Presentation made at the ASQ World Conference on Quality and Improvement, at Anaheim, CA, on May 21st, 2012.

1. M03
Driving Innovation Through Networks
WCQI Concurrent Session
Monday, May 21st, 2012, 1:30pm – 2:30pm
Mr.
Mr Alexis Goncalves
Director, Innovation Catalyst, Pfizer Inc.
ASQ Fellow, ASQ Director at Large 2008-2012

2. Session Objectives
• Discuss four operating principles that enable Innovation
Networks to prosper
• Present the different roles necessary to ensure the
success of Innovation Networks
• Overview of the day-to-day operation of Pfizer’s
Innovation Networks
• Discuss how a company can establish a culture of
knowledge sharing

3. Innovation Communities (IC) at Pfizer
 Internal platform launched by
Pfizer in early 2009
 20,000+ users visited
 12,000+ ideas submitted
 36,000+ comments on ideas
 Operating principles:
1. The Wisdom of Crowds
2. The Medici Effect
3. The Long Tail of Innovation
4. Network Behaviors

4. Four Operating Principles
1. The Wisdom of Crowds
2. The Medici Effect
3. The Long Tail of Innovation
4. Network Behaviors

5. 1. The Wisdom of Crowds

6. 2. The Medici Effect
“In Italy for 30 years under the
Borgias they had warfare, terror,
murder, and bloodshed, but they
produced Michelangelo, Leonardo
da Vinci, and the Renaissance.
In Switzerland they had brotherly
The Third Man* on
love - they had 500 years of
Innovation democracy and peace, and what
did that produce ?
The cuckoo clock.”
* Graham Greene wrote the book and screenplay. Orson Welles ad-libbed just one line -- this, the most memorable one of the film.

7. 3. The Long Tail of Innovation
The Long Tail was popularized by Chris Anderson in an October 2004 Wired magazine article, in which he mentioned Amazon.com, Apple and Netflix as
examples of businesses applying this strategy. Anderson elaborated the concept in his book The Long Tail: Why the Future of Business Is Selling Less of More.

8. 3. The Long Tail of Innovation
The best sellers that
Barnes & Nobles will
have in stock.
hundreds that sell many each
weekly The “long tail” that only
sales iTunes or A
iT Amazon can
afford to deliver.
tens of thousands that sell a few each
rank of song or book

9. 3. The Long Tail of Innovation
the Head is defined by the
point where the revenue per
book drops below the cost of
carrying it.
the Tail is made possible by
dropping carrying costs 10x,
100x, or more.
weekly
Internet technology is the big
sales
enabler.
cost of
carrying a
book
rank of song or book

10. 3. The Long Tail of Innovation
• Someone has a
business problem.
• The people “nearby”
are good & have useful
ideas.

11. 3. The Long Tail of Innovation
• Someone has a
business problem.
• The people “nearby”
are good & have useful
ideas.
• By reaching “farther
out”, the density of
people with useful
ideas goes down…

12. 3. The Long Tail of Innovation
• Someone has a
business problem.
• The people “nearby”
are good & have useful
ideas.
• By reaching “farther
out”, the density of
people with useful
ideas goes down…
• ..but the total number
goes up. This is the
long tail of new ideas.
• It is the low cost, huge
reach, and diversity of
content that make the
Long Tail practical and
valuable.

13. Not just more, but more diverse
Reaching out brings
more, and more your local
diverse voices. team
internal
customers and
stakeholders
your sales
force
Scale and risk rise, but external
can be readily customers
managed.

14. 3. The Long Tail of Innovation – Pfizer 3 Years Data
Ideas + Comments Received, • It’s nothing like a
Pfizer Idea Farm, 2006-2008
2,500 bell curve
eople entering
this many, in 5-idea bins)
2,000 • Classic statistics
how often it occurs
1,500
is useless.
• S
Some people l
(number of pe
n
n
1,000
enter no ideas,
500 some enter
hundreds. The
0
0 100 200 300
range is huge.
ideas per author

15. 3. The Long Tail of Innovation – Pfizer 3 Years Data
200 challenges, 12,700 ideas, 3180 authors
linear graph 1,000
log-log
ideas per author
100
Log-log
Log log plots show
the tail clearly.
A straight line on a
log-log graph has the 10
form y = Cx-b ,
a power law.
1
1 10 100 1,000 10,000
author rank

16. 3. The Long Tail of Innovation – Pfizer 3 Years Data
200 challenges, 12,700 ideas, 3180 authors
1,000 100%
The “area under the
curve”, the
cumulative total of all 80%
cumulative perce of ideas
entries, reminds us
ideas per author
how many people are 100
in the tail. 60%
ent
r
40%
10
20%
1 0%
1 10 100 1,000 10,000
author rank

17. 3. The Long Tail of Innovation – Pfizer 3 Years Data
The people “in the challenges, 12,700 ideas, 3180 authors
200
1,000 100%
tail” contribute
80% of all ideas and
value. 80%
cumulative perce of ideas
The top 1%
ideas per author
(30 of 3180) 100
60%
ent
contribute 20% of
r
all ideas.
40%
10
20%
1 0%
1 10 100 1,000 10,000
author rank

18. 4. Network Behaviors
Jane Pete
Jane and Pete have the same number of colleagues in their
networks, but these colleagues are connected in different ways.
Who is likely to have more good ideas? Why?

