ARCHIVES
MASSACHUSETTS INSTITUTE
OF fECHNOLOLGY
Value Creation through Intellectual Property Acquisition
JUN 24 2015
by
LIBRARIES
Nathan McMullin
B.S. Mechanical Engineering, Brigham Young University, 2004
M.S. Mechanical Engineering, Brigham Young University, 2006
Submitted to the MIT Sloan School of Management and the Engineering Systems Division in Partial
Fulfillment of the Requirements for the Degrees of
Master of Business Administration and
Master of Science in Engineering Systems
In conjunction with the Leaders for Global Operations Program at
the Massachusetts Institute of Technology
June 2015
0 2015 Nathan McMullin. All rights reserved.
The author hereby grants to MIT permission to reproduce and to distribute publicly paper and electronic
copies of this thesis document in whole or in part in any medium now known or hereafter created.
Signature redacted
Signature of Author
Engineerig Systems Division, MIT Sloanr81hool of Management
May 8, 2015
Signature redacted
Certified by
7
Certified by
eeral Motors LGV Professor
Steven Eppinger, Thesis Supervisor
of Management, MIT Sloan School of Management
Signature redacted
Warren Seering, Thesis Supervisor
Weber-Shaughness Pro essor of Mechanical Engineering and Engineering Systems
Accepted by
Signature redacted
____
Munther A. Dahleh
William A. Coolidge Professor of Electrical Engineering and Computer Science
Chair, Engineering Systems Division Education Committee
Accepted by
_________Signature
redacted
Maura Herson, Director of MBA Program
MIT Sloan School of Management
This page intentionally left blank.
2
Value Creation through Intellectual Property Acquisition
by
Nathan McMullin
Submitted to the MIT Sloan School of Management and the Engineering Systems Division on
May 8, 2015 in Partial Fulfillment of the Requirements for the Degrees of Master of Business
Administration and Master of Science in Engineering Systems.
Abstract
After Sanofi acquired intellectual property (IP) from bankrupt Pelikan Technologies it desired to
leverage the IP to identify a product concept to enhance the company's portfolio. To facilitate
the project, a structured opportunity identification process was utilized. This process consisted
of four major steps: Problem Framing, Idea Search, Screen, and Refine. Problem Framing
formulated the innovation challenge. Idea Search sourced over two dozen potential opportunities
that spanned markets and industries. Using a tournament selection approach, the Screen step
filtered the opportunities according technical and strategic objectives. This selected an
integrated blood measurement device as the opportunity of focus. This leverages the IP to
simplify at-home blood testing while simultaneously reducing pain. The Refine step evaluated
the opportunity using a framework that assessed markets, product, competitiveness, economics,
and risk. The beachhead market is the diabetes market and potential follow-on markets are
oncology, multiple sclerosis, rare diseases, and cardio-metabolic diseases. Key technology
elements were assembled into a variety of conceptual approaches and evaluated according to
market fit. This identified a conceptual approach that integrates all disposable elements (i.e.
lancet and blood test element) into a single disposable cartridge that can be inserted into an
electronically actuated meter. The projected financial returns in the beachhead market have a
positive nominal NPV. NPV sensitivity was calculated based on estimated cost and revenue
item variations. In all cases the NPV remains positive, but this highlighted key drivers of
economic performance along with risks that need to be resolved in future development work.
With key assumptions identified, Sanofi is in an excellent position to decide whether or not to
pursue the identified opportunity. In addition, this project acts as a pilot for a structured
opportunity identification process within the company and it is recommended that Sanofi adopt a
similar process as part of its product development workflow. Finally, the company should adjust
resources and financial commitment to ensure full cross-functional teams can be staffed to
execute opportunity identification work. These improvements will enable the company to more
effectively execute corporate entrepreneurial activities.
Thesis Supervisor: Steven Eppinger
Title: General Motors LGO Professor of Management, MIT Sloan School of Management
Thesis Supervisor: Warren Seering
Title: Weber-Shaughness Professor of Mechanical Engineering and Engineering Systems,
Engineering Systems Division
3
This page intentionally left blank.
4
Acknowledgements
The first person I need to thank is my wife Kristi for her un-wavering support and
encouragement. She always pushes me to reach for excellence in all that I do. She is a great
advocate and has tremendous skill in helping me polish and crystalize my thoughts.
Of course, I can't forget to express my gratitude to my four amazing children: Grace, Anderson,
Gibson, and Bee. While they didn't provide any direct input to this research, they continually
help me to remember what is most important.
The staff at Sanofi was instrumental to this project's success. Paul Jansen and Shawna
Gvazdauskas were always willing to provide a perspective of where the project fits into the
bigger picture. In addition, they were very effective at connecting me to a broader set of people
to facilitate the project. Zdenek Cerman and Marcus Dittrich provided access to critical
information relating to the technology and were great hosts when I worked in Germany. Joshua
Guthermann helped me find excellent market information and was more than willing to provide
constructive feedback on the economics analysis. Ulrich Bruggemann was a tremendous
supervisor, colleague and friend. His door and mind were always open to discussing issues,
evaluating my work, and guiding me as a true mentor.
I also want to express my appreciation to my MIT advisors Prof. Steven Eppinger and Prof.
Warren Seering. Their guidance during the project was critical. There insights at the beginning
of the project helped to shape it in a fundamental way. In addition, they're willingness to come
to Sanofi on multiple occasions and provide direct feedback helped keep the work focused.
Also, their prompt feedback on key deliverables has made this whole experience much more
manageable.
5
This page intentionally left blank.
6
Table of Contents
A bstract ...........................................................................................................................................
3
A cknow ledgem ents.........................................................................................................................
5
List of Figures ...............................................................................................................................
10
List of Tables ................................................................................................................................
13
Introduction ...........................................................................................................................
14
1
2
3
1.1
Project Overview & Goals ..........................................................................................
14
1.2
Project Execution Process ..........................................................................................
14
1.3
Thesis Overview .............................................................................................................
15
Background to Product Developm ent..................................................................................
16
2.1
The Product Developm ent Process ............................................................................
16
2.2
The "Fuzzy Front-End"...............................................................................................
19
Project Context: Sanofi and Pelikan Technologies ............................................................
23
3.1
Pharm aceutical Industry .............................................................................................
23
3.2
Sanofi in the Pharm aceutical Industry ........................................................................
24
3.3
M edical D evice Developm ent at Sanofi......................................................................
26
3.3.1
M edical D evices at Sanofi ...................................................................................
26
3.3.2
Sanofi's D evice Developm ent Process ...............................................................
28
3.4
3.4.1
A cquisition of Pelikan's M edical Device Technologies .............................................
31
Brief Pelikan H istory - Founding to Bankruptcy ...............................................
31
7
3.4.2
4
Sanofi's Asset Acquisition..................................................................................
33
Opportunity Fram ing, Searching, Screening, and Refining ...............................................
35
4.1
Early Stage Developm ent in N eed of Structure ..........................................................
36
4.2
Defining a Process for Identifying Exceptional Opportunities ...................................
38
Iterating ...................................................................................................................
41
Fram ing the Challenge ...............................................................................................
42
4.3.1
Problem Fram ing ....................................................................................................
42
4.3.2
Application at Sanofi ..........................................................................................
44
4.2.1
4.3
Searching for Potential Opportunities.........................................................................
45
4.4.1
Search for High Quality and Diverse Ideas ........................................................
45
4.4.2
Application at Sanofi ..........................................................................................
48
4.4
4.5
Screening for Prom ising Opportunities.......................................................................
48
4.5.1
Screening the Idea Set.........................................................................................
48
4.5.2
Application at Sanofi ..........................................................................................
51
Refining Screened Opportunities to Determine their Exceptional-ness......................
56
4.6
4.6.1
U se Specific Criteria to Refine Screened Ideas .................................................
56
4.6.2
Real, W in, Worth-it (RW W): A Question Fram ework........................................
57
4.6.3
Planning How to Answer the RW W Questions......................................................
59
4.6.4
Application at Sanofi ..........................................................................................
61
Down Selecting ..............................................................................................................
83
4.7
8
5
Opportunities and Observations for Sanofi's Early Stage Development ..........................
85
5.1
Structure Opportunity Identification for More Reliable Development......................
85
5.2
Opportunity Identification Needs Committed Multidisciplinary Teams ....................
87
6
C onclusions & N ext Steps.................................................................................................
89
7
B ib lio grap hy ..........................................................................................................................
91
9
List of Figures
Figure 1: Ulrich's generic development process (Ulrich, 2011)...............................................
17
Figure 2: Ulrich and Eppinger's PD process (Ulrich & Eppinger, 2012) .................................
18
Figure 3: Representative level of fuzziness in the PD process (Kim & Wilemon, 2002) ......
20
Figure 4: History of Sanofi (Sanofi History, 2014) ...................................................................
25
Figure 5: Sanofi's history of insulin pens (MED, 2014)..........................................................
27
Figure 6: Sanofi's iBGStar Blood Glucose Meter (Sanofi Diabetes, 2014)...............................
28
Figure 7: Sanofi's medical device product development process ............................................
29
Figure 8: Pelikan Technologies Pelikan Sun electronic lancing device ...................................
32
Figure 9: Pelikan Technologies electronic lancing reduced pain comparison study (Pelikan
Techn o logy , 2009) ........................................................................................................................
33
Figure 10: Actual Sanofi development process includes an undefined Opportunity Identification
po rtio n ...........................................................................................................................................
37
Figure 11: High-level view of the Opportunity Identification 01 Process ...............................
40
Figure 12: Opportunity Identification Process defined for Sanofi.............................................
41
Figure 13: Project's innovation challenge statement..................................................................
45
Figure 14: Idea generation's statistical structure based on Girota study (Girota, 2010)........... 46
Figure 15: Both linear, or cascade, (top) and whirlpool (bottom) type of screening processes as
illustrated by Terwiesch and Ulrich (Terwiesch & Ulrich, 2009) ............................................
50
Figure 16: Filter 1 voting results...............................................................................................
52
Figure 17: Visualization of the screening of potential opportunities down to two for further
refin em en t .....................................................................................................................................
55
Figure 18: RWW's Real question decomposition (Day, 2007).................................................
58
10
Figure 19: RWW's Win question decomposition (Day, 2007) .................................................
58
Figure 20: RWW's Worth-it question decomposition (Day, 2007) ..........................................
59
Figure 21: Method for utilizing the RWW framework for opportunity assessment.......... 61
Figure 22: Diabetes market needs, word size indicates relative need importance.................... 65
Figure 23: Hypothesized emerging market needs along with speculated differences with the
d iabetes m ark et .............................................................................................................................
66
Figure 24: Technology elements associated with the IP portfolio that are directly related to the
needed functions of an integrated blood measurement device .................................................
67
Figure 25: Conceptual approaches using the acquired asset portfolio......................................
68
Figure 26: Evaluation of conceptual approaches against market needs ...................................
70
Figure 27: Concept embodiments for two distinct approaches for instantiating the single test
integrated blood measurem ent device........................................................................................
71
Figure 28: Cross-section view of the selected embodiments along with key dimensions...... 72
Figure 29: Comparison of proposed concept embodiments to other marketed products .......... 73
Figure 30: Proposed concepts competitive advantage illustrations (Pelikan Technology, 2009) 75
Figure 31: Net Present Value calculation along with sensitivity analysis results for p single test
pro du ct concep t.............................................................................................................................
78
Figure 32: Overall project risk assessment through holistic evaluation of probability of project
success (D ay , 2 007) ......................................................................................................................
79
Figure 33: Specific task sequencing for Stage 0 risk reduction activities .................................
80
Figure 34: "Real" sub-question answer distribution .................................................................
81
Figure 35: "W in" sub-question answer distribution..................................................................
81
Figure 36: "Worth-it" sub-question answer distribution...........................................................
82
11
Figure 37: The so-called exceptional-ness ranking of the product concept using the combined
Real, Win, and Worth-it evaluation...........................................................................................
12
83
List of Tables
&
Table 1: Cabone et al.'s summary of models for the fuzzy front-end (Carbone, Sherman,
T ip p ett, 2 0 12 )................................................................................................................................
21
Table 2: Summary of acquired assets from the Pelikan Technologies acquisition by Sanofi...... 34
Table 3: Sanofi's therapeutic areas matched to needed blood measurements...........................
13
64
1
1.1
Introduction
Project Overview & Goals
Sanofi acquired assets from the bankrupt Pelikan Technologies, Inc. to generate value for
the business. In particular, Sanofi was interested in using the acquired technology to develop a
product concept and business case convergent with its products and strategy. In addition, the
company wanted to identify process improvement opportunities for its product development
process. This report documents the results of executing on these specific objectives. Hence, this
research focused on executing the needed development tasks to provide Sanofi with a valuable
product concept along with offering insights on product development process improvement
opportunities. As such, this research acts as a case study of early phase concept development
from acquired intellectual property.
1.2
Project Execution Process
The study is based on research done by the author while working on-site for Sanofi in
Cambridge, MA and Frankfurt, Germany (Feb-Aug 2014). The author was given access to the
results of previous work along with a significant amount of the intellectual property from the
acquired assets. From this, following the project objective, the author executed an opportunity
identification process to identify a product concept. This was done through engineering and
business analysis work by the author in collaboration with subject-matter experts at Sanofi.
Process improvement recommendations came from interviews of key individuals involved with
early stage medical device development at Sanofi, studying internal product development
process documentation, and executing the development work for this project.
14
1.3
Thesis Overview
This document proceeds by first providing context for the project, next giving details of
the early stage concept development work done at Sanofi, and finally the document wraps up
with recommendations for how Sanofi should proceed with the proposed product concept and
process improvements. Project context will cover the product development process, the
pharmaceutical industry, Sanofi, and the acquired Pelikan portfolio. The thesis will then present
how an early stage product development process was introduced and executed within Sanofi.
