Contemporary Issue

On

Value innovation & Portfolio management

Submitted to Submitted by

Mrs. Amanpreet Kaur Prabhjot kaur

Deol

Lec. LIM, LPU Regt. No. 10902957

Roll No.
RT1901A25

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 Value Innovation Portfolio (VIP) Management

Value Innovation Portfolio Management is a new way of selecting products for a portfolio --
whether at the level of the individual business unit or across divisions. Instead of relying on
guesswork, unpredictable financial data, hunches, or the charisma of the product manager, the
VIP approach to product portfolio management relies on analysis of customer value. While
customer value may seem unquantifiable, PDC has developed reliable ways to evaluate it and
then use it to determine which products to include in the product mix. Companies using this
approach can answer tough questions such as: What products do I launch?

 In which products do I invest (and which do I divest)?

 How do I delight customers?

 How do I avoid costly product failures?

 What does VIP Management offer?

Using the VIP approach, you can

 Understand what gets in the way of your customer’s greater success

 Balance your company's core competencies with market needs

 Position your organization to stay ahead of competitors by unearthing value-based

requirements

 Re-think planning along value dimensions

 Use customers and markets to set the value of innovation

 Organize your portfolio and innovation processes to account for the central role of
customer value

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  Institutionalize this new approach to portfolio management

 VIP Management Benefits

Using the VIP approach will help you

 Increase your percentage of successful development projects

 Evaluate customer value based on tangible criteria

 Reduce investments in dead-end projects

 Establish the foundation for a sustainable and profitable product pipeline

Value Innovation Portfolio Management addresses this core concern by showing you a more
reliable decision-making method based on high customer value, tight business strategy
alignment, and optimal investment intensity. These inputs will enable your company to invest
more wisely and create more successful new products. Best-in-class companies like Motorola,
DuPont, and Hewlett-Packard have used customer value in crafting winning portfolios.
Supported by various case studies and examples, the authors demonstrate the significantly
improved results that can be achieved from using customer value as the business driver for
creating a portfolio of products.

Value Innovation Portfolio Management is a must read for senior executives and anyone
involved in strategic planning, portfolio management, product development, sales and marketing,
and R&D. Senior executives will discover a path to achieving double-digit growth, greater
market share and improved shareholder value. The managers and teams involved directly in the
product development process will learn how to create a robust and thorough product definition
process aligned with the portfolio management of the enterprise.

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  Key Features:

 Provides senior executives the means to better evaluate portfolio decisions based on the
alignment of their firm’s product portfolios with the company vision and strategy, and
explains why senior executive direct involvement is essential for creating successful
portfolios

 Details the deficiencies of traditional financially based approaches to product portfolio

management, discusses the root causes of new product disappointments and methods for
eliminating them

 Reveals how companies can find and exploit white space, or unfulfilled niches in the
market, by shifting their focus to customer value as a top portfolio measure

 Explodes common conceptions of customer value and how to measure it, thus enabling
linkage to lean, Six Sigma, and other process improvement programs

 Includes comparative case studies and examples from companies such as BASF, DuPont,
IBM, Clorox, and the Scotts Company to illustrate the merits of a customer value
approach to new product portfolios

 Guides VPs, Directors and Managers to a path of simpler and more effective product
portfolio management and explains how best to communicate product plans to senior
executives

 Value innovation = value creation +Innovation

 Value creation

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 This value creation pyramid is imported from Alcan Company; on left side it shows
incremental growth from survival to increased growth, which could  able to meet tipple
bottom line. The idea of sustainability vests in both value protection (where employees
involvement, community issues, social commitments are taken into consideration) and value
creation which corresponds to increased growth & business development in the making of a
value based company.

 Innovation

Prahlad (2006), says that the breakthrough innovations for the BOP market are started with the
identification of the following four conditions, all of which are difficult to realize –even if taken
one at a time. These are-

1. The innovation must result in a product or service of world- class quality.

2. The innovation must achieve a significant price reduction – at least 90%off the cost of a
comparable product or service in the West.

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3. The innovation must be scalable: It must be able to be produced, marketed, & used in many
locales & circumstances.

4. The innovation must be affordable at the bottom of the economic pyramid, reaching people
with the low levels of income in any given society.

In this day of global recession, meltdown, and all kinds of other names it is called. Companies
are coming up with survival strategies, one of which is value innovation.

Innovation is the major driver of economies and businesses, because it leads to increased
productivity, which is critical to policy makers.