19. Innovation Communities: Decentralizing Innovation
+ +
Network Strategic Challenges Process and Support
 “White spaces” are best  Leaders can “pull” ideas by  Toolkits and templates to
explored by networked linking challenges to assist in solution building
communities strategic objectives
 Learning and training to
 Bridging silos to leverage  Networks will mobilize in build individual capacity
diversity promotes maximum areas of need
performance  Visibility of activity with
reporting and metrics

20. What can you do on Innovation Communities?
Network and Form Challenge for Suggest Ideas
Communities Solutions
Form Teams Sponsor Ideas Develop
Business Cases

21. The Different Roles
Colleague Manager Senior Leader
 Engage with  Form high-performing  Gain visibility and
colleagues teams quickly track ideas
 Learn about and  Help teams collaborate  “Pull” ideas for
contribute to the and deliver value strategic challenges,
business bridge white spaces
 Be a more effective
 Be recognized for manager by knowing  Communicate strategic
delivering value more about your team challenges to targeted
to Pfizer members communities
 Engage and award

22. How Does “Pat” Use Innovation Communities?
Pat is a Pfizer employee with lots of ideas,
energy, and passion for Pfizer
She logs onto
IC.Pfizer.com
Fills out her profile and
e-Health
joins the
community

23. Pat networks and engages with others
e-Health community leader
poses a challenge to
solve patient compliance
using e-Health
proposes an
Pat
idea and discusses it
with community members
She shares the discussion with her boss
and network of contacts

24. Pat assembles cross-functional teams
Pat receives community encouragement to
promote her idea into a project and
form a team
Recruits a colleague with finance
experience and a market research expert
i d k t h t
to further develop the business case
Pat’s team develops a compelling
business case and a BU leader
sponsors the team

25. Pat finds sponsors to test her ideas
The team receives some funding for
primary research to validate the
business plan
The sponsor approves a pilot with
additional funding, and directs Pat to more
internal and external partners
runs the pilot and
The team
reports the results to the
sponsor through the platform

26. Pat’s sponsor uses ICs to grow his business
This is Pat’s sponsor
He uses a dashboard for visibility
and tracking status of the most
interesting teams
When he finds a promising project like
Pat’s, he suggests improvements
to the team, connects the team to
other experts, or funds pilot
programs

27. Pat creates value for Pfizer using Innovation 2.0
The sponsor recommends the team for
“Innovation
the annual
Excellence Award”
presents the pilot
Pat
results with her team at the BU
annual off-site and receives
more positive responses to develop an
operating business plan
Pat, her team, the sponsor, and Pfizer
are all winners!

28. “Pat” Innovates Today for Pfizer’s Tomorrow
1 Connect and engage
2 Propose ideas
3 Collaborate in teams and
communities
4 Launch projects, develop
business cases, and seek
sponsorship
5 Innovate and be rewarded

29. A Transparent Innovation Tracking Platform
Staging Discovery Development Scale-up
 Transparent tracking along the  Minimize duplication of ideas and
workflow stages projects
 Filtering by Business Unit,  Prioritize top opportunity areas
Community, Geography
 Encourage activity in addressed
 Visibility at Colleague, Manager and opportunities
Senior Leader level

30. Session Objectives
• Discuss four operating principles that enable Innovation
Networks to prosper
• Present the different roles necessary to ensure the
success of Innovation Networks
• Overview of the day-to-day operation of Pfizer’s
Innovation Networks
• Discuss how a company can establish a culture of
knowledge sharing

31. Q&A

32. SEE MORE INSIDE THIS BOOK
Book “Innovation Hardwired”
Available at
Author
Alexis P. Goncalves
Join my Network
http://www.linkedin.com/in/goncalves

33. M03
Driving Innovation Through Networks
WCQI Concurrent Session
Monday, May 21st, 2012, 1:30pm – 2:30pm
Mr.
Mr Alexis Goncalves
Director, Innovation Catalyst, Pfizer Inc.
ASQ Fellow, ASQ Director at Large 2008-2012