Josh Krieger (Courtesy subject)

Ramana Nanda (Photo by Mallika Kapur)

Josh Krieger (Courtesy subject)

Ramana Nanda (Photo by Mallika Kapur)

Many innovations in modern medicine have come about due to cutting-edge drugs—advances that required both a scientific leap and a willingness to take risks. And while most pharmaceutical companies would love to be responsible for the next big breakthrough, the traditional R&D process is more likely to produce incremental measures than something radical. In an effort to understand what role the R&D evaluation process plays in that, Assistant Professor Josh Krieger and Visiting Scholar Ramana Nanda collaborated with Novartis to study its internal innovation accelerator, Genesis Labs.

Launched in 2017, the program sought out the sort of high-risk, high-reward projects that tend to get screened out of the typical R&D process. It succeeded in generating a lot of great ideas—and yet, the projects that received funding “were pretty similar to what the company would normally fund,” Krieger observes.

He and Nanda captured their findings in the working paper, “Are Transformational Ideas Harder to Fund? Resource Allocation to R&D Projects at a Global Pharmaceutical Firm.” It identifies the key fact that the scientist evaluators imposed their own preferences on the process, which meant they defaulted to safer bets, even after being instructed to assign triple weight to transformational potential. It’s a natural response, Krieger explains: “Scientists have been trained within certain norms.” Plus, people develop a sense of what types of projects will succeed within their organizations, so they favor projects that are most likely to work.

The study suggests several strategies. For starters, companies should have scientists help with the scoring but aggregate their findings. “Ask for their advice on technical matters but not their value judgments across projects,” Krieger advises. Also, introduce more people with varied backgrounds into the selection process. “For example, a venture capitalist is trained to think about possibility, rather than the probability of a project working. With some training, they could come in to make evaluations without the baggage of being entrenched in a lab or accustomed to the ways big corporations vet R&D projects,” he adds.

Consensus has its place in science, Krieger allows, but it can also be the enemy of innovation—and an easy way to end up with what venture capitalist Marc Andreessen calls “the mush in the middle.”

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