By Ulrich A.K. Betz , VP, Head of Innovation and Entrepreneurship Incubator, Merck
Organisations are eagerly looking for new ways to boost their innovation capabilities and open innovation is a widely accepted paradigm to achieve this goal. The Merck Innovation Cup is a new open innovation concept that brings together bright young talent and experienced retirees in a meeting of the generations to create breakthrough innovation. The concept which has already created considerable value for Merck can be broadly applied for global benefit. How to do it is described here based on experience gained over seven Innovation Cups in seven years.
“I have had a most rare vision. I have had a dream, past the wit of man to say what dream it was.”
William Shakespeare, A midsummer night’s dream, Act 4, Scene 1
The evolution of an idea
Already long before Henry Chesbrough had coined the Open Innovation paradigm,1 the influx of new ideas and technologies into an organisation from outside the company boundaries had been an integral part of the strategy of pharmaceutical corporations. Working with established academic researchers in the frame of strategic partnerships2 is an established partnering approach, although competition for the best academic researchers has intensified over the years. In parallel, the war for talent has become more intense and there is an increased competition for the brightest minds to work for a given corporation after having finished their education.3 There are two kinds of undervalued strategic resources available that can be approached and combined in a synergistic manner to generate new innovative concepts: young talented students who have not yet entered the labour market for regular employment and retirees who left the company long ago. In this paper, a concept is presented that has already demonstrated its power to leverage these undervalued resources via combining them in an unprecedented synergistic manner to benefit all involved stakeholders such as: 1) young talented students, 2) experienced retirees and 3) sponsoring corporations.
“My soul is in the sky.”
William Shakespeare, A midsummer night’s dream, Act 5, Scene 1
The value it has created
The concept has already created substantial value for Merck and won multiple innovation awards such as the German Industry Innovation Award (the world’s oldest innovation award), the German Idea Award, the Stevie Award and the Edison Award. Since its inception in 2011 until 2018, in total more than 7500 applications from all over the world have been collected for the Innovation Cup and 280 students will have run through the program by end of the year. In terms of geographical spread, most applicants came from Germany (16%), followed by the U.S. (15%), UK (12%) and India (11%) demonstrating the true global potential of this concept.
Attending the Innovation Cup comes with a series of benefits to participants. They learn about R&D in the pharmaceutical industry and understand how products are successfully discovered, developed, and brought to the market. Participants can explore career options, network with bright fellow students from all over the world and work as part of a team to generate and discuss new ideas with breakthrough potential. Participants get coaching from professionals on how to evaluate new ideas from a technical and business perspective, how to build a convincing project plan, and they learn how to successfully pitch an idea in front of a senior management team. Finally, participants get a chance to participate in the implementation of their project idea and to stay in touch in an alumni group. Surveys conducted among participants consistently exhibit a very high satisfaction rate (>97%). This is reflected by the exemplary participants’ statements cited here: “It has been one of the most unique, challenging, and mind-provoking experiences to be listed in one’s lifetime.” “Fantastic innovation, brilliant minds, collaborative teamwork, helping patients, furthering science in a meaningful way.” “It was where great minds meet and amazing ideas come out.” “It was a once-in-a-lifetime event which I will cherish for the rest of my life.”
Over the course of the past seven years a total of 40 innovative ideas have been advanced to a project plan, around 50% of these ideas were implemented in the Merck pipeline. In addition, the Innovation Cup was a great source of talent for the company and many participants have been hired by Merck as permanent or temporary employees or received consultancy contracts. A series of publications and patents originating from Innovation Cup ideas has already been published,4 and many more are currently in preparation. In addition, a variation of the Innovation Cup concept has led to the “outcubation” paradigm and the founding of a biotech company.5 The Innovation Cup has led to an advancement of the corporate culture and a strengthening of the “let’s use the world’s brain pool attitude” that helped to increase the corporation’s innovation capability. Last, but not least, a community of highly capable alumni has been created that are on their way to climb to leadership positions in organisations all over the world and that form the basis for a powerful network to grow in scope and impact over time.
“The lunatic, the lover and the poet, are of imagination all compact.”
