To stay relevant and successful in the market, companies must constantly innovate and develop new ideas.
However, innovating can be difficult, especially if a company does not have a system to manage its innovation efforts.
That’s where the concept of an innovation portfolio comes in.
An innovation portfolio is a collection of all the initiatives and projects a company is working on to promote innovation in the company’s processes, products, and services.
You can use it to track progress, assess risk and decide which projects to proceed with. In other words, an innovation portfolio provides a framework for thinking about and managing innovation.
But how do you go about building and managing it?
In this article, we will discuss what an innovation portfolio is, why it is important, how to build one in three simple steps, and how to manage it effectively.
By understanding these concepts, you can create or improve your company’s system for promoting innovation.
What is an innovation portfolio?
An innovation portfolio is a collection of all an organization’s innovative projects and initiatives.
Managing it involves handling, overseeing, and directing a collection of ideas, initiatives, and programs to achieve certain outcomes and objectives centered on innovation strategies.
This includes both new product development (NPD) projects and process improvement initiatives.
Innovation portfolios help you with three things:
1. Keeping track of your progress in innovation
An innovation portfolio is like a company’s photo album for progress. It captures all your ongoing projects and initiatives, as well as how close they are to meeting the specific goals they’ve set within a specific period.
Knowing this information allows you to determine where you excel in innovation and identify areas that need improvement.
2. Allocating resources to the most promising projects
An up-to-date portfolio helps you decide which proposed projects are worth your resources and time, particularly when it includes factors such as past success rates and projected business impact.
For instance, you might want to increase your focus on NPD projects if the global economic conditions are favorable for new product adoption.
However, if your primary competitors are starting to invest more in process improvements, the company might want to increase its focus on this area as well. But remember, this aspect highly depends on your needs.
3. Tracking the impact of your innovation efforts over time
An innovation portfolio also allows you to determine whether your innovation efforts are having their desired impacts on business outcomes.
By periodically reviewing it, you can make the necessary adjustments to ensure that your innovation strategies remain aligned with your business objectives.
What is the importance of innovation portfolio?
An innovation portfolio is a risk management tool that enables organizations to assess and mitigate risks associated with their innovation initiatives by taking into account factors such as:
- The potential impact of unsuccessful projects on the business
- How much money has been invested in a project
- How close the project is towards achieve its goals
Risks can also be mitigated by establishing clear procedures for dealing with their emergence, as well as putting in place protocols for monitoring and evaluating projects.
Plus, an innovation portfolio can also help identify potential areas of risk early on in the project development cycle, which can then be addressed through risk mitigation plans.
Building an innovation portfolio
It only takes three steps to build an innovation portfolio:
1. Use a strategic framework
The first step is to develop a clear understanding of your organization’s innovation goals.
Brainstorming concept. Group of happy creative business people looking at sticky notes on glass board, discussing new project and smilng while working together in modern office. Startup, Teamwork
To identify what your innovation goals are, you’ll need to use a strategic framework that takes into account factors such as the potential impact of each project on the business, the level of risk involved, and the expected return on investment.
This will help you identify the right mix of projects to include in your portfolio. That said, some organizations might want to focus on two aspects:
Process improvements involve every action to increase overall efficiency, and quality of performance, particularly in making new methods or developing new procedures to improve processes and accelerate progress while using fewer resources.
Product development, on the other hand, focuses on creating new products or services to enter new markets or segments. It also includes making improvements to existing products and services to better meet customer needs.
Once you’ve decided which area to focus on, you can use a strategic framework such as the stage-gate model to guide you in developing and managing your innovation portfolio.
The stage-gate model is a process that helps organizations assess whether a project should continue to the next stage of development or be terminated. This framework is composed of two parts:
- The front end is the part that includes all activities related to generating new ideas and concepts.
- While the back end consists of all activities related to commercializing the innovation.
The key here is to ensure that your portfolio is aligned with your organization’s overall business strategy.
2. Organize your priorities
Most companies have a set of overall strategic objectives that are well-defined and aligned with the company’s vision.
These may be converted into functional innovation objectives, which you should define in accordance with the subcategories you established in the preceding stage.
Initial insights come when your organization’s emphasis and loyalty depend on what your projects signify, particularly the outcome of this step in your innovation portfolio management process.
Don’t forget to organize your projects into categories based on their priority level. You can use a simple low-medium-high rating system, or you can get more specific by using a scale of 1-10.
Once you’ve categorized your projects, you can then start to allocate resources accordingly.
3. Chart your innovation projects
The final step is to create a visual representation of your innovation portfolio. This can be in the form of a table or a chart that lists all of the projects in your portfolio, along with their corresponding categories and priority levels.
