Why End?

End-game+ is not synonymous with shutdown. End-game means you are no longer a member, but you may decide to continue operations outside the franchise program. Your research unit legal entity will be dissolved and you may decide to transition+ to operations as a new legal entity. The end of membership+ does mean an eventual end of access to the firm’s funds.

End-game is triggered by several events:

  • The research unit is deemed no longer capable of a blockbuster+ pursuit
  • The research unit is deemed no longer a member-in-good-standing
  • The research unit becomes self-funding (independent) and research unit management decides to discontinue membership

These are covered in this month’s end-game discussions.

What have you done for me lately? You were invited to join the franchise because you showed potential to spawn multiple blockbuster products. Past success does not now excuse an empty future. We’re interested in what’s to come. If you no longer have potential for even a single blockbuster product then the franchise membership must come to an end.

Progress and Promise are the main determinants of blockbuster potential. Have you shown good progress over the last period? How does that progress measure against your promises from the last review period? Are you showing enough promise for the future period? Your progress and promises are specific to your pursuit, your management and your team. You set your own rate of progress. We assess your progress and promise on a periodic basis in a side-by-side comparison with your peer research units, and use this as a measure of your blockbuster potential.

Participation in the maintenance and growth of the franchise program determines whether or not a research unit is a member-in-good-standing. We expect members to commit time and resources to activities needed to keep membership benefits exclusive and valuable (e.g., the flipped matrix+). No free riding+ allowed. For research units where the firm is still the majority owner, lack of participation in the franchise program may trigger a change in research unit management. Independent research units lose membership through lack of participation, which is tantamount to research unit management unilaterally deciding to discontinue membership.

Exhibit 1 – Flow chart illustrating major decision points for ending membership of a Research Unit in the franchise
Only researchers on the ground really know when their science platform will no longer pan out in a commercially acceptable time-frame. They originally had a breakthrough in the basic research. At first it seemed commercially attractive but over the years the difficulties and obstacles surfaced and the commercial luster has dulled. We need to find a way to get researchers to tell us when it’s over. They can be infinitely creative in finding new ways to revive the promise of their science platform; they may develop a build-it-and-they’ll-come mentality. It takes a sharp dope slap to wake them from their dreams and in this we use the threat of a precipitous shutdown. Pick a commercial direction and go with it: build your commercial narrative based on that direction and opt for an orderly transition should you selected direction later prove impractical.


Home Page October 2010