Roadmapping and portfolio management: complementary processes
In our work to improve innovation effectiveness, we focus on aligning innovation strategy and execution with today’s projects and activities. Roadmapping and portfolio management are integral to successfully doing this.
Technology Roadmapping (or business-and-technology-roadmapping) is an innovation toolbox, as documented in the seminal works of the University of Cambridge. In our view, it is a long-term exploration, communication, and planning process. The added value of this process is its focus on joint assumptions about the future:
- market intelligence
How do we foresee the evolution over time of the markets we operate in (or should operate in)? Based on past data, and analysis of the trends, mid-term to long-term future events and trends are laid down. A typical checklist for this intelligence is the DESTEP acronym: Demographics, Economic, Societal, Technological, Ecological, and Political trends. I prefer DESTEP over its more widely used PESTEL twin acronym, that includes Legal at the expense of Demographics, because demographic trends provide a stable baseline for other, more speculative forecasts.
- technology intelligence
Besides looking at the environment our products and services will end up in, a good roadmapping process also forecasts trends in technology on the supply side of the business. This may reveal options for new features, new products, cost reductions, as well as process innovations by looking beyond today’s state of technology. A good technology roadmap includes both evolutionary trends (such as Moore’s law about ever-increasing computing power) as well as breakthroughs (such as the expected availability of Mars space travel).
Building these shared views of the future business environment creates enthusiasm and alignment in the team. However, stand-alone roadmapping activities often get stuck in the next stage where choices about the portfolio have to be made. That’s why I am convinced about the need to feed the roadmap into the portfolio management process.
In previous posts on this blog I have presented this decision-making process. Portfolio management is all about deciding which products (or services or combinations) best position your business in the future. And then to translate this future portfolio of products into the right activities (or projects) to work on, today and tomorrow.
The strength of good roadmapping is its focus on communication of the relevant external trends, and the process of back-casting: what do we have to do between now and then to position ourselves?
The strength of good portfolio management is its focus on the decisions needed today, and the cost, value and risk of the options. This is where the real decisions are prepared, analyzed, taken, and implemented.
Portfolio management supported by input from good roadmaps is a powerful strategic innovation management process. Do you have these tools properly linked?