When charting your projects, strategic objectives and subcategories shouldn’t be the only filtering elements in place. Other tags and details that drive different views of each project should cover:
- Functional area
- Business model
- Project phase
Knowing all these details will give you a clear overview of your innovation portfolio, which could help you identify any issues or pinpoint areas that need more attention.
Managing an innovation portfolio using innovation software
Once an innovation portfolio is established, it’s important to manage it effectively. This means tracking the progress of each initiative and making adjustments as needed.
Innovation software can be a helpful tool for managing an innovation portfolio. This type of software:
- Provides a central repository for storing information about innovation initiatives and their progress.
- It can also help businesses identify gaps in their portfolio and make decisions about where to allocate resources.
- Plus, it provides a centralized platform for managing all aspects of the innovation process, from ideation and problem-solving to project management and portfolio management.
Meaning, with innovation software, you can optimize your innovation portfolio by providing:
- Visibility into every stage of the innovation cycle and
- Real-time insights into which projects are performing well and which ones need more study and improvement
One of the best innovation software in the market today is called Accept Mission, an all-in-one integrated innovation platform made to maximize your innovation success.
Our software assists you with the categorization of your innovation portfolio, balancing it, and organizing your innovative processes by establishing gates, suitable metrics, design, and execution of persistent brainstorming and funnel management.
On top of these benefits, Accept Mission also helps with:
Projects time and money calculations
Innovation is essential to success. However, projects can quickly become bogged down, and it’s difficult to know which ones are thriving and which could use more focus. That’s where our software comes in.
By offering transparency into every stage of the innovation process, as well as immediate data on how each project is performing, we can help you calculate the time and money that you need for each project in your portfolio to flourish.
This information is valuable for making informed decisions about which projects to pursue and which ones to abandon.
Smart Decision-making go/no go next stages
The decisions you make about your innovation portfolio can make or break your innovation process.
With our software, you can take a data-driven approach to decision-making, particularly in the early stages of the innovation cycle when you’re trying to determine which projects have the most potential to thrive and prosper.
Knowing what these projects are can help you focus your resources on executing projects that matter most.
That way, you know you’re making the best possible decisions for your company’s innovation success.
Boost innovation success rate by implementing innovation projects step-by-step
The key to successful innovation is implementation. However, given its moving parts, it can be difficult to know where to start.
Using our software offers a step-by-step approach to innovation that takes you from ideation to implementation, helping you boost your innovation success rate along the way.
By following our software’s simple, effective, and highly engaging process, you can be confident that your innovation projects are on track to significantly bring your business goals to life.
Stage gate overview of innovation portfolio
If you want to get an overview of your innovation portfolio, we at Accept Mission can help with our stage gate feature, which helps you see which projects are in each stage of the innovation cycle, as well as how they’re doing.
This information is valuable for understanding where your projects are at and what you have to do to move and accelerate them forward.
Reporting on progress and success measurements
Last but not least, our software offers reporting capabilities that help you measure the success of your innovation projects.
With our tools at hand, you can see and communicate how your projects are performing in real time, which ones are working well, and what you can do to improve and significantly boost your innovation progress.
This information is valuable for understanding the impact of your projects and making sure that they’re on track to meet your business objectives.
Selection tool for smart decision making
Our software can help you make data-driven decisions about which projects to implement or relinquish.
Our selection tool can be particularly helpful in the early stages of the innovation cycle when you’re trying to identify which projects are most likely to succeed.
You can prioritize and successfully execute the projects that matter most to your company by understanding which ones can help you secure the greatest return on investment.
This way, you will be less likely to make decisions that could jeopardize your innovation success.
Build and manage your innovation portfolio today
Innovation portfolio management is a critical part of any company’s success. It provides a roadmap for an organization’s innovation efforts. It helps businesses to prioritize and invest in the initiatives that will have the biggest impact on their bottom line.
Additionally, an innovation portfolio can help companies track and measure their progress.
By understanding what an innovation portfolio is, why it’s important, and how to build and manage one using our software, you can be confident that you’re making the best possible decisions for your company’s future.
However, building an innovation portfolio is not a one-time exercise. It is an ongoing process that should be reviewed and updated on a regular basis.
To build an effective innovation portfolio, businesses need to start by taking stock of their current offerings and identifying areas for improvement. They should then set aside time and resources for exploring new ideas and testing out new technologies.
When used correctly, an innovation portfolio can be a powerful tool for driving growth and competitive advantage.
By taking the time to build and manage your innovation portfolio effectively, you can always move forward with the latest and greatest ideas for innovation success.
Book a demo with Accept Mission today! Just click the link, choose a date, and start your journey towards innovation success now.