This illustrates the structure of the process used along with the resulting product concept that was
derived from the acquired Pelikan portfolio. The final part of the thesis summarizes the
recommendations for how Sanofi should proceed with the proposed concept and how the
company can improve its early stage development process for medical devices.
This thesis acts as a case study for how an early stage product development process was
used to derive value from a set of acquired intellectual property. While Sanofi may or may not
follow the recommendations presented in this thesis, it is believed that this work provides a
useful study for future development efforts. Of particular value are the process improvement
recommendations that can be applied to any organization seeking to introduce a more structured
early stage product development process.
15
2
Background to Product Development
Because the main focus of the project was to identify a product concept along with
opportunities for process improvement, a review of product development is seen as a valuable
addition to this thesis. This is not intended to be a comprehensive review of the product
development literature, as others have provided great insight in this regard. However, we will
discuss what product development is and the process by which it is accomplished. Second, and
of particular relevance to the current research, we will then discuss some of the particulars of the
so called "fuzzy front-end." This is the earliest part of the development process where
uncertainty is high, the need for flexibility is strong, and important decisions are made. This will
provide a context and understanding for what product development is along with key factors into
the earliest stages of product development that are particularly relevant to the development
project at hand.
2.1
The Product Development Process
Product development (PD) has been defined as "the transformation of a market
opportunity into a product available for sale" (Krishnan & Ulrich, 2001). So the PD process is
the process of creating value from a recognized need. As a process, it can be broken down into
distinct steps. In the book Design: Creation ofArtifacts in Society, Ulrich defines the steps as
the identification of a gap in a user's experience, design, and production. Figure 1 reproduces
the basic framework presented in Ulrich's book. In this process, there is a gap or need sensed
from which the activity of design begins. This step in the process is important because it
provides the requirements, constraints, and objectives that are necessary for effective design to
occur. Design explores various form and function options to address the perceived gap. Once
converged on a solution, design outputs a plan of the proposed solution that has sufficient details
16
so it can be made into a real artifact. This transformation process is called Produce and includes
all the methods and processes to take a design plan and make an actual artifact that can be
delivered to a user to fill the identified gap. This basic framework of identifying a gap in the
user experience, developing a plan to fill this gap (Design), and then making the artifact from
this plan (Produce) provides the most basic view of how the product development process
proceeds.
plan
gap
user
experience
artifact
Figure 1: Ulrich's generic development process (Ulrich, 2011)
While this perspective on the PD process is useful in understanding from a high-level, it
falls short in many situations because the real world complexities require more resolution into
the activities needed to create and produce the artifacts that society needs. To deal with this,
approaches have been used to capture the details of this process in a much more granular fashion.
A classic model for the PD process is a phase-gate model. In this model, development
activities (or phases) work to a certain pre-defined milestone (or gate). These gates are a distinct
17
part of development and are characterized by not allowing the development effort to proceed into
the next phase until a certain set of criteria are met. This often manifests itself in the form of
checklist-type requirements in which reviewers assess whether all the checklist items have been
met. Only when all the items on the checklist have been satisfactorily met can the development
work proceed to the next phase. While the phase-gate process is extensively used in industry,
continuous research is on-going to improve this process structure (Ettlie & Elsenbach, 2007). In
particular, some of the learnings from the rise in the development of software, so-called agile
methods, have received attention in how they can be applied to improve the phase-gate model
(Sommer, Hedegaard, Dukavska-Popovska, & Steger-Jensen, 2015).
While the research on the PD process is extensive (Kahn, Kay, Slotegraaf, & Uban,
2013), the process steps generally follow a similar structure. Ulrich and Eppinger present a
version of the PD process that captures an accepted set of needed elements. Their approach
follows six steps: planning, concept development, system-level design, detail design, testing and
refinement, and production ramp-up (Ulrich & Eppinger, 2012). In addition, these six steps are
separated by five key milestones. Figure 2 illustrates this version of the PD process. In this
figure the key milestones are specifically called out after each of the process steps. While there
are many versions of the PD process (i.e. process steps named and / or partitioned differently),
this example is representative of what is generally thought of as key elements to the process.
Mission
Approval
Concept
Development
System-Level
Design
Concept
Review
System
Review
Testing and
Refinement
/
Critical Design
Review
Production
Ramp-up
Production
Approval
Figure 2: Ulrich and Eppinger's PD process (Ulrich & Eppinger, 2012)
18
2.2
The "Fuzzy Front-End"
While the preceding discussion suggests a nice linear process, the reality of PD is that
there is a lot of potential for iteration as uncertainties are being managed throughout the process.
This is probably most apparent during the very start of the process. The start of the PD process
has been debated over the years in order to determine what constitutes the legitimate start of the
process (Kim & Wilemon, 2002). Even with the varied opinions, there is a reasonable
understanding that this part of the process is highly uncertain, changing, and therefore referred to
as "fuzzy". In fact, the whole PD process can be thought of as a process of clarifying
uncertainties, or making things less fuzzy. Figure 3, from Kim and Wilemon (2002), illustrates
how the degree of "fuzziness" is decreased throughout the PD process. As the process proceeds
there is some point where a critical fuzziness level is crossed, the start of more clear
development activities occurs, and the fuzzy front-end finishes. Finding this exact boundary is
illusive, but there are understood process activities that if utilized can help the PD process
reliably make it through its fuzzy start.
19
Fuzziness Level
High
Fuzzy Curve
a: Approval Level
Start of Development Phase
a .b:
Low
1
Time
b
Fuzzy Front-End Phase
Development Phase
Figure 3: Representative level of fuzziness in the PD process (Kim & Wilemon, 2002)
While many definitions of the fuzzy front-end have been debated or proposed over the
years no consistent or standard framework has stood out. Various people and organizations
advocate that different parts need to be included in the process (see table below). Some focus
more on the business, some on the project, some on the technology/concept, and some on various
combinations of these. A recent study by Cabone, Sherman, and Tippett (2012) catalogues a
variety of structures that have been proposed for the fuzzy front-end. Table 1 provides the
results from this study. In particular, note the variety in the amount of details provided in the
different steps. Between the different approaches the number of steps is different, the
terminology to name steps is different, and each one has its own feel as to what it is trying to
communicate about the process. This is illustrative of the different perspectives in which the
process is instantiated.
20
Table 1: Cabone et al.'s summary of models for the fuzzy front-end (Carbone, Sherman, & Tippett,
2012)
Reference
Smith &
Description
Three stage front-end model
Stage 1: Project proposal
Reinerisen
(1998)
Stage 2: Business plan
Stage 3: Detail project plans & product
Paul
(1996)
Three step front-end model
Step 1: Idea screen
Step 2: Concept development & testing
Step 3: Business analysis
specifications
Three phase front-end model
Pre-phase 0: Preliminary opportunity
identification and market & technical
Khurana &
assessment in parallel with product and
Rosenthal
portfolio strategy evaluation
(1998)
Phase
1:
Product concept is defined
Phase 2: Product feasibility and project
planning
Cooper
(1997)
Two stages in the front-end of the updated
Stage-Gate® model
Stage 1: Preliminary investigation
Stage 2: Detailed investigation & business
case preparation
Three step front end model
1:
Kim &
Step
Wilemon
(2002)
Step 2: Idea screening
Step 3: Evaluation & document decisions
Idea generation capture
Circular model consisting of five nonsequential activities
Koen, et.al.
(2001)
Opportunity identification
Opportunity analysis
Idea generation and enrichment
Idea selection
Concept definition
While a unified perspective on what the fuzzy front-end is does not exist, several
important factors have been established that correlate to success when included as part of the
fuzzy front-end process. According to Khurana and Rosenthal, for companies to effectively
create a front end process they must carefully link business strategy, product strategy, and
product-specific decisions. The authors further explain that to create these links the process
needs to include elements of product strategy, development portfolio, concept development,
overall business justification, resource planning, core team roles, executive reviews, and decision
21
mechanisms (Khurana & Rosenthal, 1998). Cabone et al. further built upon these results and
show that product strategic fit, product definition, project definition, and project roles directly
contributed to successful performance of the development process. Khurana and Rosenthal also
note that how companies go about their process definition depends upon the culture and context
in which they operate (Khurana & Rosenthal, 1998). Specifically, the formalness in which one
company defines their front-end process may be quite different from how another company
defines their process. So while the general understanding of the fuzzy front-end doesn't
articulate what its specific steps need to be, the literature does provide insight into key elements
that ought to be included.
22
3
Project Context: Sanofi and Pelikan Technologies
This section is to provide a contextual perspective on Sanofi as a company along with the
assets acquired from the bankrupt Pelikan Technologies. First will be a review of the
pharmaceutical industry and where Sanofi is positioned within the industry. Second will be a
discussion of medical device development at Sanofi. This will highlight both the products and
product development process of the company. The final part of this section will review the
company Pelikan Technologies along with the assets that were acquired by Sanofi after Pelikan
Technologies went bankrupt.
3.1
Pharmaceutical Industry
The global pharmaceutical industry has seen tremendous growth over recent years and is
projected to continue to grow even with the extensive competition in the industry. The industry
focuses on developing, manufacturing, and distributing medicinal products for both mature and
emerging markets. The industry has seen growth as the middle class in emerging markets grows
as well as the more mature economies older age population get older. From 2001 to 2012 the
industry grew 246% to $961.5 billion (Statista Dossier, 2013) and is projected to reach $1.4
trillion by 2019 (IBISWorld, 2014). However, this growth doesn't come free; there are
significant barriers to entering the market. In particular, high competition, capital requirements,
and technological change along with a heavy regulated environment contribute to the significant
barriers to entry (IBISWorld, 2014). In this competitive market there are many enterprise
players, but the top four companies have estimated revenues that account for about 17.3% of
industry. These companies and their market share are: Pfizer (5.0%), Novartis AG (4.3%),
Sanofi (4.3%), and Merck & Co. Inc. (3.8%) (IBISWorld, 2014). While there are several
23
economic drivers for this industry, the one particularly relevant for the current research is the
changing technology (IBISWorld, 2014). Incorporating technology in a more efficient way can
help a company create a competitive advantage and so companies will likely keep looking for
opportunities to incorporate new technologies to improve all aspects of their business. In a
highly competitive business environment, if a technology can reduce costs or differentiate a
company in a significant way, there will be tremendous value in acquiring and utilizing it.
3.2
Sanofi in the Pharmaceutical Industry
As a major player, Sanofi has a history of success in the pharmaceutical industry. This
has occurred through a series of strategic mergers during the early development of the
pharmaceutical industry in Europe. Sanofi's history dates back over 100 years and includes
research in drug therapy, the changing healthcare sector, and advances in science (Caudill,
2013). Figure 4 pictorially displays the companies that, through mergers and acquisitions, have
combined to make Sanofi the company it is today (Sanofi History, 2014). A most significant
merger came in 2004 when Sanofi was finally able to acquire Aventis. While this particular part
of Sanofi's history was quite difficult to finalize, the result ended in favor of Sanofi's acquisition
and ultimately dramatically increased the company's United States presence and helped it
become one of the largest pharmaceutical companies in the world (Caudill, 2013). This
industrial position has enabled the company to continue its acquisition strategy in recent years.
Of particular note, since 2009 some significant acquisitions include: Zentiva (2009, branded
generics group based in Prague), Medley (2009, generics company in Brazil), Chattem (2010,
consumer healthcare company in the US), Merial (2009, animal health), and Genzyme (2011, a
24
biotechnology company based in Cambridge, MA) (Sanofi, 2014). This rich history of continual
growth has helped to position Sanofi as one of the largest and most influential pharmaceutical
companies in the world.
SANOFI
2004-2999
Figure 4: History of Sanofi (Sanofi History, 2014)
Building on this acquisition strategy, Sanofi focuses its investments in seven growth
platforms. This has offered tremendous sustainment for the company to remain one of the major
pharmaceutical players in the world. The company's seven growth platforms are: Emerging
Markets, Diabetes Solutions, Vaccines, Consumer Healthcare, Animal Health, Genzyme, and
Other Innovative Products (Sanofi, 2014). Around these platforms the company focuses its
execution strategy to bring pharmaceutical, vaccines, and animal health related products. These
efforts have resulted in
pharmaceutical products (i.e.
F32.95
billion of net sales for 2013. Over 80% of this comes from its
r27.25B net sales in 2013). This category includes diabetes,
25
oncology, Genzyme, consumer health care, and generic related products. Some of the most wellknown products include Lantus@ (long-acting insulin diabetes, C5.7B net sales 2013) and
Plavix@ (blood thinner, E1.86B net sales 2013) ( (National Institutes of Health, 2014); (Sanofi,
2014); (Sanofi Products, 2014); (WebMD, 2014)). This breadth of products has been supported
by a global company of over 100,000 employees working in approximately 100 countries over
five continents (Sanofi, 2014). While the pharmaceutical industry is very competitive, Sanofi
continues to grow within the industry as it strives to maintain its position as an innovative
industry leader.