 These days, when there are so many items on the shopping and to-do lists, and limited resources
to accomplish them all. The ‘thinking’ or ‘innovative’ company gets the most market share; but I
surprisingly, value innovation is not catching on as quickly in our economy. 

“The term innovation means a new way of doing something. It may refer to incremental, radical,
and revolutionary changes in thinking, products, processes, or organizations. A distinction is
typically made between invention, an idea made manifest, and innovation, ideas applied
successfully. (Mckeown 2008) In many fields, something new must be substantially different to
be innovative, not an insignificant change, e.g., in the arts, economics, business and government
policy. In economics the change must increase value, customer value, or producer value. The
goal of innovation is positive change, to make someone or something better. Innovation leading
to increased productivity is the fundamental source of increasing wealth in an economy.” 

Value innovation is mainly a visual approach to strategy that aims at expanding existing markets,
and creating new market space by providing a quantum leap in buyer value, and pushing for a
sharp drop in cost structure, such that competition is irrelevant.

Lower Airfares can be achieved on short routes in Nigeria by adopting the low cost Southwest
Airlines model.

This strategy is most freaky, and has driven most of the competition bankrupt. When most
airlines when down after nine-eleven, Southwest was not affected as badly as other carriers.

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They were making profits in the depth of the crisis. In fact, they have declared profit for 36
consecutive years!

Their strategy is simply logical; they cut a chunk of the cost of running an airline and transfer the
savings to the end user in low fares. Southwest needed to carve a strong niche, and they found
the strategy.

How was this possible? They’ve been able to employ innovation, implement and sustain the
model.

King and Kelleher figured that if they could get people to their destination at the time they want
to get there, at the lowest possible price, they would get lots of passengers.

Now, Southwest is the forth largest airline in the United States, operating approximately 3500
flights daily

The company’s competitive edge is its low price tickets, which is made possible by –

 Making multiple short trips to secondary airports in most cities in the United States, which is
cheaper

 The Southwest Airline’s consists solely of Boeing 737s, which is a short-medium range,
single aisle jet, which was developed as a shorter, lower-cost twin-engine airliner. This
also means a lot of savings in parts because they would not have to carry/stock parts to
various jet models.

 Southwest is known for short turnaround time as low as 15 minutes, and up to 30

minutes, which means savings in fees to the local airport agency.

 They do not offer in-flight meals, only peanuts and other snacks, but with the option to
purchase meals and drinks.

 There are no fancy seats, business, or first class cabins. Just basic comfort in economy
style. The management believes that passengers can be satisfied without the expensive
options.

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  There are no expensive uniforms and attires, just basic, comfortable, everyday clothing
for flight attendants. 

 There are no seat assignments, paper tickets, boarding pass, or check in counters. You
pay online or via telephone, and get your boarding passes 24 hours before the flight, and
proceed to the gate. This entire process implies million of dollars in savings.

The airline does not stop at cost savings; it also employs other strategies, such as value
innovation. The best part is, Southwest is introducing WIFI on board this year. This means that
passengers will be able to send emails and SMS's during flights, but will not be able to use their
phones. In addition to its strategies, Southwest pursues a strategy of internal growth, rather than
acquisition of other airlines as other competitors do.

 Value Innovation

Value Innovation is the cornerstone of Blue Ocean Strategy® and is created through a series of
strategic moves resulting in a product or service substantially different from any other offering.
These strategic moves also function to lower costs to the producer of the product or service,
resulting in the capability to offer a high value product or service that has not been seen before,
at a very reasonable price to the buyer.

Why value innovation? Value without innovation will give only incremental gains easily
duplicated by the competition. Innovation without value is typically technology oriented and
won’t be a commercial success.

The idea is to create a huge leap in value never seen before. That leap attracts buyers that have
never before considered buying the product or service. Consider the Nintendo Wii. When Satoru
Iwata was selected the first non-family CEO of Nintendo, he did not like what he saw. He saw
Nintendo placing a distant third behind Sony and Microsoft in the electronic games business.
After researching the market place, and realizing that the typical buyer is a young, antisocial
male, he wondered why everyone else didn’t play electronic games. So he asked older males,
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girls, families, and retirees why they didn’t play. He got an earful. The games were too
expensive, too complex, too antisocial, and too high tech. So, using four questions from the Blue
Ocean Strategy® methodology, he challenged his team to get answers never asked before of non-
gamers.

 What don’t you like about the electronic games? This question and others helped them
decide what factors could be eliminated that the industry has taken for granted.

 What is OK but way over hyped? This helped them decide what factors could be reduced
well below the industry’s standard.

