The Missing Link in Innovative Research - Booz & Company

When the pipeline of technological breakthroughs has stalled, especially in industries like pharmaceuticals, midlevel managers may hold the key to R&D productivity by Anna Pettersson and August Vlak

Despite continuous growth in R&D spending, many senior leaders remain deeply concerned about their organization’s ability to innovate. For example, the pharmaceutical industry has more than doubled its spending on research and development during the last 10 years, but its success rate in finding new drugs has been disappointing. Yet new research by Booz & Company points to an unexpected and unheralded source of potential productivity: midlevel managers in the R&D function. Companies can significantly raise their R&D productivity by recognizing and activating the unique impact of leaders in the middle of the organization’s hierarchy.

Our research with pharmaceutical companies reveals that leaders in the middle of the hierarchy have a singular ability to identify the company’s most creative bench scientists — and to help them cultivate new scientific insights and connect with the most promising external sources of innovation. These midlevel managers are an underused asset. They can nurture and navigate promising ideas through complex organizational decision making, reinforce an environment of top-quality science, and keep the brightest minds engaged day in and day out. Better use of the midlevel cohort can be a critical factor leading to breakthroughs in innovation effectiveness — not just in the pharma industry, but in sectors such as chemicals, energy, and aerospace and defense.

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