Linking ideation and portfolio management

Front-end of innovation, ideas, and portfolio management

In the past weeks, I followed a lengthy discussion thread in the LinkedIn Innovation Management Group. This thread discusses the criteria for idea management tools in the innovation process. One of the main topics was around how tools cannot be a substitute for strategic clarity, leadership, a good process and a supportive culture, but at best support those. Also, the need to target ideation by means of challenges was mentioned as a common success factor.

However, my attention was caught by the following remarks:

  • “..does the tool provide means for executing on an idea..”
  • “..integration in the end2end innovation lifecycle..”
  • “.. follow up system of innovation process from the idea up to implementation..”
  • “..address every [] aspect of an innovation program: strategic planning, to resource allocation and funding, to program management..”
  • “..ideation and portfolio management must be unified in practice and process..”

This triggered me to consider how ideation and portfolio management are connected, as two important ingredients in the innovation process.

How ideation and portfolio management connect

At the front-end of the innovation process, ideas are the raw materials or seeds of new innovative businesses, products, services, and processes. In order for these ideas to be researched, developed, prototyped, tested, validated, merged, shaped, split, upgraded, redirected, progressed, and ultimately launched into innovations, they will grow into innovation projects that require resources to proceed.

So a link between idea management and portfolio management is the transition of mature, selected ideas into embryonic projects that compete for resources. This is where they enter the portfolio management process (including the stage-gating of the projects themselves). This is then the first link between idea and portfolio management:

1. mature, selected ideas transition into the portfolio management process as project candidates

Generic idea collection (sometimes named the “suggestion box scheme” approach) seems to lead to high volumes of relatively low-value ideas from an innovation  perspective. The best practice is to define “challenges” (or “campaigns” or “calls”), that specify the type of ideas that are most wanted. These challenges can be specified at different levels, from a strategic thrust to a more specific portfolio issue to be solved. As an example, if the current portfolio of innovations does not result in the expected growth in emerging markets within 3 years, ideation should be focused on projects that can address this gap. In short:

2. gaps in the current portfolio’s coverage of the strategy are candidates for ideation challenges

On top of these, there is a third, more tactical link between the processes. Part of the portfolio management process is to monitor the execution health of the running projects. Now if a project starts to drift from its original plan, one option is to stop it (or in a less friendly tone: to kill it). However, another option is to check if this project can be strengthened, via an idea challenge. This can be particularly valuable for projects that have a more disruptive nature. The original project approach may no longer be the best one, but the opportunity is likely to still exist. The lessons learnt from executing the project (until now) add important context for this challenge.

3. a promising project that deviates significantly from plan is a candidate for an ideation challenge

The benefit of this third option is that it addresses a current (urgent) business issue. This is different from the two previous connections, which are more long-term oriented. In an environment where the innovation process is still new or immature, the need for quick wins in addition to long-term improvements is nicely addressed.

How ideation and portfolio management differ

With these linkages between ideation and portfolio management, aren’t they essentially the same process? Yes and no. Yes in that they are part of an integral overall innovation management process (as discussed above and in the discussion thread), but mostly no, in that they are, by nature, different processes. Ideation is a  creative process, in that creation (sic!)  is involved, by exploring and leveraging connections between people, needs, knowledge, viewpoints, sources of information and inspiration. Whereas portfolio management is in its essence a decision-making process where alternatives are compared in their suitability to meet goals and constraints. The group of people  involved in both processes is quite different as well: where ideation should be open to (almost) anyone, decision-making is much more closed.

Maybe the most obvious difference in tool support is the following:

ideation requires supported to make ideas unique

portfolio management requires support to make projects comparable 

One of my conclusions is that ideation and portfolio management tool requirements differ (inherently) since they have to support these different processes; however connectivity between the tools is needed for smooth implementation of both.

What is your experience in this space?

2 thoughts on “Linking ideation and portfolio management

  1. Hi Jac – you and I have chatted before. We should connect on Skype; I can show you a presentation I developed originally for Acceenture and am getting ready to present to BoozCo.

    I would go a little further that you’ve gone here. I would suggest that ideation and portfolio be treated as part a single, larger, structured process that really should be seamless, especially as regards the supporting software, UI, data model, etc., and it should be social.

    Further, it should address the Whole Product, which would mean that, for a product with retail distribution, the retail experience becomes part of the innovation domain. And, it should subsume all related business processes, such that post-sale customer care processes become part of the innovation domain.

    I’d go further still and view the entire organization as a set of inter-releated and inter-dependent portfolios. For instance, business capabilities can be managed as a portfolio. I built this out at IBM for the financial sector. Intellectual property is a portfolio. Human skills are a portfolio. Customers are a portfolio, as are channels.

    Let me apply this in a product context and I’ll make it extreme to illustrate the point: a new product, in a new category, in a new market. First, view the market as a portfolio of segments, with unequal attraction — which to select? Then view customers in the selected segment as having unequal attraction — which to target? Then consider business capabilities — sales and channel coverage, marketing capability, manufacturing scale, available management, post-sale support capability, etc. Now look at the full range in the context of the Whole Product.

    This is not being well done today and it could and should be.

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