 What features are there but you would like to see more of? This helped them decide what
factors should be raised well above the industry’s standard.

 What is missing for you? What do we need to offer that would make you really enjoy
playing games? What factors can be created that the industry has never before offered?
This is the real key to the value.

Value innovation can be seen visually by the graphic below as described in the book Blue Ocean
Strategy: How to create uncontested market space and make the competition irrelevant by Chan
Kim and Renee Mauborgne.

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Value Innovation is the cornerstone of blue ocean strategy. Value innovation is the simultaneous
pursuit of differentiation and low cost. Value innovation focuses on making the competition
irrelevant by creating a leap of value for buyers and for the company, thereby opening up new
and uncontested market space. Because value to buyers comes from the offering’s utility minus
its price, and because value to the company is generated from the offering’s price minus its cost,
value innovation is achieved only when the whole system of utility, price and cost is aligned.

A Better Approach to Your Portfolio

Are you 100 percent satisfied with the performance of your product portfolio? Do shareholders
wish you could do better? Can you tie the products you are selecting directly to expressed or
hidden customer needs? Once you create products, are they always successful? If you secretly --
or not so secretly -- wonder whether there might not be a better way to select products for
inclusion in your product portfolio, then maybe it's time for you to become a VIP.

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 Portfolio Management

The art and science of making decisions about investment mix and policy, matching investments
to objectives, asset allocation for individuals and institutions, and balancing risk against
performance.

Portfolio management is all about strengths, weaknesses, opportunities and threats in the choice
of debt vs. equity, domestic vs. international, growth vs. safety, and many other tradeoffs
encountered in the attempt to maximize return at a given appetite for risk.

Portfolio Management is used to select a portfolio of new product development projects to

achieve th following goals:

 Maximize the profitability or value of the portfolio

 Provide balance

 Support the strategy of the enterprise

Portfolio Management is the responsibility of the senior management team of an organization or

business unit. This team, which might be called the Product Committee, meets regularly to
manage the product pipeline and make decisions about the product portfolio. Often, this is the
same group that conducts the stage-gate reviews in the organization.

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A logical starting point is to create a product strategy - markets, customers, products, strategy
approach, competitive emphasis, etc. The second step is to understand the budget or resources
available to balance the portfolio against. Third, each project must be assessed for profitability
(rewards), investment requirements (resources), risks, and other appropriate factors.

The weighting of the goals in making decisions about products varies from company. But
organizations must balance these goals: risk vs. profitability, new products vs. improvements,
strategy fit vs. reward, market vs. product line, long-term vs. short-term. Several types of
techniques have been used to support the portfolio management process:

 Heuristic models

 Scoring techniques

 Visual or mapping techniques

The earliest Portfolio Management techniques optimized projects' profitability or financial

returns using heuristic or mathematical models. However, this approach paid little attention to
balance or aligning the portfolio to the organization's strategy. Scoring techniques weight and
score criteria to take into account investment requirements, profitability, risk and strategic
alignment. The shortcoming with this approach can be an over emphasis on financial measures
and an inability to optimize the mix of projects. Mapping techniques use graphical presentation
to visualize a portfolio's balance. These are typically presented in the form of a two-dimensional
graph that shows the trade-off's or balance between two factors such as risks vs. profitability,
marketplace fit vs. product line coverage, financial return vs. probability of success, etc.

In the early 1960s, the investment community talked about risk, but there was no specific
measure for the term. To build a portfolio model, however, investors had to quantify their risk
variable.

The basic portfolio model was developed by Harry Markowitz, who derived the expected rate of
return for a portfolio of assets and an expected risk measure.2 Markowitz showed that the
variance of the rate of return was a meaningful measure of portfolio risk under a reasonable set
of assumptions, and he derived the formula for computing the variance of a portfolio. This
portfolio variance formula indicated the importance of diversifying your investments to reduce
the total risk of a portfolio but also showed how to effectively diversify. The Markowitz model is
based on several assumptions regarding investor behavior:

1. Investors consider each investment alternative as being represented by a probability

distribution of expected returns over some holding period.

2. Investors maximize one-period expected utility, and their utility curves demonstrate
diminishing marginal utility of wealth.

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3. Investors estimate the risk of the portfolio on the basis of the variability of expected returns.

4. Investors base decisions solely on expected return and risk, so their utility curves are a
function of expected return and the expected variance (or standard deviation) of returns only.

5. For a given risk level, investors prefer higher returns to lower returns. Similarly, for a given
level of expected return, investors prefer less risk to more risk.

