Learning

The 7 Tips on Managing your Innovation Portfolio (IPM)

Learning
17 November 2022
7 minutes read

Companies that pursue innovation may come across many hurdles while doing so. Not just acquiring the innovation itself, but also the management of a portfolio filled with innovation requires a dedicated approach that general project management does not take into account. This brings difficulties  to companies that are unfamiliar with innovation portfolio management, leaving them unaware of how they should approach this. To help your firm manage innovation properly, Stretch Innovation will guide you through some of the most common complications.

Innovation portfolio management (IPM) is not quite the same as general portfolio management. While they are conceptually the same, IPM should be focused on innovation-specific requirements and constraints. To help your company advance in IPM, Stretch Innovation will cover the seven most important tips, all based on difficulties you may encounter and how to respond to those, to help you kick-start your next innovation project.

1. Do not focus on daily business tasks in your innovation overview

Overflowing the overview or mapping of your innovation portfolio with general daily business tasks will cloud your ability to keep track of priorities. To ensure innovation projects remain a priority and to keep the overview of your portfolio, it is of utmost importance to set clear boundaries of what is and isn't innovation in your company. This might appear as an obvious task, but it can be found  rather difficult to achieve this in larger companies with increasingly more departments and more differing opinions. Upon doing this task, you will be enabled to define what business tasks are and are not innovation-focused in your firm's context. This will uncover what priorities are to be put in your innovation project overview or mapping, clearing the cloud, and facilitating your innovation journey.  

Are you experiencing difficulties in defining what is and what isn't considered an innovation in your firm? Innovation projects often concern the introduction of new products, services, processes, or sales channels to future-proof your company and/or generate additional revenue streams. Moreover, they often have a clear start and end date. Keep in mind that defining this remains fluid, as it will evolve for different industries, maturities, companies, their focus, and ambitions.

2. Read your vision and strategy the right way

While your firm's vision can be broad, strategy and strategic directions should be sufficiently narrow to guide you toward the goals of your innovation project. If strategic objectives are too broad (e.g. grow our brand) and resemble vision more than strategy, they will no longer support a single innovation project. Instead, their meaning will be too generic and fall under several of them. In such conditions, strategic objectives are no longer able to help you understand the intention of your innovation project.

To address this risk, ensure clearly state the differences between values, visions, missions, strategic objectives, and activities. Do not only check these off with your team when starting off, but regularly review them to remind yourself and your team of your strategic objectives to not lose sight of them.

3. Estimate your risk level correctly

Innovation projects come at higher and different risks than general projects managed in a firm, leaving you likely to misestimate how to respond to them. Innovation tends to concern new products or services, unmet needs, and unexplored target groups, that have not been tested and validated by years of being on the market, bringing unknown risks which are difficult to estimate. For different innovation projects these risks will differ, and they will thus require different responses, funding, staffing, setup, skills, and more.

To mitigate these risks, you should map them out to visualize them and put them into perspective compared to your innovation ambitions. Putting risk levels on one axis and degrees of innovation (e.g. existing market, adjacent market, and new market) on the other, will give perspective to what risk you can expect for which innovation projects and how to respond differently towards them.

4. Considering IPM as a regular instance

Think having to perform IPM is an exception rather than the norm and something you will not encounter again? This mindset might set you back in your attempt to innovate your firm. While first-time IPM will call for additional effort, adopting this methodology will offer benefits and efficiencies in the long term as it enables you to follow up on your current project and tackle future ones.

To use IPM to your advantage, it must be used as if it is the new normal. Continuously follow up on your innovation projects on a repeated basis and follow the IPM principles to track innovation projects and optimize their outcome.

5. Assign the right level of strategic priorities to projects

When justifying an innovation project before your executive committee or board, you might be inclined to add several strategic objectives or goals to a single innovation project to prove its validity. Doing so for too many innovation projects however will prevent you from keeping an overview of the most pressing strategic priorities of each project, as it can feel like all projects are linked to all priorities. This is not the advised course of action, as assigning too many relevant strategic priorities or objectives to varying innovation projects will not lead to achieving said objectives, but instead to the inability to pay attention to the right priorities.

Instead, assign a single primary strategic objective to an innovation project. What is the true priority you want to achieve for your company with this project? Make honest and deep reflections for each innovation project, and then assign secondary objectives if needed. Doing so will enable you to clearly observe all projects and the network of objectives surrounding them without losing the bigger picture.

