Wednesday, August 11, 2010

PORTFOLIO APPROACH TO MANAGE INNOVATION

Portfolio is nothing but initiatives that the organization takes to build new products/ services or to bring a difference in the services it gives to its customers. The initiatives should be compared across dimensions such as stretch, strategic fit, risk, and potential return and resource requirements. By using different charts as lenses to compare initiatives, you can mix and match alternatives until you come up with the portfolio that's right for you.



There are four reasons why the organizations should use the portfolio approach to manage innovation

1.Risk Management :The portfolio is a risk management tool. If the organization have more innovation initiatives under way than traditional firms, and it is prone to stretch farther within each initiative, without an overall view of its innovation efforts, it could easily wind up taking too much or too little risk.

2.Visibility: The portfolio provides visibility that allows the organization's firm pace the introduction of new products and services. The organization should balance the introduction of revolutionary products with incremental improvements in others so as to maintain a steady flow. By having a comprehensive view of initiatives over time, it can avoid either overwhelming or underwhelming the marketplace.

3.Timing of New Initiatives: The innovation portfolio will time when the organization start a new initiative or transfer a completed one into manufacturing or the marketplace.

4.Discovering Synergies: The portfolio illuminates potential leverage opportunities among technologies, processes, products, and markets. This capability will enable your firm to get more for each innovation dollar while reducing development cost and risk, reduce complexity and free up people to work on tasks that generate greater customer value.


Source:100 ADVICE