Under these assumptions, a single asset or portfolio of assets is considered to be efficient if no

other asset or portfolio of assets offers higher expected return with the same (or lower) risk or
lower risk with the same (or higher) expected return.

One of the best-known measures of risk is the variance, or standard deviation of expected
returns.3 It is a statistical measure of the dispersion of returns around the expected value
whereby a larger variance or standard deviation indicates greater dispersion. The idea is that the
more disperse the expected returns, the greater the uncertainty of future returns.

Another measure of risk is the range of returns. It is assumed that a larger range of expected
returns, from the lowest to the highest return, means greater uncertainty and risk regarding future
expected returns. Instead of using measures that analyze all deviations from expectations, some
observers believe that when you invest you should be concerned only with returns below
expectations, which means that you only consider deviations below the mean value. A measure
that only considers deviations below the mean is the semi variance. Extensions of the semi
variance measure only computed expected returns below zero (that is, negative returns), or
returns below some specific asset such as T-bills, the rate of inflation, or a benchmark. These
measures of risk implicitly assume that investors want to minimize the damage from returns less
than some target rate. Assuming that investors would welcome returns above some target rate,
the returns above a target return are not considered when measuring risk.

Although there are numerous potential measures of risk, we will use the variance or standard
deviation of returns because

(1) This measure is somewhat intuitive.

(2) It is a correct and widely recognized risk measure.

(3) It has been used in most of the theoretical asset pricing models.

Portfolio management is a process to ensure that your organization or department spends its
scarce resources on the work that is of the most value. If you practice portfolio management
throughout your organization, this process helps to ensure that only the most valuable work is

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approved and managed across the entire enterprise. If you practice portfolio management at a
departmental level, it will provide the same function at this lower level.

Department leaders that do not understand how their budgets are spent, and who cannot validate
that the work being funded is the most important, will find themselves under greater scrutiny and
second-guessing in the future. Portfolio management can help your department answer some of
the most basic, yet difficult, questions regarding work performed and value provided.

Example: You have a chance to answer simple questions such as the following.

 Are your resources allocated to the most important work?

 Are you allocating the right amount of resources in new business investments versus
keeping the older, mission-critical processes up and running?

 Do you have capacity to do all the work on our plate for the coming year?

 When new work comes up during the year, can you identify the previously approved
work that will no longer be completed?

 When should you stop supporting old stuff and make the investment in new stuff?

In general, the value of utilizing a portfolio management approach to managing your investments
is as follows:

 Improved Resource Allocation. Too often today, low value projects, or projects in
trouble, squeeze scarce resources and do not allow more valuable projects to be executed.
One critical step is for all departments to prioritize their own work. However, that is only
part of the process. True portfolio management on an organization-wide basis requires
prioritization of work across all of the departments. In addition to more effectively
allocating labor, non-labor resources can be managed in the portfolio as well.

This includes equipment, software, outsourced work, etc. Just because you outsource a
project, for instance, and do not use your own labor, does not mean it should not be a part

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 of the portfolio. The same prioritization process should take place with all of the
resources proposed for the portfolio.

 Improved Scrutiny of Work. Everyone has pet projects that they want to get done. In
some departments, managers make funding decisions for their own work and they are not
open to challenge and review. Portfolio management requires work to be approved by all
the key stakeholders. The proposed work is open to more scrutiny since managers know
that when work is approved in one area, it removes funding for potential work in other
areas. As stewards of the department's money, the Executive will now have a
responsibility to approve and execute the work that is absolutely the highest priority and
the highest value.

 More Openness of the Authorization Process. Utilizing a portfolio management

process removes any clouds of secrecy on how work gets funded. The Business Planning
Process allows everyone to propose work and ensures that people know the process that
was followed to ultimately authorize work.

 Less Ambiguity in Work Authorization. The portfolio management planning process

provides criteria for evaluating work more consistently. This makes it easier to compare
work on an apples-to-apples basis and do a better job in ensuring that the authorized work
is valuable, aligned and balanced.

 Improved Alignment of the Work. In addition to making sure that only high priority
work is approved, portfolio management also results in the work being aligned. All
portfolio management decisions are made within the overall context of the department's
strategy and goals. In the IT department, portfolio management provides a process for
better translating business strategy into technology decisions.

 Improved Balance of Work. In financial portfolio management, you make sure that
your resources are balanced appropriately between various financial instruments such as
stocks, bonds, real estate, etc. Business portfolio management also looks to achieve a
proper balance of work.

