prioritisation of ideas
of ideas when incomplete information is available
where the impact on the business can be managed.
The Pentathlon Framework can be used to describe a structured process
that removes the risk of failure as ideas progress through the 'Innovation Funnel'.
2 > Ideas Generation
to problems and challenges.
of ideas to market
to move ideas from conception, through implementation
to market in an environment of high uncertainty.
where it is most needed
selection and implementation, identifying the business priorities
and ensuring senior management buy-in at an early stage.
The strategy may recommend acquisition, a new supply chain or new skills.
5 > People & organisations
tension between taking risks and minimising
failure as products and services near market.
Portfolio Management techniques
Managers face many challenges when deciding how to allocate resources to develop new ideas : –
- Intrinsic value – some projects are worth doing for themselves
- Right portfolio – there will be a set of projects that meet the overall needs of the organisation
- Retaining good people – some ideas will be rejected but it is important that the people behind them don’t take it personally.
One of our themes is about managing the R&D pipeline and it explores these issues further.
Below is one approach that is gaining interest.
Portfolio Management (PM) techniques are systematic ways of looking at a set of projects or activities or even business units, in order to reach an optimum balance between risks and returns, stability and growth, attractions and drawbacks in order to make the best use of usually limited resources.
In many organisations, the uncertainty surrounding individual projects leads them to place considerable emphasis on the development of a portfolio of activities which is aimed to balancing risk and reward in such a way as to reduce the overall uncertainty.
One useful approach to this task is to consider the innovation process from idea to implementation alongside certain variables, such as future cash flow projections and resource requirements.
Joe Tidd and John Bessant explore a number of techniques specially suited for Portfolio Management at the strategic and operational level.
Portfolio Management Tools, Joe Tidd and John Bessant, www.innovation-portal.info (John Wiley and Sons Ltd)
Recommended by Charlotte Stone, post by R&D Today admin
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