The Challenge: Grow OrganicallyBased in Indianapolis, Lilly is a fully integrated, mid-sized pharma-
ceutical company with annual sales exceeding $11 billion. Lilly is
independent and, in an industry in which mega-mergers are com-
mon, determined to stay that way. Its business strategy is simple:
Outgrow the competition, even the giants of the pharmaceutical
industry, by churning out a steady flow of superior new products.
Doing so with current work processes requires even greater
resources than the estimated $2 billion a year Lilly already spends
on R&D or the more than 8,000 scientists and technicians it
employs. For Lilly, organic growth requires new ways of thinking
about knowledge, processes, and problem solving.
Historically, Lilly has relied on the creation of cross-functional,
co-located teams and the use of advanced IT tools to improve flows
of data. However, in an increasingly information-driven world,
such measures are merely a first step.
“We’re truly a knowledge business,” says Sharon Sullivan, chief
learning officer and vice president for human resources. “Every
medicine we make is the result of an idea that has been probed,
played with, tested, tweaked, iterated, reiterated, reviewed by reg-
ulatory agencies, and ultimately validated in the marketplace. Our
challenge is to use knowledge tools both inside and outside the
company to improve every step of this process.”^3
To meet this challenge, Lilly has taken actions that are untra-
ditional, some might even say audacious. Chief among these was
helping to create a wholly owned subsidiary called InnoCentive,
Inc., based in Andover, Massachusetts.
A Bounty on Breakthrough IdeasAs the name implies, InnoCentive generates incentives for inno-
vation by creating a Web-based community of “seekers,” compa-
nies like Lilly with specific scientific challenges, and “solvers.” A
solvercan be any scientist worldwide who registers online and
enters the Web site’s secure “project room,” which contains data
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