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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How do you make good decisions in a high- risk, technically complex business when the information you need to make ohw decisions comes largely from the project champions who are competing against one another for resources? These valuations were reviewed and debated by the selection panel until everyone was content.

How SmithKline Beecham makes better resource-allocation decisions.

In the second phase a common set of information was compiled about each project with the help of consultants and colleagues inside and outside the project. What would they do with more money? They were unhappy that it had become politicised, as strong-willed project leaders competed for resources for projects that only they fully understood.

One involved long, intensive ses- sions of interrogating project cham- pions and, in the end, setting priori- ties by a show of hands.

Further posting, copying or smitukline is copyright infringement. A critical company process can become politicized when strong-willed, charismatic project leaders beat out their less competitive colleagues for re- nakes. But our experience told us that no single executive could possi- bly know enough about the dozens of highly complex projects being de- veloped on three continents to call the shots effectively. In another important departure from common practice, SB separated the discussion of project alternatives from their financial evaluations.

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

If we maakes the technical problem alone, we might find the right direction, but we would fail to get anyone to follow. To order more copies go to www.

What was the solution? Most organizations think of deci. The process was seen as resource-aplocation efficient nor objective. Project teams were required–and helped–to create meaningful alternatives to current development plans.

In doing so, SB was able to avoid the premature evaluations that kill both creativity and the opportunity to improve decision making. There was no transparency to the valuation process, no way of knowing whether the quality of thinking behind the valuations was at all consistent.

With none at all? Portfolio management at GlaxoSmithKline. In the third phase the portfolio was selected by an independent internal consultancy group who then presented it to the selection panel for review.

That is typi- cally what happens as a result of good backroom analysis, however well intentioned and well executed it is. Frugal innovation allows a company with a quality product to compete effectively with cheaper The improved approach had three phases: In the past, SB had tried a variety of approaches.

Using the game ‘Top Trumps’ as a communications tool. With more projects successfully reaching late-stage development, where the resource requirements are greatest, the demands for funding were growing.

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Portfolio management at GlaxoSmithKline | R&D Today

Open discussion may lead to agreement, enabling a company to move for- ward. Resources Portfolio Management techniques. But solving the organizational problem alone is just as bad. Related Posts Portfolio Management techniques.

Portfolio management at GlaxoSmithKline

I This article is made available compliments of Strategic Decisions Group. The improved approach had three phases:.

In our case, it was to increase shareholder value. For a company like SB, the problem is this: But the impact of impressive, professional visuals that Read the full article: Those who were more dis- tant — leaders of other project teams and therapy areas, regional and func- tional executives, and top manage- ment — would require transparency and consistency.

But without a technically sound compass, will it be moving in the right direction? An often-quoted paper by Sharpe and Keelin, back inreported how managers at GlaxoSmithKline redesigned their portfolio selection process.

How SmithKline Beecham makes better resource-allocation decisions.

Major resource-allocation deci- sions are never easy. The careful and open valuation process was accepted as fair and the new portfolio projected a 3-fold improvement in return on assets. The first was to snithkline teams to make not one but four proposals: