"Most enterprises that we're familiar with are built upside down in terms of the innovation processes that we want to see. At most enterprises, the people leading the revolution come from below, and the hierarchy of innovation is the opposite of the normal hierarchy," said Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA) president and CEO at the Israel Marketing Association's innovation conference today.
"We live in an era of upheaval. A characteristic is that the strongest enterprises become fragile and sometimes disappear. They are replaced by players coming from unexpected places, new players that win global leadership more quickly than ever before. We're entering this era with ideas, concepts, and sometimes also leaders suited to the old world. Completely different concepts and ideas are needed for the new world. The era of revolutions changes the rules of the game in industry after industry," said Vigodman.
"The world is changing and the pace is quickening. What does this mean in the business world? We live in a world in which competition is more global and growing stronger, and the differences between the winners and losers are narrowing. We're travelling on a winding road. If you miss one curve, at best you'll lag behind the leaders; at worst, you're off the road. It doesn’t matter what car you're driving."
Vigodman continued, "For example, Nokia took the lead position for five years in one of the world's biggest industries - mobile phones. Motorola invented, but missed one turn - GSM. Nokia missed one turn - the smartphone. Another example is Kodak, which no longer exists. It missed one turn."
Vigodman presented four rules for winning in the era of revolution. "What characterizes the revolutions in the business world are discontinuities. We must understand the significance and the risks in them. The second rule is to attack dogma. This is especially hard and complicated in big enterprises which had great successes. The third rule is to simply spot needs for which there is no response. Remember the fourth rule, before all of them: in each of us, especially in our enterprises, there is far greater potential than we see. The ability to realize this potential is the basis for transformation," he said. "Our job is to create the future, to decide where we want to be in 5-10 years, and to do everything to get there."
"The rules of the game are also changing in the pharmaceuticals industry, and massively. To reduce risk and exploit opportunities, we analyzed conditions of discontinuity. The generics industry is completely changing; there are new technologies - biosimilars. You have to reinvent yourself to stay a leading player in generics. There is massive consolidation in the industry. There are technological leaps that allow the focus on needs that are not met now, and big companies are going there and vacating spaces in the industry. The digital revolution is very relevant for our industry.
"Product innovation is important and will always be important, but it is not enough in the era of revolution. You need another, radical, perspective to win in this era. You need innovation that changes the business model. How will we do it? In the coming months, we will reveal it, but I'll give a synopsis.
"Our strengths combine generics and specialty medicine. One of the dogmas that we're attacking is the dogma that you can be either generic or innovative. This is a model that makes us unique in this industry.
"You start by improving what already exists. Keep Copaxone, create organic growth - this is product innovation. To build a new future for Teva, you need long-term value. This is done by strengthening infrastructures, fulfilling the potential of existing products, the ability to identify discontinuities and attack dogma and find unmet needs all over the world. This will let us define space that will make us unique in the industry, and create differentiation for us. We believe that we have a great opportunity to realize."
Vigodman concluded, "Much of what we've seen here is related to the ability to look forward, to build a future with the head in the clouds and the feet on the earth at any given moment. Our job is not to predict the future, but to create it, and that is in our hands."
Published by Globes [online], Israel business news - www.globes-online.com - on May 21, 2014
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