3.3
3.3.1
Medical Device Development at Sanofi
Medical Devices at Sanofi
As a leading pharmaceutical company, Sanofi is not generally thought of as a medical
device developer, but they are in order to support meaningful solutions to their customers. These
devices can be conveniently thought of in two categories: directly interacting with the delivered
drug and supporting the patient's drug experience. In the first category, a great example is the
insulin pen. As a major manufacturer of insulin for people with diabetes, Sanofi has invested in
the development and manufacturing of insulin pens. Pictured in Figure 5 are some examples of
what these devices look like. They are generally shaped like a large writing pen and even have a
cap. Once the cap is removed a vial of insulin is attached followed by a small needle. Typically
the user can set the amount of medicine that will be delivered during each injection. Once an
injection is complete, the cap can be placed back over the product, covering the needle and vial
of medicine. This safely stores the device until the user needs another dose of medication. These
26
devices have been tremendously successful over the years and Sanofi has invested resources to
continue to refine this product.
tANnS
op"set
OpOPen
OpUClk
OptPen Pro
aw
rAR
S kTA R
ttpw
II
1989
1902
1999
200 2002 2003 2004 200 2006 2007 200 2009 2010 2011
SANOFI Cj
Figure 5: Sanofi's history of insulin pens (MED, 2014)
The second category for products deals with devices that don't directly interact with the
drug being delivered, but provide a better overall experience when using the drug. While Sanofi
hasn't traditionally been in this space, they decided to invest in it and in September of 2010 they
introduced their iBGStar Blood Glucose Meter (Sanofi Diabetes, 2014). While glucose meters
have been on the market for a number of years, this product offered a new innovation by making
it function as an attachment to the iPhone and iPod Touch. The device is small, allows users to
send data to their physicians, and has an app-based interface on the phone. As a new and
innovative product, the iBGStar helped lead the way in new approaches in diabetes management.
Figure 6 shows what the iBGStar product looks like and how it functions with an iPhone.
27
Figure 6: Sanofi's iBGStar Blood Glucose Meter (Sanofi Diabetes, 2014)
Sanofi has a history of developing medical devices but this has traditionally focused on
products that directly interact with their drug products. This will likely continue to be part of
their strategy in addition to developing products that are of more of a complimentary nature to
their drug products. The iBGStar is an example of Sanofi expanding this part of their portfolio
and evidence of the company acknowledging the importance of creating an enhanced user
experience through their product offerings.
3.3.2
Sanofi's Device Development Process
To support its medical device development, a six step product development process has
been developed by Sanofi to effectively meet customer needs and the regulatory constraints
imposed on medical devices. The six development stages at Sanofi (Stages 0-5) can be broken
up into two distinct groups: Early Stage Development (ESD) and Full Device Development
28
(FDD). Figure 7 illustrates the overall medical device product development process and
highlights some of the distinct activities that occur in each of these groups. The goal of this
process is to develop a medical device that is ready to move to the production environment.
- ao nt n] Ful[vieDvop
K.Early St-r,
nt>
De'-,
p
Full Development
Approval
Stage 0
YesYes
Full Device
Development
Stage 1\
Stage S
Approval\
No
Periodic
Review
Project Ends
Stage 4
Stage 2
Stage 3
Figure 7: Sanofi's medical device product development process
The major differences between the two groups of activities are process formalities and
regulations. ESD includes all the medical device related activities that occur before FDD
approval. These activities are more loosely defined but there is a basic structure of governance
in place. A project can only enter Stage 0 if it makes it through an approval process. This
requires an Initial Project Definition (IPD) document and approval from at least two members of
the medical device leadership team. The IPD outlines the project scope, justification, schedule,
milestones, and resources needed. Upon approval, resources are assigned, development work
begins, and the project is controlled through a periodic review process by the same medical
device leadership team that approved the project. The types of activities that occur during this
stage are quite varied and there is no strict requirement put upon them. This loose structure
29
allows the ESD process to handle a variety of internal or external potential opportunities once
they have been approved (Dette, 2011).
Once ESD is complete, and Full Development Approval is achieved, then FDD begins its
five stage development process. These stages closely align with the five stages outlined in the
&
United States' FDA requirements for design control (US FDA, 1997). Stage 1, Design
Development Planning, has the stated goal to define a project with sufficient details so as to get
senior management approval. This should include information regarding project definition, user
requirements, budget, timeline required, and user requirements. Stage 2, Design Input, is
focused on finalizing requirements. In addition, further planning is completed during this stage
along with human factors engineering, design validation, design verification, risk analysis, and
quality assessment. Stage 3, Design Output & Design Transfer, is particularly tasked to fully
define and document the design and manufacturing specifications for the chosen concept. A
significant part of this stage is the completion of an initial production run. In addition, work
related to packaging, labeling, and instructions begins during this stage. Stage 4, Final
Verification & Validation, takes the initial production run from the previous stage and performs
verification and validation tests. Verification is focused on comparing results to technical
specifications and validation focuses on comparing results to market requirements. At this stage,
all key development documents have to be included in the Design History File (DHF). Stage 5,
Submission & Launch, finalizes the development process by submitting the needed
documentation to the regulatory authorities and transferring all the design and project
information to the manufacturing site to begin production. This manufacturing site is a different
organization within Sanofi and so this step represents a complete transfer of project
responsibilities between two significant entities within the organization (Bode, 2013).
30
By defining and following their medical device development process, Sanofi hopes to be
able to capture new opportunities and move them through the development process to create
production ready products. Their vision is that the ESD process is flexible enough to capture a
wide variety of opportunities and refine them to a point that they can be approved for FDD.
Once FDD starts, their structured set of five stages methodically moves the product through the
development process while at the same time keeping it compliant with the regulatory agencies.
The final goal of this process is a product fully characterized, approved by regulators, and
transferred to the production facility.
3.4
3.4.1
Acquisition of Pelikan's Medical Device Technologies
Brief Pelikan History - Founding to Bankruptcy
Pelikan Technologies was founded in 2001 with a focus on handheld diabetes
management devices. While the company conducted a lot of internal research, its only
commercialized product was the Pelikan Sun. The Sun is a lancing device that utilized a
proprietary electronic lancing technology to reduce pain. Users put a disposable disk containing
50 lancets into the device; they then calibrate the device to a specific depth suitable for their
particular skin type. Once this configuration was complete, users then were able to use the
device multiple times to help them draw the needed blood for a glucose test. Figure 8 shows the
Pelikan Sun as well as the 50 lancet disposable disk.
31
PEUKAN 0
TECHNOLOGIES
Pelikan Sun Lancing Devicej
50 Lancet Disposable
i
Figure 8: Pelikan Technologies Pelikan Sun electronic lancing device
In 2007 the company launched the Pelikan Sun product. The technology proved to
deliver on its promise of reduced pain. One study compared people using the electronic lancing
system to a traditional mechanically based lancing system. The results are shown in Figure 9 and
indicated a significantly perceived benefit in terms of reducing pain. However, the product
failed to gain widespread traction. There is debate as to why this happened given the
effectiveness about reducing pain; a couple popular hypotheses were the cost and size of the
device. Typically, diabetics pay very little for their lancing devices and these devices fit in the
same carrying case as their glucose monitor. With the Sun, there were two devices that needed
to be carried around, they were of comparable size, and the Sun was significantly more
expensive than a traditional mechanical lancing device. Whether or not these were the reasons,
32
business suffered after the launch of the Sun and the company declared bankruptcy in 2011
(Pelikan Technologies Voluntary Petition for Bancrupcy, 2011).
Pain Perception of Electronic Lancing Technology
90
80
ua'70-
~60'l50
0
3-
0
Z 2010
0
Much less
Same
Slightly less
Slightly more Much more
Figure 9: Pelikan Technologies electronic lancing reduced pain comparison study (Pelikan
Technology, 2009)
3.4.2
Sanofi's Asset Acquisition
After bankruptcy, Pelikan' s assets went up for public auction and Sanofi gained
ownership of them. The assets included a variety of items that encompassed both physical and
intellectual property. In total, these assets created a reasonably large set of new assets to
manage. Table 2 summarizes the complete asset acquisition that Sanofi received.
33
Table 2: Summary of acquired assets from the Pelikan Technologies acquisition by Sanofi
Acquired Assets from Pelikan Technologies
Intellectual
- Trade secrets (e.g. strategy docs, supplier
lists, CAD files, R&D docs, investor
Property
reports, management files)
(>275K computer
files, >200 GB
storage)
Physical Assets
Trademarks (4)
* Patents (>500 patent related documents)
* Test equipment
(318 boxes)
-
*
Prototypes
- Lab notebooks
- Benchmarking products
As can be seen from Table 2, the acquired assets represent a large set of property. It
should be highlighted, that the assets include much more than what was publically disclosed
information in patents. For example, it includes important trade secret information that Pelikan
had developed in order to give itself a competitive advantage. Much of this information never
made it into products offered commercially by Pelikan, but this provided a potentially rich
opportunity for Sanofi to determine how it could use the assets to create business value.
With this portfolio, Sanofi embarked on activities to organize and make sense of the
assets in order to determine how they could derive value from it. As noted earlier, the focus of
this project targeted the intellectual property portion of the assets. Nevertheless, the physical
assets, in many cases, provided verification and/or validation of the maturity of the different
aspects of the intellectual property portfolio. In accordance with this, potential opportunities
were first investigated from the IP perspective and physical assets were only used, when
possible, to determine technology or manufacturing readiness.
34
4
Opportunity Framing, Searching, Screening, and Refining
Based on this background and context, the process of determining a valuable opportunity
from the acquired Pelikan assets proceeded. As will be seen, it was found that very little "fuzzy
front-end" development process structure was in place within Sanofi's development process to
provide a framework for project execution. Noting this deficiency, an Opportunity Identification
process, similar to the one presented by Ulrich and Eppinger (2012), was utilized to provide the
needed structure to the process. In addition, this process instantiation provided a pilot for a
process structure that Sanofi can use to improve its product development process. The end result
was the derivation of a product concept that leverages the acquired IP along with identified
beachhead and follow-on markets in which Sanofi can choose to pursue industrialization in.
This section presents the key steps in the Opportunity Identification along with their use within
Sanofi to derive the above stated opportunity.
35
4.1
Early Stage Development in Need of Structure
While the development process at Sanofi is formally documented to start at Stage 0, on-
site research revealed that actual development work begins earlier and is highly unstructured.
Through personnel interviews and documentation review, it is clear that a lot of activity occurs
before Stage 0 and this activity directly impacts the amount and quality of innovations that flow
through the rest of the process. In truth, these pre-Stage 0 activities characterized the notion of
the fuzzy front-end as discussed earlier. In addition, these pre-Stage 0 activities are, for the most
part, unstructured, uncoordinated, and not guided by any formal principles or process (see
section 5.0 Opportunitiesand Observationsfor Sanofi's Early Stage Development for more
details on process observations and recommendations).
Based on this background, Figure 10 shows the actual development process that Sanofi
utilizes. There are a few key differences of note in this updated version of Sanofi's development
process model. First is the "Opportunity Identification" (01) part of the process is included to
represent the unstructured nature of the activities that occur during this part of the process.
Second is the indicator that there is a difference in resource allocation between projects that have
received Stage 0 approval and those who haven't. Pre-Stage 0 has some money, but much less
than post Stage 0 approvals. Also included in this is the significantly lower number of personnel
allocated to execute the 01 process. The specialized engineering teams are not released to work
on this process, but rather a set of more senior medical device personnel. Periodically, members
of the engineering development teams are temporarily assigned to help these early stage efforts,
but only for a short period of time (i.e. minimal amount of resources required). The 01 workers
36
are to search for opportunities and, to a large degree, do so independently.
air
Opprtuit
Strm
aMge
0 omi-
Opportunity
Stral
Identification
Approval
Sta~
.y
D veI oo We_()1 t 11r UllDce De.
Stage 0
Full Development
Full Device
Approval
Development
Yes
Yes
No
No
ProjectEnds
lon/i)F1fii
PeriodicStg3
Review
ProjectEnds
Stage 5
Stage I
Stage 2
Stage 4
tg
Figure 10: Actual Sanofi development process includes an undefined Opportunity Identification
portion
Without a structured vision for their early stage innovation activities, Sanofi's current
approach is limited. In addition, the research to develop a product concept from the Pelikan IP
was classified in this portion of the development process. Therefore, there were no structured
methods or milestones that would help facilitate the project. As an outsider coming into the
organization to execute this project, the limitations of the ad hoc approach to early stage
innovation were apparent and accentuated. No inherent, or built in, networks were established to
facilitate the project. Historically, the projects facilitated during this phase were "swallowed" up
in the strategy and pace of the division or business unit MED was attempting to serve. However,
this project was different. No external or internal customers were calling for this project. This
was strictly the medical device group attempting to innovate and develop a product concept
independently as a potential new venture for the company. As such, this was a great opportunity
to test an early stage innovation process structure that would not only identify an opportunity
37
from the acquired IP, but offer a possible improvement to Sanofi's medical device development
process.
4.2
Defining a Process for Identifying Exceptional Opportunities
Given this uncertainty, a structured process was defined to more effectively facilitate the
current project. To do this, some best practices were utilized to develop a comprehensive
framework for deriving value from the acquired assets. This resulted in defining a process with
four key steps: Problem Framing, Idea Search, Screen, and Refine. These steps provided a solid
framework to derive value from the Pelikan portfolio and test a new process for Sanofi. The next
few paragraphs will discuss the process used during this project. First will be a high-level view
of the process in which a discussion of what the general inputs, outputs, and measures should be.
Second will be a brief look into the detailed steps of the process. This will provide a roadmap
for the rest of this section where the details of the process and its application at Sanofi are
presented.
