Before organizations can manage innovation
as a portfolio, leaders must first clarify which innovation projects and portfolios are strategic
to track and manage. This will depend on the specific industry and company context. In most cases, a portfolio typically includes no more
than 20 to 30 initiatives, each significant enough to contribute to the achievement of the strategic objective it supports. Leaders should align on inclusion criteria for each portfolio and determine the metrics against which the portfolio will
be managed in order to deliver against performance objectives.
Once defined, leadership teams should regularly review their strategic portfolios and use the insights to make decisions about portfolio composition and resource allocation. To support these conversations, it is helpful to develop multiple “portfolio views” that provide insights from different vantage points. In many organizations, the simple act of creating visibility into the pipeline creates value by helping executives understand where projects and investments are focused so they can start to connect the dots to broader strategic priorities
and figure out where to cut or double down in
order to get the overall portfolio back on track.
When leaders conduct a one-time analysis of
an innovation portfolio, it can be an incredibly powerful tool to drive discussions about long-term growth and resource (re)allocation to support strategic goals. However, the real value in portfolio management comes from integrating portfolio views with the existing strategy and resource allocation functions of the business. Without
this integration, innovation will always be
an afterthought rather than a critical enabler
of the strategy.