How SmithKline Beecham. Makes Better Resource -. Allocation Decisions by Paul Sharpe and Tom Keelin. Reprint Harvard Business Review. “How SmithKline Beecham Makes Better Resource Allocation Decisions”. by Paul Sharpe and Tom Keelin. In this paper, former SDG consultant Tom Keelin and. R11 Sharpe & Keelin, , “How SmithKline Beecham Makes Better Resource- Allocation Decisions,” Harvard Business Review, Vol. 76, No. 2, pp.

Author: Akijora Tarr
Country: Senegal
Language: English (Spanish)
Genre: Relationship
Published (Last): 21 November 2016
Pages: 321
PDF File Size: 16.20 Mb
ePub File Size: 14.63 Mb
ISBN: 799-5-56733-922-6
Downloads: 87873
Price: Free* [*Free Regsitration Required]
Uploader: Goran

How do you make good decisions in a high-risk, technically complex business when the information you need to make those decisions comes largely from the project champions who are competing against one another for resources? An often-quoted paper by Sharpe and Keelin, back inreported how managers at GlaxoSmithKline redesigned their portfolio selection process.

The challenge of applying TRIZ tool kit for ideation. The selection panel could now concentrate on the portfolio debate, without getting drawn back into valuation issues.

How SmithKline Beecham makes better resource-allocation decisions.

For a pharmaceuticals company like SmithKline Beecham, the problem is this: As we set out in to design a better decision-making process, we knew we needed a good technical so- lution — that is, a valuation method- ology that reflected the complexity and risk of our investments.

What would they do with more money? A critical company process can become politicized when strong-willed, charismatic project leaders beat out their less competitive colleagues for re- sources.

Using the game ‘Top Trumps’ as a communications tool.

Portfolio management at GlaxoSmithKline

The first was to ask teams to make not one but four proposals: The improved approach had three phases: Content is the essence of roadmapping. The improved approach had three phases:. That is typi- cally what happens as a result mames good backroom analysis, however well intentioned and well executed it is.

If we solved the technical problem alone, we might find the right direction, but we would fail to get anyone to follow. Read the full article: Open discussion may lead to agreement, enabling a company to move for- ward.


What was the solution? Would an analogy help? In the past, SB had tried a variety of approaches. Resources Portfolio Resource-allocatioj techniques. Portfolio management makkes GlaxoSmithKline. The easy part of our task was agreeing on the ultimate goal.

But even when all the project teams agreed to use the same approach — allowing SB to arrive at a numerical prioritiza- tion of projects — those of us involved in the process were still uncomfort- able.

Most organizations think of deci. One involved long, intensive ses- sions of interrogating project cham- pions and, in the end, setting priori- ties by a show of hands. But solving the organizational problem alone is just as bad. In the end, the company learned that by tackling the soft issues around resource allocation–such as information quality, credibility, and trust–it had also addressed the hard ones: Next Post Transferring new decisioons from research to pract In most resource-allocation processes, project advocates develop a single plan of action and present it as the only viable approach.

Project teams were required–and helped–to create meaningful alternatives to current development plans. How do you make good decisions in a high- risk, technically complex business when the information you need to make those decisions comes largely from the project champions who are competing against one another for resources?

At the same time, we needed a solution that would be credible to the organi- zation. TRIZ the theory of inventive problem solving provides a logical approach to developing creativity But the impact of impressive, professional visuals that That smithmline turn leads to the cynical view that decizions project is as good as the performance you can put on at funding time.

I This article smiithkline made available compliments of Strategic Decisions Group. In the third phase the portfolio was selected by an independent internal consultancy group who then presented it to the selection panel for review. In another important departure from common practice, SB separated the discussion of project alternatives from their financial evaluations.


There was no transparency to the valuation process, no way of knowing whether the quality of thinking behind the valuations was at all consistent. The company had also been disap- pointed by a number of more quanti- tative approaches. In doing so, SB was able to avoid the premature evaluations that kill both creativity and the opportunity to improve decision making. Valuations were produced using decision trees and resulting in an upper and a lower valuation for each project rather than a single-point valuation.

Frugal innovation allows a company with a quality product to compete effectively with cheaper The careful and open valuation process was accepted as fair and the new portfolio projected a 3-fold improvement in return on assets.

Although the approach looked good on the surface, many people in- volved in it felt in the end that the company was following a kind of pseudoscience that lent an air of so- phistication to fundamentally flawed data assessments and logic. With more projects successfully reaching late-stage development, where the resource requirements are greatest, the demands for funding were growing.

For a company like SB, the problem is this: The patent on its blockbuster drug Taga- met was about to expire, and the company was preparing for the im- pending squeeze: Related Posts Portfolio Management techniques. They were unhappy that it had become politicised, as strong-willed project leaders competed for resources for projects that only they fully understood.

Tom Keelin is worldwide managing director of the Strategic Decisions Group, an international manage- ment-consulting firm based in Menlo Park, California.

Major resource-allocation decisions are never easy. Enviado por Felipe flag Denunciar.