams or models or writing single words on a paper. Design gives form to ideas1.

Design is synthetic, as it combines separate elements to form a coherent whole; it is

real, because it is can be found anywhere. Design involves an analytic element -

requires analysis, and a symbolic element - models and theories constitute its base.

Design as a tool for changes underlines a difference between design and structure.

Organization design translates organization’s purpose, which is encored in its vision,

into business processes, inserts them into a physical

space and places resources around them. Design

produces a flexible organization. Organization is

such a complex entity that when one element

changes, it influences another. That is why when

identifying a problem in design, one should first try to change it without altering other

elements.

Constraints that may impede the implementation of design can be both external and

internal factors such as government regulations, company’s information system,

corporate cultures or interests of shareholders2. Organization design that

1 Sharma P., Poole D., “It’s Not What Design Is, It’s What Design Does”, Design Management Review, 2010: 65-74. 2 Goold M., Campbell A., “Do You Have a Well-Designed Organization?”, Harvard Business Review, March 2002: 5-11.

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demonstrates flexibility and no part is resistant to change makes the organization

adaptable to environmental changes. Organization design identifies parts resistant to

changes (which can be found at all levels of the company) and supports sources of

competitive advantage and operation activities.

1.2. Strategic mindset

Strategy is an intangible asset, an invention created

within a company. It is a perspective shared by

company members, which is reflected by their actions

and behavior. Manager serves as initiator, his task is

to share the message which guides a company in a specific direction (Exhibit 4). If the

vision is realistic and consistent with employee's emotions and intelligence, it

integrates and directs. Thus, actors that create the organization need to be somehow

involved in the strategy creation process to

ingrain organization’s philosophy of life, to

understand and embrace the idea.

Organizational space stimulates effectiveness

and creativity and allows to act freely in the interest of the company. Employees

should be permitted to take entrepreneurial initiative, though setting limits depending

on people who create the body. That's why understanding the corporate vision,

purpose and mission statement is of such importance to act accordingly. In the light of

time it may, however, become a constraint when organization’s members cannot or do

not want to change their mindset and perspectives. Equally, skills are utilized in the

company in a way they should be, that is experts devote their time to tasks that

require their specialized skills, paperwork can be done by novice employees. Individual

actors concentrate on their domain of activity, know their roles and follow strategy in

their way.

Strategy is a plan to execute aspirations (Exhibit

5). Choices are not the same all the time,

organizations evolve and go through different

stages in their lives, like people do. Knowledge

and experience gained subject to assessment never produce the same decisions. Thus

strategy is being reviewed and appraised either at particular time intervals or

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whenever organization’s operational deviations are observed. Plans, aspirations and

dreams change during lifetime. Organization’s purpose, direction and values may

change due to changing circumstances in the environment. Strategy like design is a

process that is modified according to firm’s direction. Company chooses business area

where it wants to operate. Competitors are defined by the business an organization is

in. Strategy can lead to turning competitors not the same competitors anymore. It

enables an organization to enter at a level above competitors.

1.3. Form follows function

Each organization operates according to a model (Exhibit

6) which it chose, or modified a model to satisfy its needs,

profile and activity. Management structures such as flat

structure, divisional hierarchy, functional hierarchy and

matrix are applied in corporations3. Since all organizations

differ in some way, standard models are mixed to form a

new one meeting requirements of an organization, which leads to the application of

“form follows function”4 principle. Organization design

invites and discourages certain types of behavior and

determines the type of an organization. It is the

designer’s role to make organization’s structures and

work processes survive in the long term. There has to be

a match between organizational units and business

processes, a consistency and coherence between work processes and formal structure

of an organization despite their distinct nature. Structure needs to adjust to

organizational processes, as per form follows function5, designer must assess the

functional requirements and develop

form most suitable for these

requirements. Function means

economic purpose of an organization

(which can be contrary to the individual or shared purpose of its members).

3 Harris M., Raviv A., “Organization Design”, Management Science 7, Vol. 48, July 2002: 852-865. 4 Gellerman S.W., “In Organizations as in Architecture, Form Follows Function”, Organizational Dynamics 3, Vol. 18, 1990: 57-68. 5 Ibid.

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As environment affects organization, functions may change entailing form which also

should change in this instance. In biology, things create themselves independently

(Exhibit 8); in this sense everything is functionally designed. Organization complying to

“form follows function” brings its purpose closer to its structure, and reconciles

internal opponents to the change. Purpose is then translated into processes, around

which resources are organized. The purpose of design answers the question what was

organization build for.

1.4. Plan to execute aspirations

Mission statement defines organization's purpose

(Exhibit 9). It indicates the uniqueness of a firm in

its scope of operations and product or service

offerings. Strategy is a way of life for the

company and its employees, it directs all parts of an organization and their behavior,

and serves as a constraint of activity (Exhibit 12). To become competitive an

organization pursues either a low-cost

approach or differentiation approach, or

both. According to Porter, company has

to choose between low cost and

differentiation in order to avoid "the

inherent contradictions of different strategies"6. Cost-leadership is a competitor-

oriented approach and is manifested in strict cost control and operational efficiency7.

Organizations following this kind of strategy are striving to realize their offerings at

lowest possible cost.

A differentiation strategy, in contrast, aims at

creating a perception in the minds of

customers that the company’s offerings

differentiate them from those of competitors

based upon design, quality, reputation, brand

image and others, but not only (Exhibit 11).

6 Porter M. E., “What is Strategy?”, Harvard Business Review, Nov.-Dec. 1996: 61-78. 7 Porter M. E., Competitive Strategy, New York: Free Press, 1980.

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Strategic styles consider whether environment can be

predicted and shaped. Some companies manage more

than one strategic

style (Exhibit 13).

By allowing

flexibility in a

company, each business unit may choose their own

approach. Finally, companies may adopt different

approaches as they go through different stages of

their life cycle.

1.5. Collaborative capacity

Design makes interdependencies among organizational units and boosts their

integration and collaboration. Interdependency meaning the level of interaction

required in work processes8. It is about identifying the degree of interdependency

among units and deciding which ones to integrate9. If two units need to exchange or

share information, they should be integrated and organized within the same unit.

There are units in the organization where tasks should be performed individually.

Depending on a given task or activity, it is either teamwork or individual work that can

be performed faster than the other. If employees from two units don’t need any

information or resources from each other, they can perform their activities in parallel.

