Innovation and success go hand-in-hand across the chemical industry. Companies that fail to update their processes, chemical products, or raw material sources are unlikely to survive for long.
As Peter Drucker, the much-publicised management consultant and business theorist, observed, “Innovation is the fuel of corporate longevity. It endows resources with a new capacity to create wealth.”
In a recent Chemical Sciences Roundtable publication on the topic of innovation in the chemical industry, Prof. Richard M. Gross of NY University, discussed what makes a chemical company successful. Asking, how does a firm use innovation to bring value to its products and the corporation as a whole?
The answer, he found, lay in three Ps: People, Processes, and Partnerships.
People
“I believe people are the main determinant in successful innovation,” writes Prof. Gross, who is also corporate vice president of research and development for the Dow Chemical Company. “The right people are needed at the right time and in the right place. People define the environment, and to have an innovative environment requires the right people.”
His theory is based on the idea that everyone has a specific skill set, and it is the leader’s role to put everyone in the correct position to match those abilities within the various stages of innovation.
He warns, however, that sometimes people can be drawn to particular kinds of study or phases of the research process, not because of their expertise or way of thinking, but because of an idea they have about that specific area of the study or about themselves.
For example, there are people who think that discovery is the most exciting and valuable part of innovation and are not interested in the other parts of the development process. People in these situations are like square pegs in round holes. Moving the person to an area that fits their profile - both in terms of skill set and mindset - is therefore crucial. Efficient resource allocation is essential for swift innovation.
As one of Gross’s predecessors at Dow Chemical, John Grebe observed, “Ideas are among God's most precious gifts; without them we'd still be living in the Dark Ages. They separate man from all other creatures.”
Processes
The next ingredient in the recipe for innovation for a chemical company is having the correct processes in place.
Work processes come in a variety of shapes and sizes, ranging from the most basic structural methods to intricate multifunctional systems. They are important, and their significance increases with the complexity of the innovation challenge. Unfortunately, much of the chemical industry operates using a stage-gate process.
These are a practical solution to piloting large projects, as they break the issues down into smaller, more manageable parts. Once each stage is complete, data is collected and reviewed so that a decision can be made. Typically, if to proceed and how to proceed.
“Stage-gate processes are business activities, not functional R&D processes,” writes Prof. Gross. “Work processes provide a useful framework to do industry-wide benchmarking to evaluate internal performance versus best-in-class standards. This is useful to identify areas that need improvement and to understand what is both internally and externally possible.”
Nobel-prize winning physicist Arno Penzias knew how to construct an innovate process. In one interview with Business Week, he described how elevators were counter-productive in many companies, as no one talks in an elevator.
Instead, his research centres had stairs and long corridors, making it easier for staff to take long chatty walks together.
It was a simple idea, but one that helped construct a process which encouraged innovation.
Partnerships
The final element for successful innovation is partnerships.
Data indicates that the number of partnerships in the US economy is rising, both in the chemical sector and beyond, and according to Prof. Gross, this is with good reason.
“Many companies have downsized their R&D organizations or eliminated their central or corporate R&D capabilities entirely,” he explains. Therefore, necessity has driven at least a proportion of the increase in partnerships.
An additional driving force which is increasing the amount of cooperation between chemical companies is in understanding the importance of being first to market with a new product.
“With the rapid rate of change in the marketplace and thus in the industry, it is virtually impossible to have all the right skill sets internally at the right time,” observes Gross. “Partnerships allow a company to put the required skills together before they are needed, regardless of whether they're internal or external.”
As the German economist, Joseph Schumpeter, noted, “Innovation is the first commercial use of new technology.”
For these reasons, notes Gross, the number of partnerships that Dow is taking part in has tripled in the last four years, while the company’s focus on getting the right people and processes is ongoing.
As Gross concludes, “People define the innovative environment. Work processes capture best practices and standardize them for all members of the team. Finally, partnerships provide the required knowledge, understanding, and skill sets in real time to really drive rapid innovation.”
After all speed counts in the modern chemical industry.
You may also like to read: Three Goals for Improving Chemical Industry Innovation, The Chemical Industry 20, 40, 60 Years from Now, or Is the Chemical Industry Really that Innovative?
Photo credit: Freepik, Dilokastudio, Freepik, Freepik, & Freepik
