Indiana Jones in the Temple of Portfolio Management

By Jay Armstrong

Imagine that you are Indiana Jones – a series of ancient doors before you – behind one – unimaginable success, profitability and reward. Behind the others – defeat, loss and failure. You have but a single key and too many possible doors – which to choose? Does this sound like your organization? This is the constant dilemma facing those inindiana portfolio management. With exploding R&D costs, falling productivity, high failure rates and persistent competition from generics, the need for effective portfolio management in the pharmaceuticals is a forgone conclusion. While every drug company utilizes some management process to ensure the success of their portfolio, certain approaches can be substantially more effective than others.

The Nature of the Beast

Historically, organizations have prioritized and applied resources against what were the major (or most politically connected), projects in their portfolio – sound familiar? Although this is the easiest and seemingly most obvious solution, it is not always the best or most efficient one. Projects evolve, expectations change, results and requirements conspire over time, all derailing the best laid initial plans and portfolios. By returning to the process that got you there and then reapplying that thinking, you only create more issues and deeper frustrations – the cycle of performance despair.

Resource directed portfolio management has enabled organizations to extract a competitive advantage from the application of valuable, unique and usually, scarce resources. Traditionally, resources are your human assets, financial strengths, processes or knowledge brought to bear by your organization to fulfill its strategic initiatives. This definition illuminates an underlying problem faced by pharmaceutical companies – various factors must intelligently be brought to bear in a complex and dynamic reality to produce a profitable outcome within an acceptable time-frame, under regulatory scrutiny. Unfortunately, all of this usually occurs in a vacuum of understanding around the organization’s resources potential, leading to poorly supported or weakly delivered project objectives. So, which approach(s) make the most sense and can consistently provide the highest ROI and prospects for success ?

The Process

Obviously, your initial strategic and organizational assessments must be robust – therapeutic areas, finances, markets, production and R&D capability and internal and external variables – all must be understood, evaluated and tracked well before portfolio planning begins. Only then, can the heavy lifting of portfolio resource management begin. Your first step should be to create a benchmarking strategy to obtain insights into the best practices in portfolio resource management. By reviewing how those in other industries and companies operate, you can compress your learning curve, establish solid performance metrics and save valuable time. It’s best not to restrict yourself to the pharmaceutical industry for ideas – the financial, manufacturing and software industries can all provide ah-ha moments and creative solutions to your planning problems. In addition to providing your portfolio teams with a solid lift-off, you can gain a deeper sense into how good portfolio planning should perform and execute.

A good second step is to identify all of the available or potential resource options that you have which match your anticipated portfolio plan. Are there resources in other sites, countries or departments that could be applied in the portfolio? Should you hire-in, or train your people, develop in-house, or purchase new capabilities and technologies? Can existing resources, tools or processes in one area be re-purposed to support another, new one? Do you need full resource support, or can people be shared, or rolled on/rolled off for peak demand periods? Many organizations fail to adequately understand or gauge the full breadth and depth of their potential resources and thereby artificially limit what they could accomplish. When you begin with assumptions or suppositions, you have already significantly undermined the possible capability of your alternatives. Use a broad based portfolio team from different sites, departments or countries to ensure that all options have an equal probability for consideration.

The third step requires an evaluation of how those resource options can best be leveraged across the portfolio mix. Which resources and in what combinations provide the greatest ROI with the lowest cost?Will they change over time? How can I measure effectiveness and impact? This is where software and tools such as decision trees, greedy algorithms, resource matrices or scenario modelling may be particularly impactful. Singly, or together, these instruments will allow you to ask various what-if questions, without the burden of having to learn from failure. Because they execute brute-force quantitative analyses quite well, these approaches are seductive, but be careful to evaluate the outcomes against your internal experts for a reality and fitness check. Once you have created an optimal resource mix and launched, it is critical that you are able to measure the performance and outcomes of your portfolio.

An important overarching continuous responsibility is having the capability to carry out a real time analysis of your portfolio performance. This provides an appropriate answer to the How are we doing right now? question. It enables quick responses to unexpected outcomes or evolving conditions and requirements that are inherent in any portfolio. In fact, it may be wise to develop short-term and long-term forecasts to optimize staffing over time as conditions and demands change. Additionally, this philosophy allows you to compare, balance and re-balance the portfolio resource demands against financial costs, outcomes and skills capability.

Finally, any reasonably good portfolio resource management plan must have an internal stage-gate review process. This can be as simple as a quarterly meeting of the principals crafting a go/no go continuation decision based on the current performance metrics. Nothing is more financially draining or demotivating to an organization than an unbalanced, weak portfolio, or initiatives that hang around long past their expired by date. It drains and misapplies critical resources, while wasting time and money that could be better applied elsewhere.

