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Beyond Phase-Gate: An Innovation Portfolio
Management ModelNext Practices in Innovation Management
Who We Are…• The American Institute for Innovation Excellence is
a 501(c)(3) non-profit organization organized as a professional research “think tank.”
• Under this organizational framework, the AIIE limits and dedicates its operations to promoting innovation excellence, for the exclusive and charitable benefit of government agencies, corporate entities and the greater good, through research, development, education and publication within the following focus areas:• Innovation Management Best/Next Practices
Development • Innovation Management Maturity Concepts • Innovation Execution Delivery Methodologies • Portfolio, Program and Project Execution Models • Innovation, Idea and Creativity Concept Education and
Training
Research Question(s):• If the leading framework and
approach for innovation management, such as phase-gate, requires such prolific modification by its professional user base, is it simply the wrong tool for the job?
• If the answer to question one is in the affirmative, what are some alternatives to moving beyond these linear, step-by-step process-based approaches for innovation management?
Is Phase-Gate The Right Tool For The Job?
1. Review: • Foundational & Historical
Assessment2. Analysis:
• Challenges With Traditional Phase and Gate-Based Approaches
3. Concept Development: • The Innovation Portfolio
Management Model • Innovation Architecture
4. Implementation Recommendations:• Innovation Portfolio Management
Model Suggested Implementation Roadmap
• Commonly Used Innovation Management Process Artifacts
Research Approach…
The Innovation Portfolio Management Model
A New Innovation Management “Value Chain”
• Needed a way to resolve three of the biggest pain points (and main points of failure) experienced by organizations seeking an innovation management approach:• Aligning innovation approach to
overall organizational strategy• Strategic Alignment
• Review, selection and management of multiple ideas • Portfolio Management
• Execution of individual initiatives within the portfolio• Execution Management
Research & DevelopmentProcesses
Strategic PlanningActivities
Execution / DeliveryModel
New “Value Chained” Innovation Process
Strategy Development
Executive Leadership Function
• Determines where the organization needs to be positioned for the future and how they will get there from a tactical perspective
• Also ensures a focus on market and environmental trends, developing responses to various potential future scenarios and observing consumer preferences and behaviors
Major Activities:
· Scenario Planning
· Strategic Planning
· OGSM Tactics
· Customer/Market Analysis
Strategy
Concept Development
Research & Development Function
• Ensures independent assessment of market trends, research on new scientific developments, exploration of alternative uses for existing materials and encourages innovative new thinking
• This “blue sky” approach will ensure that thinking is not limited to strategic intent, thus ensuring an appropriate mix of risk / reward initiatives within the innovation portfolio.
Major Activities:
· CPS / Idea Management
· Feasibility Analysis
· Research & Development
· Prototyping
Concept
Building The Innovation Portfolio
Major Activities:
· Scenario Planning
· Strategic Planning
· OGSM Tactics
· Customer/Market Analysis
Strategy
Major Activities:
· Strategic Focus Analysis
· Portfolio Development
· Portfolio Management
· Risk Management
Portfolio
Major Activities:
· CPS / Idea Management
· Feasibility Analysis
· Research & Development
· Prototyping
Concept
Executive Leadership Function Portfolio Management Function
• Strategy and possibility are combined to ensure that the organization works on the right initiatives to maintain a growth focus and starts that work at the right time within identified near-term, mid-term and long-term time horizons.
Building The Innovation Portfolio (cont’d)
Executive Leadership Function Portfolio Management Function
• The portfolio-based approach explores risk, places initiatives into categories that align to strategic focus areas, manages resources, sets priorities and conducts time-boxing, sequencing and duration setting functions.
Major Activities:
· Strategic Focus Analysis
· Portfolio Development
· Portfolio Management
· Risk Management
Portfolio
The Innovation Portfolio Grid
Sustaining Breakthrough
Incremental
EX
IST
ING
EX
IST
ING
vs.
NE
W
Disruptive
HIGH RISK
NE
W
LOW RISK
RISK• Sustaining Portfolio
• “Keep The Lights On” (KLO) Activity
• Maintenance• Support
• Incremental Portfolio• Continuous Improvement / Lean
Activities• Line Extensions• Feature Releases
• New Concept Development – Breakthrough Portfolio• Existing market “game changers”
• New Concept Development – Disruptive Portfolio• New / Adjacent market “game
changers”
The Innovation Portfolio Grid (cont’d)
Sustaining Breakthrough
Incremental
EX
IST
ING
EX
IST
ING
vs.
NE
W
Disruptive
HIGH RISK
NE
W
LOW RISK
RISK
“Place Your Bets”
A
E
F
D
GC
B
Portfolio – Execution Loop
Executive Leadership Function Project Management Function
• Circular feedback loop between Execution and Portfolio Development, ensures that the individual efforts being managed within portfolio remain aligned to the appropriate overall strategic portfolio focus areas and time horizons.
Major Activities:
· Project Management
· Process Management
· Decision Management
· Monitoring & Reporting
Execution
Major Activities:
· Strategic Focus Analysis
· Portfolio Development
· Portfolio Management
· Risk Management
Portfolio
Execution Activity
Project Management Function
• Day-to-day project operations are planned, executed, monitored and controlled.
• Monitoring and reporting make up the main feedback mechanisms utilized to ensure the initiatives either continue toward delivery or take some other action to change course.
Major Activities:
· Project Management
· Process Management
· Decision Management
· Monitoring & Reporting
Execution
Delivery Activity
Sales Function Marketing Function Support Function
• Strategic alignment and transition to organizational marketing functions, sales approaches, delivery mechanisms and established levels of support
Major Activities:
· Market Strategy
· Sales Strategy
· Delivery Strategy
· Support Strategy
Delivery
The Innovation Portfolio Management Model
Full Report Available at:
American Institute for Innovation Excellence
~ http://www.AIIEOnline.org ~
Click on: Research
Published Research Spring 2011 Report