Innovation portfolio management success for shipbuilding leader
A world-leading shipbuilder’s internal analysis had shown alignment and prioritization of its many innovation projects could be improved. Philips Engineering Solutions created an Innovation Strategy, a Strategic Framework for positioning and a Yardstick for measuring innovation projects.
By Rob de Graaf, Senior Consultant Product Innovation, Industry Consulting, Philips Innovation Services
Image: Three levers for ongoing improvement of the innovation management process
To get started, categories or ‘buckets’, over which the projects should be distributed, were introduced. Each of these buckets was allotted a certain percentage of the total innovation budget, with the goal of arriving at a balanced portfolio. Furthermore, a yardstick for the different phases of projects was developed. This enables comparison of same-phase projects in each bucket to enable prioritizing.
The approach: strategy-based decision making
After testing the Strategic Framework and the Yardstick on a set of projects, both were sharpened. An Innovation Strategy for the company was developed, which substantiated the priorities for innovation set by the Executive Committee. Next, deployment of the Portfolio Management approach was initiated, including setting up the organization, governance and IT infrastructure. Additionally management and the innovation professionals were trained in assessing innovation projects proficiently.
Industry Consulting’s Portfolio Management approach
With the implementation of Portfolio Management, certain effects are already visible. Firstly, assessing how each project fits in with the Innovation Strategy has made this more vivid. This has already led to repositioning of certain projects. Furthermore, the fact that innovation projects are now assessed from five different perspectives has improved project information dramatically, making it much easier for management to prioritize.
Additionally, it has become clear that to fill the buckets to the required percentage, certain projects must be reconsidered and additional projects initiated. This gives the customer greater control over the innovation portfolio, determining which projects are the right ones to start, whether the running projects are going in the right direction, and whether they deliver the right results.
“Industry Consulting has been able to get acquainted with our organization, strategy and R&D processes in a short period. Based on this we developed an improved innovation strategy and structure together. We are very pleased with services rendered by Industry Consulting.”
Image: Strategy based decision making
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