Degree of interdependency is a result of information availability for employees to

perform their tasks and standardization of tasks in a work process. One solution for

creating alignment is to change organization structure according to performed

functions making form compatible with function, thus increasing efficiency and

effectiveness. Space can be organized in a way that employees bind their relationships

naturally.

Managing collaboration across units is a challenge in comparison to that within units.

Apart from rigid need for specialized experts, there is a focus on collaborative capacity.

8 Worren N., “Hitting the Sweet Spot between Separation and Integration in Organization Design”, People & Strategy 4, Vol. 34, 2011: 25-30. 9 Goold M., Campbell A., “Do You Have a Well-Designed Organization?”, Harvard Business Review, March 2002: 5-11.

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Organization is a collaborative network which has to realize collective and individual

objectives of the business and its stakeholders. From the perspective of an

organization being a collaborative network, competition is no longer defined by

products or services, but by the ability of the people in an organization to build

relationships and work across boundaries sustaining or enhancing the quality and

value delivered to stakeholders. To build relationships and thus collaboration, instead

of just seeing an additional work, people should notice additional resource these

relationships represent. Reward systems and metrics contribute to and promote

integration across units, functions and geographies10.

1.6. Stakeholder balance

Global operations lead to an increase in

distance and decrease in interaction

between businesses and stakeholders. It is

the role of design to face the challenge and

to adapt to the changes and enhance

stakeholder engagement. Factor

determining the survival of the organization is a stakeholder balance, which means

understanding what stakeholders contribute and how they are rewarded (Exhibit 14).

According to Freeman, inability to engage with

stakeholders increases risk of regulations and

lawsuits and reduces opportunities in foreign

markets due to competition satisfying

stakeholder needs11. Strategy to increase

stakeholder engagement provides a system of

measurement to recognize stakeholder

perceptions about the corporation. This raises awareness among management and

forces discussions when evaluating the holistic view of the organization stakeholders

present. Additionally, it may highlight key performance indicators the corporation

should focus on. Stakeholder dashboard is a tool for giving an overlook of stakeholder

perceptions in one place. Corporations that monitor their dashboards and determine

10 Kates A., Kesler G., “Why Organization Design?”, People & Strategy 4, Vol. 34, 2011: 4-5. 11 Strand R., „The Stakeholder Dashboard”, Greener Management International 54, Oct. 2008: 23-36.

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trends are likely to increase stakeholder engagement, thus enhancing collaboration

and trust12. Building relationship between corporation and its stakeholders serves as a

cooperative advantage which in turn may prove to be a competitive advantage in the

global marketplace13.

1.7. An integrated whole

Organization design deals with the inside of an organization, strategy is an element of

organization design and a mediating force between internal environment of an

organization and an external environment. Organization design and strategy are

interrelated. Strategy has to fit organization design. That is why both of them are tools

without which an organization is not able to function in the long-term. There has to be

alignment and coherence inside the corporation, including collaboration within and

across units, rapport between stakeholders, and a

relation between organization and outside

environment. Each and every organization has its

position in an environment as well as each stakeholder

has their own position and role in an organization. Organization is constructed to

translate purpose into business processes which aim at value creation by leveraging its

resources. Strategy is a variable which, whenever being changed, has to be congruent

with the design of an organization. Strategy is meant to link opportunities with

resources and competences. Purpose of the strategy should be so formulated that it

attracts both people’s consent and commitment. Specific organization design invites

specific behaviors. Members behave naturally, although in a contrived body, they act

together executing aspirations. Organization’s leaders are carriers who identify

themselves with organization’s fundamental message and spread it across attracting

those that accept the ideology14. Before people filled corporation with themselves,

now people create the corporation. From this perspective organization’s existence

prerequisite is a collection of interpersonal ties between and within the groups of

12 Kim W. C., Mauborgne R., “How Strategy Shapes Structure”, Harvard Business Review, Sept. 2009: 73-80. 13 Ibid. 14 Czarnecki J. S., Architektura Korporacji. Analiza Teoretyczna i Metodologiczna, Łódź: Wydawnictwo Uniwersytetu Łódzkiego, 2011.

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stakeholders15. People are the organization, there has to be an initiator who can

communicate the message in a way that it draws in individuals who adopt the mindset,

mutually create aspirations and form a synergetic contrived body behaving in a natural

way. When particular relationship comes in place and people make promises to each

other, ask for help or divide work to be done for mutual benefit, they feel the inner

accountability to complete the task, because of the binding relationship, the will to

sustain this tie and the need of belonging.

The created body has a prescribed course, is composed of interrelated subsystems

delineated by boundaries from its environmental suprasystem16. The organization is a

system characterized by dynamic relationship with environment, because biological

and social systems are inherently open ones17. Design is on top of that. People enter,

assimilate strategic concept and execute it. Leaders should be dedicated to the durable

core of organization’s character and strategy, while encouraging innovations that will

evoke or respond to changes taking place in the surroundings. Collaborative ability

creates collaborative networks that forge innovation contributing to the growth of an

organization. Such innovation is manifested in products or services, within boundaries

of an organization and through its way of interaction with stakeholders. Knowledge

created within organizations can lead to entering new market sectors or forming new

business models. Human is the only active element in an organization that can create

knowledge18. Gathered data compose information which is then transformed into

knowledge. Sharing knowledge, within and across the collaborative groups, provides

wisdom which applied in a situation can produce an innovative outcome.

15 Czarnecki J. S., Architektura Korporacji. Analiza Teoretyczna i Metodologiczna, Łódź: Wydawnictwo Uniwersytetu Łódzkiego, 2011. 16 Kast F. E., Rosenzweig J. E., “General Systems Theory: Applications for Organization and Management”, Academy of Management Journal, Dec. 1972: 447-465. 17 Ibid. 18 Laise D., Migliarese P., Verteramo S., “Knowledge Organization Design: A Diagnostic Tool”, Human Systems Management 24, 2005: 121-131.

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2. Pfizer Company

2.1. Access to information

Pharmaceutical industry is characterized by explosion of health information and flow

of data19. Corporations in this industry are

competing on the level of information

transformation, and application of the

findings. Knowledge created within

organizations and wisdom generate

conditions that attract inventive

processes. Pfizer has established a

collaborative network outside its boundaries - the company receives hospital

admission and discharge data, claims data from insurers, scrip (medical prescription)

data from pharmacists, clinical trials data20. The corporation is designed in a way to

cooperate and connect with the external environment and succeeds in encouraging

people to cooperate with them. Forming a corporation that deals with data and

information collection on its own would require employing numbers of people, high

capital expenditure, technology and research, so the strategy executed by Pfizer is cost

effective, guarantees faster access to information and builds a global network that is

more likely to survive than the corporate team composed of employees engrossed

only in that particular company. Although all elements seem separate, they form one

collaborative body. Pfizer’s design translates its purpose into its business processes

which fulfill its mission statement (Exhibit 18).

