A World of R&D

So maybe there is a time slot for presentations at conferences that is worse than the after lunch hour, and maybe that’s the time slot that comes between the audience and happy hour, as the final presenter on Monday, Al Bingham, put it.

Bingham’s presentation, Innovation: Creating a Global Community to Solve R&D Problems, may have had the smallest audience of the information packed day, but pity the poor CIOs who skipped it. The Eli Lilly vice president showed the hearty souls who remained in the room a new way to practice R&D that’s modeled off the open source community and that addresses the problems facing R&D-driven companies: the increased pressure for faster, more cost-effective R&D and the huge financial risk that innovation-driven companies face. (He cited a staggering data point: Two-thirds of capital is spent on projects that fail in R&D-driven companies. Phew!)

To address that problem, Eli Lilly created a networked global community of scientists called InnoCentive to which the company poses its most perplexing questions. He compared it to a “bounty hunting system” whereby Lilly poses its problems to this brain trust, explains what it wants to accomplish and specifies the criteria for the solution. InnoCentive includes a comprehensive IP protection scheme to back everything up. On one occasion in particular, Lilly needed to know how to make a particular molecule. The company posted the problem on the InnoCentive website, and lo and behold, a former Celanese executive solved the problem. Lilly tested the solution and when the company found it worked, it asked the executive how he made the molecule. When the executive told Lilly, the company paid him $25,000 for his work. Bingham says the $25,000 was less than what Lilly would have spent to have its own scientists try things and fail over and over, yet generous considering the amount of time the Celanese exec spent solving the problem.

Bingham admonished CIOs to think of ways to use technology to support R&D: “Our imaginations have not kept up with the potential of the tools we’ve been given.”

In offering this example and in talking about this external community as a source of innovation, Bingham echoed the ideas that John Seely Brown and John Hagel have been promoting in their new book The Only Sustainable Edge. “The source of many low-cost innovative solutions is likely outside the corporation,” said Bingham.

InnoCentive facilitates practice sharing. Bingham said someone who might not have solved a problem might post what research and work they have done so as to help out someone else who might be able to figure it out.

Bingham said more than 300 challenges have been posted on this website, in which more than 80,000 problem-solvers participate. InnoCentive has paid over $1 million to problem-solvers to date. A variety of companies participate in InnoCentive, including P&G, Dial and Boeing.

In spite of throwing some bewildering slides of molecular compositions on screen to illustrate his example of how Lilly used InnoCentive to determine how to create a particular model, he did not intimidate his audience, who peppered him with questions when he finished his presentation.

—Meridith Levinson