Balancing Pragmatism and Values in Business Decision Making

Decision making is fundamental to every business. The questions that are key to any business are ‘what to do’ and ‘how to accomplish purpose’. In recent years, in the defense & aerospace monopsony, there has been a sea-change reversal, where now, the commercial industry is leading technological innovation, and is executing agile-product development – enabling faster time to market, with more robust products. This paper uses a mixed-methods research approach to compare and contrast portfolio management (PM) and new product development (NPD) practices in the commercial industry with those practiced in the defense industry. There are many unique aspects to the defense industry that differentiate it from many other industries. Primary amongst these is secrecy – that is, much work in the industry is classified, and/or deliberately obfuscated. Thus there is scant published research on defense industry PM practices and NPD decision making processes. To address this, the researchers analyzed published studies on commercial industry to extract the PM and NPD decision-making factors used in large-sized commercial technology companies. And, then used peer-interviews and broad-area surveys to examine the applicability of these factors in the defense industry's PM and NPD practices. The initial conclusions are that PM and NPD decision-making processes, in both the commercial and in the defense industry share a common frame work. The factors include, market conditions, company's internal processes, and individual organization's assessment of the value-proposition. Often most decisions are made based on a combination of strategic intent and opportunistic reactions. A surprising finding is the unique role that middle managers play in the defense industry in shaping and in the outcome of PM and NPD decisions.