How Bayer’s Open Innovation Chief Overcomes Metric Challenges

By Lilly Milman |  April 1, 2021

In his role at Bayer, Chandra Ramanathan is managing close to 60 partnerships globally at a given time. As Global Head of Pharmaceutical R&D Open Innovation, Ramanathan leads the company’s Open Innovation Centers, which focus on public-private partnerships, the company’s engagement with local ecosystems, and its potential to access and accelerate breakthrough technologies that can progress life sciences.  

Chandra Ramanathan, Global Head of Pharmaceutical R&D Open Innovation at Bayer

This does not come without challenges — especially related to identifying and reporting the right metrics, convincing leaders of value, and more. 

In a recent conversation with InnoLead, Ramanathan shared insights into these topics and more. This interview with Ramanathan is a part of InnoLead’s most recent research report, “Developing Innovation Metrics & Reports That Really Matter.” For more data and interviews on how big companies are using metrics to track innovation, visit the main report page.  

What financial metrics do you typically look for when you’re determining the success of a project?

I think the main metric for us is pipeline impact. If we do a program, [we look at] how it impacts the pipeline. So the highest level of metrics is if the project actually adds a new asset to the pipeline. 

The biggest thing for us is: How many products come out of the partnership? The second one is: A new asset may not come out of the partnership, but it can actually enable an asset. It can accelerate…so there’s an impact. We do — at a one-on-one level — a lot of co-creation. We work with PI [program increment planning] at an idea… The metric there is whether that particular idea has turned into collaboration. … The second metric is if it goes to a new company creation or something. Both of [these metrics] are…impact-oriented. Personally, a bigger metric, an important metric, also for us is if we can help at PI [program increment planning], either to advance that idea in a certain way, or kill that idea. 

How do you present and report metrics to the C-suite? 

I just report KPIs, one single slide…[which] basically contains a number of phase 1 [trial] assets that came from a partnership, the number of phase 2 [trial] assets that came from a partnership, the number of assets getting into clinical, and then we put a consolidated number of the entire pre-clinical portfolio. … We made a small modification in the last six months… On the top [of the slide], we put the finance, how much you spent… 

Once a quarter we update [the slide, but] we don’t send it out. … Every presentation I make to the management, [that’s] one of my first slides I start with. 

What is a challenge that your team has faced when it comes to identifying the right metrics? 

When you go beyond the pipeline…everything else is very qualitative. … For example…public-private partnerships are mostly pre-competitive, or made to advance science. So if we do a pre-competitive partnership, from an advancing science perspective, it does a very good thing for our objective. Let’s say we are doing something in cardiovascular, it increases our heart…knowledge. It achieves the honest objective. For us, the biggest challenge we’re facing [is]: How do we make sure we force the internal people to use that knowledge and impact the internal program thinking? 

That’s what we struggle with. Whenever we capture those kinds of metrics, you’ve got to be very careful — what I might think of as value creation, someone might shoot it down saying, “You’re taking too much claim for your work.” What is value? … The back and forth [is] what makes our job very difficult.

How does your team pivot in the right direction during those challenges? 

[What] I think open innovation should be looking at is identifying the trends. If I can tell people what they are already working on — while it’s good, it’s important — I’m not really adding value. When I bring [a] totally unknown quantity, we want to talk about that co-creation. With co-creation, we come up with new ideas, not necessarily in Bayer’s area of expertise. Well, how do I convince people to say that I’m creating value? … 

When [we take ideas to the] company, suddenly that’s where the rubber meets the road. They start looking at, “Can I convert this into a product in two months or one year? Six months?” Because that’s what all the metrics are weighted towards: funding, working towards converting the pipeline. [If I] really come up with radical thinking that would fit into a traditional pharmaceutical metric, how do we take it forward? … But by not doing that, we are going to lose out… That’s the challenge we face — convincing people that what we are doing is still important.