The resulting product was first known as Defiance, then as Glaxo from lactounder the slogan "Glaxo builds bonny babies.
Get Full Essay Get access to this section to get all help you need with your essay and educational issues. With more projects successfully reaching late-stage development, where the resource requirements are greatest, the demands for funding were growing. The patent on its blockbuster drug Tagamet was about to expire, and the company was preparing for the impending squeeze: Major resource-allocation decisions are never easy.
For a company like SB, the problem is this: 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?
A critical company process can become politicized when strong-willed, charismatic project leaders beat out their less competitive colleagues for resources.
That in turn leads to the cynical view that your project is as good as the performance you can put on at funding time. What was the solution?
Some within the company thought that SB needed a directive, top-down approach. But our experience told us that no single executive could possibly know enough about the dozens of highly complex projects being developed on three continents to call the shots effectively.
In the past, SB had tried a variety of approaches. One involved long, intensive sessions of interrogating project champions and, in the end, setting priorities by a show of hands.
Although the approach looked good on the surface, many people involved in it felt in the end that the company was following a kind of pseudoscience that lent an air of sophistication to fundamentally flawed data assessments and logic. The company had also been disappointed by a number of more quantitative approaches.
It used a variety of valuation techniques, including projections of peak-year sales and five-year net present values. But even when all the project teams agreed to use the same approach—allowing SB to arrive at a numerical prioritization of projects—those of us involved in the process were still uncomfortable.
There was no transparency to the valuation process, no way of knowing whether the quality of thinking behind the valuations was at all consistent. As we set out in to design a better decision-making process, we knew we needed a good technical solution—that is, a valuation methodology that reflected the complexity and risk of our investments.
At the same time, we needed a solution that would be credible to the organization. If we solved the technical problem alone, we might find the right direction, but we would fail to get anyone to follow. That is typically what happens as a result of good backroom analysis, however well intentioned and well executed it is.
But solving the organizational problem alone is just as bad. Open discussion may lead to agreement, enabling a company to move forward. But without a technically sound compass, will it be moving in the right direction?
The easy part of our task was agreeing on the ultimate goal. In our case, it was to increase shareholder value. In particular, the traditional advocates in the process—the project teams and their therapy area heads—would have to believe that any new process accurately characterized their projects, including their technical and commercial risks.
Those who were more distant—leaders of other project teams and therapy areas, regional and functional executives, and top management—would require transparency and consistency.
Most organizations think of decision making as an event, not a process. They attach great importance to key decision meetings. But in most cases, and SB is no exception, the real problems occur before those meetings ever take place. Generating Alternatives One of the major weaknesses of most resource-allocation processes is that project advocates tend to take an all-or-nothing approach to budget requests.
At SB, that meant that project leaders would develop a single plan of action and present it as the only viable approach.
Project teams rarely took the time to consider meaningful alternatives—especially if they suspected that doing so might mean a cutback in funding. And so we insisted that each team develop at least four alternatives: Then it would brainstorm about what it would do under each of the four funding alternatives.
The numbers in this example are not actual figures. When the team working on the project was asked to develop alternatives to the current plan, they balked.
Their project had always been regarded as a star and had received a lot of attention from management.
They agreed, however, to look at the other alternatives during a brainstorming session. Several new ideas emerged. When the value of those alternatives was later quantified, a new insight emerged.“How SmithKline Beecham Makes Better Resource Allocation Decisions” by Paul Sharpe and Tom Keelin In this paper, former SDG consultant Tom Keelin and Paul Sharpe of then-SmithKline Beecham detail the portfolio management process SDG developed to maximize the value of SmithKline Beecham’s drug research & development portfolio.
Shrinking R&D budgets and shorter product life cycles mean investment dollars must be invested with precision if companies are going to stay on the cutting edge in their industries.
For a. How SmithKline Beecham Makes Better Resource-Allocation Decisions. SmithKline Beecham was spending more than half a billion dollars per year on R&D, the lifeblood of any pharmaceuticals.
HOW SMITHKLINE BEECHAM MAKES BETTER RESOURCE-ALLOCATION DECISIONS Paul Sbarpe is vice president and director of project management Major resource-allocation deciin neuroscience at SmithKline sions are never easy. For a company Beecham in Harlow, England. Tom like SB, the problem is this: How do .
How Smithkline Beecham Makes Better Resource? Essay Sample. In , SmithKline Beecham was spending more than half a billion dollars per year on R&D, the lifeblood of any pharmaceuticals company.
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