Block and Run Innovative Strategies and their Implications for Project and Knowledge Management Routines : the Case of a Pharmaceutical and Chemical Company

Abstract

The role of innovation in business has long been recognized, but increased competition among companies has forced them to seek new strategies. In this paper, two types of strategies will be compared. In the first type, patents play a key role in protecting businesses from the entry of new competitors (block). The second strategy is characterized by repeated introduction of new products on the market (run). The focus of this article will be on the implications of these strategies for the firm and its internal procedures. Specifically, we investigate how the choice of innovative strategy determines the type of project management and knowledge management that the company adopts. Based on a case from the chemical and pharmaceutical industry, we will demonstrate that both types of strategy involve “heavyweight project management.” In the block strategy, learning processes are mainly dedicated to scientific knowledge rather than market knowledge. Consequently, development partnerships are established primarily with academic units and research centers of other companies. In contrast, in the run strategy, repeated interactions with customers occur during the development process. This “learn and probe” process is aimed at iteratively defining the new product with the customers. Development partnerships involve the clients themselves and enable joint learning. Because very successful companies have recently combined these two types of strategies, we will elaborate on the implications of such a dual strategy for the company. As each strategy alone is associated with a specific knowledge management approach, internal conflicts might emerge when they are combined. We will conclude with organizational procedures that might reduce such conflicts