Data collection process is therefore managed in an

appropriate manner, but is just one step forward

towards a knowledge organization which requires

time and effort to be created (Exhibit 19).

Moving to a system that focuses on translational

medicine and Pfizer’s engagement in this discipline suggests evidence of corporation’s

efforts to follow consecutive steps to become a knowledge organization. Translational

19 Looney W., “The Art of Invention”, Pharmaceutical Executive, Aug. 2011: 44-50. 20 Ibid.

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medicine aims to convert (“translate”) research findings into diagnostic tools,

medicines, procedures, policies and education21 which in this context means spreading

knowledge onto organization and embodying it in its products and services. Such

process requires analytical and design thinking; it’s about predicting and selecting

actions within an organization, transferring knowledge into processes, and applying it

in products, services, brand, reputation, people, and everyday corporate life.

21 “Translational Medicine”, Wikipedia, 10 Nov. 2013 http://en.wikipedia.org/wiki/Translational_medicine>.

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2.2. Global R&D network

Pfizer has its own R&D centers located in the US and UK, and has three Clinical

Research Units (CRUs) spread around the world, in Connecticut, USA, Belgium and

Singapore22. Pfizer has managed to connect with different places getting the most

knowledge and cooperation of it (Exhibit 21, Size). Taking into account people, Pfizer

sees and adapts to environmental changes in that aspect. Pfizer proposes the model of

small, decentralized R&D groups of a global nature23. An oxymoron: separate but

working together towards mutual benefit. Whether due to people’s changing

expectations of working patterns and work behavior or the benefits autonomy brings

in a workplace, Pfizer “[…] allows value to emerge as an outcome of a new way of

thinking and behaving”24.

New model of the R&D process is the approach which the corporation took in 2010,

opening the first center in San Francisco25. Pfizer offers win-win proposal to academic

institutions, creating Centers for Therapeutic Innovation and building campuses for

collaborative work. Pfizer uses resources found at academic sites and creates a “self-

propagating biomedical engine”26. Such body

behaving naturally unlocks energy of invention

and productivity. As opposed to Big Pharma

(Exhibit 4) companies which drive research

studies, Pfizer promotes autonomy among

researchers providing them with resources

needed to conduct a study. “The CTI will

empower true experts […]”27. The company assures that the cooperation is both-sided

by having Pfizer people at each site to be at investigators’ disposal28. This creates a

linkage between knowledge and business, enabling both scientists and the company to

prosper. Researcher – to develop the discovery and advance at no cost. The company –

22 "R&D Locations”, Pfizer, 20 June 2013 <http://www.pfizer.com/research/rd_works/rd_locations>. 23 “Pfizer’s Open Innovation Strategy in Asia”, Bio Partnerships Asia 2, Vol. 4, Dec. 2011: 8-9. 24 Johansson F., “How to Size Opportunity”, Management Today, Feb. 2013: 36-38. 25 “Pfizer: Creating a Biomedical Engine for Upstream Innovation”, partneringNEWS, 29 Aug. 2011, 10 June 2013 < http://ebdgroup.com/partneringnews/2011/08/pfizer-creating-a-biomedical-engine-for-upstream-innovation/>. 26 Ibid. 27 Ibid. 28 Ibid.

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to get the first rights to license any product being a result of the network

collaboration. Taking advantage of Pfizer’s offer seems logical; scientists and

postdoctoral students who form research teams have an opportunity to turn their

ideas into drugs and access facilities. Setting their own company would require more

effort, time, capital and entrepreneurial personality, which scientist often lack, while

Pfizer as a multinational corporation can make their dreams come true.

To set direction and achieve mutual understanding of actions taken in CTIs, Pfizer and

academic scientists create “a statement of work”, which defines goals, sets

responsibilities and timeline. This gives employees and Pfizer’s academic partners a

sense of belonging, defines direction that they follow and gives every member project

ideas that they share and understand. One problem Pfizer encountered during CTI

project was creating the union between academic and corporate culture and provision

of tools for mutual cooperation29. Pfizer’s stakeholders still learn how to function in a

new model. The pace of pharmaceutical industry, which demands both efficiency and

effectiveness at work, was applied to academia, so scientists learn to adapt to it.

Pfizer’s employees learn from academic scientists, expand knowledge and

techniques30. CTIs are producing results, they rely on teamwork and interaction,

everyone is equal and brings value to the discovery.

2.3. Ready for an opportunity

Pfizer cooperates with companies operating in the same or different branch. Strategic

partnership of Pfizer and MaRS Innovation that was announced in April, 2013, was

aimed at advancing early-stage therapeutic and diagnostic technologies related to

human health31. Thanks to this, Pfizer gained access to the source of innovation –

MaRS Innovation’s 16 member academic institutions. Another surprising fact was the

almost worldwide (except Japan) collaboration agreement between Pfizer and its

competitor, Merck & Co, for the development and commercialization of Pfizer’s

ertugliflozin. Merck & Co is a leader in diabetes care and was supposed to introduce a

29 Jarvis L. M., “Pfizer’s Academic Experiment”, American Chemical Society 40, Vol. 90, 1 Oct. 2012: 28-32. 30 Ibid. 31 Monier-Williams E., “MaRS Innovation Announces New Strategic Partnership with Pfizer”, MaRS Innovation, 22 April 2013, 10 June 2013 < http://marsinnovation.com/2013/04/mars-innovation-announces-new-strategic-partnership-with-pfizer/#.Ut0yT7StbIU>.

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medicine discovered by Pfizer scientists to the market32. Although competing firms,

they made a deal and joined their forces. Pfizer’s activity indicates the importance of

collaboration as one of the strategies to grow and increase revenue. Acquisition of

smaller units is another approach the corporation follows. In November 2012, Pfizer

purchased NextWave Pharmaceuticals, which was developing ADHD drugs33. This

enabled Pfizer to enter ADHD market with a new medicine called Quillivant XR34.