William Shakespeare, A midsummer night’s dream, Act 5, Scene 1
How it works and what is special about it
The Merck Innovation Cup annually invites graduate students and post docs in natural sciences, medicine, computer sciences and business administration to come to Merck for a one-week summer camp where they learn how R&D in a corporate environment works. All travel and accommodation are paid by the corporation. During this summer camp, young talented students from innovation hotspots from all over the world convene in teams of high diversity with experienced retirees and active Merck professionals in a meeting of the generations, develop a new idea covering unmet medical need and advance it to a full project plan. At the last day of the summer camp the teams present their project idea to a jury consisting of internal and external experts. The jury selects the winning team which is awarded the Merck Innovation Cup along with a team cash prize of €20k. The best-generated project plans receive resources and are implemented either directly at Merck or in the frame of a collaboration with academic or corporate partners. Merck might select members of the student teams to stay part of this process, receive consultancy contracts or be hired as employees. The project plans generated during the summer camp are owned by Merck, background IP is licensed if required, and in case an idea is not implemented at Merck, it is released back to the student team that is then free to implement it as desired. Should the idea after implementation at Merck result in a publication or patent application, the student teams are co-authors and should a product emerge, Merck will also offer success payments.
Summer camp participants are selected in a two-step process. In the first phase, applicants are ranked according to their CV with publication track record, innovation performance (e.g. having won innovation awards) and extra-curricular activities (e.g. having founded a company) as key criteria. In the second phase, candidates are asked to sign a participants’ agreement and to submit a preliminary idea. Final summer camp participants are then prioritised and selected based on the merit of their CV and the innovativeness of their submitted idea combined.
Two weeks prior to the start of the Innovation Cup online networking begins and the team members are introduced to each other. The agenda of the Innovation Cup week itself consists of lectures, Q&A and coaching sessions, teamwork blocks and team building exercises to build a well-rounded program. Participants are regularly surveyed on their assessment of the Innovation Cup in anonymous questionnaires to enable continuous optimisation of the program from year to year.
Compared to other corporate summer camps, there are a series of special features involved in the Merck Innovation Cup that make it unique. These features are a combination of bright young talent with experienced retirees in a meeting of the generations, the ability to resource and implement the worked-out project ideas at Merck and the fact that not an individual, but a team wins the final award.
In 2018 Merck, the world’s oldest pharmaceutical and chemical company, is celebrating its 350th anniversary. At the occasion of this anniversary the Innovation Cup concept is further expanded and an anniversary edition of the Innovation Cup will be conducted covering in addition to the healthcare topics also topics in life science/synthetic biology, material sciences, digitalisation/cognitive computing and new ways of working together. In addition, alumni of previous years will play a major role acting as team coaches in addition to the retirees. Furthermore, the developed project and business plans will all be released into the public domain.
“For never anything can be amiss, when simpleness and duty tender it.”
William Shakespeare, A midsummer night’s dream, Act 5, Scene 1
Why it works
Based on seven years of experience running the Innovation Cup, a series of key paradigms emerged that are paramount why the concept works so well.
The synergy of three generations
Effects on team performance of diversity in technical expertise, cultural background, age, tenure and gender have been described before.6 The Innovation Cup is a true cross-generational innovation activity that brings together three generations: 1) young talented students, 2) employees, and 3) retirees. A fine balancing of these three generations, however, is required. Especially an over-dominance of active professionals must be avoided. For the Innovation Cup, this is achieved by limiting their presence to the afternoon of day one of the summer camp to give advice on which of the students’ ideas best to select for advancing it to a business plan during the following days of the summer camp. In addition, also the team’s proportion of young talents vs. experienced retirees needs fine-tuning in relation to an optimal distribution of members preferentially providing fresh new ideas vs. members primarily stress testing/experience checking of the provided ideas. For the Innovation Cup, a five (students) to one (retirees) ratio turned out to be optimal. Overall, there are tremendous synergies when three generations are grouped into one innovation team as described above.
