What Works: 6 Best Practices of Innovation and Product Portfolio Management

/What Works: 6 Best Practices of Innovation and Product Portfolio Management
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What Works: 6 Best Practices of Innovation and Product Portfolio Management

For over a decade, our sole focus has been to help our customers grow organically through the strategic use of innovation governance software solutions. Our track record of helping more than 250 of the world’s leading companies to adopt innovation and product portfolio management (PPM) best-practices is unique; no other company in the world has helped implement innovation governance as often as we have. Along the way, we have learned a number of lessons with our customers about what works (and what does not) that we have incorporated into our software solutions, our implementation methodologies, and our roadmap for the future.

1. Focus on business processes

It is tempting to think of innovation governance as a software problem.  However, software is only an enabler. Your initiative is first and foremost a business process improvement initiative. Before worrying about the software configuration or selection, an organization should focus on:

  • Understanding the current state of the innovation governance process (organization, processes, tools),
  • Identifying and documenting the desired areas of focus and improvement (What are your goals?), and
  • Defining the rules of engagement for the process.
  • Understanding the current state and the desired state of the governance process, along with clearly defined rules of engagement, provides the framework for the rest of the project.

    2. Plan the implementation in phases, as a journey

    When we chart a company’s current state and desired state, we use an “Innovation Governance Maturity” assessment.  There are two dimensions: governance maturity, which addresses the level of sophistication the company has in its innovation governance process, and adoption maturity, which address how widely adopted this is across the enterprise.

    There is usually a significant gap between where the organization is today versus where the organization wants to be. In most cases this gap is too large to cover in a single step. The development of a plan to increase process maturity and/or adoption maturity using a clearly defined series of steps allows the organization to make demonstrable progress along the way. Each implementation project takes a different course based on the initial maturity level, and the unique needs and objectives of the business, so the plan that worked for one organization may not work for another organization.

    3. Avoid complexity

    The most common mistake we see is the desire to over-complicate the process and portfolio design. There are several factors that lead to an overcomplicated design, a few of these are:

    • The desire to fix every problem with one process,
    • A fear omitting something and not being able to include it later,
    • Lack of clarity regarding what needs to be included leading to superfluous inclusions of stages, documents, value drivers and/or classifications , and
    • Lack of clear understanding of the purpose of the project.

    4. Address decision-making first, tasks second

    The primary objective of an innovation governance solution is to provide a decision support framework. To do so, there are a couple of guidelines that can help ensure focus:

    • Concentrate on the information needed by product line and business unit managers and senior executives to make the critical Go/Kill decisions and prioritize resources.
    • When discussing decision-making, it is useful to note that we often talk about it in relation to the typical timing, or “cadence,” of your other governance processes (e.g., project reviews, gate meetings, portfolio reviews, annual planning, etc.).

    5. Avoid the “trough of disillusionment”

    For years, the Gartner Research group has used hype cycles to characterize the over-enthusiasm (“hype”) and subsequent disappointment that typically happens with the introduction of new technologies.  Hype cycles also show how and when technologies move beyond the hype, offer practical benefits and become widely accepted.

    Hype cycles can also be applied to the implementation of new processes and systems within a company. Early on, unrealistic expectations can develop without understanding the required change, and they assume the technology is a silver bullet that will solve all of their problems.  This expectation can then lead to disappointment and the “trough of disillusionment” when they realize this is not the case. In extreme cases, this can create a barrier to adoption of the new processes.

    Too often it is not until later in the initiative that people have a clear understanding that success comes from the combination of improved business processes along with a clear view of how the technology will enable them.  Once this is achieved, the business can move up the “slope of enlightenment” during which all parts of the business are engaged and the new processes become fully adopted. To minimize the peaks and valleys and move up the “slope of enlightenment” much earlier, we recommend a proactive approach:

    • Define & execute change management plans,
    • Communicate vision and continue communicating,
    • Track stories of “real” value and share them,
    • Learn quickly from failures and adapt, and
    • Keep teams and support structures together.

    6. Launch is when the most important work begins

    Finally, remember that launch is when the most important work begins in earnest. Although it may seem daunting just to get to the point where you can turn on a new process and software package, this is the beginning of the journey to drive successful adoption of your new innovation governance solution. Thinking about the launch as more than just the “go live” of the software is fundamental to success. Specifically, there are some key business milestones that require careful planning to ensure success.

    The first of which is the initial cross-functional innovation process workshops in which the new processes are introduced to the organization. Workshops may also include some training on the new software; however the focus of such sessions needs to be about the new business processes themselves including why they are being introduced, what the processes are, and what the value of the new processes is to each stakeholder in the workshops. These workshops should include executives as well as the innovation teams.

    The next milestones are the first gate and portfolio meetings in which the new process is used. Those sessions require careful planning as they are the first time where your business leaders are reviewing business information in the form of new deliverables, scorecards, or dashboards, and making their business investment decisions in a new way.

    Finally, after about six months of using the new processes, it is important to conduct a deployment review in which you take stock of the new processes, assess adoption levels, identify changes that are required to further optimize the processes, and then plan for the next steps in the journey.

    Interested in more innovation and product portfolio management information? Click here.

    2017-05-10T15:23:50-05:00February 25th, 2013|

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