Behavior fundamentals guide the review. They represent the best thinking on how individuals will behave under the constraints of a specific investment. For example, we may build competition into an investment (vis-à-vis other investments) to encourage greater efforts. We may structure the investment at arms length⁺ where the uncertainty is high. We think carefully about needed behaviors as we structure each investment, especially behaviors during those special moments (i.e., obstacles, crises, lulls). This is not much at odds with what one sees in a transaction structured by a Venture Capitalist, with the exception that we look at the behaviors of both the recipient and the giver of funds (i.e., both are working with Other People’s Money⁺).

Personalize both parties’ needs for Evidence Gathering, Mgt. of Risk & Uncertainty, and Organizational Behaviors. Governance of World Class R&D accepts a much higher level of variability in results from single investments than would be allowed for the overall investment portfolio. Particularization recognizes the unique situation of each investment: the maturity of the science, the maturity of the team, the amount of funding required, the innovations in the pursuit, etc. Particularization is not just for the beginning of an investment. Particularization occurs at the inception, execution and shut-down of each specific R&D investment. As new opportunities or challenges are uncovered, we adjust our investment expectations.

Discontinuous Discovery requires a governance body to be creative in how it maintains continuous funding in the face of an unpredictable timing (or even eventuality) of blockbuster discovery. This calls from an order of magnitude greater flexibility on the part of both the teams pursuing discontinuous discovery, and on the part of the governance body in how it manages and funds all its investments.

Avoid cheap heuristics⁺ in the selection and assessment of investments. It’s not a numbers game at the level of the overall portfolio of R&D investments. At a very tactical level on each R&D team we continually look for new sources of revenue, new sources of funding, and interim products with sub blockbuster⁺ potential. And, we continually look for ways to achieve effectiveness goals without spending money (e.g., trading ownership percentages for work-in-kind, partnering). The sacred mantra for blockbuster discovery is: Do whatever it takes!

Minimize the influence of irrational investment behaviors⁺ (e.g., churn⁺, regrets⁺) on the actions of members of the governing body. Behavior Fundamentals are a two way street. The governance board funds the behavior management, and is subject to this management. Individuals making recommendations to improve Governance board behaviors must be able to do so without prejudice to their short or long term careers.