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122 MANAGING KNOWLEDGE WORK AND INNOVATION

from GlobalPharma, as well as commission a new project to scale up manufacturing
capacity. GlobalPharma committed to setting up a project to commercialize the prod-
uct and, later, a project to conduct the final phases of clinical trials.
This collaboration involved projects being conducted in two very different com-
panies. Cell was described as ‘a small research lab . . . There wasn’t even a person
here could spell the word “marketing”. There were 250 PhDs (this number was
used figuratively) doing cutting-edge research and some of that research was at
the level of Nobel Prizes’. Meanwhile GlobalPharma was described as ‘a huge,
multinational corporation . . . high complexity, a lot of management layers, a lot
of politics, not particularly agile in reacting to your partners’ needs’. Soon after
closing the deal, major problems began to emerge. For instance, the products
manufactured by Cell were being sold to GlobalPharma at a price that was below
what it was actually costing Cell. This was because Cell had not known, when the
deal to work with GlobalPharma was agreed, what the actual cost of its production
was. The GlobalPharma project team also began to realize that their initial sales
projections were unrealistic because the clinical trials had led them to appreciate
that selling SKIN was very different to selling a ‘pill’. SKIN, they came to realize, was
actually more similar to a medical device in terms of its adoption curve because of
the need for GlobalPharma sales representatives to work intensively with the clini-
cians, teaching them to use the product; while selling a ‘pill’ merely required them
to get the clinicians’ attention and so persuade them to prescribe this – not easy
but not requiring the same level of one-on-one work as teaching clinicians to use
a new medical device.
Moreover, GlobalPharma had assumed that they would market the product to
dermatologists with whom they had strong sales links. However, it transpired that it
was surgeons who were treating the ulcers SKIN was being used for in the trials.

We had to build up those networks with surgeons. Besides that, you need to
understand the reimbursement environment; you need to understand how a doc-
tor or a medical center can make money or at least not lose money by using the
product; how to use it; when to use it; you also have to understand the underlying
disease. [GlobalPharma] simply did not have the sales force to cope with this level
of complexity.
(Project Manager, Cell)
This led to tensions between the respective product development teams with scep-
tics in GlobalPharma pointing out: ‘it’s going to be 0.01% of our revenue; it’s 20%
of our headaches; Why don’t we just get out of it?’ Others were still supporting
the project: ‘ this is very innovative; it’s good for our PR; it’s still a pilot project, and
we have certain obligations to our contractual partner, [Cell]’. At about this time, the
Cell team started to request a renegotiation of the contract because they realized
that they could not go on losing money on every sample of SKIN that they were sup-
plying to GlobalPharma. This request allowed the sceptics to gain the upper-hand
and so accelerated GlobalPharma’s decision to abandon their project, leaving Cell at
significant financial risk. However, because the clinical trials had involved using the
product in some life-saving operations, Globalpharma could not be associated with

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