If not creating knowledge within its organization, Pfizer acquires or uses knowledge of

other subjects in the environment. Having revenues at $12.6 Billion (third quarter,

2013)35, the corporation has financial resources to invest in innovation, any company

or product, buy out smaller units, satisfy stakeholders, and eliminate barriers. Through

partnerships with other Big Pharma corporations, Pfizer can control the industry. Pfizer

actively engages in cooperation with entities

that compose its environment; such strategy

fosters innovation and development. Pfizer

grows at a rate, at least the same as the

industry grows, which suggests organization’s

continuous relationship with environment,

design demonstrating no denial reactions,

rapport and agreement inside the organization.

To compete in the generic sector, Pfizer developed a generic (Exhibit 23)

pharmaceutical subsidiary – the Greenstone brand36. This allows the corporation to

grow and expand the area of its activity, increase its competitiveness and control, and

create a broader network of collaborations. Pfizer moves forward and tries to

32 “Merck&Co., Inc. and Pfizer Enter Worldwide Collaboration Agreement to Develop and Commercialize Ertugliflozin, an Investigational Medicine for Type 2 Diabetes”, Pfizer Pharmaceutical News and Media, 29 April 2013, 27 May 2013 < http://press.pfizer.com/press-release/merck-co-inc-and-pfizer-enter-worldwide-collaboration-agreement-develop-and-commercial>. 33 “Pfizer Completes Acquisition of NextWave Pharma”, BloombergBusinessweek, 28 Nov. 2012, 12 Nov. 2013 < http://www.businessweek.com/ap/2012-11-28/pfizer-completes-acquisition-of-nextwave-pharma>. 34 Grogan K., “Pfizer Enters ADHD Market with Quillivant RX”, PharmaTimes online, 15 Jan. 2013, 12 Nov. 2013 < http://www.pharmatimes.com/Article/13-01-15/Pfizer_enters_ADHD_market_with_Quillivant_XR.aspx>. 35 “Pfizer Reports Third-Quarter 2013 Results”, 2013 Business Wire, Evaluate, 29 Oct. 2013, 20 Nov. 2013 < http://www.evaluategroup.com/Universal/View.aspx?type=Story&id=465275>. 36 Chandler L. L., Samaroo H. D., “Pfizer and the Greenstone Brand: A Sustainable Competitive Advantage?”, Journal of Medical Marketing 2, Vol. 10, Dec. 2009: 155-164.

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eliminate obstacles. When Lipitor lost its exclusivity in the US and later in the other

markets, its revenues dropped by half from 2012 to 201337. Pfizer managed to

minimize the impact of Lipitor generic versions by partnering with Watson

Pharmaceuticals for an authorized generic version of their blockbuster.

Other steps included advertising campaign promoting the continued use of Lipitor, and

cooperation with health insurance company UnitedHealth Group Inc. to encourage its

members to continue the use of that medicine38. Its Greenstone brand launched

generic of Lipitor in January, 201339.

Although Pfizer fosters innovation from within

the organization, its one medicine was a result of

a coincidence. Viagra was supposed to be a heart

disease medicine, but when researchers noticed

the anomaly while testing the drug they saw a

new possibility. Viagra became a blockbuster of Pfizer and created a new category of

drugs40. Innovation can be achieved by chance without creative people, however

wisdom is required to apply knowledge to any opportunity and to use it to invent

things of value. Such process requires apprehensive people with the cognitive ability

(Exhibit 24).

2.4. Pfizer people

Pfizer’s mission underlines interdependence between innovation capacity and actors

involved in the process. It suggests that collaboration is one of the ways to innovate

and create value for customers (Exhibit 18). The more units (people, institutions,

organizations) involved in this process, the more chances to innovate. All depends on

people. People create the corporation, they bring resources, they use facilities and

tools that the organization is offering to combine these resources, finally the process

produces results. Pfizer does that by inviting scientists, researchers, students,

physicians, institutions and other entities to share knowledge and cooperate. The

37 “Pfizer Reports Third-Quarter 2013 Results” 2013 Business Wire, Evaluate, 29 Oct. 2013, 20 Nov. 2013 < http://www.evaluategroup.com/Universal/View.aspx?type=Story&id=465275>. 38 “Watson Pharmaceuticals Joins Pfizer for Generic Lipitor”, StockBlogHub.com, 6 Dec. 2011, 14 Nov. 2013. 39 “Greenstone LLC Introduces Atorvastatin Calcium Tablets Generic of Lipitor”, Evaluate, 1 Jan. 2013, 20 June 2013 < http://www.evaluategroup.com/Universal/View.aspx?type=Story&id=393852>. 40 Johansson F., “How to Size Opportunity”, Management Today, Feb. 2013: 36-38.

19

more units involved, the higher quality of these resources, the more chances to

innovate. People learn all the time, as organization grows, people develop their skills,

resources multiply. Pfizer connects talents, professionals, cultures, people with

different backgrounds and life experiences, and integrates them into its organization

design (Exhibit 25).

One approach Pfizer used to improve revenue on its

product was finding a way to communicate with the

sales force and drawing conclusions from their

experiences. Pfizer relies on salespeople whose task

is to communicate medical product information to

physicians. Every employee has different

experiences during meetings with physicians. What

Pfizer did to get to know these experiences was creating “anecdote circles” – social

events, where people naturally shared their stories. Each country organized the event

according to cultural and local needs. One person was speaking, while others were

filling in a signifier sheet41. Pfizer created informal space which invited people to share

information with a formal collection system. People felt a sense of community and

engaged naturally, their involvement was a result of the process design.

All information, mission, values and many others are incorporated in company’s Blue

Book, which is the summary of Pfizer Policies on Business Conduct. This Code of

Conduct is translated in 28 languages and shared with all actors that constitute the

collaborative network42. Pfizer emphasizes the importance of adherence to and

spiritual identification with its policy. Pfizer empowers and educates people giving

them personal growth opportunities. 73% of its employees reported high job

satisfaction (2012)43. Those people really feel they make a difference in the world44.

One exemplary initiative is a Global Health fellows program which gives Pfizer

41 Edwards N., “Using Stories to Increase Aales at Pfizer”, Strategic Communication Management 2, Vol. 15, Feb./March 2011: 30-33. 42 “Code of Conduct” Pfizer, 15 Jan. 2014 <http://www.pfizer.com/about/corporate_compliance/code_of_conduct>. 43 Giang V., Stanger M., Lubin G., “The 50 Best Employees in America”, Business Insider, 4 Feb. 2013, 20 Jan. 2014 <http://www.businessinsider.com/best-employers-in-america-2013-2?op=1>. 44 Simoes M., “Pfizer Keeps Employees Happy by Sending Them Around the World”, Business Insider, 5 Feb. 2013, 25 Jan. 2014 < http://www.businessinsider.com/pfizer-global-health-fellows-program-2013-1>.