First we look at the overall goal or strategic vision of the proposed Opportunity
Identification (01) process. Figure 11 presents this view and it highlights some interesting
features. Note that the ultimate goal of this process is generate high quality ideas that make it
into formal development, and do it at a pace to keep up with the demand for them. As an input
to this process a robust flow of key business questions must flow. This is because in order to
reliably generate a regular set of high quality ideas to formal development, a sufficient number of
business questions (or stated problems the company needs to address) need to be entering the
process. Also, during the execution of the 01 process it is inevitable that certain identified
opportunities will be seen as more of a strategic development (e.g. disruptive innovation). While
38
this is an important part of the innovation process, this part of the path is much less frequently
traveled and the reader is referred to the extensive literature available on the topic (Christensen,
2011). In addition, by formally defining a process, certain features could be tracked as key
indicators as to whether the process is running healthy or not. Therefore, as Sanofi utilizes this
process over and over again it will be able to track some key metrics to determine how efficient
the process is being executed. Figure 11 lists three important process efficiency measures that
should be tracked: number of business questions entering the process over time, number of
quality ideas making it to formal development over time, and how long the process takes to go
from business question to concept to formal development. With metrics like this tracked, Sanofi
will better understand what it means to have a healthy 01 process. In particular, what levels do
the process metrics need to be at in order for the 01 process to be efficiently outputting
exceptional opportunities? While there is a lot of uncertainty during the early stages of
development, adding a process framework and efficiency measures around the process enables
Sanofi to better determine if how they are executing their early stage innovation activities is
being successful.
39
*
development
I
Business
questions
Concepts to formal
T
MgMt
Review
Overall Process Efficiencies I
1. # of business questions
2. # of quality ideas to formal development
3. Process time
Strategic
Development
Disruptive innovation
Exploratory research
Figure 11: High-level view of the Opportunity Identification 01 Process
Having the strategic view of the 01 process understood we are in a position to explore the
details of the process used for this project. As mentioned above, the 01 process involves four
main steps: Problem Framing, Idea Search, Screen, and Refine. Figure 12 illustrates how these
process steps are connected. Also, similar to the strategic process view, having a defined process
structure enables the inclusion of process measures or metrics. These measures are strategically
located in the process to capture key process information. As these measures get tracked from
project to project, Sanofi will gain a better understanding of their 01 process operations.
Throughout the rest of this section a more detailed discussion of each of these process steps is
presented. This should provide clarity to why the certain process measures are noted in addition
to how the step was utilized at Sanofi to derive value from the acquired IP.
40
Business
questions
Concepts to formal
development
.
4--.%
A-V
Problem
Framn
-+Idea Search
Screen
Efficientlyselect high
qualityideas
Generate a large # of
high quality ideas
Source and frame
Innovation Charters
0
-+
0
Iterate
Refine
Evaluate screened
idea through criteria
D*w
Select
00
Process Measures
P\sProject Team
Decision
rocess
jStes2
1
Lessfrequent
path - 4
Process
Measure
1. # Innovation charters/time period
2. # of ideas/charter
3. Average idea quality/charter
4. Idea quality variance/charter
Figure 12: Opportunity Identification Process defined for Sanofi
4.2.1
Iterating
One important feature of this process is that there is a high likelihood for iteration during
any part of it. This is indicated in Figure 12 by the dotted arrows pointing to the left. Any
product development process is inherently subject to potential iterations, it is the nature of
product development. Since this 01 process is essentially a fuzzy front-end process, it is
particularly prone to iteration because of the high uncertainty at this stage in development. To
counter this inherent challenge, it is important for this process to be completed rapidly. This
allows for quicker learning cycles to occur which in turn increases the ability to move through
the process. One factor enabling this speed is to ensure a suitable cross-functional team is in
place and that proper resources are allocated so key assumptions can be tested quickly.
41
4.3
4.3.1
Framing the Challenge
Problem Framing
How we view things is fundamentally critical to how we proceed in life, and the same is
true for innovation. Because the 01 process is uncertain, it is important to identify and articulate
the initial challenge as clearly as possible. This starts with creating the correct cognitive
framework in which to deal with the problem, or problem framing. In the general sense, this
starts with the business related questions that enter the process. From these questions, discrete
innovation challenges should be articulated that adequately bound the problem into the correct
perceptual mapping of the innovation space to operate in. Van Gundy expands upon the notion
of framing the innovation challenge in his book "Getting to Innovation." Of particular interest
are some important principles that Van Gundy lists for adequately creating the innovation
challenge. I will review these principles in this section to give structure to the Problem Framing
step (VanGundy, 2007).
The first is to have a singularity of objective for a given innovation challenge statement.
The reason for this is, especially early on, often people articulate their innovation challenges as
complicated multi-objective problems that are difficult to innovate on. This creates an unclear
focus and can dramatically misalign teams. This isn't to mean that innovation challenges can't
have multiple goals, but, as Van Gundy notes, there should be an articulation of the main goal or
focus of the challenge. Other purposes are fine, but should be articulated as supporting or
positioning statements (discussed shortly) and not the main purpose itself.
Second are the absence of evaluation criteria and solutions in an innovation challenge
statement. Including evaluation criteria in the innovation challenge statement makes the
42
innovation process more difficult. This is because people's creativity is more open to generate
unique ideas if they don't continuously have to do a mental check on whether they are meeting
all the criteria. Closely related to this is ensuring that solutions are not included in innovation
challenge statements. While it can be tricky to distinguish between what is a solution and a
problem, it is vitally important that solutions are not posed as problems. Problems lead to
innovation actions that generate solutions. Solutions lead to evaluation rather than innovation.
The third element from Van Gundy worth noting is to ensure that innovation challenge
statements are abstracted appropriately. The broader the scope of the challenge the less
restriction is created on the solution space. This allows for a larger set of solutions which brings
up both the potential number of solutions and the variety of the solutions. As discussed later,
these two factors are important in having a reliable innovation process.
Fourth is to use positioning elements to highlight the intent of the innovation challenge.
Positioning elements are a way to include other objectives or criteria in the innovation challenge.
However, they should not be made the main focus of the innovation challenge. In fact, Van
Gundy notes that these should not be part of the actual innovation challenge statement, but a
distinctly separate set of statements that are placed only to clarify intent of the challenge.
The final principle Van Gundy highlights is to ensure that innovation challenge
statements are clear and unambiguous. While it is acknowledged that this particular principle is
subjective and particularly prone to functional biases of innovation participants, it is nevertheless
important to ensure that the innovation challenge statement is as straightforward as possible.
The practical reality is that even if an innovation challenge seems clear and unambiguous, when
43
ideation sessions start it usually becomes apparent whether everyone has a clear understanding or
perception of what is intended by the innovation challenge.
While Problem Framing seems logical and straight forward, given the great uncertainty
that abounds in the 01 process, there is strong temptation to neglect this step. This section has
pointed out the importance of clearly framing the innovation challenge in order to align early
stage development teams. While a lot isn't known when the 01 process starts, following the
principles of singularity of objective, exclusion of evaluation criteria, appropriately abstraction,
positioning elements, and clarity in innovation challenge statement, early stage development
teams will be better aligned. Disciplined and effective use of this step will make teams more
effective at identifying innovation challenges that lead to solutions that meet critical
organizational needs.
4.3.2
Application at Sanofi
Sanofi made a lot of progress on this step before the project began. They had already
identified and articulated a lot of context for the problem and stated an overall goal for the
project. The pressing business need for the company was that they had acquired a set of
intellectual property from Peliken Technologies and needed to do something with it rather than
just continuing with the maintenance costs. Essentially, the goal or innovation challenge, for the
project was to use the technologies acquired from the Pelikan intellectual property to enhance
and/or expand Sanofi's product portfolio. As far as positioning elements, the company was
particularly focused on more near term solutions (e.g. able to generate value within the next five
years) along with innovations that would be convergent with Sanofi's current product and/or
intellectual property offerings. That being said, Sanofi was also open to exploring a broad set of
44
options, even new markets/industries. As will be seen later, this statement resulted in a broad
approach to ideation.
Use the technologies acquired from the
Pelikan intellectual property to enhance or
expand Sanofi's product portfolio.
Figure 13: Project's innovation challenge statement
As noted previously, this innovation challenge statement has a dramatic effect on how the
innovation process proceeded. For example, if the innovation challenge statement was changed
to "How might we improve the Pelikan Sun design?" or "How might we use the injection
technology from the Pelikan IP?" the downstream development activities would have been
significantly different. However, this was not the choice for Sanofi when the project was scoped.
Therefore the resulting assessment included an evaluation of a large option set that crossed
industries, markets, applications, and business models. In the author's opinion, this was the
correct level of abstraction for this innovation challenge because it gave a more complete
assessment of the acquired assets.
4.4
4.4.1
Searching for Potential Opportunities
Search for High Quality and Diverse Ideas
Idea Search is the process in which the goal is to source a large number of high quality
and diverse ideas. The reason for this may seem intuitively obvious, generate a lot of ideas and
45
you are bound to get a good one. However, there is a fundamental structure of idea generation or
innovation that should be exploited during this process. This structure is summarized in the
book, "Innovation Tournaments" (Terwiesch & Ulrich, 2009) and supported through
fundamental experimental work on idea generation (Girota, 2010). The basic structure is
fundamentally based on extreme value theory concepts and asserts that idea generation and
selection is similar to making a random draw from a statistical distribution. That is, innovation
follows a statistical distribution along the dimension of quality; this is depicted in Figure 14.
Idea Generation Process
(fora specific Innovation Charter)
00000
Mi
0
# of ideas
generated
-o
Avg idea
quality
0
0
0
0
0
0
0
0
0
0
0
0
0
0 00
0
0
0
0
0
o
0001
0
0
0
Variance in idea
quality
Figure 14: Idea generation's statistical structure based on Girota study (Girota, 2010)
Figure 14 clearly illustrates the key features of this statistical structure to be exploited
during the idea searching process. The first follows intuition, generate as many ideas as possible.
This is because the more ideas that are generated the more the total idea distribution will be filled
46
out and hence more ideas filling in the high quality tail of the distribution. Admittedly, it will
also include more ideas in the lower quality tail of the distribution, but ideas are generally
"cheap" and can be generated reasonably quickly. Second is to increase the average quality of
the idea set. This can be accomplished in multiple ways (one of which I will discuss briefly
below), but one of the most effective ways is to actively identify and enlist highly creative
people during the ideation process. Again, this concept is intuitive, but with the notion of the
idea quality distribution the impact is much more tangible in understanding how it directly
impacts the ultimate results. The higher the average quality of the ideas the higher up the quality
dimension the whole distribution shifts. The third element that is important is the variance of the
idea quality distribution. As noted in the figure, this dimension should be high because this will
drive more ideas that are higher on the quality scale. That is, the tails of the distribution are
much "fatter" because they are populated by more options. As noted by Terwiesch this basic
notion runs counter to how other process management proceeds (Terwiesch & Ulrich, 2009).
Usually business processes are managed to reduced variation, but the innovation process requires
an increase in variation to be most efficient. Said another way, to effectively generate a good
idea a lot of diverse ideas need to be created. Therefore the goal of the Idea Search step is to
generate a large number of ideas, to generate a set of ideas where the average quality is high, and
to generate a large variety of ideas. Hence, business processes and teams need to be structured to
facilitate the achievement of these parameters. In addition, projects can keep track of these
particular parameters in order to determine what their nominal values need to be for them to
reliably generate high quality ideas (see the measures in the proposed process flow in Figure 12).
47
4.4.2
Application at Sanofi
While some potential opportunities existed at the start of the project, more idea sourcing
was needed. In particular, an initial set of potential opportunities had been identified both
through work the company did itself (Dittrich, Schneider, & Cerman, 2013) as well as through
research partnerships (Cooper-Davis, 2014). However, it wasn't felt that this initial set provided
the needed quantity for sufficient ideation. Therefore, more ideas were identified and were
added to increase the set of ideas. To achieve this increase, the author began studying the
intellectual property to source more potential opportunities. The goal was to identify matches
between problems to be solved and the technology in the IP. One extremely valuable part of this
process was that buried amongst the vast amount of intellectual property was a wealth of ideation
information. In particular, the assets included several dozen potential applications for the
technology. In total an additional 79 different ideas were researched as potential applications of
the technology. However, this set included ideas that were deemed out-of-scope or not a direct
application of the technology. This idea sourcing work resulted in a very diverse set of 26
potential opportunities deemed worth consideration, targeted a real problem, and was a direct
application of the technology.
4.5
4.5.1
Screening for Promising Opportunities
Screening the Idea Set
The goal for this step is to efficiently select the highest quality idea from the set of
potential opportunities. There are many methods noted in the literature for filtering ideas
(VanGundy, 1988). These range from basic pros and cons approaches to more formal matrix
ranking analysis. For the sake of this stage of the process, a "holistic judgment" approach is
48
utilized (Ulrich & Eppinger, 2012) to judge the ability of an idea to drive business value. By
grouping all possible assessment parameters into a single judgment, the process of decision is not
bogged down by the many uncertainties present in the process. As long as the people making the
judgment have a reasonable subject-matter background, this is a fast approach that is reasonable.
For this particular instantiation of the screening step, the idea of an innovation
tournament was used (Terwiesch & Ulrich, 2009). An innovation tournament leverages the ideas
just mentioned about rapid quality scoring or judging. A series of filters are used to narrow the
option field down and bring focus as quick as possible. The filtering process can take several
forms. A few well known forms are that of a linear process or an iterative or so-called whirlpool
process. In the linear process, set filters are in place and each one reduces the number of
potential opportunities. The whirlpool approach allows for ideas to move back and forth across
filters with an average progression of refining and reducing the option set through time. Figure
15 illustrates both of these processes.
49
0
0
o
0
0
0
0
0
0
0
0
0
o
o
o
o
0o0
Exceptional
0
______
Opportunities
0
-
Ra 0
Opportunities 0
0
0
0
-
o
0
Ra o
0
0
0
0
o
o
0
0
Filter
0
0
0
0
Fiter
Fitef
00
Raw_
Opportunity
0
.
_
0
*
0-
*
Exceptional
Opportunity
Filter
Filter
Filter
Figure 15: Both linear, or cascade, (top) and whirlpool (bottom) type of screening processes as
illustrated by Terwiesch and Ulrich (Terwiesch & Ulrich, 2009)
During each filter, ideas are given a quality score and then a decision is made on what is
moved to the next phase for filtering again. Note that the filters are critical during this and
should be chosen to match the purpose of the innovation challenge. Terwiesch provides an
example where the filters were the opportunity pitch, the concept pitch, and finally the full
business plan pitch. These filters are not fixed, but must be specified to bring sufficient clarity to
50
the potential opportunities and match the intent of the process. In this way filters provide a
historical roadmap of how the large quantity and variety of ideas is reduced to the final selected
opportunity.
