An Organizational Appraisal of Innovation: Drivers of Risk Based
Innovation
Innovation requires the ability to take higher order risks. In drug
development, there is often a defensive mindset at play and such a risk
posture can hamper innovation and reduce productivity [2]. Using the
validated scale of Hansen and Birkinshaw [3], a survey based
analysis in which a myriad of pharmaceutical companies participated, the
survey revealed high scores on two dimensions, namely, difficulty with
which ideas got funded, and that there was a risk averse attitude
towards investing in novel ideas [2]. The survey revealed that in
general there was a good degree of collaboration across units and
businesses. Idea sources appear to transcend specific organizational
boundaries – originating from within and beyond firm’s immediate
environment. There was a good degree of idea sourcing within the
organization and there is sufficient agility in the organization to
leverage fast to patients. These observations suggest that ideation and
diffusion are not problem areas in an innovation enterprise.
Because the analysis revealed two potential weak links, difficulty in
getting ideas funded and a risk-averse attitude, firms are
conversion-poor [3], which is validated in the
industry analysis by others [1,4]. It is poor in selection of
concepts for further advancement. This aspect warrants an understanding
of how innovation occurs within an enterprise, and more importantly,
what change situations do to the organizations. A change situation is
one where an organization reacts to a certain situation that could
affect the ways of the firm in unprecedented ways, e.g., the coronavirus
pandemic. This aspect is further analyzed as follows.