Innovation is a critical factor in any company’s success. However, it is not always easy to know what innovations to pursue. This article provides a step-by-step approach to developing a proper innovation portfolio.
One way to get a handle on the rate of innovation in your company is to examine the number of new products that are introduced and the success rates for these new products. You should also ask customers if they believe your company is innovative.
The most relevant innovation question for customers is: “How satisfied are you with our new products? “The second most relevant innovation question for customers is: “How satisfied are you with the quality of our services? “No other questions have a comparable impact on perceived value, and therefore repeat purchases, when they are included in customer satisfaction surveys.
Why You Need Innovation Management Tools?
Innovation management tools are essential for developing a true innovation portfolio. Innovation is a continuum, not a one-time event. Consequently, innovating must become an integral part of everyday life in your organization.
For this to happen, the company’s management must align and monitor the innovation portfolio and provide all employees with an understanding of what innovation is and how it is to be accomplished.
As with most things in life, the first step is not so difficult. It’s easy to understand and believe that innovation is important to the future of a company.
Even an organization that intends to manage its innovation as part of its standard work process needs to evaluate whether they are doing it well or not.
While management by objectives and programs may have been enough for a while, that approach is no longer sufficient. It must be evaluated in terms of the extent to which it contributes to, or detracts from, innovations.
Establishing KPIs (key performance indicators) for innovation portfolios is a critical management tool. A significant amount of effort and talent is involved in managing innovation projects. Without management, projects tend to go off in their direction at a breakneck pace. The rate of change of the speed of business is too high.
What to measure and why?
Innovation is a buzzword that has become commonplace in the business world. However, the term is often misused and misunderstood. The key to developing an actual innovation portfolio is measuring and understanding what innovation means to you and your company.
The dimensions that you define as innovation can be divided into three broad categories: Internal Innovation. It should allow you to change or improve something in your business.
This can be done through process changes, new product or service development, and corporate strategy changes. In this category, you can consider things like investing in the right technology, being responsive to customers and investors, creating a solid corporate culture, or hiring the right people for your company.
These changes should be things that allow you to grow. For example, when Kodak produced a camera with film and electronics in one easy-to-use unit, the company became a household name, and the founder took home the Nobel Prize. But Kodak is no longer around. If it’s not growing the business, don’t pursue it.
It didn’t foresee the effects of this technology on its business. And just as digital cameras ate Kodak, so did iPhones and iPads eat Apple’s iPod market share. To stay in business, Apple had to change to the tune of several billion dollars a year, switching from selling music players to becoming the world’s largest seller of music downloads.
What are the seven main types of innovation portfolio management tools?
Innovation portfolio management tools are a way for companies to manage their innovation process. The first thing to know is that there are seven different tools:
- Timelines. This is a visual tool that plots milestones as cards or colored rectangles; the further back in time the card, the smaller and greyer the rectangle, or at least that’s how it works in the windows version. So you can see and follow progress over time.
- Burndown charts are the same as above but plotted on a straight line and without the time info.
- Project dashboards, which is a single view that includes the above as well as charts of work by the team, status (to do, in progress, done), current burndown, etc. with breakdowns of these things by stage/team. This can be overlaid on Kanban board if needed.
- Stat WidgetThis shows what you have done over the past week.
- Task List (not part of PMM)Only when I’m listing tasks with deadlines but not marking off finished ones. I don’t yet see the advantage of this task list over my typical sticky note in the kitchen.
- Note Taking (not part of PMM)This is ok but probably not as good as Evernote.
- Data science tools like vizologi help you understand the business models and innovations changing the world. It lets you create a portfolio of innovation projects that transforms your business strategies and produces disruptions.
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