4.5.2
Application at Sanofi
With a solid set of ideas on how to utilize the Pelikan technology, the next task was to
Screen the idea set through a series of filters. The key challenge around filtering ideas was to
determine where Sanofi strategically wanted to go. With the diverse set of potential
opportunities the path forward could take a lot of different directions. To do this, two different
filters were utilized. The first filter was focused on technology with the intent to utilize medical
device experts to identify the most promising set of applications. The second filter was more
strategic and used senior medical device management to identify the best aligned technology to
company needs. The results of this process were two promising opportunities, one for internal
product development and one for selling/licensing.
4.5.2.1 Filter 1: Technology Experts
The first filter was done through an innovation workshop where the External Opportunity
Leads and the Pelikan Subject-Matter Experts voted on which opportunities they saw as most
promising to pursue further. These individuals either had significant experience in technology
and medical device development projects or were very familiar with the Pelikan IP. To
accomplish this filtering, the complete team was assembled and every opportunity was reviewed.
A brief description of each opportunity was provided. If workshop attendees had questions
about an opportunity, these were briefly discussed. The team then voted "yes" or "no" on
whether to pursue the opportunity more. In this way expert judgments were used to match
51
technology to business needs and provide a filter of the ideas. The voting results are shown in
Figure 16. From this distribution, the top five ideas were selected to pursue further
No
Yes
0
0
I
3 11 4 9 21 5 6 7 1415 101920122325 26
2 8 13 1617182422
Ideas
Figure 16: Filter I voting results
4.5.2.2 Filter 2: Medical Device Business Leadership
The second filter focused on leveraging the strategic view of the medical device
leadership team to determine the preferred approach among the top five potential opportunities.
At first, this also used a voting structure of "yes" or "no", but focused on the top five
opportunities from the previously filtered results. However, this second filter revealed no strong
preference among the reduced set of opportunities (but this did show alignment among
leadership within the organization). While the alignment was useful, more differentiation was
needed.
This triggered the need for more information on each of the five selected opportunities in
order for the leadership team to approve the path forward of a single opportunity. The additional
52
information sought to identify major risk factors for each of the five opportunities and quickly
evaluate them. The goal was to efficiently identify opportunities that appeared more likely to
turn into exceptional opportunities. Hence, for each opportunity major uncertainty areas were
identified and those were the focus of this evaluation. The top opportunities are identified below
along with a summary of their evaluation results:
Opportunities 3 & 4: Integrated devices (i.e. bleed and read) - The big concern here
was regulation constraints around having an integrated device. After a discussion with
internal regulatory expertise and studying relevant material, this proved significant but
not a showstopper. It seems like with thoughtful concept development activities and
smart partnerships a promising opportunity may result.
"
(Stopped) Opportunity 9: Intradermal injection - The big concern here was to see how
big of a differentiator a low pain intradermal injection device would be. This was
tackled through a targeted internet search. This resulted in an understanding that there
are already some effective technologies in this space and these solutions seem less
complex than what a Pelikan Technologies based concept would provide. In addition,
Sanofi already has an intradermal injection solution for its Intanza vaccine through its
partnership with BD. These types of observations suggest that the space is not likely
very fruitful and so pursuing this opportunity was not recommended.
" Opportunity 11: Reduced pain permanent make-up device - The big concern here was
to get a sense if pain is a big issue in permanent make-up/tattooing applications. After
an internet search it became clear that pain is an issue with tattooing. In addition, this
search identified technologies currently on the market that have a form factor that
53
would be comparable to a device enabled by Pelikan Technologies. From a high level, it
makes sense that the Pelikan Technologies could reduce pain, but a more detailed look
will be needed.
(Stopped) Opportunity 21: Skin monitoring - The focus for this potential opportunity
was on getting a sense if there really was a market need for better control in monitoring
applications. The assessment specifically focused on skin viscoelastic monitoring and
Fine Needle Aspiration Biopsy (FNAB). The viscoelastic monitoring application search
resulted in that there may be an area where Pelikan technology can "help" with a
solution, but it will not likely be an enabling technology. For FNAB, it appears like there
could be an application for a better controlled device for biopsy, but this did not jump
out as a strong need when compared to current technology already on the market.
These results didn't suggest a clear or "real" opportunity so it was recommended to
stop.
Note, these assessments were not comprehensive; they were not intended to be. The goal of these
assessments was to quickly check major uncertainty areas and provide recommendations of
potential opportunities to eliminate options that appear unlikely. The result was that the
company wanted to primarily focus on a product opportunity associated with the integrated
blood measurement device as this was more in line with where they wanted to head. With the
permanent make-up application seen as a technology selling or licensing opportunity it was not
deemed as an appropriate area of focus for this project. This provided concrete focus for
opportunity refinement along with alignment from the organization leadership. The results of the
54
complete Screening process are visualized in Figure 17; note that the integrated blood
measurement device option is more emphasized (i.e. bigger text) as the opportunity of focus for
Screening
Idea Search
S.
Refine
-
this project.
I
* Integrated blood
measurement device
* $.'
Permanent make-up
'application
e: p
0@
0@
26 potential
Filter 2: MED Leadership
Filter 1: External Opportunity
Leads & SMEs
opportunities identifie I
Figure 17: Visualization of the screening of potential opportunities down to two for further
refinement
These Screening results provide Sanofi with a concrete tracking of ideas through a
methodical and logical process of selection and ultimately to the opportunity of focus. This data
allows Sanofi to more effectively reflect on how decisions were made along with initial data on
not only the markets-to-technology match, but also company alignment.
55
4.6
4.6.1
Refining Screened Opportunities to Determine their Exceptional-ness
Use Specific Criteria to Refine Screened Ideas
The next step in the 01 process is Refine. This step takes a deeper look into the
opportunity selected. By diving into more detailed areas to try and resolve some of the key
uncertainties which may be quite large at this point in the development process. Various
techniques are possible, but an effective way to approach this is to have a criteria based method
to assessing opportunities. While there are several different criteria-based techniques
(VanGundy, 1988), the main goal for this step is to be able to define with more clarity and
resolution the proposed opportunity.
One of the most powerful parts of the criteria-based techniques referred to above is that
they are often based on asking important questions. Questions have long been known to be a key
to learning. Questions help generate lines of thinking and hypotheses that can be tested and
validated/invalidated throughout the development process. This feature of effective questioning
allows it to be an effective way to deal with ambiguity. Since the 01 process is known to be
highly uncertain, the most important task is to be asking and answering questions that lead to
clarity in understanding the opportunity being assessed. This in turn generates the needed
answers to manage the important uncertainties. It is all too often that early stage developments
are killed because of answers to only a few targeted questions that don't capture all the learning
necessary to substantially evaluate the innovation opportunity. As an example, refer to
Christensen and Kaufman's work on how focusing too narrowly on certain financial questions
can inhibit innovation (Christensen & Kaufman, 2008). To this end, it is critical that a
56
refinement method be selected that is comprehensive enough in its questioning to facilitate
effective learning.
4.6.2
Real, Win, Worth-it (RWW): A Question Framework
The Real, Win, Worth-it (RWW) framework is a useful tool that contains a set of
questions carefully developed over the years to provide a deep dive into determining the
exceptional-ness of an innovation opportunity (Day, 2007). This framework, as the name
implies, breaks the decision to pursue an opportunity into three basic questions: 1) Is the
opportunity real? 2) Can we win?, and 3) Is the opportunity worth pursuing? On the surface
these questions don't seem actionable enough to figure out the needed yes/no response. The
RWW framework deals with this by breaking each of these questions into more actionable subquestions to facilitate more effective assessment (17 sub-questions in total). With this
decomposition, the RWW framework becomes an effective criteria based method for the 01
process. The following paragraphs will briefly discuss the RWW framework and describe how it
was specifically applied at Sanofi for this project.
When talking about whether the opportunity is real, we are specifically speaking about
the market and product readiness. Figure 18 shows the decomposition of this question along the
market and product dimensions. This question helps established whether a clear pull from the
market is real or not. In addition, the question forces a discussion of the actual product and
whether it can be defined and understood in a very clear way. In addition, consideration is given
to account for the actual technological and manufacturing readiness of the products.
57
eal?
Is the product real?
Is the market real?
- Is there a need or desire for the product
- Can the customer buy it
- Is the size of the potential market adequate? - Will the customer buy the product?
Is there a clear concept?
Can the product be made?
Will the final product satisfy the market?
Figure 18: RWW's Real question decomposition (Day, 2007)
The next question is whether the opportunity can win in the market. The decomposition
of this question is presented in Figure 19. This particular question deals with both how
competitive the product is and how competitive the company is. From a product competitiveness
perspective, this question addresses the competitive landscape in terms of the current competitive
advantage and the hypothesized future competitive landscape. Addressing whether the company
can be competitive, the questions address how well the company is prepared to move the product
forward. In particular, this addresses resources, management, and market knowledge.
Can we win?
Can the product be competitive?
Can our company be competitive?
- Does it have a competitive advantage?
. Can the advantage be sustained?
- How will competitors respond?
- Does the company have superior resources?
- Does the company have appropriate
management?
- Can the company understand and respond
to the market?
Figure 19: RWW's Win question decomposition (Day, 2007)
The final question that the RWW framework addresses is whether the opportunity is
worth pursuing. Figure 20 displays the decomposition of this question. In particular, this
question first requires the estimation of potential financial returns and the associated risks. Also,
58
the strategic trajectory of the company is examined in relation to the potential opportunity. This
includes addressing questions about management support for the potential opportunity. Taken
together, these different dimensions provide a reasonably complete assessment of whether the
opportunity under investigation is worth pursuing or not.
Is it worth doing?
Will the product be profitable at
an acceptable risk?
Does launching the product make
strategic sense?
"Are forecasted returns greaterthan costs?
- Are the risks acceptable?
9 Does the product fit our overall-growth
strategy?
- Will top managemnet support?
Figure 20: RWW's Worth-it question decomposition (Day, 2007)
4.6.3
Planning How to Answer the RWW Questions
While the RWW framework provides a comprehensive set of questions to ask for
opportunity refinement, it doesn't provide a way to know how detailed or not to answer
questions or what to do with the answers once obtained. To address this shortcoming, this
project used extra steps to more concretely utilize the RWW framework. Two specific features
were added to the framework in order to use it effectively with the 01 process as defined. These
details are presented graphically in Figure 21. The first of the additions is the methods feature.
This feature is important because each question can be answered to a varying degree of detail.
For example, the question, "Is there a clear concept?" could be answered in many ways. The
answer could be a simple sketch on a paper or it could be a full looks-like-feels-like prototype
(note that different stages in the development process will require different levels of detail).
Each can be a completely valid way of assessing whether the concept is clear. It depends on
59
what level of development the project is at. However, for a specific evaluation scenario a
specific method or set of tasks must be defined to address the question. This must be based on
stakeholders understanding and judgment as to how much information is needed or desired to
make a decision on a given question.
Another addition to the RWW framework is to actually score how close to yes the answer
to a given question is. The answer is assigned a number within the range of 0-100, depending on
how close to yes the answer is. That is, the score of 100 means an absolute yes, while an answer
of 0 is an absolute no. Placing a score on each question is still, admittedly, a judgment call, but it
is at least informed from a careful assessment of specific tasks associated with specific questions.
These additions put an actionable structure around the RWW framework so it can be
more objectively used in the 01 process. A clear definition of the methods used to answer
questions provides a concrete set of activities for determining answers. This then facilitates a
more effective assignment of a quantitative score to each question. With a quantitative score
assigned, the distribution of scores can be graphically visualized to identify variations among
answers. In addition, a total score can be determined by rolling up the scores from each question
to ultimately providing a score for whether the opportunity is real, whether it can win, and
whether it is worth pursuing.
60
I
Refine
Analysis Process
Can we win?
Is it worth doing?
Markets
products
Competitive advantage
company's capabilities
Finances, risks,
strategic alignment
&
Is it real?
&
&
1. Main questions
2. Sub-questions
3. Methods
4. "Yes" score
Defined specific tasks to answer questions
Score each question 0-100 for how close to "Yes" it is
(O=Absolute "No", 100=Absolute "Yes)
J
*1
Figure 21: Method for utilizing the RWW framework for opportunity assessment
4.6.4
Application at Sanofi
This basic modified RWW framework was used for the Refine step in the 01 process.
The following sections articulate how the RWW was applied at Sanofi to assess the integrated
blood measurement device selected through the Screen step.
4.6.4.1 Clarifying the Reality of an Opportunity
The first question to be addressed is whether the opportunity is real. This comes down to
determining a market for the opportunity and conceptualizing the product form. This was
completed by investigating existing markets where the opportunity is applicable in addition to a
conceptualization of an approach based on the technology associated with the acquired IP.
61
4.6.4.1.1 Markets that match the technology
To identify markets the first aspect is to understand more clearly where there is a match
between the technology available and potential market needs. To this end getting an
understanding of the functional performance of the proposed opportunity is important. From this
information a thoughtful evaluation of potential markets can be evaluated.
The integrated blood measurement device performs a series of discrete functions. First,
lance the finger using a lancet insertion just into the capillary portion of the skin layer. Second,
capture the resulting blood drop sample. Third, measure the desired analyte from the blood
sample. Fourth, communicate the resulting information to the user. In addition, articulated in
the opportunity description within Sanofi, the intent of this opportunity was to first target the
diabetes market and then also see what other markets would be matched with this functional
behavior.
