Our portfolio management service offering helps clients increase the health of their innovation portfolio by improving the overall return on their innovation investments — a metric we call ROI2.
In our experience, too many companies prefer to stay well within their product development comfort zones, thus failing to maximize the value of their innovation investments. While these companies may effectively manage the day-to-day execution of commercialization projects, they fail to take a holistic approach to managing the entire innovation portfolio. Such companies typically fall into three “portfolio traps.” The first is to excessively overweight the innovation portfolio with incremental product and service extensions, creating the risk of a growth or revenue gap in later years. The second involves allowing an excessive amount of small, poorly justified projects with low payoff potential to creep into the portfolio, stealing resources from high-quality opportunities. Finally, many companies fail to define and rigorously manage the front-end processes of idea generation, concept development and technology creation, slowing the innovation engine to a crawl.
By comparison, the most innovative companies carefully balance their investments in both incremental, substantial, and “big bet” breakthrough innovations, rigorously managing the innovation portfolio from ideation to product introduction.
Strategy&’s portfolio management service offering begins by diagnosing the health of the client’s current innovation portfolio, and then systematically applies tools and best-practice templates to improve performance. Our methods have dramatically improved the quantity and quality of clients’ ideas and product concepts, and boosted clients’ efficiency by tailoring and implementing innovation portfolio processes to their particular situations. Our efforts have yielded real benefits in several metrics, from portfolio valuation and time-to-market to percentage of revenue from new products and overall return on innovation investment.