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Example: When you first evaluate your portfolio of work, you may find that your projects are
focused too heavily on cost cutting, and not enough on increasing revenue. You might also find
that you cannot complete your strategic projects because you are spending too many resources
supporting your old legacy systems. Portfolio management provides the perspective to categorize
where you are spending resources and gives you a way to adjust the balance within the portfolio
as needed.

 Changed Focus from Cost to Investment. You don't focus on the "cost" side of your
financial portfolio although, in fact, all of your assets were acquired at a cost.

Example: You may have purchased XYZ company stock for $10,000. However, when you
discuss your financial portfolio, you don't focus on the $10,000 you do not have anymore. You
invested the money and now have stock in return so you focus on the stock that you now own.
You might also talk about your investment of $10,000 to purchase the stock, but your interest is
in its current value and whether it has generated a positive or negative benefit! Likewise, in your
business portfolio, you are spending money to receive benefits in return. Portfolio management
focuses on the benefit value of the products and services produced rather than just on their cost.

This switch in focus is especially important in the Information Technology (IT) area, where
many executives still think of value in terms of the accumulated cost of computers, monitors and
printers. Using the portfolio management model, you show the value of all expenditures in your
portfolio. These expenditures include not just the computing hardware and software, but also the
value associated with all project and support work. If the value is there relative to the cost, the
work should be authorized. If the value is not there relative to the cost, the work should be
eliminated, cut back or backlogged. However, the basic discussion should be focused on value
delivered – not just on the cost of the products and services.

 Increased Collaboration. In many organizations, senior managers make business

decisions while only taking into account their own department.

Example: The Marketing Division is making the best decisions for Marketing, and the Finance
Division is making the best decisions for Finance. However, when all the plans are put together,
they do not align into an integrated whole, and, in fact, they are sometimes at odds.

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You cannot perform portfolio management within a vacuum. If you practice portfolio
management at the top of your organization, all departments will need to collaborate on an
ongoing basis. If you are practicing portfolio management within a service department like IT,
portfolio management will force collaboration between and among IT and the other client
departments.

 Enhanced Communication. This is a similar benefit to increased collaboration. In many

organizations today, functional departments do not communicate well with their peer
departments or even within their own groups. Portfolio management requires an ongoing
dialog. If your portfolio is organization-wide, the heads of the departments will need to
communicate effectively.

This enhanced communication will also be required between the Executive and the
portfolio management team. In addition, there are many more opportunities to
communicate the value of the portfolio. Portfolio metrics should be captured and shared
with the rest of the departments. A portfolio management dashboard should be created
and shared. The business value of portfolio projects should also be measured and shared.

 Increased Focus on When to Stop a Project. This is equivalent to selling a part of your
financial portfolio because the investment no longer meets your overall goals. It may no
longer be profitable, or you may need to change your portfolio mix for the purposes of
overall balance. In either case, you need to sell the investment. Likewise, when you are
managing a portfolio of work, you are also managing the underlying portfolio of assets
that the work represents. In the IT Division, for instance, the assets include business
application systems, software, hardware, telecommunications, etc. As you look at your
portfolio, you may recognize the need to "sell" assets. While the asset may not literally be
sold, you may decide to retire or eliminate the asset.

Example: A number of years ago you may have converted to new database software and now
you realize that only a couple of the old databases remain in use. It may make sense to
proactively migrate the remaining old databases to the new software. This simplifies the
technical environment and may also result in eliminating a software maintenance contract. This
is equivalent to selling an asset that is no longer useful within the portfolio.

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  Challenge with Traditional Portfolio Management

In larger organizations, however, a major challenge remains: the alignment of the strategic
corporate vision at an executive level and the transformation at a project level. Due to the size of
the organization, political hierarchies, and geographical boundaries, the communication channels
between levels are often ineffective. Written status reports, tools, and indirect communication
channels can create additional layers of ambiguity. Agile project teams need direct access to the
folks creating the corporate strategy so that questions and issues can be resolved pragmatically.

For example, executive management wants unbiased insights into strategic IT projects. Review
meetings, however, are often executed with stakeholders at different levels of an organization.
Reports are created at many different organizational levels. The higher the in the hierarchy the
more condensed the status report, focusing on metrics rather than assessing the technical
progress and issues. It is also very common, that project teams are not very open about the issues
in written formal reports. Furthermore, the performance of one project may be difficult to
compare with the performance of another project. Different metrics, review cycles and the
inclusion of prose-style reports make it very difficult to compare individual projects with each
other. Harvesting, administrating, and massaging the data could increase internal costs as
compared to open communication in a review meeting with a clear agenda.