6. Align the project and objective strategically

When justifying an innovation project before your executive committee or board, you might not only be inclined to add too many strategic objectives or goals to a single innovation project but also force irrelevant projects to important strategic priorities. Forcing a project to fit under your wanted strategic objective can have adverse repercussions, as the further course of the project and its outcome can deviate from what you genuinely want to achieve with the strategic priority.

Though it might sound like not force-fitting an objective and a project is a straightforward and uncomplicated task, being neutral in this decision can prove difficult when being too closely involved or when outside forces try to influence the decision. To evade such situations, ensure a neutral party or someone not involved in either the project or the strategic objective joins you and your team in the decision-making process or the decisive meeting or workshop. Their principal task is to provide an unbiased view and identify strategic shortcomings when you and your team are assigning projects to strategic priorities or vice versa. Doing so will enable you to make better-founded decisions and increase the success factor of your projects.

7. Scope your innovation project accurately

To close off the list with number seven, it is important to scope innovation projects with accuracy. With the scope being the cornerstone of managing any project, having the right scope within your innovation portfolio is crucial. Innovation projects can be unfamiliar to people in terms of scope, with these types of activities being new to your team or even your company as a whole. Thus, it can be tricky attempting to assign a fitting scope.  

To succeed, do not go lightly over deciding what the scope is. Thoroughly discuss the matter with your team, find the fitting level of ambition, and ensure the scope is formulated clearly. If needed, pause the decision-making process for a moment and step back, to once again take a look at the bigger picture and let it guide you toward the fitting scope.

Ready... 1,2,3 let's go!

Feel ready and empowered to tackle a new innovation project at your company? Keep our seven tips in mind to facilitate the process, and don't forget to give everything you have. Don't treat an innovation project like any other, but act like your company's future might depend on it (because it just might, actually). Stretch Innovation is always excited to spar with you and your firm and would be happy to schedule a meeting to discuss your next innovation project.

Learning

The 7 Tips on Managing your Innovation Portfolio (IPM)

Learning
17 November 2022
The 7 Tips on Managing your Innovation Portfolio (IPM)

Companies that pursue innovation may come across many hurdles while doing so. Not just acquiring the innovation itself, but also the management of a portfolio filled with innovation requires a dedicated approach that general project management does not take into account. This brings difficulties  to companies that are unfamiliar with innovation portfolio management, leaving them unaware of how they should approach this. To help your firm manage innovation properly, Stretch Innovation will guide you through some of the most common complications.

Innovation portfolio management (IPM) is not quite the same as general portfolio management. While they are conceptually the same, IPM should be focused on innovation-specific requirements and constraints. To help your company advance in IPM, Stretch Innovation will cover the seven most important tips, all based on difficulties you may encounter and how to respond to those, to help you kick-start your next innovation project.

1. Do not focus on daily business tasks in your innovation overview

Overflowing the overview or mapping of your innovation portfolio with general daily business tasks will cloud your ability to keep track of priorities. To ensure innovation projects remain a priority and to keep the overview of your portfolio, it is of utmost importance to set clear boundaries of what is and isn't innovation in your company. This might appear as an obvious task, but it can be found  rather difficult to achieve this in larger companies with increasingly more departments and more differing opinions. Upon doing this task, you will be enabled to define what business tasks are and are not innovation-focused in your firm's context. This will uncover what priorities are to be put in your innovation project overview or mapping, clearing the cloud, and facilitating your innovation journey.  

Are you experiencing difficulties in defining what is and what isn't considered an innovation in your firm? Innovation projects often concern the introduction of new products, services, processes, or sales channels to future-proof your company and/or generate additional revenue streams. Moreover, they often have a clear start and end date. Keep in mind that defining this remains fluid, as it will evolve for different industries, maturities, companies, their focus, and ambitions.

2. Read your vision and strategy the right way

While your firm's vision can be broad, strategy and strategic directions should be sufficiently narrow to guide you toward the goals of your innovation project. If strategic objectives are too broad (e.g. grow our brand) and resemble vision more than strategy, they will no longer support a single innovation project. Instead, their meaning will be too generic and fall under several of them. In such conditions, strategic objectives are no longer able to help you understand the intention of your innovation project.

