We recently fielded an inquiry from an InnoLead member who wanted to learn more about building regional innovation initiatives that involve everyone from executives to lower-level employees.
For answers, we turned to Merck’s Wim Vandenhouweele, who runs commercial innovation for the $39.5 billion pharmaceutical giant in Emerging Markets, Europe, and Canada. Vandenhouweele, who has worked for Merck in Belgium, the Netherlands, China, and the U.S., now works directly with different regions to drive commercial innovation and foster an innovation mindset globally.
Distributed and Focused
Vandenhouweele’s approach to global innovation is similar to those that InnoLead has encountered at companies such as Vodafone and others. Specifically, he brought a distributed philosophy to the challenge. “I don’t want to build a team,” he says. “I believe that process kills innovation.”
Instead, Vandenhouweele identified in every region a “country innovation leader.” In each case, that leader had another position at the company; for example, a marketing, medical, or other role. Between 40 and 50 employees across the world are chosen by this country leader to be responsible for commercial innovation. Vandenhouweele is in regular contact with them to provide guidance and advice; he is currently tracking a portfolio for each region that has approximately 10 to 12 initiatives in each.
According to Vandenhouweele, this distributed approach has helped country leaders “zero in” on innovations that address a commercial problem or a customer problem. This is very different from the company’s classic R&D function, which is to develop “new products or new medicines,” he says.
According to Vandenhouweele, the process of identifying and pursuing those innovations comes down to three Ps:
- Problem: Start with the problem, rather than a solution;
- Passion: Identify and support the people who are passionate about their innovation project;
- Process: Avoid it.
This sounds obvious, but Vandenhouweele emphasizes that it is absolutely critical to start with a real problem identified on the ground locally.
Too often, says Vandenhouweele, companies take a solution-first approach directed from a centralized innovation lab or corporate headquarters. Those solutions, developed far from target countries and customers, are rarely successful due to implementation challenges in developing nations. “Large companies come up with a great idea, and say, ‘This is really great … what we need to do is to find someone somewhere who can implement it.'” And while sometimes there will be good synergy between HQ and the in-country team, Vandenhouweele says this approach rarely works. “It’s very, very challenging.”
To illustrate this dynamic, Vandenhouweele discussed Merck’s approach to drug adherence, or making sure patients take their full regimen of medication. This perennial healthcare issue could be addressed from HQ with a smart pillbox or reminder app, but those solutions would miss the mark. That’s because, according to Vandenhouweele, the on-the-ground adherence problem in certain nations may be different than the adherence challenge envisioned within the headquarters market. Smart pillboxes and reminder apps are good for those who forget to take their meds, says Vandenhouweele. But in emerging markets, patients might stop taking medicine for other reasons, like a fear of potential side effects. “A simple phone call could address that better than a smart pill box,” he says.
This disconnect between “top down” centralized innovation, and “bottom up” innovation from global teams in-country, is critical for companies to understand and solve. “Corporate HQ may come to the conclusion that adherence is the problem,” says Vandenhouweele, “but the reasons for non-adherence may differ widely in emerging nations.”
To approach the adherence problem from the “bottom up,” the team worked directly with teams in Australia, India, and the Philippines to address the adherence challenge at the regional level. The teams sought to understand the market dynamics in each country — including patients, hospitals, doctors, pharmacists, and more — and ultimately discovered that leveraging drugstore chains was the fastest and most efficient way to engage patients.
The final adherence program — which has been tested in multiple markets and is now being rolled out to 15 countries — has multiple components, including call centers and technology, such as reminder apps. “We got those learnings over time,” says Vandenhouweele. “Once they reached that proof-of-concept, then I took the team that developed that solution, and asked them to share the results with the senior management team.”Vandenhouweele was able to analyze key success criteria and identify all the countries and products that would benefit from the program. That included taking into account country-by-country compliance needs and implementation challenges. “Then we made a recommendation: ‘This is what we should be scaling to in these countries; here are the resources we would need; here are the resources the country would need; and we need this center of excellence to help countries,'” he says.
According to Vandenhouweele, the program is a perfect example of how on-the-ground “bottom up” approaches to innovation in counties can have a big impact. “It has dramatically increased adherence to many of the diseases Merck medicines address, especially diabetes.”
Of course there are no guarantees that this local approach will work; in fact, Vandenhouweele admits that failure is not only accepted but expected within the organization. “We have a significant failure rate, because I am only looking for things that have never been done before,” he says. “Sometimes it takes three to four years to get to proof-of-concept, and sometimes it takes a couple of months; there’s a huge variation.”
In one country, Vandenhouweele’s team was faced with a particular challenge: high demand for Hepatitis C products, but little patient ability to pay out-of-pocket. “Because of local cash flow issues,” says Vandenhouweele, “only a very small percentage — about two percent of the population — could afford the product.”
The local Merck innovation team participated in the ideation, stakeholder engagement, and testing activities outlined in this article, and quickly realized that the innovation needed was actually a financial one; namely, a relationship with a bank that could provide each patient with a loan.
The solution turned out to be a win-win for everyone. Patients were able to benefit from the full six-month treatment period, but could finance the treatment over as long as three-years. “Because of this approach,” says Vandenhouweele, “more than 45 percent of the patients could afford the product.”
Similarly, there was an important “win” for the bank: the ability to develop relationships with a new group of customers. That’s because most of the patients were living in remote areas, and had no financial history or established relationship with a financial institution. “They didn’t have typically banking access,” Vandenhouweele says. The Merck partnership therefore became an important bridge for the bank, enabling it to reach new customers to whom they could offer a more diverse set of financial products.
