MM5026 - Management of Innovation, Technology and

Entrepreneurship for Executive

Lessons Learned of Bayer’s Innovation Agenda Case

by:

SYNDICATE GROUP 2

1. Ely Rahmawati (29320072)

2. Akhmad Kurnia (29320050)
3. Taufiqurrohman (29320196)
4. Fadhila Nurfida Hanif (29320149)
5. Edi Priyo Yunianto (29320219)

Master of Business Administration

School of Business and Management

Institut Teknologi Bandung

2021
I. INTRODUCTION

An important question for innovators is how to put the concepts from books turns into
real practice. Bayer, one of the largest life-science companies, proved leading succeed
to use strategyzer tools and methodology to create a growth innovation portfolio. We
learned to summarize how Bayer took a portfolio approach to investing in new ideas, the
obstacles they faced and the measures they took to overcome these. The main goal of
innovation at Bayer is to create institutionalized innovation.

“Bayer wants to reach out to the world’s most creative and innovative minds. Innovation
is at our core to be responsive to the needs of customers, patients, and farmers.”
(Monika Lessi, Head of Corporate Innovation, R&D and Societal Engagement).

II. LESSONS LEARNED AND DISCUSSION

Leadership and structure

Innovation is not something that can be outsourcing to innovation team. The organization
must have top leader that believe and support any ideas from inside or outside
company, and emphasize those ideas into innovation. Have that one person on board,
later he/she can mobilize anybody in the company and the rest will understand and
follow the lead. Leadership support in Bayer at least enables in three ways:
1. Strategic guidance via network of innovation ambassadors aligning with local
business leads
2. Resource allocation central programs & resources empowering local networks for
Entrepreneurship
3. Portfolio Management by assessment of bottom-up funnel with divisional venture
boards

One of the important things in innovation planning is the budget for research and
development investment. In this era of increasingly competitive business competition, a
brand is required to keep abreast of the times. Various policies were made to survive
and compete at the highest level in an industry, including policies to continue to innovate.
This has led to the importance of investing in innovation. In his book, Dodgson stated
that Investment can make technology more valuable. In Bayer, the annual cost for
research and development is about €4 billion.
Innovation must be in line with the goals and mission of the company. Whether an
innovation strategy is explicit or implicit, broad or detailed, prescriptive or emergent, and
whatever its objectives, its formulation and application are bounded by the firm’s culture,
norms, and values. For Bayer, they did the innovation to achieve their goal to win the
competition and being the market leader. Bayer has mission that is Science for a Better
Life and innovation was central to delivering on this mission. The commitment Bayer to
enables the mission can see through:
1. Legitimacy & power through Board Member for Innovation & Corporate Innovation
team
2. Bridge to the core via all functions in global Innovation Network and frameworks
3. Rewards & Incentives for innovation activities, visibility of project & team efforts

People and skill

To be able to produce good innovation, excellent teams are needed. In the theory, one of
key element for success in innovation is the development teams. The teams need to
work efficient and have the speed of response to new opportunities exceeds that of their
competitors. For improve Bayer’s innovation capabilities, they formed Innovation
Strategy Team. The team was formed with different cross divisional and cross functional
team to identify the most important areas to resolve.

There is huge challenge even for mature and big company like Bayer, especially for
employees outside RnD : lack of skills and knowledge, risk avoidance, silo mentality,
regulated environment. The answer for that obstacles is creating Innovation Ecosystem.
Therefore, Bayer focused on fundamental behaviours to established innovation-driven
culture : customer focus, experimentation, collaboration and trust.

In Bayer, innovation is responsibility for every employee. Everyone has formal role to
support innovation. Besides that, employee got involved in innovation training and they
were connected through the innovation portal. The employee also can give their opinion
or idea for business improvement. Bayer even held an event to increase employee
participation to actively participate in innovation, namely Innovation Days.

Bayer build portfolio on a company level, but tailored it in three divisions: CropScience,
Pharma, and Consumer Health. Bayer can achieve a nice portfolio results because they
start “Explore” in a big number, transform 5000 ideas generated into 250 challenges.
During 2017 the Catalyst fund receive 120 applications and 11 winners going into
incubation phase of development. These continuous innovation pipeline could
significantly advance products for consumers worldwide.
Innovation requires a whole new set of skills. Training is an essential thing. Based on
literature, the ways firms not only react to external change, but also proactively seek to
shape the environment in which they operate and learn (Ansoff 1968; Chandler 1962). In
Bayer, they used three core methodologies to drive innovation: SIT (Systematic
Inventive Thinking) to give people a tool to quickly create new and out-of-the-box ideas;
Design Thinking to drive customer-centricity in order to focus on the customer needs;
and Lean Startup to quickly get projects through fast experimentation to the execution
or implementation of these ideas. These methods can help people tackle problems in
new ways.

Tools and innovation process

To support the development of innovation in its company, Bayer creates several
platforms that allow all employees to provide ideas, namely the YOUniverse platform,
WeSolve. Not only a platform for internal use, but Bayer also has a means to interact
with external parties through the new open innovation platform
(www.innovate.bayer.com).

Innovation requires collaboration or involvement from many parties. In building an

innovation, collaboration from many parties is needed. A major reason for firms
belonging to networks and communities is that as technology becomes more
complicated and complex, it is necessary to combine and integrate knowledge,
components, and systems from many different domains (Hargadon and Sutton 1997;
Fleming and Sorenson 2001; Amin and Cohendet 2004). For Bayer, they had
collaboration with internal and external partners in North America and Europe using a
new open innovation platform.

The company need the innovation agenda that can promote innovation in a systematic
manner. In this case, with Innovation Agenda, Bayer wanted to show that innovation was
possible in every part of the business. Innovation not only for new product and new
technologies, but also for new processes services and even new business models.

It is important to company to has some success indicators for the innovation. We can
measure innovation by using some indicators, such as R & D statistics, patent data,
innovation surveys, and product announcements. Each of these measures has strengths
and weaknesses. Some additional methods used by firms to audit and benchmark their
innovation performance (Dodgson). Bayer has some indicators of success, for example
Bayer consistently achived the Top 50 Most Innovative Companies in the World by the
Boston Consulting Group.
 Innovation Culture
Basic concept Innovation in Bayer = Explore + Exploit. Exploration culture cultivates the
creation, discovery, validation, and acceleration of new ideas that are foreign to an
organization. Exploitation culture cherishes the management, systematic improvement,
and growth of existing business. In the past, innovation had historically been equivalent
to RnD. But fast changing and disruptive technologies pushed Bayer to broaden the
perspective. Innovation is not just RnD, but something new creating value either product,
process and business model. Innovation Agenda of Bayer is enabling every employee to
“Innovate in what you do”.

One of the things that has helped shape a culture of innovation at Bayer is employee's
acceptance. All employees accept company policies well, including policies related to
innovation. Employee acceptance of innovation is something that is not easy to achieve,
including at BPOM. Many innovations, especially related to information technology at
BPOM, have not been well received and utilized by all BPOM employees. For example,
the SIPT (Sistem Informasi Pelaporan Terpadu) platform, which is a platform for
reporting the results of sampling and testing, has not been utilized properly because
there are still deficiencies in the system and also not ready for employees to digitilize.

III. CONCLUSION
It is important for a company to has innovation culture. Every company always has
its own culture, and this serves as a marker that has its own characteristics. If innovation
is essential for company growth, then it is very important to develop a creative and
innovative corporate culture. With innovation culture, the company can make innovation
as a business-as-usual activity.