The magic of new encounters
In general, a boost of creativity often results from exposure to new people, preferentially via face-to-face contact and direct exposure. This is also reflected by experience gained during the Innovation Cup. The first days of the summer camp are the most creative ones and often during the initial face-to-face interactions a new idea emerges, that no single individual has had before. We have experimented with varying lengths of pre-meeting online networking prior to the face-to-face summer camp and found the time-benefit curve to be u-shaped. If there is not enough time prior to the start of the summer camp for participants to familiarise themselves with the ideas of fellow team members, then too much time during the face-to-face meeting is lost for understanding the idea before being able to contribute, amend or synthesise it with another idea into something bigger. On the other hand, if the time of pre-meeting networking is too long, there is no flexibility anymore at the face-to-face meeting, things tend to petrify and the magic of the creative first face-to-face contact is lost. We came to the conclusion that an online pre-meeting networking period of two weeks is optimal.
The right inspiration
A key question in innovation activities often is where the new great idea should come from. In our experience, most successful innovation teams could always base their success on an initial key inspirational trigger that started the successful flow of events afterwards. Such a trigger very often is an outstandingly inspiring insight gained e.g. via a stimulating paper describing a new surprising finding. For teams struggling to come up with a unique idea screening the literature (scientific publications, blogs, videos, conference abstracts) is a good starting point to spot an outstanding finding, a surprise, a singularity or oddity and to work from there.
Next steps then are to do further research around the discovered publication, to explore how it could be exploited to solve a certain problem, to combine it with other findings and to add the team’s own spark of genius to advance to a new or amended idea from this inspiring starting point. Prior and during the Innovation Cup teams are actively encouraged to find such starting points.
The power of competition
The importance of benchmarking the competition has been convincingly described before. Also for the Innovation Cup we have seen that the competitive element cannot be overestimated. Of particular importance are so called dry-run-sessions. One day prior to the finals each team presents the current status of their idea pitch in front of the other teams. This routinely leads to an overall leap in the quality of presentations after teams had a chance to implement best practice examples seen from other teams at the dry run. In addition, the ability to position the team’s performance vs. other teams and the desire to outrun the competition are key motivators.
Be good and be happy to awaken the force
Lawrence and Nohria9 defined the four-drive model of employee motivation. According to this model optimal employee motivation can be achieved if four drives are satisfied: a chance to acquire – material goods and immaterial things like status, power and influence; a chance to bond – interact with other people and form new relationships; a chance to learn – explore new areas of life, practice new skills and satisfy our curiosity; and finally a chance to defend – be able to protect what is “ours” and drive away threats to our safety and security. All these drives are covered in the Innovation Cup process. In expansion to the four-drive model we found the ability to do something good to be another strong motivator. It is very satisfying to bring forward an idea, to ease the suffering of patients, to fight cancer or to end world hunger.
In addition, the importance of being happy has been shown to be of key importance for creativity10 and even success overall.11 Also for events such as the Innovation Cup, the relevance of this aspect should not be underestimated. Over the years we have constantly amended and optimised the Innovation Cup program based on participants’ feedback to strengthen this point further, and added more fun activities such as sports, arts or sight-seeing. Feeling good and joyful, experiencing beauty and fun, and being happy are key prerequisites for being able to work successfully.
“I follow thee and make a heaven of hell”
William Shakespeare, A midsummer night’s dream, Act 2, Scene 1
What it means to other organisations
The past seven years have been a rich source of experience on how to optimise the power of the Innovation Cup concept.
Key lessons learned are shared in this paper that will allow the concept to be globally applied for the benefit of humanity. The scheme is incredibly productive and can help organisations increase their innovation capabilities. It helps young talent to learn about research and development in an industrial context and has the potential to even be a life-changing event. The Innovation Cup concept in addition provides a unique opportunity for retirees to continue to contribute their valuable experience in a meaningful way and to act as a source of inspiration for the next generation. The concept has tremendous potential to boost the innovation capability of organisations all over the world, it helps generations to work together in a synergistic and highly productive way, it can change our societies, be a role model for aging populations and has the power to contribute building a better world together.
