Improving and outflanking

I’m very clear with clients that if they haven’t got what it takes to be breakthrough innovators, they should concentrate on studying competitors products and services, existing and new, and outflank them by making improvements in key areas. And moving fast.

After all, that’s substantially what has taken Apple to their current dominant position. And Samsung after Apple.

The power of this strategy first struck me in the years that I worked on new product development with the Rowntree company in York (now owned by Nestlé). It was frustrating that the senior managers would initially be positive about new ideas, but over time it became clear that nothing would actually happen.

Then, one day, one of them took me aside and explained to me the source of their success. “So many of our biggest and most profitable brands were developed as improvements on existing products made by other companies, usually abroad,” he told me.

All this came back to me in recent days, as the Rowntree chocolatier, Brian Sollitt, who died recently, has been feted in the British media as the “genius” behind many of Rowntree’s new products – Lion Bar, Yorkie, Drifter, Matchmakers and, most famously, After Eight.

But while Mr Sollitt undoubtedly was a skilled improver of products, he was not really an innovator. For example, the idea for the wafer thin chocolate mint, After Eight, came from an existing local product in Sweden.

Work in secret – even risk your own life?

A comment from Vincent Nolan on the Mavericks post reminds me of the amazing case of the breakthrough immunity-suppressant drug, cyclosporine (brand name Sandimmune®). I first became aware of this story when I worked with the company, at that time Sandoz (now Novartis), on the relaunch of the brand.

This is what happened.

In 1970, a Sandoz R&D team led by JF Borel got interested in the properties of certain fungal spores contained in soil samples brought back by team members from trips to Wisconsin and Norway. Metabolites were isolated that had anti-fungal properties – this was cyclosporine. A whole range of tests with mice were conducted to explore cyclosporine’s efficacy, but only one test showed promise – suppression of the immune system.

However, in 1973 immunosuppression ceased to be a strategic priority for Sandoz. It was a small market with apparently limited growth potential, and it was estimated that it would cost in the region of $250 million to gain FDA approval in the USA. Initially the team was allowed to carry on with its work, and in 1975 it was ready to start human testing. A separate team in Cambridge, England, successfully did heart transplants involving pigs, using cyclosporine to suppress the immune system and radically reduce rejection of the implanted organs.

Because the company no longer supported the project – actively opposing its development – further development work was conducted in secret and three of the R&D team’s members (including Borel) courageously took the new drug themselves, risking their own lives, in order to test the suppression in their own immune systems. In 1978, the first human transplants were undertaken – of kidneys. Throughout this period there are disputes as to exactly who did what.

In 1983 FDA approval was obtained and the following year synthetic cyclosporine was developed.

Meanwhile, since1967 Christiaan Barnard and others had been successfully transplanting organs. He in particular became world famous as a great pioneer in cardiac surgery. However the fact remained that the patients all died over relatively short time-spans, their new organs rejected by their own immune systems. The arrival of cyclosporine changed all that.

Of course the resulting dramatic market growth of organ transplants of all kinds (heart, kidney, liver, skin etc) led to rapid growth in sales for Sandimmune®, so that it became by far the company’s most profitable brand.

I believe there are powerful lessons for all organisations and innovators in this extraordinary case story. How does it strike you?