Effective portfolio resource management is a dynamic beast, it requires insight, flexibility and responsiveness to be able to balance and extract the full value from your portfolio. Solid portfolio planning beforehand, helps to minimize failures and creates a culture of excellence that is both sustainable and highly profitable.


Jay Armstrong holds certification as an ASQ Six Sigma Black Belt and advanced degrees from Stanford, University of Pennsylvania, Johns Hopkins in fields such as Biotechnology, Management, Biomedical Technology. He holds certificates in Project Management, and Decision/Risk Management. He has led workshops in employee coaching, designing and fundamentals with led to eight Kaizen events, and five discovery events. He was the leader in launching of the process workshops for clinical trials, and developed and led a clinical trials E-2-E work-stream which identified 10 clinical process area improvements. He is responsible for leading of five R&D process-improvement teams in delivering major cycle time, cost, and resource reductions of up to 80%, leading to $11M savings.

New Course Catalog – Share with your co-workers, managers and friends!

We were hard at work this summer developing and publishing a new course catalog, chock full of information you can present to your co-workers, managers and friends. You can download a copy and print it or just read it online from here. Do you have capital left in an account for education and training? Why not take a look at the catalog and see if you, or your team might need to brush up on quality concepts. Getting ready for an ISO audit? Need to perform Root Cause Analysis for key quality issues? Your section provides the training you need to succeed at work or make yourself more marketable in this ever changing workplace.

Upcoming Learning Opportunities from our Experts

ASQ Philly has upcoming course offerings to help you brush up on your existing skills or to add to your repertoire. There will be online options available so you can study when your schedule allows. We also will offer classroom courses, which allow for and promote in-class discussion and comradery not experienced in individual study courses.

Meet some of our instructors and learn more about them on our Instructor Biographies page.  Lou Angelucci has written an article of the benefits of a CQA (Certified Quality Auditor) certification. Tom Reed talks about the benefits of studying the body of knowledge of the CMQ/OE (Certified Manager of Quality/Organizational Excellence) in the video shown, below. Visit our YouTube channel for more exposure to our instructors.

Watch our website for a new catalog that features abstracts of some of our more popular courses. And, we’ll be maintaining our website calendar with upcoming courses and registration details.

Message from the Chair

Hello Everyone,

I’m Clark Fuss and I’m honored to serve you as Chair of the Philadelphia Section of the American Society for Quality for 2016. I have six months to go before I turn the job of Chair over to my able successor, Alex McCambridge.

Folks, I want to make the most of these six months and provide more value for your membership. So I thought I’d write to you today to discuss with you just how I can best lead the leadership team to do that.

As you know we are a non-profit organization, so our real mission is serve the membership and advance quality principles wherever and however I can.

I feel a particular responsibility to those members among us who are unemployed or underemployed. There is a very powerful service that that the section provides which is very low cost certification training that could leads to a better career. For every class the section holds we reserve one or two seats for our unemployed members (through a selection process) giving you a FREE class.

If earning an ASQ certificate has been on your “to-do list” then this truly is the year for you to get it. We can’t do anything about the exam price itself at the section level but we can do something about training costs. Therefore, we’re revising our pricing down for the next round of classes prepping for the November and December exam dates, starting with my PMP course (July 25th) that I teach once a year for the section priced at only $350. All other certification classes (starting in August and September 2016) will be similarly discounted.

So watch for upcoming announcements. Like I said, this is your year to improve your skills, justify what you already know by getting an ASQ certificate and stand out from others applying for the same job. The generosity here is possible because of all of us who have invested our time and money in Section 0505 classes and programs in the past.

Get to know your membership! We’re going to hold our annual BBQ in September, bigger and better than before. Great food will be provided (burgers, ribs, chicken, salads, beverages and more) and great activities for the whole family. (music, games, fun and giveaways). All for (that’s right!) a price that’s insane!

We’re planning great dinner program events in the Fall that will be fun as well as informative and we’re planning a memorable Holiday party? combining our membership awards ceremony to honor the section’s best for 2016.

And we’re always looking for ways to help our members earn RUs. As you know the best way is by volunteering to help us plan, execute and get the word out for all the events we want to do. Checkout our redesigned website for more information on volunteer opportunities.

Our next event is our Quality Discussion Group that will now meet monthly including July and August. The feedback has been tremendous so the leadership team decided to have these monthly meetings to promote open discussion and mentorship between seasoned and new Quality professionals. Everyone seems to really have a good time and we’d like to see more members join us. Look for the next Eventbrite invitation coming soon!

Best Regards to all,

Clark Clark Fuss