About the Author
Ulrich A.K. Betz is Vice President, Head of the Department Innovation and Entrepreneurship Incubator at Merck. He is responsible for global innovation management at Merck Biopharma across the value chain. Ulrich designed and implemented the Merck Innovation Cup, the Curious2018 – Future Insight Conference, co-designed the competition innospire and the BioMed X Outcubator, and started a comprehensive open innovation and crowdsourcing platform. He is also responsible for public private partnerships and strategic academic collaborations in Merck Biopharma R&D.
Dr. Betz is an accomplished R&D manager with 20 years of experience in the pharmaceutical industry, including positions in the President’s Office Merck Biopharma and positions reporting directly to the Heads of Research and Development at Bayer AG and Merck KGaA.
He received his PhD in functional genomics and immunology from the University of Cologne and his diploma in biochemistry and physiological chemistry from the University of Tübingen. Uli Betz has won several innovation awards for his innovation activities such as e.g. the German Industry Innovation Award 2015, the Edison Award and the Stevie Gold Award in 2017 (R&D manager of the year), the German Idea Award 2014 and the Bio IT world best practice award 2012.
Dr. Betz is author and co-author of more than 80 publications (e.g. Cell, Nature Medicine, Nature Biotechnology) and patents.
1. Chesbrough, H.W. (2003). “Open Innovation: The New Imperative for Creating and Profiting from Technology”, Harvard Business School Press
2. Schachter, B. (2012). Partnering with the professor, Nat. Biotechnol, 30, 944-952
3. Chambers, E., Foulon, M., Handfield-Jones, H., Hankin, S., Michaels, E. (1998). The war for talent, The McKinsey Quarterly 1998, Nr. 3
4. Rasche, N, Tonillo, J, Rieker, M, Becker, S, Dorr, B, Ter-Ovanesyan, D, Betz, UA, Hock, B, Kolmar, H (2016). PROLink-Single Step Circularization and Purification Procedure for the Generation of an Improved Variant of Human Growth Hormone., Bioconjug Chem. 18;27(5):1341-7; Siegmund, V, Piater, B, Zakeri, B, Eichhorn, T, Fischer, F, Deutsch, C, Becker, S, Toleikis, L, Hock, B, Betz, UA, Kolmar, H (2016), Spontaneous Isopeptide Bond Formation as a Powerful Tool for Engineering Site-Specific Antibody-Drug Conjugates., Sci Rep. 16;6:39291; Siegmund, V, Schmelz, S, Dickgiesser, S, Beck, J, Ebenig, A, Fittler, H, Frauendorf, H, Piater, B, Betz, UA, Avrutina, O, Scrima, A, Fuchsbauer, HL, Kolmar, H (2015), Locked by Design: A Conformationally Constrained Transglutaminase Tag Enables Efficient Site-Specific Conjugation., Angew Chem Int Ed Engl. 2;54(45):13420-4.
5. Betz, UA, Tidona, CA (2015), Outcubation – where incubation meets outsourcing., Nat Biotechnol. 33(1):20-21
6. Horwitz, SK (2005). The Compositional Impact of Team Diversity on Performance: Theoretical Considerations., Human Resource Development Review 4, 219-245; Klabuhn, J., Thommes, K. (2017), Age diversity and its effects on team performance.,
Acad Manage Proc, 2017:1 15119
7. Bohns V.K. (2017). A face-to-face request is 34 times more successful than an email., Harvard Business Reviews, April 2017
8. GBN (2010), Global survey on business improvement and benchmarking.https://web.archive.org/web/20140803220401/ http://www.globalbenchmarking.ipk.fraunhofer.de/fileadmin/user_upload/GBN/PDF/2010_gbn_survey_business_improvement_and_benchmarking_web.pdf
9. Lawrence, P. R., & Nohria, N. (2002). Driven: How Human Nature Shapes Our Choices. San Fransisco: Jossey Bass
10. Visser, V.A., van Knippenberg, D., van Kleef, A., Wisse, B., (2013) How leader displays of happiness and sadness influence follower performance: Emotional contagion and creative versus analytical performance. The Leadership Quarterly, 24, 172-18
11. Lyubomirsky, S., King, L., & Diener, E. (2005). The Benefits of Frequent Positive Affect: Does Happiness Lead to Success? Psychological Bulletin, 131(6), 803-855