20

employees a chance to travel, to do volunteer work with NGOs or other organizations

and to investigate and research medicines45. To connect people, exchange news and

knowledge, share ideas and solutions inside Pfizer’s collaborative network, the

corporation uses social networking hub called “MyWorld”46. It is a part of

“PfizerWorld” intranet platform which functions since 2010 and is used every day47.

2.5. Business strategies

Pfizer pursues a differentiation strategy. After its patent for Lipitor expired and

cheaper alternatives appeared on the US market, the corporation switched to new

foreign markets and introduced their product there, putting emphasis on India. There

is also evidence of Pfizer’s low-cost strategic approach. In India, the corporation

offered Lipitor at or even below the cost of a generic medicine during a 180-day period

to enable access to the drug for those who want to stay on it48. Although Pfizer began

selling Viagra online through CVS pharmacies with an aim to fight against its

counterfeit versions49, it facilitated purchases of the drug from patient’s perspective.

The sales model removed the feeling of shame and effort to buy Viagra pills in person.

Pfizer’s strategy is to give consumers trust with their products. The company is offering

customers three free pills with their first order, and 30% off their second order50.

Viagra is the most counterfeited drug, and most sales are offered online, so following

this strategy was a move to eliminate fraudulent competitors selling uncertified

products. As Viagra represents only 3.5% of the company's total revenue, Pfizer plans

to learn from this online selling experience and expand online sales to other

products51. Pfizer brought its strategic tools to a higher level. Above advertising

campaigns or product packaging the corporation educates, supports people and

promotes exchange and dialog.

45 Ibid. 46 Dunay P., “The Big Brand Theory: How Is Social Media Reshaping Pfizer?”, Socialmedia Today, 12 Aug. 2013, 25 Jan. 2014 < http://socialmediatoday.com/pauldunay/1657956/how-social-media-reshaping-pfizer>. 47 Ibid. 48 Mukherjee R., “Pfizer Fights Back, to Offer Lipitor Below Generic Price”, The Times of India, 2 Dec. 2011, 19 Jan. 2014 < http://timesofindia.indiatimes.com/business/india-business/Pfizer-fights-back-to-offer-Lipitor-below-generic-price/articleshow/10950532.cms>. 49 Isidore C., “Pfizer To Start Selling Viagra Online”, CNN Money, 6 May 2013, 23 Jan. 2014 < http://money.cnn.com/2013/05/06/news/companies/pfizer-viagra-online/>. 50 Ibid. 51 Ibid.

21

Pfizer communicates with its consumers through

social media (Exhibit 26). In 2008 Pfizer refined

its Corporate Social Responsibility strategy which

put emphasis on people and communities. CSR

global network involved people across the world

to later make it local in their operating countries.

The issues for improvement were societal value

creation, community benefits, environment

sustainability. Among CSR performance measures Pfizer identified innovation

opportunity to hear stakeholder voices and gather commentary about challenges52.

Such move indicates the company needs its people and awaits value they bring,

stakeholders get a feeling of gratitude, which incurs motivation and engagement.

Pharmaceutical industry is an environment that can be classified as unpredictable,

nobody knows what diseases and needs will come and how many people will suffer.

Predictions are made as companies like PwC53or BCG create forecasting industry

reports and foresee future trends, recognize possibilities and threats. Pfizer belongs to

Big Pharma, the collection of the largest players in the pharmaceutical industry defined

by annual revenues. Pfizer holds a monopoly on a product until drug patent expires.

Until the patent for Viagra expired, which covered the period from 1997 to 2003, the

company earned $1.7 billion profit in 200254. Pfizer’s monopolistic approach allows to

control the price for the drug. Pharmaceutical industry can’t be characterized as

interchangeable. It includes dominating bodies and those with no power or influence

struggling in the survival mode. In case of product Pfizer experiences monopoly.

Drawing a conclusion, the market Pfizer operates in is malleable. In case of Big Pharma

Pfizer competes with the other forces in an oligopoly. Global collaborative network

gives the company access to clinical data, patient information, insurance data, diseases

etc. Pfizer has to synthesize these data and apply the knowledge to find solutions.

52 “Pfizer: Focusing, Refining, and Aligning CSR with a New Strategy”, BSR, June 2010, 20 Jan. 2014 <https://www.bsr.org/en/our-insights/case-study-view/pfizer-focusing-refining-and-aligning-csr-with-a-new-strategy>. 53 “Pharma 2020: Marketing the Future”, PwC, 26 Jan. 2014 < http://www.pwc.com/gx/en/pharma-life-sciences/pharma-2020/pharma-2020-marketing-the-future-which-path-will-you-take.jhtml>. 54 Forgang W. G., Einolf K. W., Management economics: An Accelerated Approach, New York: M.E. Sharpe, Inc., 2007: 159.

22

According to the strategic styles (Exhibit 13) Pfizer shows evidence for both shaping

and adaptive strategic style.

Pfizer acts according to the “form follows function” principle and maintains a

stakeholder balance. The organization strives to innovate through a collaborative

strategy, so it has a shape of an open organization, with present subsidiaries in

different parts of the world. The corporation provides tools for communication across

the globe and connects “its people” in a virtual space. Therefore, in terms of size, the

space that Pfizer creates is unlimited. People enter that space, insert their resources

and naturally work for mutual benefit despite the need to adapt to Pfizer’s internal

requirements.

23

3. Learning for Innovation

3.1. Seeking a germ of a an innovation

Every organization changes at some point, as people do. To rise up to environmental

challenges an organization needs to go through stages with all its participants engaged.

To sustain its market position or to enter a level above, this has to be a continuous

process that is ingrained in the minds of all its stakeholders and in organization design,

so that whenever someone joins the network, they assimilate and decide whether they

identify themselves with the concept, rules, vision, philosophy, and then take it and

stay or refuse and leave. In order to cope with change and perceive it as neutral or as

an opportunity a corporation should become a learning organization.

Pfizer’s information sharing and knowledge creation combined are elements of

innovation process. Although advanced, enhancing Pfizer’s learning abilities would

increase the probability of an innovative outcome. Pfizer’s competitive capital lies in its

network. Due to extensive “cords” in different parts of the world, the organization has

access to data and information which influences the chances of being a leader in

pharmaceutical innovativeness. Thus, strengthening Pfizer’s model of functioning is

indirectly related to increasing probability of an innovation outcome.

