By structuring your portfolio you will do more than just organize your innovation pipeline. You’ll be able to see which projects are actually driving innovation while being aligned with your company goals and assets and which ones are definitely not supporting your company’s big vision.
Innovation portfolio management is often confused with a general portfolio management concept. But general portfolio management refers to all things strategic – all the plans and investments based on company goals, including daily projects, marketing campaigns, or business expansion plans.
While innovation portfolio management is a method to help you oversee innovation projects specifically, independently of a company’s daily business activities.
Why do you need innovation portfolio management?
What we see while working with numerous clients is that many companies get paralyzed because of the number of projects and areas that could be driving innovation, but for some reason, they don’t.
The role of innovation portfolio management is to bring clarity to existing projects, their outcomes, and their alignment with your company goals.
Innovation portfolio management supports:
- managing innovation risk by reviewing a project’s strategic alignment, ambition and pipeline,
- identifying where in your innovation process projects get stuck,
- deprioritizing non-essential projects,
- dropping unprofitable projects,
- understanding the revenue potential of ongoing projects.
How to implement innovation project management?
- Outline your strategic mapping framework
Any company’s innovation projects can be split into two main categories to help differentiate a project’s nature, but also improve the overview of the entire portfolio in the end.
First category: Improve and Optimize: all activities related to efficiency, new systems, processes, etc. Projects under this category aim to make things better and faster while spending fewer resources.
Second category: Spot and Develop: projects in this area stand as the traditional understanding of innovation, inventing something new. This is what most people refer to when they talk about innovation. But remember, exploring or creating innovation initiatives goes beyond implementing radical innovation.
- Map strategic priorities
The result of the mapping is initial insights on where your company’s focus lies in reality, based on what your projects represent.
- Map innovation projects
After mapping your priorities, it’s time to begin charting ongoing and pipeline projects according to each subcategory. This step is a moment when we often reevaluate investments and set new grounds for informed decision making.
When mapping your projects, strategic objectives and subcategories won’t be the only filtering elements in place. You should take into account things like: started project vs. pipeline project, the level of resource intensity, and potentially problematic projects ex. these strongly dependent on other departments/projects.
Insights and results
One of the most significant outcomes of implementing innovation portfolio management is having a clear road towards strategic resource allocation or reallocation. You will determine if your innovation investments are being put to good use.
Beyond resource management, innovation portfolio management shows which strategic objectives don’t have enough projects in the pipeline to drive them and which don’t match strategic objectives and must be filled up through new projects to drive the results you desire.
You will have a great overview of how ambitious and innovative your projects are. It will help in decision making if the next investments should be for change or stability. Such a great way for better risk management, right. You can split the eggs into different baskets and secure your business development future.
Are you wonder if you have enough innovative projects in each category and where to put your investment in? We help our clients in making fully informed decisions regarding their innovation pipeline and benefit from innovative concepts. Shere your big challenge with us on a free consultation. Leave an email below. Our consultant will reach out to you to schedule a private call.