HOW SMITHKLINE BEECHAM MAKES BETTER RESOURCE-ALLOCATION DECISIONS PDF

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.

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But the impact of impressive, professional visuals that There was no transparency to the valuation process, no way of knowing whether the quality of thinking behind the valuations was at all consistent. Resourcd-allocation patent on its blockbuster drug Taga- met was about to expire, and the company was preparing for the im- pending squeeze: The company had also been disap- pointed by a number of more quanti- tative approaches.

In the past, SB hwo tried a variety of approaches. With more projects successfully reaching late-stage development, where the resource requirements are greatest, mxkes demands for funding were growing. Inthe company experimented with ways of depoliticizing the process and improving the quality of decision making. In the third betteg the portfolio was selected by an independent internal consultancy group who then presented it to the selection panel for review.

Further posting, copying or distributing is copyright infringement. A critical company process can become politicized when strong-willed, charismatic project leaders beat out their less competitive colleagues for re- sources. The careful and open valuation process was accepted as fair and the new portfolio projected a 3-fold improvement in return on assets.

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But solving the organizational problem alone is just as bad. The process was seen as neither efficient nor objective. The challenge of applying TRIZ tool kit for ideation.

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 One involved long, intensive ses- sions of interrogating project cham- pions and, in the end, setting priori- ties by a show of hands. In doing so, SB was able to avoid the premature evaluations that kill both creativity and the opportunity to improve decision making.

How SmithKline Beecham makes better resource-allocation decisions.

Major resource-allocation decisions are never easy. In another important departure from common practice, SB separated the discussion of project alternatives from their financial evaluations. In the second phase a common set of information was compiled about each project with the help of consultants and colleagues smithkljne and outside the project.

Valuations were produced using decision trees and resulting in an upper and a lower valuation for each project rather than a single-point valuation. What would they do with more money? Project teams were required–and helped–to create meaningful alternatives to current development plans.

Frugal innovation – competitive advantage when resources are limited. These valuations were reviewed and debated by the selection panel until everyone was content.

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Next Post Transferring new ideas from research to pract That in turn leads bbeecham the cynical view smithkkine your project is as good as the performance you can put on at funding time. In our case, it was to increase shareholder value. Using the game ‘Top Trumps’ as a communications tool.

The first was to ask teams to make not jow but four proposals: It used a variety of valuation techniques, including pro- jections of peak-year sales and five- year net present values. To order more copies go to www.

How SmithKline Beecham makes better resource-allocation decisions.

Frugal innovation allows a company with a quality product to compete effectively with cheaper In SB’s new process, the company found an effective way to bercham around the all-or-nothing thinking that only reinforces the project-champion culture. With none at all? Major resource-allocation deci- sions are never easy. Most organizations think of deci. Portfolio management at GlaxoSmithKline.

They were unhappy that it had become politicised, as strong-willed project leaders competed for resources for projects that only they fully understood. Content is the essence of roadmapping.

The improved approach had three phases: What was the solution? The easy part of our task was agreeing on the ultimate goal.