To address this risk, ensure clearly state the differences between values, visions, missions, strategic objectives, and activities. Do not only check these off with your team when starting off, but regularly review them to remind yourself and your team of your strategic objectives to not lose sight of them.

The 7 Tips on Managing your Innovation Portfolio (IPM)

3. Estimate your risk level correctly

Innovation projects come at higher and different risks than general projects managed in a firm, leaving you likely to misestimate how to respond to them. Innovation tends to concern new products or services, unmet needs, and unexplored target groups, that have not been tested and validated by years of being on the market, bringing unknown risks which are difficult to estimate. For different innovation projects these risks will differ, and they will thus require different responses, funding, staffing, setup, skills, and more.

To mitigate these risks, you should map them out to visualize them and put them into perspective compared to your innovation ambitions. Putting risk levels on one axis and degrees of innovation (e.g. existing market, adjacent market, and new market) on the other, will give perspective to what risk you can expect for which innovation projects and how to respond differently towards them.

4. Considering IPM as a regular instance

Think having to perform IPM is an exception rather than the norm and something you will not encounter again? This mindset might set you back in your attempt to innovate your firm. While first-time IPM will call for additional effort, adopting this methodology will offer benefits and efficiencies in the long term as it enables you to follow up on your current project and tackle future ones.

To use IPM to your advantage, it must be used as if it is the new normal. Continuously follow up on your innovation projects on a repeated basis and follow the IPM principles to track innovation projects and optimize their outcome.

The 7 Tips on Managing your Innovation Portfolio (IPM)

5. Assign the right level of strategic priorities to projects

When justifying an innovation project before your executive committee or board, you might be inclined to add several strategic objectives or goals to a single innovation project to prove its validity. Doing so for too many innovation projects however will prevent you from keeping an overview of the most pressing strategic priorities of each project, as it can feel like all projects are linked to all priorities. This is not the advised course of action, as assigning too many relevant strategic priorities or objectives to varying innovation projects will not lead to achieving said objectives, but instead to the inability to pay attention to the right priorities.

Instead, assign a single primary strategic objective to an innovation project. What is the true priority you want to achieve for your company with this project? Make honest and deep reflections for each innovation project, and then assign secondary objectives if needed. Doing so will enable you to clearly observe all projects and the network of objectives surrounding them without losing the bigger picture.

6. Align the project and objective strategically

When justifying an innovation project before your executive committee or board, you might not only be inclined to add too many strategic objectives or goals to a single innovation project but also force irrelevant projects to important strategic priorities. Forcing a project to fit under your wanted strategic objective can have adverse repercussions, as the further course of the project and its outcome can deviate from what you genuinely want to achieve with the strategic priority.

Though it might sound like not force-fitting an objective and a project is a straightforward and uncomplicated task, being neutral in this decision can prove difficult when being too closely involved or when outside forces try to influence the decision. To evade such situations, ensure a neutral party or someone not involved in either the project or the strategic objective joins you and your team in the decision-making process or the decisive meeting or workshop. Their principal task is to provide an unbiased view and identify strategic shortcomings when you and your team are assigning projects to strategic priorities or vice versa. Doing so will enable you to make better-founded decisions and increase the success factor of your projects.

7. Scope your innovation project accurately

To close off the list with number seven, it is important to scope innovation projects with accuracy. With the scope being the cornerstone of managing any project, having the right scope within your innovation portfolio is crucial. Innovation projects can be unfamiliar to people in terms of scope, with these types of activities being new to your team or even your company as a whole. Thus, it can be tricky attempting to assign a fitting scope.  

To succeed, do not go lightly over deciding what the scope is. Thoroughly discuss the matter with your team, find the fitting level of ambition, and ensure the scope is formulated clearly. If needed, pause the decision-making process for a moment and step back, to once again take a look at the bigger picture and let it guide you toward the fitting scope.

Ready... 1,2,3 let's go!

Feel ready and empowered to tackle a new innovation project at your company? Keep our seven tips in mind to facilitate the process, and don't forget to give everything you have. Don't treat an innovation project like any other, but act like your company's future might depend on it (because it just might, actually). Stretch Innovation is always excited to spar with you and your firm and would be happy to schedule a meeting to discuss your next innovation project.

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Learning

The 7 Tips on Managing your Innovation Portfolio (IPM)

Learning
17 November 2022

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