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Scoring and Funding Breakthrough Ideas: Evidence from a Global Pharmaceutical Company

Author

Listed:
  • Joshua Krieger

    (Harvard Business School, Entrepreneurial Management Unit)

  • Ramana Nanda

    (Imperial College London)

  • Ian Hunt

    (NIBR)

  • Aimee Reynolds

    (NIBR)

  • Peter Tarsa

    (NIBR)

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.

Suggested Citation

  • Joshua Krieger & Ramana Nanda & Ian Hunt & Aimee Reynolds & Peter Tarsa, 2022. "Scoring and Funding Breakthrough Ideas: Evidence from a Global Pharmaceutical Company," Harvard Business School Working Papers 23-014, Harvard Business School, revised Nov 2023.
    • Handle: RePEc:hbs:wpaper:23-014
    as

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    References listed on IDEAS

    as
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