Such improvement in the form of structured innovation process enhances learning

capabilities of an organization. It increases innovation creation in a company55.

Analyzing Pfizer Corporation, with relevant literature and materials found online as a

foundation, allowed to construct an innovation boosting process in a way that fits the

design of Pfizer corporation, leverages its competitive advantage56, meets Pfizer’s

aspirations and plans of providing everyone with innovative treatment, and doesn’t

need transformation in the design or structure to be adapted. The knowledge sharing

process also supports Pfizer’s value to operate with transparency by involving target

groups like physicians, academics, society and patients into organizational life. The

process was created based on the literature on brainstorming research and its

varieties, group dynamics, idea generation and creative problem-solving.

55 Brandel M., “Beyond Brainstroming: How Innovators Maintain a Delicate Balance Between Blue-sky Thinking and Practical Constraints”, CIO, Dec. 2013/Jan. 2014, 11-12. 56 An assumption has been made that Pfizer’s competitive advantage comprises of its cooperative network and Pfizer People. This is based on Pfizer’s vision which emphasizes partnership with variety of units to ensure accessibility and quality of treatments.

24

Through observation of Pfizer functioning and its activities, one technique emerges

that can be used to foster innovation. For idea generation phase, communication

channels used so far for other purposes imply the use of Electronic Brainstorming.

Tools which Pfizer has already created can be used for Electronic Brainstorming or new

ones can be created on the basis of company’s experience. For instance, Get Old

Program (Chapter 2, Exhibit 26) website formed in order to educate and communicate

with the society can serve as a space for gathering ideas about health problems,

requests, needs, innovative products etc.

There is evidence of Pfizer’s efforts to include features of Electronic Brainstorming by

having developed enterprise social network for employees to collaborate and

communicate across the globe. A platform named Pfizer World contains Moving Pfizer

Forward module aimed at encouraging discussion about company issues and employee

engagement57 which demonstrates some characteristics of Electronic Brainstorming.

As the only pharmaceutical company, Pfizer created a sponsor blog for its scientists

called Think Science Now58 and takes care of them.

Pfizer targets every group of its stakeholders. Engaging all of them into idea generation

tasks brings benefits for the enterprise. All this suggest the use of brainstorming as a

building block of Pfizer’s innovation process.

3.2. Inspiration from outside

The most researched and fundamental stage in the group task processes is the phase

of idea generation called brainstorming59. Pfizer People are spread around the world

which can be illustrated metaphorically as a spider plant60. Therefore Pfizer has no

problem with data gathering, rather its only challenge is establishing connectivity

around these data (chapter 2, p. 13). Different groups of stakeholders ranging from

patients or academics, through health care providers or governments to top executives

57 Social Media Crowds Analysis, “Case Study: Enterprise Social Network @ Pfizer – Pfizer World Intranet & My World”, 14 April 2014, 28 April 2014 < http://socialmediacases.blogspot.com/2014/04/case-study-enterprise-social-network.html>. 58 Ibid. 59 Kerr D. S., Murthy U. S., “Beyond Brainstroning: The Effectiveness of Computer-mediated Communication for convergence and negotiation tasks”, International Journal of Accounting Information Systems 10, 2009, 245-262. 60 Morgan G., Imaginization: The Art of Creative Management, Newbury Park and San Francisco, CA: Sage Publications, 1993.

25

or partners can provide the organization with different inspiration for innovative

product or service, even a ready-to-execute innovative concept.

Pfizer’s network designed in a way that enables brainstorming among its participants,

involving the society can enhance organization’s innovation process as a foundation

for consecutive steps. To overcome problems like distance and geographies Electronic

Brainstorming is a solution that allows participants to generate ideas from their homes

or offices in different places, simultaneously or at different times. Backgrounds of

Pfizer’s people vary (chapter 2, p. 18). While face-to-face Brainstorming highlights

boundaries such as status differentials61, personality characteristics, the role of mood62

and others, as well as fear of critical evaluations63 or “verbal traffic jams”64, Electronic

Brainstorming reduces the above blocking effects.

Electronic systems provide memory features and allow anonymity. Computers support

human attention and improve the speed of responding by e.g. providing anticipatory

cues65. Researchers like Dennis, Gallupe or Connolly state that for brainstorming tasks

groups using computer-mediated communication can outperform those meeting face-

to-face66. Idea generation is a divergent task which can be performed via computers in

virtual groups. Cognitive stimulation requires attention to the ideas of others67 which is

easier in case of Electronic Brainstorming when participants have all ideas on screen

and can read and refer to them at any time, in contrast to Brainstorming. Idea

generation can be enhanced by exposure to ideas used as stimuli68.

61 Heslin P. A., “Better than Brainstroming? Potential Contextual Boundary Conditions to Brainwriting for Idea Generation in Organizations”, Journal of Occupational and Organizational Psychology 82, 2009, 129-145. 62 Byron K., “Creative Reflections on Brainstorming”, London Review of Education 2, Vol. 10, July 2012: 201-213. 63 Ibid. 64 Heslin P. A., “Better than Brainstroming? Potential Contextual Boundary Conditions to Brainwriting for Idea Generation in Organizations”, Journal of Occupational and Organizational Psychology 82, 2009, 129-145 65 Ferreira A., Antunes P., Herskovic V., “Improving Group Attention: An Experiment with Synchronous Brainstorming”, Group Decision & Negotiation 20, 2011, 643-666. 66 Kerr D. S., Murthy U. S., “Beyond Brainstroning: The Effectiveness of Computer-mediated Communication for convergence and negotiation tasks”, International Journal of Accounting Information Systems 10, 2009, 245-262. 67 Michinov N., “Is Electronic Brainstorming or Brainwriting the Best Way to Improve Creative Performance in Groups? An Overlooked Comparison of Two Idea-Generation Techniques”, Journal of Applied Social Psychology 42, 2012, 222-243. 68 Ibid.

