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Drive Innovation with Better Decision-Making

 

Here is an excerpt from an article written by Emily Tedards, Linda A. Hill, and Taran Swan for Harvard Business Review and the HBR Blog Network. To read the complete article, check out the wealth of free resources, obtain subscription information, and receive HBR email alerts, please click here.

Credit:  Mattia Balsamini

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Don’t let old habits undermine your organization’s creativity.

To stay competitive, today’s business leaders are investing millions in digital tools, agile methodologies, and lean strategies. Too often, however, those efforts produce neither the breakthrough operational processes nor the blockbuster business models companies need—at least not before their competitors introduce their own advances. And a key culprit is the inability to make quick and effective innovation decisions.

The discovery-driven innovation processes companies now rely on involve an unprecedented number of choices, from big go/no-go gates that govern which ideas are pursued to countless decisions about how to conduct experiments, what data to collect, how to interpret findings, and how to act on them. But in companies that are just learning to experiment, too many decisions are made inefficiently or informed by past experience and narrow perspectives. As a result, critical risks aren’t identified, and bad ideas hang around forever, eating up scarce resources and crushing the chances of bigger, more-transformative bets.

Take Pfizer. (One of us, Hill, has been a paid adviser to the company over the years.) In 2015 the pharmaceutical giant kicked off a digital transformation effort in its Global Clinical Supply (GCS) arm, which delivers more than a million doses of investigative medicines to thousands of clinical sites in over 70 countries each year. Doing so while maintaining clinical trial integrity is a complex task. Any issue, such as inadequate refrigeration, unclear instructions for medical professionals, or patients’ failure to comply with regimens, could delay the development of potentially lifesaving treatments. By 2018, GCS had made significant progress with its digital initiatives. But with new medical and digital technologies on the horizon, Pfizer’s strategy changed to focus exclusively on breakthrough drugs and vaccines. GCS needed to become ever more agile, innovative, and patient focused so that it could adapt to myriad clinical-site and patient needs. Findings from a cultural survey, however, underscored that the organization was struggling to make good, timely decisions about systems, processes, and capability innovations.

So GCS altered its approach on a number of fronts, creating cross-functional teams that were responsible for key decisions, changing the frequency of decision-making meetings, and improving team members’ ability to robustly debate ideas. Those efforts paid off when Covid hit: Thanks in no small part to the quick-footed support of GCS, the first emergency authorization of the Pfizer-BioNTech vaccine was granted only 266 days after the declaration of the pandemic. (GCS’s journey in advance of the pandemic will be described throughout this article; for more on the race to make the vaccine, see “The CEO of Pfizer on Developing a Vaccine in Record Time,” HBR, May–June 2021.) GCS’s success at rapidly delivering tens of thousands of doses of the vaccine candidates and collaborating with colleagues across Pfizer to develop solutions to the thorny challenge of preserving them at subzero temperatures is just the most prominent of its many recent innovation achievements, which range from real-time tracking of trial-drug shipments to personalized tests for cutting-edge therapies.

We’ve spent almost two decades studying leaders at highly innovative organizations and, more recently, incumbent firms that are on their way to becoming innovation powerhouses. When we looked closely at 65 of the companies that were on the journey to becoming more nimble, we found that the more successful ones were applying many agile and lean principles to decision-making itself. In this article we’ll show what that means: including diverse perspectives, clarifying decision rights, matching the cadence of decision-making to the pace of learning, and encouraging candid, healthy conflict in service of a better experience for the end customer.

Diverse Perspectives

Research has long shown that diverse teams are better at identifying opportunities and risks in any problem-solving situation. But in organizations that are learning to experiment, four perspectives tend to be underrepresented in decision-making:

[Here’s the first they discuss.]

The customer perspective.

It’s hardly a surprise that the customer needs to be at the heart of all decisions, whether they’re about new products, business models, or internal processes. But we find that customer intimacy is all too rare. Because of that, firms end up chasing problems that don’t really matter to customers and miss opportunities to address their unarticulated pain points and desires.

The solution here is to include in your decision-making processes the people who are most closely connected with end customers: frontline operations staff, customer service employees, salespeople, and the customers themselves. Organizations that are good at this also tend to work closely with user experience or user interface teams, ethnographic researchers, or experts in human-centric design. And if you’re developing a new business process or a digital tool for employees, remember that their voices need to be heard—in this case they are the customers who will use it.

Mattia Balsamini photographed equipment at the teaching labs at Eni Corporate University, which trains the energy company’s workforce, in Cortemaggiore, Italy.

To represent the voices of patients in clinical trials and the health care professionals working directly with them, Pfizer’s GCS unit created a new function, Clinical Research Pharmacy, and recruited pharmacists (who had prior experience administering the treatments) to join it. Over time, the CRP came to play an integral role in decision-making at GCS. Its pharmacists’ insights have led to innovations ranging from user-friendly package designs to virtual-reality training for health care providers.

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Here is a direct link to the complete article.

Linda A. Hill is the Wallace Brett Donham Professor of Business Administration at Harvard Business School. She is author of Becoming a Manager and coauthor of Being the Boss and Collective Genius.
Emily Tedards is a research associate at Harvard Business School.
Taran Swan is a managing partner at Paradox Strategies, a provider and creator of advisory services, experiences, and tools that enable organizations to navigate the paradoxes of leadership, innovation, and diversity.
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