MERCK Innovation Center: How to create space for innovation?

On the occasion of the 350th anniversary of MERCK, the company opened their innovation lighthouse project – the Innovation Center in Darmstadt in 2018. Four years earlier, theLivingCore has begun working with MERCK on the conception, planning and implementation of the Innovation Center. In March 2019, the joint project was awarded 3rd prize at the XING New Work Award.

How it all began – the exciting journey taking Merck from being a pharmacy in Darmstadt to becoming a global pharmaceutical and chemical group to turning into a technology player

In 1816, Emanuel Merck takes over his father’s pharmacy – this marks the beginning of the impressive success story of MERCK. Gradually, Emanuel’s enthusiasm for experimentation transforms the pharmacy into a research laboratory and then into the oldest pharmaceutical-chemical company in the world.

“Since 1827, we have been among the pioneers of science-based industry in fields in which we still operate today. We set technology and quality standards at an early stage. Until today, these strong roots have been driving our growth and our passion for discovery”. (Merck – The history of the future)

Today, MERCK is a leading technology company in the fields of healthcare, life science and performance materials. An example of the worldwide importance of MERCK is the industrialization of liquid crystals (discovered in 1888 by the Austrian botanist Friedrich Reinitzer, used in Merck products as early as 1994 (!)), which made today’s LCD technology possible in the first place. Without liquid crystals, today’s flat-screen TV, mobile phone displays or displays on digital watches would have been inconceivable. In 2004, a MERCK research team received an award for the successful implementation of this technology.

Recognizing one’s roots

In 2018, MERCK celebrated its 350th anniversary under the motto of “IMAGINE: Always curious – for the next 350 years”. MERCK used this occasion to celebrate another milestone in its history – the opening of the new Innovation Center at the company headquarters in Darmstadt. What is the story behind the center?

With its 350th anniversary coming closer, MERCK posed the question as to what purpose the entire group would serve over the coming 10-25 years, how it would contribute to society and how to bring its future purpose to life.

In early 2014, the answer was focused strongly on the physical building, but it quickly became clear that the Innovation Center would be much more than just a chic shell. Intense collaboration with theLivingCore yielded the identification and description of the cornerstones of the Innovation Center: (1) the Innovation Center should develop new offerings and technologies that lie outside MERCK’s existing business areas; (2) the Innovation Center as an instrument for transforming MERCK’s process-oriented culture into a culture of innovation: breaking free from routines, predetermined processes and rigid attitudes in order to create space for reflection and foster enthusiasm for novelty.

In March 2019, Merck successfully obtained a U.S. patent for a novel combination of artificial intelligence and blockchain technology. Merits for this patent go to a team from the Innovation Center. See more information on here (in German).

The Innovation Center as an enabler for a desired future

The innovative aspect of the Innovation Center is visible in the configuration and integration of selected elements into a holistic concept: Defined future themes and innovation fields provide a strategic direction. They provide the container for internal idea-creation programs (corporate accelerator) and to subsequently develop ideas into a dedicated project portfolio, using the novel New Business Builder approach. Through its ambassador network, MERCK connects with internal and external innovators and strengthens their innovation skills through events (Hackathons, Innovators’ Club, F*** Up Nights), targeted training and workshops at the Innovator Academy. Innovation projects are supported with rapid prototyping in the center’s maker space. Founders are offered a novel incentive model to strengthen entrepreneurship.

The Innovation Center is intended to enable internal and external entrepreneurs to develop new offerings, which are meaningful and relevant to society. One of the biggest challenges in the project was to break up existing structures and processes. This could be achieved with e.g. the “New Business Builder” approach that offers a protected ecosystem within the corporate structure. MERCK thus succeeds in bridging between start-up agility with the complex and usually quite rigid processes of a large established company.

What we learned during our cooperation with MERCK

1. A clear vision of the future and a thorough understanding of the core and purpose of the organization are prerequisites for future-oriented innovation. All considerations in this project started by trusting in the creative potential of the employees, in the enabling effect of space for innovation work and social interaction, as well as by designing a coordinated set of innovation formats that go beyond a mechanistic understanding of innovation and are driven by the future and the “purpose”.
2. For the implementation of this strategic project, MERCK has established a dedicated project office. It housed the project members (approx. 10 persons) in one physical space: the project employees from different departments and business areas cooperated at a shared location. This enabled short communication channels, quick decisions and “intrinsic” agile work, which experience has shown is difficult to achieve in established and process-oriented companies.
3. The unique thing about this project was that the Executive Board had seized the opportunity to not only push MERCK into the future in a holistic manner, but also to assume social responsibility. For example, some projects covered in the Innovation Center are currently dealing with the question “How can we feed the world in the future?”
4. The Innovation Center covers an area of approx. 10,000 sqm. Designing such a large are in a way that radiates liveliness and a spirit of innovation is a highly complex challenge. For this reason, two years before the opening of the Innovation Center, MERCK started a prototyping phase and set up and operated a smaller, temporary Innovation Center. There, processes were tested, people (and skills) developed, new forms of work and governance systems were explored, and events were organized. Thus, MERCK created positive momentum and used it extremely successfully to prepare for the opening of the “real” Innovation Center.
5. In our work, we aim at empowering people to autonomously develop and advance the concepts and we are laying out and describing. With MERCK, this approach has proven to be very successful. One result – among other things – is the successful development and implementation of the New Business Builder (realization of ideas/concepts). Another example is the appointment of the Head of Innovation Center, who had been on the team in another function since the beginning of the concept: by being involved right from the start, this person was up-to-date in all topics and questions, had already prepared, supported or made all decisions himself in the set-up and preparation phase and can now not only explain the purpose of the Innovation Center like no other but he also lives it authentically.
6. The success of all these activities goes back to our Enabling Space(™) approach, which is guided by an understanding that innovation cannot be managed, but only be enabled.

Together with the MERCK Innovation Center team, we received the XING New Work Award in March 2019 for the successful design and implementation of the innovation center, for laying the basis for innovative products and business models, and developing a new innovation culture, groundbreaking processes and network activities. Here you will find more information on the XING New Work Award.