The diabetes market for at-home blood testing has matured in recent years with the
advent of blood glucose monitors (Clarke & Foster, 2012). With over 380 million people with
diabetes worldwide (International Diabetes Federation, 2013) and projections to grow at a rate of
about 9.5 million/year, the blood glucose monitoring market is estimated at $8-9B (Proprietary
Market Researcher, 2014). With Sanofi not being a major player in the market, the proposed
opportunity offers a potential opportunity to increase market share and revenue through an
additional product line in this space. This being the case, it was justified that the diabetes market
be the target or beachhead market for this particular opportunity.
While the diabetes market has clearly been the leader in terms of bringing blood sample
testing out of the lab into the at-home or user setting, the advancement of technology and the
62
more user centered landscape, various markets are trending to more at-home applications with
some special case examples of other at-home blood testing applications in other markets, see
Santrach (2007) and Sullivan (2010). One of the challenges of this space is that these markets
are not yet fully developed, but they appear to be emerging and have the potential of following a
similar trajectory to how the blood glucose monitoring market developed. This fact places some
ambiguity on where the markets might develop.
To focus the emphasis, a more detailed understanding of what type of functional problem
being addressed is needed. One key functional need a patient must have, whatever the market, is
a regular need to have their blood sampled. From Sanofi's perspective, this type of scenario
happens most often with its therapeutic drug products. These products require on-going use to
maintain a patient's health. Because of this, it made sense to explore these areas as potential
follow-on markets to the diabetes markets.
The particular therapeutic areas of interest for Sanofi are oncology, multiple sclerosis,
rare diseases, and cardio-metabolic diseases. Table 3 shows these different areas along with the
blood measurements that are currently needed to maintain health in each of these areas. One key
practical detail is that there is a fundamental difference between diabetes blood glucose
measurements and the other areas. The blood measurements used in diabetes is measuring for an
analyte feature relating to the disease itself and requires a drug dose response. However, several
of the other therapeutic areas require blood measurements that are related to treatment side
effects. That is, Sanofi has drugs focused in these different therapeutic areas, and their use can
have unpleasant side effects. Using the feedback mechanism from a blood measurement device
can provide important information to patients on how their health is doing while using the drug.
In addition, this data can be sent to providers to provide more detailed monitoring of patient's
63
health during the therapeutic process. However, this doesn't lead to more or less drug use in the
direct way that the diabetes market does. So from a high-level, the feedback provided by
utilizing a blood measurement device is the same, but in the detailed functional application there
is a difference worth keeping in mind when exploring the potential follow-on markets that are
emerging.
Table 3: Sanofi's therapeutic areas matched to needed blood measurements
Diabetes
Glucose, HbA1C, creatinine, ketones
Oncology
Creatinine, blood count, liver function tests
Multiple Sclerosis
WBC, creatinine, platelet, potassium, liver function
tests
Rare Diseases
Kidney function
Cardio-Metabolic
Diseases
Cholesterol, triglycerides, kidney function
With a general understanding of the primary market of focus along with the potential
follow-on markets the next task was to determine market needs. To determine market needs,
several different points of market research were used. Synthesizing primary market research
data from almost 10,000 participants in multiple market surveys, consulting with experts in the
diabetes marketing from within Sanofi, and reviewing market research reports allowed the
derivation of key market needs along with a relative weighting of each of these needs with
&
respect to each other (market research sources: (Alzaid, Schlaeger, & Hinzmann, 2013); (Frost
Sullivan, 2013); (Guthermann, 2013); (Guthermann, 2014); (Sanofi Marketing, 2014)). Relative
weighting of needs came from the relative number of responses about a given need. This
64
resulted in a comprehensive list of key end user need areas in priority order. This list is provided
in Figure 22 below.
Data/Connectivity
Payer Price
Simplified Process
Reduced Pain
Accuracy
Aesthetics
Size & Weight Analyte Flexibility
Figure 22: Diabetes market needs, word size indicates relative need importance
To get a better understanding of what the needs will be for the emerging markets, the
diabetes market's needs were used as a foundation. Since the emerging markets are considered
follow-on markets and don't exist yet, data isn't known explicitly about market needs. To deal
with this the diabetes market needs were used as a baseline. Differences were indicated based on
speculation of how these new markets would likely utilize a blood measurement device. It is
reasonable to hypothesize that these new markets will mature in a similar fashion to the diabetes
market, but with some key differences due to specific applications. Figure 23 lists the
65
hypothesized emerging market needs, based on the derived diabetes market needs, along with the
speculated adaptation of market needs due to important differences in product use.
Speculated Differences to
Diabetes Markets
Hypothesized Emergin
Market Needs
Data/Connectivity
Payer
Price
- Possible reimbursement
* Less price sensitive (i.e. less testing)
Simplified Process
- More desirable, less experienced testers
3 - More sensitive to pain
Reduced Pain
Accuracy
Aesthetics
Size & Weight
- May accommodate less portability
- Analyte measure maybe more complex
Analyte Flexibility
Figure 23: Hypothesized emerging market needs along with speculated differences with the diabetes
market
4.6.4.1.2 Conceptualizing a Technological Approach
The second part of determining whether the opportunity is real is to determine a concept
realization. The IP portfolio contains specific technology elements that support key functions of
an integrated blood measurement device. The first element is the electronic driving system.
This system is designed to drive a needle for finger lancing. As an electronic system it has the
ability to maintain precise needle control. This allows it to ensure a needle position and velocity
profile during lancing that creates a low pain and low skin damage experience. Also, because
this is an electronic based system an energy source is required (battery-capacitor combination).
The second major element from the IP portfolio that supports an integrated blood measurement
66
device is test cartridge possibilities. These combine the disposable parts of the blood sampling
process. That is, they combine the lancet along with a blood sensor element so that once used
the complete cartridge system can be discarded. Figure 24 displays examples of these
technology elements.
Test Cartridge
Electronic Driver
E-driver Energy Source
Figure 24: Technology elements associated with the IP portfolio that are directly related to the
needed functions of an integrated blood measurement device
It is from these basic technology elements that concept realizations were accomplished.
Through researching and brainstorming activities about twenty different possible concept
embodiments were developed. Each of the different embodiments used some to all of the
technology elements from the acquired asset portfolio. That is, the concepts spanned the
spectrum from utilizing all the technology elements in one concept to utilizing only one aspect of
the technology from the asset portfolio. This produced natural conceptual approach groupings
into four major categories: Multiple Test, Single Test, Off-board Energy, and No Electronic
Driver (i.e. No E-driver). Figure 25 illustrates a sampling of the conceptual approaches that were
developed within each of the conceptual groupings.
Multiple Test: The multiple test category of conceptual approaches include the electronic
driving unit along with a disposable container system that allows for multiple tests to be
completed. In particular, the disposable container has distinct spots for multiple lancets and
67
biosensor combinations. Once a user performs a test, the device has the mechanisms in place to
index the disposable to the next available lancet/sensor location for a new test. The integrated Edriver enables the repeated actuation of each lancet in a controlled manner.
Multiple Test
Single Test
Off-board Energy
No E-driver (mech lancing)
Figure 25: Conceptual approaches using the acquired asset portfolio
Single Test: The single test concepts provide a distinct grouping from the multiple test
groupings by simplifying the disposable element (i.e. lancet/sensor combination) into a single
lancet and sensor combination. This dramatically reduces the complexity of the disposable and
the actual device in which the disposable is inserted. That is, the required indexing (mechanical
and electrical) systems are not needed for these concepts. However, only a single test at a time
can be performed and multiple disposables are needed if multiple tests are desired. These
concepts also utilize the E-driver along with its benefits.
Off-board Energy: The distinctive feature of this concept grouping is that the energy
source is provided from some external source rather than an integrated battery and capacitor.
This source could be from a direct power source like a wall outlet or another portable device like
a mobile device. In either case, this applies to both the multiple and single test disposable
configurations. In addition, this combination also uses the E-driver system and gains the
resulting benefits.
68
No E-driver: This category completely removes the E-driver system and incorporates a
mechanical mechanism to execute the lancing process. This again applies to both the multiple
test and single test disposable approaches. Therefore, this grouping of concepts has the benefit
of integrating the lancet and biosensor, but receives no benefit in terms of better lancing
experience than a traditional mechanical based lancing device.
These conceptual approach groupings were evaluated with respect to the market needs in
order to narrow down to a concept that seemed most promising for the beachhead market as well
as follow-on markets. Each of the concept groupings were evaluated with respect to the market
needs discussed above. That is, for each market need each concept grouping was given a score
(-1, 0, or 1) based on how well it is architected to meet the market need. Once scored, a total
score can be generated along with an inherent ranking of the different concept groups. Figure 26
shows the results of this analysis. Under the market relevance section of this figure, the more
blue filled into each pie graph indicates the degree to which the concept group meets that specific
market's needs. It is noted in the figure that for the Off-board Energy concepts there is a
regulatory concern when viewing this option from the diabetes market perspective. In addition,
the net result is that the Single Test category offered the best cross market application and so
stood out as the basic architecture that ought to be pursued for more concept refinement.
69
Multiple Test
Off-board Energy
Single Test
-~
w
U
-
No E-driver (mech lancing)
Diabetes
Market
Figure 26: Evaluation
of conceptual approaches against market needs
Upon refining the single test approach, two distinct concept embodiments are presented
to illustrate this conceptual approach's architecture. These two distinct versions were developed
to offer options for Sanofi to pursue. Figure 27 provides a more detailed view of these two
options along with a description of their basics of operation. The left version is what is referred
to as the handheld concept or architecture. The particular version shown in the figure utilizes
touch screen technology for a user interface. The size and format of this version more closely
aligns with monitoring devices on the market today. The concept on the right of the figure is
simply a different layout of the technology elements, but offers a unique approach for an
integrated device that matches the form factor of the insulin pen products Sanofi offers. This
design is sized to match the size of Sanofi's insulin pens and fits easily in the current carrying
case that Sanofi provides for insulin pens. In addition, Figure 28 provides a cross section view
of both of these concept embodiments for illustration of how the technology is integrated into
each approach. From this basic conceptual modeling, looks-like prototypes were built using
Sanofi's 3-D printing facilities thangible
real-ness of the product concept. This
70
conceptual development, culminating in a prototype build, provided a level of concreteness to
the concepts and strength to the perspective that the technology and manufacturing readiness of
the single test concept is high.
Handheld Concept
Pen Formatted Concept
LCD Display
Insertion
port
Disposable
insertion
Disposable
insertion/removal
Insertionport
Touch screen
Disposable is pushed into the insertion port
of the device
-
Pen lid removes and disposable is pushed into
the insertion port on the end of the device
*
Finger is placed on exposed end of the
disposable during the test
-
Finger is placed on exposed end of the
disposable during the test
-
Sized to fit in palm
*
Uses touch screen technology for user
interaction & device control
About the size of an insulin pen, can fit in
insulin pen storage bag
-
Uses button controls & LCD screen for user
interaction
e
e
Figure 27: Concept embodiments for two distinct approaches for instantiating the single test
integrated blood measurement device
71
L
58.5 mm
(2.303")
19.75 mm
(0.777")
71.05 mm (2.797")
20 mm
(0.787")
169.03 mm
(6.655") 4
Figure 28: Cross-section view of the selected embodiments along with key dimensions
4.6.4.2 Can We Compete and Win?
The next question addressed is whether the proposed opportunity is competitive enough
to win in the market. As noted by Day, this comes down to whether the product can be
competitive and whether the company can be competitive. Each of these topics is addressed in
this section (Day, 2007).
To understand competitiveness, the proposed concepts were benchmarked against
existing products on the market to determine their position and differentiating factors. In the
beachhead diabetes market there is quite a number of blood monitoring devices, in the form of
blood glucose monitors. These devices typically have four major elements: lancing device,
lancet, biosensor test strip, and analyte reading meter. Figure 29 illustrates one view into the
competitive landscape, along a dimension important to customers, size. Noted on this chart are
72
blood glucose monitors as well as devices that offer the ability to test multiple analytes (an
iPhone is also listed to offer dimensional context). It also shows the few current integrated
devices on the market. This figure illustrates part of the intent of how the proposed conceptual
embodiments were developed. The handheld version mimics the size of a typical device whereas
the pen format offers something unique to the competitive landscape. While the size of the
device ranked lower on the customer needs list presented earlier, it is the part of the device that
initially meets the user and provides perception of the product. Therefore understanding where
the proposed concepts fit in the competitive landscape for size was seen as important and
provided useful insight into the two distinct embodiment approaches.
Size & Mass Competitive Comparison
(bubble sized according to mass, label is actual mass in grams)
------------- - .........
-- --------- ---
76
0141.75
5
119.07
3
-
0 36, * ------
---
iPhon
07.73
028
S2223
C4
%132
5c
Q0 1773
7.06
34.02
72 57
45
42.52
-
1
o Not integrated BGMs
o Integrated BGMs
o Multi-test (not integrated)
17-01045 3
43.94
X
42
52
46
78
O iPhone Sc
0
0
0.5
1
1.5
2
2.5
3
Width (in)
Figure 29: Comparison of proposed concept embodiments to other marketed products
73
3. 5
Figure 22 illustrated the market needs and ranked them in terms of their importance to the
market. Of these user needs, the technology from the acquired portfolio and integrated into the
proposed concepts enables a competitive advantage in the Simplified Process and Reduced Pain
needs. Figure 30 provides an illustration of how this is achieved. First, with the integration of
the lancet and the biosensor test strip into a single disposable cartridge two separate elements are
combined into one. Also note that these two elements are the elements that must be disposed of
after use because they are a biohazard. Second, the incorporation of the E-driver system enables
repeated actuation of the lancet within the disposable. In particular, it enables the carefully
controlled trajectory of the lancet and has demonstrated reduced pain when compared to
traditional (i.e. mechanical) lancing devices (see bottom left of Figure 30). The other benefit that
comes from using the more precise E-driver system is a lower skin damage lancing experience.
