Publications
Publications
- 2023
- HBS Working Paper Series
Scoring and Funding Breakthrough Ideas: Evidence from a Global Pharmaceutical Company
By: Joshua Krieger, Ramana Nanda, Ian Hunt, Aimee Reynolds and Peter Tarsa
Abstract
We study resource allocation to early-stage ideas at an internal startup program of
one the largest pharmaceutical firms in the world. Our research design enables us to
elicit every evaluator’s scores across five different attributes, before seeing how they
would allocate capital to the projects in a head-to-head comparison. In head-to-head
comparisons, evaluators displayed a systematically higher preference for projects that
scored high on execution-related attributes, compared to the organization’s proposed
weight on these attributes. Because of this, projects of similar overall quality perceived
as being high risk and high reward were systematically penalized relative to projects
perceived as less transformational, but safer bets. Our results shed light on a potential
mechanism for why breakthrough ideas are handicapped in R&D funding.
Keywords
Project Selection; Pharmaceuticals; Financing Innovation; Resource Allocation; Innovation and Invention; Research and Development
Citation
Krieger, Joshua, Ramana Nanda, Ian Hunt, Aimee Reynolds, and Peter Tarsa. "Scoring and Funding Breakthrough Ideas: Evidence from a Global Pharmaceutical Company." Harvard Business School Working Paper, No. 23-014, August 2022. (Revised November 2023.)