26

Therefore such work systems improve performance and attention. Virtual teams focus

on task not on people69, thus accelerating time

to execute the task. Electronic systems

produce a higher level of satisfaction70

meaning participants prefer this idea

generation technique. Different backgrounds result in different understanding or

interpretation of a problem being discussed (Exhibit 27). The process of Electronic

Brainstorming activates the phenomenon of incremental creativity. As McGrath argues

that groups generate fewer and less creative ideas than do individuals working alone71,

taking this into account Pfizer people can work individually using a virtual space for

sharing their ideas and being exposed to other’s ideas, hence stimuli. Also, Electronic

Brainstorming minimizes cost due to the only expense being an interaction enabling

tool like an online platform. Involving society in such process provides direct

information about the market, demand, areas for improvement etc.

This fundamental phase of innovation process is able to engage groups of stakeholders

that comprise Pfizer’s network, generating possibilities for the organization to grow.

Evaluation stunts idea generation72, therefore it is proposed as a next step in the

process.

3.3. Processing and evaluation inside

Once a large number of ideas is collected, evaluation of these ideas ensues. Evaluation

occurs at the end of the creative process and “[…] filters out poor ideas” 73. In contrast

to idea generation, which is about creating and sharing the largest number of ideas,

evaluation requires convergent thinking and a shared understanding of a problem,

discussion, negotiation and decision-making to arrive at a solution. In case of Pfizer,

evaluation means filtering knowledge from outside environment, comparing it with

R&D discoveries and ideas, processing it by finding interrelationship which might

produce an outcome.

69 Michinov N., “Is Electronic Brainstorming or Brainwriting the Best Way to Improve Creative Performance in Groups? An Overlooked Comparison of Two Idea-Generation Techniques”, Journal of Applied Social Psychology 42, 2012, 222-243. 70 Ibid. 71 Ibid. 72 Ibid. 73 Ibid.

27

Communication mode depends on task.74 In this case, typical brainstorming should be

used because of social presence dependence upon an

outcome. High level of social presence (voice tone,

body language, facial expression) is present in face-to-

face communication and makes a group achieve “[…]

higher joint benefits”75.

Osborn (1953) proposed four guidelines for

Brainstorming (Exhibit 28), one of which was “deferment of judgment” to eliminate

anxiety or fear that diminishes productivity76. People working with each other in a

corporation on a daily basis can form teams where these rules can be applied with no

effort, and productivity blocking factors can be diminished due to the fact that they

work together on different projects and know each other. Such people demonstrate

traits that are typical of Pfizer’s employees. Although with different backgrounds, they

act accordingly to the Code of Conduct (chapter 2, p. 19), share vision and assimilate

with Pfizer’s design. Space designed for Evaluation stage of Brainstorming also imposes

certain behavior unwittingly. Teams meeting face-to-face to discuss, contrast, compare

and select a set of ideas and then find a solution need to share problem framework

and build on the same idea, which can be a problem

using virtual tools77.

Evaluation and idea generation should be separate

phases (Exhibit 29). There is, however, evidence that

evaluation as a source of disagreement and debate can stimulate divergent thinking78

yet assigning goals for idea generation can have stimulating effect as well, and “add

value by directing and sustaining attention and effort in knowledge activation”79.

74 Kerr D. S., Murthy U. S., “Beyond Brainstroning: The Effectiveness of Computer-mediated Communication for convergence and negotiation tasks”, International Journal of Accounting Information Systems 10, 2009, 245-262. 75 Ibid. 76 Isaksen S. G., “A Review of Brainstorming Research: Six Critical Issues for Inquiry”, Creativity Problem Solving Group - Buffalo, New York, June 1998. 77 Kerr D. S., Murthy U. S., “Beyond Brainstroning: The Effectiveness of Computer-mediated Communication for convergence and negotiation tasks”, International Journal of Accounting Information Systems 10, 2009, 245-262. 78 Harvey S., Kou C., “Collective Engagement in Creative Tasks: The Role of Evaluation in the Creative Process in Groups”, Administrative Science Quarterly 58, 2013, 346-386.

28

Both feedback and goal assignment are interventions that serve as stimulation, but are

differently perceived by Brainstorming participants. Goal orientation meaning, for

instance, an assignment that everyone understands in the same way, directs

attention80.

During Brainstorming and Evaluation employees work together and seek to find

solution that suits enterprise’s requirements. Building on the same idea, engaging

emotionally into creative process and feeling a sense of ownership, coalition around

idea is built, hence more people become sources of creative message which is later

spread on the whole organization. The more people supporting the idea, the less

changes of refusing that idea by a decision body81. Information and knowledge sharing

as a first stage, and filtering followed by processing as the second stage situated in

organizational frame lead to innovation. What remains is knowledge

commercialization, an execution and implementation of the idea or proposal to

convert it into benefits for the enterprise.

3.4. Design pulls innovation

Three elements influence the process of knowledge sharing in an organization –

culture, circumstances and motivation. An ownership of an idea serves as one

motivator for employees. However, by creating a culture of condor, where team

members bring different input in more or less equal quantity and produce an outcome

together, they share ownership of an idea and receive rewards together as a group.

Pfizer can assure conditions supporting creation of a knowledge sharing culture which

evokes motivation.

Pfizer implementing the Brainstorming Mode (Electronic and

typical Brainstorming) can increase its innovation capabilities

by adding resources, and increase probability of a coincidence

by opening and exposing itself to thoughts, perceptions,

images, inspiration. That may lead to idea creation which results in the product or

79 Litchfield R. C., “Brainstorming Reconsidered: A Goal-based View”, Academy of Management Review

3, Vol. 33., 2008: 649-668. 80 Ibid. 81 Bernhut S., “Leading The Revolution: Gary Hamel”, Interview with Gary Hamel, Ivey Business Journal Online, July/August 2001, 28 April 2014 < http://iveybusinessjournal.com/topics/strategy/leading-the-revolution-gary-hamel#.U16lxlfIl6B>.

29

service development, or organizational process improvement. Engaging societies

increases the likelihood of an outcome from which the enterprise benefits (Exhibit 30).

The whole process complies with Pfizer’s vision to operate in partnership with

everyone to ensure that people everywhere have access to innovative treatments and

quality health care (chapter 2, p. 13). Thus, indicating high engagement as people from

the society would contribute out of concern for their safety. Conducting idea

generation actions under the pretext of individuals’ safety activates motivation to join.

A designed tool for the process of idea generation should attract resources, leading to

network effect where people can exchange their views, ideas or problems on variety of

topics between various groups of people. Pfizer scientists or physicians can give advice

to patients, patients can discuss some health issues, Pfizer employees can encourage

people’s participation in programs by sharing corporation’s messages, or improve

brand image. In such situation, all entities of a network benefit and innovative ideas

occur as by-product, but not necessarily.

