Creating an R & D strategy

de Gary P. Pisano

Strategy is a systematic approach to solving a problem. Some problems have small stakes (e.g. how can I beat Joe at tennis this weekend?). Some problems are more important (e.g. what’s the right approach to finding a cure for Alzheimer?). In this note, we outlined a way to develop a systematic approach to addressing the problem: how can we make our R&D organization more competitive and effective? This involves consistent and coherent choices across architecture, processes, people, and portfolio. The pharmaceutical examples above give some flavor of how and why different companies pursued different strategies to essentially address the same problem. The differences were largely rooted in different “core hypotheses” (bets) on the underlying root cause of the problem. This suggests that the very first question to be answered in strategy development is: what’s our shared understanding of the root cause of the problem we are trying to solve?

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