Vandenhouweele says the success of the innovative vaccine-financing program has the potential to expand elsewhere. “When we showed it works for the patient, the partners, and the company, we started to look at other countries where we could scale it.”
Just as important as the locally-driven, “bottom up” approach, is finding passionate leaders for innovative initiatives.
In the beginning, Vandenhouweele says he selected regional innovation leaders whose more senior status and credibility within Merck might help get innovations implemented. Unfortunately, that was “a total failure,” he says.
Vandenhouweele found that these high-ranking managers have so many responsibilities that they often have limited capacity. More importantly, Vandenhouweele found these managers didn’t always have an affinity for innovation. For example, those who move up the corporate ladder often are great at seeking out for efficiencies and adjacent opportunities. But those characteristics, say Vandenhouweele, are not necessarily what you want in a champion of innovation and further-out ideas.
Instead, Vandenhouweele began seeking out specialists in a particular area, some of whom were very junior in that country’s organization. “I’ve seen examples of someone who was four levels below the managing director,” he says, “but made a major change in that country because she was so passionate about it.”
In one particular case, Vandenhouweele says a lower-level executive from the company’s Venezuelan team had devised a simple plan to promote innovation by showcasing examples of successful Merck programs from Venezuela and the rest of the world. She even persuaded management to do a company-wide meeting to promote the program, and launched an annual innovation competition, with awards and incentives for winners. She kept the program top of mind, even getting the managing director from her region to include her new innovation logos in his speeches.
“She made an enormous change in the organization,” Vandenhouweele says. “I see this repeatedly in other countries,” he adds, noting that this approach has allowed him to identify high-performing individuals that may be under-the-radar. “I go away from the requirement of the level of authority, and focus on each person’s absolute passion.”
Ultimately, investing in innovation is about delivering results, and Vandenhouweele says working with passionate leaders helps get the company there. “If you have passion for a solution, you’re going to go after it and you’re going to find the time, resources, colleagues, and collaborators,” he says.
Vandenhouweele says he tries to nurture and promote these individuals as much as possible. That often means removing barriers to innovation, and showcasing their successes to management or colleagues. “Sometimes they’re so passionate about their initiative, they cannot let it go,” he says. “They cannot accept that it fails. That’s the downside of it.” He says this is manageable by trying to help them with some simple metrics, and help them understand what they learned from an initiative and how to move on.
Vandenhouweele also inspires his teams with monthly calls with the entire innovation network, in which they share ideas, initiatives, or programs that different countries are implementing. This is intended to instill pride in these individuals, and inspire them to replicate a program that is showing traction in another region. When he brought the aforementioned Venezuelan innovator on the call, “suddenly she became a celebrity,” says Vandenhouweele. “That was another reinforcement to continue to do it.” Now Vandenhouweele says he sees that replicated all over the world. “I see it in Turkey, South Africa, Mexico… all over the place. Those models are infectious.”
Vandenhouweele isn’t opposed to all processes … just those that can create innovation logjams.
“One of the first things traditional managers ask when someone comes up with an innovative idea is, ‘What is the ROI?'” he says. “Of course, very often you have no clue, because you don’t know if something is even going to work.”
As a result, Vandenhouweele has worked hard to streamline the ideation, feasibility evaluation, and pilot stages. “In the front end of innovation, I recommend as little process as possible,” he says.
To accomplish that at Merck, he developed a simple framework to help teams quickly identify innovations, examine qualitative assumptions, and work through feasibility issues. He developed worksheets that allow a country innovation team to define a problem in two minutes, and then help them through a quick and low-cost feasibility test. “If it fails, it fails quickly and cheaply,” he says. “If it works or there are some adjustments, you adapt it a little bit and then you go forward.”
Vandenhouweele’s streamlined system ensures innovators talk to stakeholders, collect feedback quickly, validate key assumptions, and make course corrections as needed.
This approach helps maximize participation and productivity. “If you need ten steps and three forms to fill in for every idea you have, nobody is going to do it,” he says. “They just give up and they lose all interest.” Vandenhouweele’s role often entails helping the innovators clear obstacles, whether political, financial, or technical.
But he acknowledges that minimizing process can be tricky on a global scale, especially when it comes to regulatory or compliance matters.
Vandenhouweele’s “light on process” approach has evolved to engage early legal and compliance departments, which play critical roles in Merck’s core business. Similar to approaches utilized by PwC, Adobe, and others, Vandenhouweele has developed partnerships with those functions to speed innovation without too much bureaucracy. “I don’t want a blessing or approval [from legal], but they can say to the innovators, ‘Watch out for this,’ or ‘If that is your objective, then this is how you could approach it.'” This sense of cooperation has eliminated some barriers to innovation internally. “I’m trying to create that collaboration and trust between those teams, without creating a process; it’s more of a partnership offering guidance.”
The same goes for information technology, where innovators work with IT to ensure a concept can be built and sold properly, and that intellectual-property issues have been considered; Vandenhouweele says IP issues can differ from country to country, and can quickly get complicated, especially if a third-party vendor is involved.
In the end, Vandenhouweele acknowledges that the global innovation challenge is a complex one that takes time. “I know the culture of the company is very hard to change,” he says. “It’s like little flames that I try to [light] across the organization, and hopefully that’s going to create a big fire, which will then change the culture.”