Crafting the Set of Buckets in a R&D Portfolio

The fact that R&D portfolio should be aligned with firm’s strategy is self-evident. The strategic buckets method is often posited in the literature as an alternative to ensure the strategic alignment. However, crafting the right set of buckets is not a straightforward task. In this paper, we consider the question of how to establish the set of buckets that aligns the R&D portfolio with business’ strategy. Through an abductive approach we carried on case studies in seven leading corporations, from different segments, and propose a framework to assist decision makers in designing the set of buckets. Our framework is composed of four strategic constructs, namely technology, marketing, capabilities and organizational processes. In addition, the external environment is also taken into account. We offer a series of propositions grounded on some theoretical insights concerning the strategic constructs, which can be combined and divided, resulting in a set of buckets that better suit company’s strategy. We close by discussing some practical and theoretical implications of our approach.