Coding of events

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4.3 Data gathering and analysis

4.3.1 Coding of events

The primary data in this study were archival records of past portfolio committee and project committee meetings. The meeting minutes were reviewed and approved by the participants and thereby they constituted an authoritative internal record on what actually happened, which decisions were made, and what actions were taken. They were not intended to be publicly available. These reports formed an uninterrupted source of documented managerial action. Internal research and development handbooks covering the years of study were used as sources for clarifying standard operational procedures in the project and portfolio management. Additional data sources included the case firm’s annual reports, and their website for detail of the general financial performance and firm structure. This study did not try to discover the internal process of arriving at the documented decisions. Furthermore, archival data from committee meetings did not provide details of any discussions during the meetings that revealed the rational, political or bargaining decision processes in the interactions of top managers.

In the process of coding information from archives, the critical question for each meeting document was: what happened? What were the actions taken or decisions made by this body of managers? The coding of events was mostly straightforward, since archival documents were written in a brief manner, only for internal use. The language of archival records was English. The following quotations from archives indicate the minimalistic, even laconic style and easy readability of the text that required coding.

The milestone decisions of the project committee were typically recorded as follows:

“Stage 3 was granted [to the project x]”

“The decision for stage 4 was granted [to the project x].”

The decisions to prioritize were also short, as the following examples from the portfolio board committee meeting minutes show:

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“The project [x] was redefined to global and prioritized.”

“Project [x] status was switched to priority.”

“Top prioritized development projects are listed in the [table in the] appendix.”

“Milestone for stage 5 was granted. The project [x] was prioritized”

Decisions made by the portfolio and project committee (who recommend the decisions to the portfolio board committee) to initiate and terminate or complete a project were reported like this:

“The development [of project x] was terminated due to insufficient bioavailability.”

“The stage 2 [for project x] was approved.”

“The decision to terminate [project x] was approved.”

“The project [x] was terminated due to successful completion of development.”

During the period, in total the top managers discussed 274 projects. For some projects, part of the data was missing. Some projects were so short lived that it was not possible to document initiation and end in a reliable way. In addition, for some projects, development stages were not fully recorded. A few projects were renumbered or united.

I coded the project attributes of all projects (stage of development, age, business unit membership, priority status) at the point of the project and portfolio meeting during the project’s lifetime. If a project was not discussed at a meeting, for coding purposes I assumed that its attributes were unchanged from the previous meeting. I also chronologically coded all decisions and other actions made in the project and portfolio committee meetings that changed project attributes as events (project initiation, project completion, project termination, project prioritization, project de-prioritization, project milestone decision, and project review). This resulted in 508 portfolio committee decisions and 347 project review committee decisions. A total of 746 review events where no specific decision on change of attributes was made were also recorded.

Altogether, 10 different types of project attributes and 11 types of managerial actions and decisions were recorded. Decisions and portfolio status were recorded between 6 to 9 times annually for 9 years. In total, 83 meetings were held during the time period.

The sequence and timing of actions and events were preserved. Data on all project attributes and events was coded by a nominal yes/no classification according to the

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presence or absence of an attribute of any project, or an event at an instant of time. A full data coding dictionary is presented in Appendix 2.

The sequence of time found in the primary archival data was chronological. Data included the date for the meeting and the approval of the minutes. In this study, time was represented as an ordinal scale, which preserved the temporal order. Events were also aggregated to obtain annual average or cumulative figures. This temporal bracketing permitted comparison between event data with the corporate financial data collected from annual reports.

The unit for measuring time was the chronological number of a committee meeting.

Meetings had ordinal numbers from 1 to 83. The number of and type of meetings by year is set out in Appendix 4. The project age was chronologically given as the number of meetings of the project and portfolio committees from project initiation to present.

For example, a project initiated in meeting 23 was 14 units of time old at the time of meeting 37. The meetings took place at almost, but not quite, regular intervals. Their number per year varied a little. It might have been possible to measure time with an interval calendar scale; however this approach would not improve the explanatory power because the intervals between meetings differed by only a few weeks. The time interval between actual meeting date and the approval date of the recorded minutes was typically 2 weeks. These differences were small against the study period of nine years.

Moreover, data was aggregated to an annual level. The date when a meeting was held was recorded as the time of an event. Appendix 4 presents the chronology of committee meetings and units of time.

Project age provided a crude proxy for measuring the resources used for the project from initiation until present. Resources for development stages S2 to S6 were not generally interchangeable. This was particularly the case when clinical trials were conducted in stages S5 and S6; they needed resources radically different from resources required for stages S2 and S3.

Budget planning and investment decisions for research facilities were not addressed in primary data. Total R&D resources were allocated to business units through annual budgeting.

71 4.3.2. Constructing data matrix and aggregating data

Following Miles & Huberman (1994), event histories were developed for each project;

they were recorded in an Excel file. Time sequences and types of action were conserved in the data reduction. All other variables were discrete and nominal; however the timescale was an ordinal, indeed almost interval. The data matrix contained 22742 rows and 21 columns in binary coding. Portfolio evolution was examined based on the data matrix. The observational unit of analysis was a project, whereas the explanatory unit of analysis was a project portfolio.

Event histories at a micro level may be too rich in detail for analysis. After coding was completed, project data was aggregated to annual median values. The aggregates of project attributes are portfolio attributes (number of projects, number of prioritized projects, number of projects by business unit, number of projects by development stage, and number of projects by age). Changes in project attributes in meetings created annual level changes in the portfolio. Event data concerning managerial actions was aggregated to an annual total number of events. The actions are portfolio level changes (number of prioritizations, de-prioritizations, initiations, terminations and completions, reviews, and milestones decisions).

The aggregated managerial events formed patterns which were examined as a means to understand managerial action. The aggregated portfolio attributes formed patterns which were examined to understand portfolio evolution. The analysis was carried out at an annual level to gain an understanding of the action pattern, portfolio development pattern and their matching. The time series of managerial action was compared with the time series of portfolio outcome. Managerial actions and portfolio changes were compared internally in order to detect patterns of change, and their consonance or dissonance.

Due to incomplete information, the age of projects initiated before year 1 could not be determined accurately. This left margin bias affects the data on project age and previous prioritization. To avoid left margin bias, portfolio meeting minutes from three previous years were examined to reveal the priority status decisions before year 1. This information was incorporated into the coded data. There are two systematic errors in

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recording project age. For projects that were initiated before the observation period, data on project age is incomplete in the archives of the three previous years that were available. For lack of complete data, project age was not calculated for years 1 and 2.

From year 3 on, projects surviving over 2 years would actually be older than project median age which is 2 years, as calculated in chapter 5. The error would result in some projects being older than was coded. The exact date of some project initiations was not visible in archival meeting minutes. This is because no meeting records existed until the project was evaluated for the first time after being given project status. The overall development time for projects varied a lot because medication for acute use (days to weeks) require a shorter time for clinical trials than products for chronic use (years).

Because some decision was documented in two separate meeting minutes a few decisions were recorded twice. It was hard to identify, after which of the two committee meetings a decision was really put to action. For example, the portfolio committee confirmed the fact that project committee had effectively, but not formally, terminated a project for safety reasons. Here, the consequences of the two coded decisions had an effect on one project only.

Some projects in Cinnamon continued although the product had already been launched.

This was either due to regulatory requirements for collecting phase 4 clinical data, or to the documenting of new applications or other ancillary properties in stages S5 or S6.

All these cases had a project team assigned to perform R&D project development, so it was appropriate to list the ongoing activity as product development project; hence, it was not an artifact of the project notation conventions. Some projects were combined or the number switched, but this occurred only a limited number times.