Therefore skin healing speed is improved, infections are reduced, and these benefits not only
lead to a better testing experience, but payers are happier because a better experience leads to
better compliance and therefore reduced medical complications. In summary, using the proposed
conceptual approach, the needed elements to achieve a blood test are reduced by 50%, all
disposable biohazards are retained in a single element, and the E-driver provides an overall more
pleasant experience. In addition, because the key technology elements leveraged were derived
from the acquired IP portfolio, these aspects of the competitive advantage are protected and
therefore sustainable.
74
Reduces the needed product elements by 1/2
Current Proce ss
Proposed Process
Meter, test strip s,
lancing device, 7ncet
E-driver Enabled Meter
/
Multi-functional Disposable
Proven pain reduction
Appeals to regulators & payers
Pain Perception of E-DriverTechnoogy
90
70
:960
105030
.S30
, Meet device cleaning standards
- Quicker skin healing after lancing
* Reduced infection from lancing
* Better experience = better compliance
I
E 20
2
10
Much less Slightly
less
Same
Slightly
Much
more
more
Figure 30: Proposed concepts competitive advantage illustrations (Pelikan Technology, 2009)
The next aspect of the opportunity being competitive is whether the company is situated
to be able to execute successfully on the opportunity. In particular, does the company have the
resources, management, and market competency to be successful? Sanofi clearly has experience
in the blood measurement device arena (e.g. iBGStar). However, much of the company's
development experience comes through partnerships on only a few marketed products. This
builds in a level of risk that the company needs to manage and work with if it decides to pursue
the proposed concept. It is likely that in order to be successful with this product, the company
would need to work with its current partnerships and those that can be leveraged from the
acquisition of the Pelikan portfolio. A significant benefit the company has to support the
partnership is extensive expertise in the beachhead market along with the potential follow-on
markets. That is, Sanofi has a lot of understanding about the market and has the resources it
needs to gather the needed market information to successfully be competitive.
75
4.6.4.3 Is the Opportunity Worth Competing for?
The last question to ask about this opportunity is whether it is worth pursuing. This
really helps to make the business case by addressing whether the concept will be profitable at a
level of risk that is acceptable and whether it fits in with the company's strategy.
4.6.4.3.1 Strategic Fit
In terms of strategy, the proposed concept is clearly in line with where the company is
going. The company desires to offer complete solutions that provide patients with exceptional
experiences. This has the company focusing on dealing holistically when it thinks of product
solutions. So while the company has a history of providing innovative drugs to help its
customers, a more accurate picture of where the company wants to be is a comprehensive
solution provider to their customers. The medical device group within Sanofi can contribute to
this vision by offering up innovative device solutions for the key strategic areas for the company.
As Sanofi has publicly stated:
"Sanofi is committed to finding innovative therapies and solutions, making life easier for
people with diabetes by acting as a focal point for all stakeholders, patients, healthcare
professionals and other caregivers, as well as Health Authorities." (Sanofi, 2013)
The proposed concept embodiments offer tangible options to help Sanofi achieve this vision
with its customers.
4.6.4.3.2 Financial Estimates
While there is still uncertainty involved in the conceptual approach, there is enough
concept definition to estimate what the financial benefit will be from developing and launching
the proposed product. This was done through a careful itemization and estimation of projected
costs and revenues. Data was gathered from market projections, historical product and project
76
cost values, product cost estimates, benchmark product market performance, and in-house
evaluations from Sanofi's marketing organization. While many of the details are proprietary to
Sanofi, some salient facts are presented here. The basic financial performance indicator used for
evaluating the financial health of the project to develop and commercialize the proposed concept
was a Net Present Value (NPV) calculation along with a sensitivity analysis.
Figure 31 illustrates example results of this analysis for the beachhead market. One can
immediately note from this figure a positive NPV over the range of uncertainties. The base NPV
value is not illustrated, for proprietary reasons, but it is noted that the first year of sales offers a
return that will dramatically increase Sanofi's current BGM sales. Therefore, this could be a
tremendous boost to the business financially while offering more options for a complete solution
to their patients. In fact, the figure also notes a break-even point by five years (including the
needed development).
Overlaid on this baseline NPV is the ranked order results from the sensitivity analysis.
This sensitivity analysis was performed by assigning each cost/revenue line item a base, best,
and worst value. Each item could then be varied to see the impact on the NPV. In this way the
most sensitive items could be identified. Figure 31 highlights the disposable unit price,
forecasted demand, disposable COGS, and disposable usage as the factors likely to cause the
most variation. While the uncertainties can have substantial impact on the projects value, the
financial analysis provides the perspective that the project looks profitable even when
considering a wide variety of uncertainties.
77
NPV
0.00
DisposA
Opportunity's Projected 1st Year
Sales: >$50M*
Dis
Sanofi's Projected 2014 BGM
Sales: >$80M**
Disposabi
Device unit price
Oevice COG:
Base NPV
Break-even by 5 yrs
Development tim
Does not include any financial benefitfrom
increased drug sales
Based on Sonofi's 2014 half year reported
earnings for BGMs
Development costs
Figure 31: Net Present Value calculation along with sensitivity analysis results for p single test
product concept
4.6.4.3.3 Risk Assessment
The risk assessment of the project was evaluated from both a macroscopic level and from
a microscopic level. The macroscopic level looked at the project as a whole, taking technology
and market as the key factors. The microscopic view looked at specific risks that are more
tactical in nature, but are key uncertainties that need addressing for the product to be successful.
In this way, both a strategic along with tactical evaluation was done for a risk assessment.
The macroscopic risk assessment leveraged a framework based on two key dimensions:
market vs. product/technology. Providing an assessment along these two dimensions has been
shown to correlate to the probability of success of a new product innovation (Day, 2007). From
a market perspective, the goal was to understand how close the intended market for the new
innovation is similar to or vastly different from any of the company's current markets. In a
similar fashion, determining the product/technology competency of the company will directly
78
impact the likelihood of project success. Through careful investigation of each of these factors
an estimate for project success was determined. Figure 32 shows the synthesis of these results,
and states that for the diabetes market there is a 60-75% chance for project success and for a
potential follow-on market of particular interest to Sanofi there is a 40-55% probability of
&
success. This data helps to place the proposed concept on the innovation horizon (Terwiesch
Ulrich, 2009) and give a sense of what the overall project risk is.
z
IProbability of Project Success
t0
0
C
0
C.
Cu
New Market
40-55%
D e
Diabetes
60-75%
Current
New
Intended Market
Figure 32: Overall project risk assessment through holistic evaluation of probability of project
success (Day, 2007)
While the macroscopic perspective of risk is healthy to understand the project
positioning, it lacks the specificity needed to take actions in reducing uncertainties. This is the
job of the microscopic risk assessment. In this approach, specific risks were articulated for each
of the customer needs in the given market. Along with these, other project level risks were
articulated. Because of their proprietary nature, the actual risks cannot be presented here.
79
However, each risk was assigned a degree of severity in terms of how clear of a path exists for
mitigating the risk. From this, six major risks were identified along with specific mitigating
tasks. These mitigating tasks formed an actionable set of activities that can be phased and
sequenced in time. For this project, a sequence of five tasks is needed to address the six major
risks. Their sequencing is presented in Figure 33 and illustrates the ability to do some tasks in
parallel and some in series. This then forms tangible next steps for Sanofi in the next phase of
development. In so doing, Sanofi will directly target the key risks identified with the proposed
product concept.
Figure 33: Specific task sequencing for Stage 0 risk reduction activities
4.6.4.4 Quantifying and Visualizing the RWW "Yes Scores"
With the real, win, and worth-in analyses completed, appropriate "Yes Scores" were
assigned to each of the questions in the RWW framework being used. As mentioned previously,
each question was given a value between 0 and 100, where 0 meant absolutely "no" to the
question being asked and 100 meant absolutely "yes". Following this logic, a score of 50 is
"maybe", not more yes than no.
Figure 34 through Figure 36 shares the distribution of sub-question yes scores for each of
the three categories of questions (real, win, worth-it). Due to the proprietary and sensitive nature
80
of the specific answers, the explicit sub-questions are not shown. However, the shape of the
distribution is shown along with the relative comparison between the diabetes and the new
market Sanofi is interested in. In addition, a final synthesized chart is provided with a match of
score to each of the real, win, worth-it questions.
m Diabetes
New market
Is it real?
-
Yes
-
Maybe
-
No
Sub
question A
Sub
Sub
Sub
Sub
question D
question E
question F
Sub
question B question C
Figure 34: "Real" sub-question answer distribution
E Diabetes
New market
Can we win?
-
Yes
-
Maybe
NoSub
question A
Sub
question B
Sub
question C
Sub
question D
Sub
question E
Figure 35: "Win" sub-question answer distribution
81
Sub
question F
* Diabetes
New market
Is it worth doing?
Yes -
Maybe -
---
-
No
Sub
Sub
Sub
question A
question B
question C
Figure 36: "Worth-it" sub-question answer distribution
Because each of these questions had a numerical score associated with it, they could be
combined with respective weighting factors, to consolidate the answers. This provided an
exceptional-ness evaluation of the opportunity. That is, this provided the combined answers to
estimate whether the opportunity is real, whether it can win, and whether it is worth doing.
Figure 37 presents the combined scores in a visual representation of the exceptional-ness of the
opportunity. This shows that for the diabetes market the opportunity looks reasonable. While it
isn't all yeses it is definitely more yes than no. For the new market, the opportunity is closer to
the maybe. So it isn't closer to yes than no in the aggregate. This is likely due to the fact that
the new market is emerging and so clear answers to some of the specific questions in the RWW
framework are not available at this time. What is nice about the scores is that the opportunity
gets rigorous treatment through the Refine step and can be neatly represented visually for final
evaluation and Down Selection.
82
* Diabetes
New market
-
Yes
Maybe -
- - -
m-
---
-
No
- --
Real?
Win?
Worth-it?
Figure 37: The so-called exceptional-ness ranking of the product concept using the combined Real, Win, and
Worth-it evaluation
4.7
Down Selecting
While two specific recommendations for how to proceed with the proposed concept are
presented, down selecting is a decision left to key stakeholders of Sanofi. The decision point for
the leadership team is whether to proceed or whether to iterate through another 01 cycle. While
Sanofi may or may not choose to proceed and industrialize the proposed concepts, the following
two specific recommendations are provided.
First, the integrated blood measurement device for the diabetes market looks promising
and should be pursued in Sanofi's Stage 0 phase of development. The market is large, the
product directly aligns with Sanofi's vision, and the financial estimates provide enough returns
so as to out-weight the costs. Key risks and mitigations have been articulated and phased into an
executable plan that can be utilized in Stage 0 development.
83
Second, the integrated blood measurement device for the new market is seen as an
opportunity for strategic development. While the risks and returns are still quite uncertain, the
RWW analysis clearly revealed a market is developing and represents an opportunity that Sanofi
will likely be able to capitalize on as a follow-on market. The immediate next step for Sanofi is
to take the proposed product concept and conduct targeted primary market research.
Pursuing an integrated blood measurement device in the diabetes market, as primary, and
the identified new market, as a follow-on, are specific actions where Sanofi will likely be able to
generate valuable returns from the acquired assets. While Sanofi may or may not pursue the
proposed product concept in the identified markets, a clear value proposition was developed and
shows a promising path to directly leverage the acquired IP.
84
5
Opportunities and Observations for Sanofi's Early Stage Development
While the previous sections focused on deriving value from Sanofi's acquired assets, this
section focuses on two key learnings about process and teams. The intent is to enable Sanofi to
more reliably identify exceptional medical device innovation opportunities. Process, as
mentioned earlier, is important because there is a distinct lack of structure in Sanofi's early stage
development activities that is likely reducing the efficiency in which opportunities are identified
and brought to market. Teams are also important because of the widely accepted view that for
new ventures (internal or external to a company) to be successful, an appropriate team is needed.
By focusing on process and teams, Sanofi will be better able to identify innovative medical
device opportunities.
5.1
Structure Opportunity Identification for More Reliable Development
As stated to previously, the very earliest stages of medical device product development at
Sanofi has little structure to support the opportunity identification activities the company is
pursuing. This understanding was discovered through interviewing key practitioners within the
company and studying the company's internal product development process documentation.
Because structured processes are part of Sanofi's medical device development culture, building
in structure to the earliest stages of development will allow the company to more efficiently
identify and develop exceptional opportunities.
Through interviewing key practitioners in addition to studying process documentation it
is clear that Sanofi's medical device group values innovation, communicates the formal product
development process, but lacks structure when determining new opportunities to pursue.
Because the project was focused on the early stage development process, key leaders in the
85
medical device group were interviewed to determine their understanding of the product
development process. This provided a unanimous consensus among the practitioners that early
stage work after Stage 0 approval (see Figure 7 for Sanofi's PD process) was clearly understood.
However, before Stage 0 approval no formal structure for the process existed. It was noted that
at the periodic review meetings during Stage 0 work, some discussions are had amongst
practitioners about pre-Stage 0 work. While valuable, it was clear that these particular scenarios
are informal and ad hoc. It was also noted during the interviews that some practitioners
expressed a desire for more of a structure during the pre-Stage 0 activities.
The results of the interviews were further substantiated through a careful review of
product development process documentation. The documentation clearly emphasized full
development over any early stage development activities. Some documentation provided process
insight for Stage 0 work, but zero formal documentation provided insight into pre-Stage 0
activities. Some informal documentation was found that dealt with pre-Stage 0 activities, but
these were older documents and were never formalized. However, this supported the conclusion
that there is an inherent desire to have some structure to support these activities.
