The big idea: A top-down research and development portfolio strategy can ensure that R&D projects implement your corporate strategy.
The scenario: Lockheed Martin Space System Co. designs, develops, manufactures and operates advanced technology systems for government and commercial customers. The company is focused on nine core business segments: human space flight; global communications systems; commercial space; sensing and exploration systems; missile-defense systems; strategic missiles; commercial launch systems; surveillance and navigation systems; and special programs.
This collection of business segments requires advanced research and development to deliver cutting-edge technology. Most of the advanced R&D takes place in a centralized manner, serving each of the business segments as needed. To allocate resources across R&D initiatives, LMSSC uses a predominantly “bottom-up” strategy. R&D projects are suggested by each of the business segment managers. The projects are then scored and ranked based on required investment, duration of investment and other financial metrics, such as net present value and return on investment.