Grassroots Innovation: A Promising Innovation Paradigm for Pharmaceutical Companies - Innovation and Marketing in the Pharmaceutical Industry - page 120

innovation , i.e., new business ideas that arise from employees in several corners of
the organization (Anand et al. 2007 ; Huy and Mintzberg 2003 ). Grassroots innova-
tion is increasingly seen as the most natural and sustainable source of change (Huy
and Mintzberg 2003 ).
The core thesis of this chapter is that for pharmaceutical fi rms, grassroots innova-
tion programs may be an essential complement to their more traditional and top-down
stage gate processes. Therefore, we propose pharmaceutical companies to adopt a
proactive approach to grassroots innovation. This proposal mirrors calls by other
scholars. Anand et al. ( 2007 ), for example, defend that organizations need to actively
setup a process capable of offering the organizational support, political sponsorship,
and access to resources needed to nurture grassroots innovation. In The Future of
Management , Hamel and Breen ( 2007 ) advise companies to (1) dramatically acceler-
ate their pace of strategic renewal, (2) make innovation everyone's everyday job, and
(3) create a highly engaging and inspiring work environment capable of motivating
employees to give their best to achieve the company's strategic goals.
Despite the increasing number of scholars defending grassroots innovation princi-
ples, there is a lack of clear practice guidelines for innovation managers on how to
embrace such principles. Such lack of guidelines may be hampering fi rms' adoption of
grassroots innovation (Grant 2008 ). To fi ll this void, this chapter (1) provides a concep-
tual framework that pharmaceutical managers can use to design their own grassroots
innovation processes and (2) presents an in-depth case study ( Innospire at Merck KGaA,
Darmstadt, Germany, 1 a global pharmaceutical and chemical company) providing the
practical steps needed to successfully 2 implement our proposed framework.
The conceptual framework, the in-depth case study, and the anecdotal evidence
from other companies lead us to the following main conclusion: in line with predic-
tions from self-determination theory (Ryan and Deci 2000 ), successful grassroots
programs need to promote employees ' intrinsic motivation for innovation by satisfy-
ing three innate human needs — autonomy , competence , and relatedness .

4.2 A Conceptual Framework for Grassroots Innovation

4.2.1 Grassroots Innovation Roots

The concept of grassroots innovation dates back to the 1940s and stems from an
unlikely source: the Tennessee Valley Authority (TVA). TVA is a federally owned

1 In the remainder of this chapter, for parsimony, we always refer to Merck KGaA, Darmstadt,
Germany as Merck KGaA.
2 We consider implementation of a grassroots innovation process to be successful when the busi-
ness objectives that led an organization to invest in such a process are achieved. Even such objec-
tives are fi rm-specifi c, they typical fall in one of the three major categories: (1) development of
new business (increased revenues), (2) identifi cation and development of human talent, and (3)
stimulation of an entrepreneurial culture in the organization.