In addition to practitioners desiring more structure, it is the author's point of view that
having a structured process in place to guide the very earliest stages of work is inherently
valuable to Sanofi. Referencing Ulrich and Eppinger, there are at least three reasons why having
the structure is valuable: 1) Structure creates an environment where the process of making
decisions is explicit; 2) Structure provides a better framework where important pieces aren't
missed; and 3) Structure creates built-in documentation (Ulrich & Eppinger, 2012). Also noted
by Ulrich and Eppinger, having a structure does not dictate inflexibility. The process will need
to be adapted to the organization and throughout time to ensure needs are being met.
86
Based on these findings, the Opportunity Identification process demonstrated during this
project offers an explicit opportunity for Sanofi to improve its overall product development
process. This process will provide the structure needed and desired and will create an
environment that will more reliably output exceptional opportunities. While the specifics of the
process will likely need to be adapted upon formal implementation, the current project acts as a
successful initial pilot of the process within the organization and one in which useful learnings
can be drawn from.
5.2
Opportunity Identification Needs Committed Multidisciplinary Teams
One of the other key aspects that came from researching the current early stage
development process was the apparent silos in which the activities occur. That is, no clear team
structures are set up for 01 projects. Rather, it is a single person executing a project and reaching
out to others when needed. This is incentivized because of how funding and resources are
allocated. That is, before Stage 0 approval, a small amount of resources are allocated while after
approval a larger amount are committed. While there is some logic in this split, one of the side
effects is the reduced innovation capability created in the earliest stage of development.
Defining and funding clear cross-functional teams for 01 is a key opportunity for Sanofi.
Project teams are widely seen as important for start-up like projects of any substantial
degree of complexity. As Paul Graham, co-founder of the accelerator Y-Combinator, wrote in
his 2006 article The 18 Mistakes That Kill Startups, "Starting a startup is too hard for one person.
Even if you could do all the work yourself, you need colleagues to brainstorm with, to talk you
out of stupid decisions, and to cheer you up when things go wrong" (Graham, 2006).
Summarizing extensive research on the topic, Bill Aulet of MIT's Martin Trust Center for
87
Entrepreneurship exposes the myth of the lone venture creator, "While the entrepreneur as a lone
hero is a common narrative, a close reading of the research tells a different story. Teams start
companies" (Aulet, 2013). Taking this idea and extending it, teams start new ventures for
companies. This extension is supported by early stage development research. Cabone provided
research that identified critical success factors for the front-end of product development. Part of
this research showed that defining project roles (specifically including project manager,
executive sponsorship, and the right mix of cross-functional team members) was one of the key
predictors of success in the market (Carbone, Sherman, & Tippett, 2012). In short, early
innovation or venture-like work is a "team sport" and to reliably create exceptional opportunities
the business process, values, and resources must be aligned to this reality.
To support these observations and opportunities, it is recommended that Sanofi start by
specifically defining a strategy for the 01 process and then define team roles and responsibilities
accordingly. Key learnings from the pilot of the 01 process during this project should be
leveraged in this implementation. As mentioned, it is important for Sanofi to identify key
executive sponsors, project leaders, and a set of cross-function team members that can
effectively be utilized during the process. It is critical that team members be well trained in the
key process steps of 01 so they can both understand it and be able to adapt it as needed. This
will require an adjustment of resources to provide the needed resources to the 01 part of product
development. While this is a shift to the current process, it is clear that investing in the early
stage of development will reliably provide more innovative opportunities to the product
development process.
88
6
Conclusions & Next Steps
The utilization of the OpportunityIdentification process within Sanofi's medical device
group has enabled the identification of a value proposition from the acquired IP. While the
company may or may not choose to industrialize this opportunity, the opportunity does provide
an explicit way to leverage the acquired IP and bring value to the company. Specifically for the
opportunity, it is recommended to pursue the diabetes market in Stage 0 development and to
pursue the identified new market as a strategic development activity. In addition, the
introduction and demonstration of a more structured early stage process provides an initial pilot
for the company to improve its current process. It is specifically recommended that the company
take steps to formally implement an 01 process to structure pre-Stage 0 work. This work has
provided clarity for the company to confidently decide how it wants to leverage its IP and
improve its development process.
The integrated blood measurement device for the diabetes market looks promising and
should be pursued in Sanofi's Stage 0 development phase. The market is large, the product
directly aligns with Sanofi's vision, and the financial returns provide enough return to out weight
the costs. Key risks and mitigations have been articulated and phased into an executable plan
that can be utilized in Stage 0 development.
The integrated blood measurement device for the identified new market is seen as an
opportunity for strategic development. While the risks and returns are still quite uncertain, the
RWW analysis clearly revealed a market is developing and represents an opportunity that Sanofi
will likely be able to capitalize on. The immediate next step for Sanofi is to take the proposed
product concept and conduct targeted primary market research.
89
Sanofi should formally integrate the OpportunityIdentification process used during this
project into its overall product development process to provide structure to its earliest stage of
development. This structure will provide a more reliable process for identifying and defining
exceptional opportunities. The current project, acts as a successful initial pilot of the process
within the organization. The next step is to define the specific strategies, roles, responsibilities,
and team structures to operationally enable the process in the organization.
While Sanofi may or may not proceed to commercialize the proposed product, the results
of the Opportunity Identificationhave provided Sanofi with a clear path for how the company
can proceed. There is value in pursuing the product in the diabetes market along with strategic
development for potential follow-on markets. Also, with a pilot of the Opportunity Identification
process successfully completed, Sanofi has some internal experience for further enhancing its
earliest phase of development.
90
7
Bibliography
Pelikan Technologies Voluntary Petition for Bancrupcy, 11-59022 (United States Bankruptcy
Court - Northern District of California September 28, 2011).
Alzaid, A., Schlaeger, C., & Hinzmann, R. (2013, Nov 12). 6th Annual Symposium on SelfMonitoring of Blood Glucose (SMBG) Applications and Beyond, April 25-27, 2013,
Riga, Latvia. Diabetes Technology & Therapeutics, 15. doi:10.1089/dia.2013.0260
Aulet, B. (2013). Disciplinedentrepreneurship:24 Steps to a Successful Startup. Hoboken, New
Jersey: John Wiley & Sons, Inc.
Bode, A. (2013). Design Controls (internalprocess document FRA-SOP-02036). Sanofi.
Carbone, T. A., Sherman, J. D., & Tippett, D. D. (2012). Front-end Success Factors and the
Impact on High Technology Industry New Product Development. International
Technoloyg Management Conference. Dallas: IEEE.
Caudill, C. (2013). Sanofi SA. In K. Hill, & K. Hill (Ed.), InternationalDirectory of Company
Histories(Vol. 139, pp. 450-455). Detroit: St. James Press. Retrieved October 22, 2014
Christensen, C. M. (2011). The innovator'sdilemma: the revolutionary book that will change the
way you do business. New York: Harper Business.
Christensen, C. M., & Kaufman, S. P. (2008, Jan). Innovation Killers: How Financial Tools
Destroy Your Capacity to Do New Things. HarvardBusiness Review.
Clarke, S. F., & Foster, J. R. (2012). A history of blood glucose meters and their role in selfmonitoring of diabetes mellitus. British JournalofBiomedical Science.
Cooper, R. G. (1997). Fixing the Fuzzy Front End of New Product Development Process.
Building the Business Case. CMA Magazine, 71, pp. 21-23.
Cooper-Davis, S. (2014). ExtractingProduct Opportunitiesfrom Intellectual Property
Porfolios:From Patentto ProductIdea. Cambridge: Massachusetts Institute of
Technology.
Day, G. S. (2007, December). Is It Real? Can We Win? Is It Worth Doing? Managing Risk and
Reward in an Innovation Portfolio. HarvardBusiness Review.
Dette, C. (2011). Projectgovernance process in MED (internalprocess document FD-KOMM00394). Sanofi.
Dittrich, M.-M., Schneider, G., & Cerman, Z. (2013). Pelikan Portfolio Analysis. Internal
company presentation.
Ettlie, J. E., & Elsenbach, J. M. (2007). Modified Stage-Gate Regimes in New Product
Development. The Journalof ProductInnovation Management, 24, 20-33.
Frost & Sullivan. (2013). APAC Self-monitoring of Blood Glucose (SMBG) Market: Increasing
Compliance andAdoption are Driving the Market. Presentation.
Girota, K. T. (2010, April). Idea Generation and the Quality of the Best Idea. Management
Science, 56(4), 591-605.
Graham, P. (2006, October). The 18 Mistakes That Kill Startups. Retrieved February 2015, from
http://www.paulgraham.com/startupmistakes.html
Guthermann, J. (2013). DiabetesMine Patient Voices Survey 2013. Internal company primary
market researchpresentationthat both synthesized and included the survey resultsfrom
the survey "DiabetesMinePatient Voices Survey: A Patient-Let Initiative to Improve
Tools & Care,"the survey included 796 respondents.
91
Guthermann, J. (2014). Abbot Diabetes Care Europe Survey Results on BGM. Internal company
email - internalmarket reasearchthat synthesized informationfrom the Abbot Diabetes
Care Europe online study conducted between 1 Nov 2013 and 31 Jan 2014 and surveyed
9,239 people.
IBISWorld. (2014, August 1). Global Pharmaceuticals& Medicine Manufacturing. Retrieved
October 20, 2014, from www.ibisworld.com.
International Diabetes Federation. (2013). IDF DiabetesAtlas 6th Ed. Retrieved from
www.idf.org/diabetesatlas
Kahn, K. B., Kay, S. E., Slotegraaf, R. J., & Uban, S. (Eds.). (2013). The PDMA Handbook of
New ProductDevelopment Third Edition. Hoboken, New Jersey: John Wiley & Sons,
Inc.
Khurana, A., & Rosenthal, S. R. (1998, Jan). Towards Holistic "Front Ends" In New Product
Development. Journalof Product Innovation andManagement, 15(1), 57-74.
Kim, J., & Wilemon, D. (2002). Focusing the fuzzy front-end in new product development. R&D
Management, 32(4).
Koen, P., Ajamian, G., Burkart, R., Clamen, A., Davidson, J., D'A more, R., . . . Wager, K.
(2001). Providing Clarity and a Common Language to the "fuzzy front end". Research
Technology Management, 44, 46-55.
Krishnan, V., & Ulrich, K. T. (2001, January). Product Development Decisions: A Review of the
Literature. Management Science, 47(1), 1-21.
MED, S. (2014). Internal MED Website.
National Institutes of Health. (2014). Clopidogrel (Plavix). Retrieved from
http://www.nlm.nih.gov/medlineplus/ency/patientinstructions/000 1 00.htm
Paul, R. N. (1996). Evaluating Ideas and Concepts for New Business-To-Business Products. In
M. D. Rosenau, A. Griffin, G. A. Castellion, N. F. Anschuetz, & Eds., The PDMA
Handbook of New ProductDevelopment (pp. 207-216). John Wiley & Sons, Inc.
Pelikan Technology. (2009). Proprietary Investor Report.
Proprietary Market Researcher. (2014). Diabetes ProductsQuarterlyReview. Unpublished
Proprietary Information.
Sanofi. (2013). Sanofi: A global integratedhealthcareleader, focused on patients'needs. Sanofi.
Sanofi. (2014). Form 20-F 2013. Annual Report.
Sanofi Diabetes. (2014). iBGStar. Retrieved from http://www.ibgstar.us/
Sanofi History. (2014, October 17). Sanofi - Our company. Retrieved October 20, 2014, from
Our history: http://en.sanofi.com/our-company/history/history.aspx
Sanofi Marketing. (2014). Personal communication about market needs with Sanofi's Diabetes
Marketing organization.
Sanofi Products. (2014). Sanofi Products. Retrieved from
http://www.sanofi.us/l/us/en/layout.jsp?scat=5668F5DC-416D-4978-A1B6989FEE5957CB#P
Santrach, P. J. (2007). Current & Future Applications of Point of Care Testing. Rochester: Mayo
Clinic.
Smith, P. G., & Reinertsen, D. G. (1998). Developing Products in Halfthe Time: New Rules,
New Tools (2 ed.). New York: John Wiler & Sons, Inc.
Sommer, A. F., Hedegaard, C., Dukavska-Popovska, I., & Steger-Jensen, K. (2015, Jan-Feb).
Imporved Product Development Performance through Agile/Stage-Gate Hybrids.
Research-TechnologyManagement.
92
Statista Dossier. (2013). Globalpharmaceuticalindustry. Statista.
Sullivan, F. a. (2010). US. Point-of-CareTesting (POCT) Markets - 2009. Frost and Sullivan.
Terwiesch, C., & Ulrich, K. T. (2009). Innovation Tournaments: Creatingand Selecting
Exceptional Opportunities. Boston: Harvard Business Press.
Ulrich, K. T. (2011). Design: Creation ofArtifacts in Society. University of Pennsylvania.
Retrieved from http://opim.wharton.upenn.edu/~ulrich/designbook.html
Ulrich, K. T., & Eppinger, S. D. (2012). ProductDesign and Development, Fifth Edition. New
York: McGraw-Hill.
US FDA. (1997). Design Control Guidancefor Medical Device Manufacturing. Regulator
Report, United States Food and Drug Administration.
VanGundy, A. B. (1988). Techniques ofStructuredProblem Solving 2nd Ed. Van Nostrand
Reinhold Company Inc.
VanGundy, A. B. (2007). Getting to Innovation: How Asking the Right Questions Generates the
Great Ideas Your Company Needs. New York: American Management Association.
WebMD. (2014). Lantus Subcutaneous. Retrieved from http://www.webmd.com/drugs/2/drug20815/lantus-subcutaneous/details
93