Research Reveals How Prolific Inventors Shape Company Responses to Failure

By Eric Hollenbeck

Amrita Lahiri

WSU researchers are studying the role of “prolific inventors” in developing new products, such as pharmaceutical drugs. These star scientists are often seen as experts in their field and can hold influence within their company and in the wider business community.

Creating new and innovative products is vital for companies to stay ahead in the world of business, especially in technology-heavy industries. However, developing new products can be challenging and risky, and failure can be expensive and frustrating.

A new paper “When opportunity meets ability: The moderating effects of prolific inventors on novel drug innovation following product development failure in biotechnology” examines how these inventors affect a company’s innovation following a product development failure.

To date, there is not a lot of information available on how companies can learn from these failures to improve their future products.

“Most studies on the subject have focused on how the company as a whole can recover from failure, rather than how individual people within the company can help with the learning process,” says coauthor Amrita Lahiri, WSU Carson College of Business professor of entrepreneurship.

Prolific inventors have a pronounced, complicated role in innovation following failure

When a company faces adversity due to product development failure, these inventors’ responses can be complex. They may prompt the organization to protect itself by focusing more on what it has lost, rather than what it could have gained, and becoming more rigid when facing difficulties.

“This response can make it difficult for the company to recognize and react to new information, leading individuals and groups to become inflexible under pressure and default to existing knowledge,” Lahiri says.

The study suggests the effect prolific inventors have when it comes to generating new knowledge is nuanced.

For example, those with more collaborative strength and a long tenure within a company are likely to reduce the propensity for drug innovation following failure, whereas those with low tenure increase it.

“Our theory suggests the effect of prolific inventors on novel drug development after failure depends on the number of prolific inventors, their collaborative strength, and their tenure,” Lahiri says.

Examples already exist in biotech industry history

The development of Pfizer’s Viagra, a prescription drug used to treat impotence, illustrates such influence. In the mid-1980s, Pfizer discovered sildenafil, a chemical with potential to be developed as a drug to treat angina—chest pain due to reduced blood flow to the heart. The drug failed in clinical trials, which led Pfizer’s executives to consider terminating further development.

Its subsequent development as the blockbuster drug Viagra is generally attributed to a few scientists at the company who championed it. In particular, inventor David Brown had just become the leader of the sildenafil development team. His lack of tenure in the company may have contributed to his openness to explore a new potential application for sildenafil based on some unexpected side effects noted in the clinical trials.

The WSU study highlights the importance of human capital within a company when analyzing its response to failure and provides managers with a more detailed understanding of how new knowledge is generated.

“By understanding the role of prolific inventors, companies can develop better strategies for responding to failure and create more innovative products in the future,” Lahiri says.