How SmithKline Beecham Makes Better Resource Allocation Decisions
April 16, 2024
Speaker: Tom Keelin (Keelin Reeds Partners)
In one of our profession's most consequential DA/DQ projects, SmithKline Beecham (SB--prior to its acquisition by Glaxo) retooled its decision processes, reallocated resources across its 20 late-stage development projects in four therapeutic areas on two continents, and shifted significantly more resource into R&D. Shareholder value added of better decision-making, compared to the decisions that would have been made otherwise, was more than a billion dollars. Focusing on the soft issues (like building credibility and trust} and introducing new methodology (like considering project alternatives at the portfolio level) enabled SB to more effectively address the hard ones -- how much and where to invest. The subsequent Harvard Business Review (HBR) article became one of HBR's most widely distributed. Widespread adoption and adaptation of the approach in pharmaceutical, energy, and other industries ultimately led to downstream value creation in dozens of major companies and job creation for decision professionals.