An amusing and probably apocryphal story did the rounds of the British research community some years back. It concerned a conversation between a head of research and his managing director and concludes with the research scientist saying to her completely befuddled boss “I can explain it for you but I can’t understand it for you.”
This is the problem being addressed by
Jan Rosier
, newly appointed Institute Élan Professor of The Business of Biotechnology, a joint appointment
.*
A former vice president for drug development at Johnson & Johnson, Prof Rosier’s research focuses on the role of chief executives in innovation in life science R&D firms.
"Scientists have become so specialised in their different areas that it is difficult for outsiders to understand what is going on in those areas", he notes. "If you see an article in Nature or another journal about a new drug or other development in the life sciences industry you now need a scientific background to read it. I am interested in how the people at the apex of organisations are going to deal with that increased level of complexity."
Heart of the problem
At the heart of the problem is people from the two areas are effectively speaking different languages – the language of business and finance and the language of science and research.
“How are they going to understand each other?” Prof Rosier asks. “Where is the overlap between their areas? We should be concerned about the possibility that CEOs become spectators in the R&D process. That would not be the wisest thing to allow happen.”
This can lead to serious problems for companies which rely on research outputs for future success. This is particularly the case in the life sciences and other high tech areas where new product pipelines are critically important. The difficulty lies in the fact that the cheques for the R&D activity have to be written by the CEO and CFO and if these people don’t understand what’s going on in the research department the money is unlikely to be forthcoming or, equally damaging, making it available for the wrong things.
“It can happen when the corporate strategy is being developed by the CEO and the management team a different strategy is being built in R&D where they are creating competitive knowledge,” Rosier explains.
He cites an example given by former Intel ceo Andy Grove in his book Only the Paranoid Survive. "He wrote that at one point he and the management developed a strategy but at the same time R&D was developing new products which completely changed that strategy."
But at least Grove and Intel paid attention to what was happening in R&D and acted upon it. Many of the other IT giants competing with Intel in Grove’s time no longer exist because they ignored their research departments and failed to keep pace with industry developments.
And the price can be even higher with research carried out by Insead in France showing how a major pharmaceutical firm put a drug with known side effects on the market because the managers in overall charge didn't understand the information given to them by the research department.
"This is why we need to find a way to get these people talking to each other in a way that is good for innovation," Rosier points out.
Carrying out research
Over the past five years he has been carrying out research into the problem and has interviewed life sciences industry ceos and research leaders in the process.
“We asked the ceos how they managed innovation and R&D and one of them said he didn’t understand science and was a bit annoyed by it because it made him feel insecure. Even ceos who had scientific backgrounds felt insecure because the pace of change in the industry meant that once they were out of the lab for a few years they were at a disadvantage to those who stayed in it. What is needed is some kind of a platform or shared space where the two groups can meet.”
The R&D people interviewed recognised the problem and the gap in knowledge which exists. “They often referred to the issue of trust between them and the ceo and said if they weren’t trusted they couldn’t develop the new products needed by the firm. The question is how do you build trust between the two and the R&D people offered part of the solution. They pointed to a need to transform scientific knowledge into a language which could be understood by ceos and other managers.”
One solution he is considering is the establishment of new departments in firms to perform this function. “Maybe you need a separate department with the people who can confidently translate complex knowledge into a form that can be absorbed by non-scientists and used by top management. I am not arguing that the ceo of a life sciences firm should be a scientist but that they should be able to develop their absorptive capacity to help them understand complex information.”
His aim is to create a virtuous circle where the act of making the information understandable to non-scientific people actually assists in the development of their absorptive capacity thereby improving their ability to understand complex information.
“By making complex R&D data understandable to the ceo, the ceo develops their capacity to absorb new knowledge and because of their growing understanding of R&D knowledge can develop greater trust in R&D. A knowledge complexity reduction process not only simplifies complex R&D data, but also builds trust, which is the cornerstone of effective leadership.
“When the ceo has information they understand they can share it with others and help the organisation achieve its strategic goals much more effectively.”
* This article was amended on November 21st, 2013 to correct a factual error.
