At the recent Pharma CEO Summit, I ran a workshop with about 60 executives on best practices for portfolio management. We looked at three practice elements: quantitative portfolio comparison, assessment of probability of success and using uncertainty in commercial evaluations. You can see handouts that were discussed here.
While the discussions were rich and interesting, one exercise presented an interesting dilemma: the benefits come significantly from the portfolio comparison, but the challenges to implementation come from getting quality assessments. In a forced choice exercise, participants voted for the one practice element that if implemented would create the most benefits for their organization, and then again on the one practice element that would be the most challenging to implement. The results are shown below:
47% of our group said that the quantitative portfolio comparison would give the greatest benefits, while only 12% said it would be the most challenging to implement, significantly higher and lower than the 33% base rate we would expect from this kind of forced choice survey. We all love our portfolio dashboards, and it is easy to visualize what we could do with them.
However, the quality of those dashboards depends on the quality of the data, which comes from the other two practice elements. Each of these creates significant benefits on its own – good discussions of probability of success and commercial uncertainty help improve projects. But both are also viewed as significantly challenging, getting 50% and 38% of the votes for “greatest challenge” respectively.
So while the great portfolio displays produce the benefits, they rest on good inputs, which are much harder to get.