On the other hand, project team members (including the project manager) often cruise on their
own towards the goals initially defined in vision documents, a.k.a. scope or mission documents 
Not knowing when and how the executive strategy has been adjusted, the project team could
continue going into the wrong direction.

Sometimes the vision is re-communicated to projects that are in progress. This may challenge
them with drastic changes to the goals of their project, especially if the project is near the end of

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the schedule. Smaller and more frequent changes to the corporate strategy will be easier to
digest than one major shift late in the project.

Leveraging a Portfolio Management Approach for Innovation

Portfolio Management, according to our good friends at Wikipedia, is defined as “a set of

methods for analyzing and collectively managing a group of current or proposed projects based
on numerous key characteristics. The fundamental objective of portfolio-based management is to
determine the optimal mix and sequencing of proposed projects to best achieve the organization's
overall goals - typically expressed in terms of hard economic measures, business strategy goals,
or technical strategy goals - while honoring constraints imposed by management or external real-
world factors. Typical attributes of projects being analyzed in a portfolio-based management
approach include each project's total expected cost, consumption of finite resources (human, time
or financial), expected timeline and schedule of investments, expected nature, magnitude and
timing of benefits to be realized, and relationship or inter-dependencies with other projects in the
portfolio.”

If your organization is interested in creating products and/or services that solve problems for
your customers, and if that problem solving process can be managed in some orderly way, and if
the management of that process produces potential solutions to those problems, and if those
solutions can further be defined and structured in such a way as to create separate project-based
initiatives to execute the solutions, and those project-based initiatives create the aforementioned
new products and/or services, then it makes sense to organize your idea management and
innovation approach into a portfolio-based management system.

The idea here is that your organization may have many great ideas or potential new initiatives
that you would like to try, but your resources are finite and your time horizon is short. Does it
not then make sense to gain a better understanding of the totality of those initiatives, consider all
of them across a consistent set of criteria, have a view into the utilization of your resources,
make decisions about priority based on the magnitude of potential, and balance risk between safe
bets and wild swings for the fence?

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“Good” portfolio management systems allow for dynamic responses to a constantly changing
business climate. “Better” portfolio management systems provide the maintenance of the right
amount and mix of efforts. “Best” portfolio management systems include central oversight of
budget, risk management, strategic alignment of investments, resource supply/demand
management along with standardization of procedure, process and reporting.

Consider the following innovation portfolio management foundational concepts:

 Approach

o Define your portfolio approach

o A portfolio is nothing more than a logical collection of strategically similar

projects

 An innovation project is simply the management of an idea from concept

to reality

o Maximize the value of the portfolio. Can some projects be killed to better serve
more promising projects?

 Strategy

o Align the portfolio with the organizational strategy

o Develop a strategic, risk-based profile on “incremental vs. breakthrough” and

“sustaining vs. disruptive” innovation initiatives

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  Blend

o Ensure the innovation portfolio matches the incremental vs. breakthrough

strategic BLEND

 For example, if you decide that your organization should devote 70% of
the time to product extensions and 30% of the time on new-to-market
products, your innovation portfolio would have a 70/30 mix of these types
of new idea projects

 Choose the right risk blend / balance the portfolio

 Commitment

o Ensure that you have a broad range of commitment on the Innovation Portfolio
Management Team from across your organization. 

 Engagement

o Ensure that you have Senior Leadership engagement.

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  Preferably a strong decision maker with authority

 Balance

o Ensure that you constantly balance the innovation management portfolio against
the overall organizational strategy

o Based on availability and skill set of resources, how “full” can you load your
portfolio

 Extraordinary

o Hire and retain extraordinary project, program and portfolio managers.

There is much more to be learned from the portfolio-based management approach as it relates to
innovation and idea management concepts. This will be a key American Institute for Innovation
Excellence research and development charter topic area that will receive significant funding and
attention over the next year. Stemming from that research, we hope to be able to bring society
many new ideas and advancements for leveraging this management discipline

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 Reference

http://blueoceanstrategicplanning.blogspot.com/2009/04/value-innovation-key-to-blue-
ocean.html

http://www.pdcinc.com/value-innovation-portfolio-management-0

http://blog.thinkforachange.com/2010/12/10/leveraging-a-portfolio-management-approach-for-
innovation.aspx

http://www.indianmba.com/Faculty_Column/FC1237/FC1237b/fc1237b.html

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