To sustain its market position, Pfizer needs to search insights from various sources,

filter ideas and rank them. In the next stage, pass to process them during evaluating

sessions, where by choosing a mindset to adopt, employees know how to behave,

what to look for and share problem framework. In an industry where Pfizer operates,

knowledge is created inside a corporation, yet information and inspiration comes from

outside. Exposing itself to different stakeholders can give stimuli as well as ideas that

might never come to one’s mind. It can uncover the direction which the organization

should follow for the future.

3.5. Learning ability

Learning processes, learning environment and leadership are three blocks on which a

learning organization can be built82. People learn and change by themselves, an

organization can only create supporting environment by shaping its climate and

implementing rules, for example, mistake tolerance. Forms for sharing knowledge like

Pfizer World platform make it happen by itself by providing space which attracts

employees and encourages its use. Pfizer’s design demonstrates features of a learning

82 Interview with David Garvin and Amy Edmondson, The Importance of Learning in Organizations, Harvard Business Publishing, March 2008, 28 April 2014 < http://hbr.org/2008/03/is-yours-a-learning-organization/ar/1>.

30

environment – an Open Door Policy is aimed at detecting valid concerns. Its anti-

retaliation law encourages to rise up and inform about problems.

Brainstorm on problems and fact confrontation constitute a part of a learning process.

Using this technique e.g. to reconsider business processes can result in teams deciding

what activities to improve, what to sustain, what to refuse. Systematic reflection is a

part of a learning process83. While space invites behavior, an initiator stimulates

learning. By starting from himself or herself and exposing certain behavior inspires

others to follow the pattern. If more than one person displays behavior with a

message, the process of employees adapting the “theme” accelerates. Developing an

adaptive system for learning skills and procedures brings organization closer to achieve

a status of a learning one and makes knowledge sharing happen.

People in a corporation determine the rate in which organization learns with all

supporting facilities around. Each individual is characterized by a learning style and if it

matches their career choice, such people show commitment to their work. Adaptation

to organizational changes may require new skills and imply new tasks84. Therefore, a

support in a form of workshops or training session, as well as supervisor’s help

diminish employee’s anxiety and resistance to change shortening time to adapt to new

circumstances. Innovation and change treated as natural occurrence denotes a

learning organization. To do this people need to share values that encourage changes,

seeking for opportunities, growth and development which serve as motivators. It’s the

environmental design, behavior of an initiator and learning process construction that

can either inculcate a spirit of learning and excellence or

promote tensions and scare off.

Competencies matter, because they are more than a skill

(Exhibit 31). A challenge is to combine all competencies

that are somewhere in the world and leverage them85

with both sides deriving benefits from mutual cooperation. By questioning different

83 Bernhut S., “Leading The Revolution: Gary Hamel”, Interview with Gary Hamel, Ivey Business Journal Online, July/August 2001, 28 April 2014 < http://iveybusinessjournal.com/topics/strategy/leading-the-revolution-gary-hamel#.U16lxlfIl6B>. 84 Puerta Melguizo M. C., Dignum F., Dignum V., “Learning for Organizational Change”, University of Utrecht, the Netherlands. 85 Bernhut S., “Leading the Revolution: Gary Hamel”, Interview with Gary Hamel, Ivey Business Journal Online, July/August 2001, 28 April 2014 < http://iveybusinessjournal.com/topics/strategy/leading-the-revolution-gary-hamel#.U16lxlfIl6B>.

31

subjects and listening to the market, Pfizer can even get inspired to change its business

concept. Pfizer corporation has connections and has built relationships with people

inside and outside the enterprise. It cares for its capital composed of its people

everywhere. The use of Electronic Brainstorming technique on a daily basis engages a

number of minds and connects each entity to Pfizer network via an interactive

platform. From concern for their safety people would contribute to knowledge

creation, while Pfizer employees need to combine this knowledge from the market and

society with the knowledge from scientists and R&D units.

Answering the question whether environment

creates innovation, it does give a boost for

innovation. This view is supported by Hammel

(Exhibit 32). Whether organization can be innovative

without creative people may be the matter of

dispute. Invention, however, can come into being by chance. Pfizer experienced it with

their blockbuster Viagra. Employees need to keep their minds and eyes open and

observe surroundings, seek for connections and transform information from various

sources into knowledge. Pfizer proves there are no literal boundaries of an

organization, offices are a space that invites to doing nothing else than dealing with

organizational issues. Pfizer may take a number of people under its wings ignoring

geographical limitations and leverage their knowledge and competencies and as a

result see gains in innovation.

32

Conclusion

Organization design influences the way people behave and interact with each other.

Leveraging its resources and structure built over years, Pfizer can strengthen its access

to information, data and knowledge to increase its chances to innovate. Exposing

Pfizer to stimuli to enhance its innovation process can be carried out using channels

built so far, but changing the form of communication. By implementing brainstorming

and electronic brainstorming techniques the corporation can engage both internal and

external resources, hence utilize more and more competencies. Strategic mindset

ingrained in all stakeholders makes them ready for an opportunity, ready for a

discovery. To transform information into knowledge within organization people need

to have their thinking stimulated and show an attitude to search for innovation. Idea

thrown into a crowd within the frames of designed space can produce feedback, thus

indicating direction the company should follow. Evaluation within a specialist circle

filters ideas and seeks ways to utilize them for the benefit of the corporation and the

community. Collaborative capacity of Pfizer enhanced by more resource units taking

part in the innovation process means more perspectives, views, more problems, its

frameworks and its origins. Confronting all these can result in Pfizer’s employees

intercepting new ways of thinking, and having new ideas. Information from different

sources combined can therefore indirectly cause an invention to occur.

Brainstorming between people with different backgrounds can increase connectivity

around data. Dialog between science and business while listening to society and

patients allows all pillars to learn from each other and improve understanding. Space

and tools are designed to create a learning atmosphere. Combining three forces under

one “organizational roof” contribute to value creation. In its R&D centers Pfizer

connects science and business where both sides derive learnings while cooperating

with each other. Going further, Pfizer can add external element of the jigsaw which is a

group of patients and customers. This party, as opposed to creators or producers,

creates demand and is dependent upon Pfizer’s solutions (treatments); communities

present a different view of the problems and can put their knowledge and beliefs into

the process as a resource. Such exposure broadens spectrum of organizational

learning, meaning employees’ learning abilities who form the corporation.

33

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