Wednesday, November 03, 2010

Seeing is believing - how visualizing the innovation portfolio makes better decisions

Running an innovation organization effectively requires close control of two disparate dimensions - the value of the portfolio (regardless of currency - $, time, IP ...) and how investments are made (regardless of currency - $, time, IP ...). Keeping an eye out for opportunities, spotting potential issues and making prioritizations between different projects requires a good visual representation that enables all stakeholders to grasp their share of interest.
What can then be said about how such a visualization tool materializes? Which decision types are helped through improved visualization?


  • Set a goal of killing at least 10% of all projects each year. With an average running time of 2 years that means that 20% of all projects get killed. The number has to be adjusted for actual project duration. 
    • Decide on which metrics to measure for killing decisions. Is it time ahead of competitors? Is it potential revenue? Is it time-to-market combined with potential value. Make that number visible and make sure it gets updated regularly. 
  • Set a goal of only running 20% of your projects at any given set of time. If average number of projects is 2 years that means 10% running in parallel. Measure and visualize project duration, time-to-market ((time left * market value)/resources ($, people, etc) and alignment with current strategy.
  • Define share of projects on different levels - extension, incremental or radical. Kill projects from each category to keep the balance and loose in the long run.
These are just a few examples of the importance of measuring and visualizing the performance of the innovation portfolio. Which are your favorite way of illustrating innovation portfolio status?


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