Your path to business agility
Operationalize strategic plans - from formulation to execution across the organization.
What is an R&D-driven company with $10-50 billion of cash in the bank to do? In the last twelve months, Merck, Pfizer, HP, AstraZeneca, and Bristol-Myers Squibb have announced stock buybacks totaling over $25 billion, and layoffs of over 30,000 employees. So apparently, for many firms, the best use of their cash hoard is a...
Finance and R&D can get along You’ve just finished briefing the executive committee on the methods for project valuation that you have worked so hard to establish in your R&D group. The team has finally acknowledged that risk needs to be managed in all its potential forms. You’ve reached consensus on the following set of...
Innovation is inherently risky. By definition, you’re doing something that you haven’t done before so there are no guarantees it will work. The mindset in many organizations is to “minimize” risk as if it were a disease, but it isn’t that simple. The best companies face risk head-on and manage it both systematically and transparently....
Detailed project valuations are often requested by executives, the basis being they will feel more confident in their decision making process if the accuracy of the forecasts is increased They might believe that adding detail to their valuations can accomplish this; however, this is inevitably not the case (All the NPVs are wrong, can we...
Another striking—and often underappreciated—aspect of [Steve] Jobs’ success was his ability to say no. At a company like Apple, thousands of ideas bubble up each year for new products and services that it could launch. The hardest thing for its leader is to decide which ones merit attention. Mr Jobs had an uncanny knack of...
“We can’t talk about the portfolio until you explain why Varmenase revenue is 5% less than last year’s forecast!” In almost every large organization a huge percentage of the effort in the “portfolio” process is spent “tying out” the new project valuations with the old ones. Teams ardently create reports to explain why the net present...
A review of Itanium server sales forecasts made over seven years reveals the same bias year after year after year. When the economist Kenneth Arrow was working as an air force weather forecaster during the Second World War, he and his colleagues found that their long-range weather predictions were no better than random. They informed...
Every firm we speak with talks about strategy, and yet for all the attention lavished upon the idea, few companies are able to craft a strategy that provides a clear path forward for the R&D organization. Why is it so hard? There are a wide range of statements that are interesting, useful, difficult to conceive,...
It is hard to open the paper these days without seeing a story presaging the demise of a another industry titan. If you believe the articles, Microsoft, GM, Xerox, Dell and many other bellwethers will face, at best, a slow, uninteresting decline due to their failure to innovate in ways that disrupt the markets in...
Sample playbook (click to enlarge) Over the years, we have seen again and again that how you present information is just as important as the information itself. Cram too much information on a screen or a page, combine nonessential and essential facts in one display, or fail to annotate a graph with important contextual information,...
