Over our 20-year history, SmartOrg has helped numerous organizations increase the value of their innovation and new product portfolios, sometimes several-fold. Here are ten tips we can share for increasing your portfolio value.
- Understand the value of good portfolio decisions
- Decrease clutter
- Focus on what matters
- Raise your aspirations
- Look inside projects for hidden value
- Create learning plans to make that hidden value real
- Start an oyster farm
- Heal wounded projects
- Keep scouting
- Follow a continuous process of strategic portfolio management
Understand the Value of Good Portfolio Decisions
The children’s story Millions Of Cats is a fable about clutter. If you can’t say no to any project proposal, you end up with far more projects than you can fund or manage. And if you can’t bring yourself to cancel or redirect projects that have little chance of success or little potential for significant return, those projects linger to clutter your portfolio.
Focus on What Matters
Look Inside Projects for Hidden Value
Raise Your Aspirations
As we discussed above, White Elephant projects are too small to make a significant difference to your business goals. But sometimes this is because a big business opportunity has been stunted by doubt and skepticism, so that the project’s champion has been driven to make small promises for what the project will deliver. Often those responsible for financial performance mistake uncertainty for risk, and require project owners to skew estimates of what is possible to what is probable.
Before cancelling or shelving a White Elephant project, look into its business model and see if its upside potential has been stunted. Have assumptions about the market, the realizable price, the available margins been systematically reduced in the name of ‘cutting risk’? What would happen to the projected value of the project if these assumptions were restored to the original aspirations, or if an entirely new set of aspirations was applied?
Create Learning Plans to Make that Hidden Value ReaL
Start an Oyster Farm
Heal Wounded Projects
Diluted focus is not the only problem clutter creates. Another is spreading resources too thin.
It’s common for companies to call for across-the-board cuts, asking every project leader for belt-tightening. Using project resources efficiently and intelligently is important, but when resources get cut below the level needed to execute on the project, that’s neither efficient or intelligent. The project becomes wounded, able to limp along but unable to make the necessary progress to realize its upside potential – or even to achieve any degree of commercial success.
Part of the systematic process of Oyster farming is scouting out new opportunities. In this part of the process, it’s important to recognize that new Oysters don’t always appear as Oysters at first glance. Sometimes a new idea incubates at a lower level, looking like a White Elephant, until its full upside potential becomes apparent. Keep your eyes and ears open, and probe under the surface of new opportunities to see whether they have the potential to join the crop of Oysters in your farm.
Follow a Continuous Process of Strategic Portfolio Management
- Evaluation: look into each project to find its value with corresponding uncertainty ranges.
- Calibration: put all the projects on a comparable scale so that comparisons between them are credible.
- Decision: align the portfolio with the future you want to create, prioritizing projects and balancing the strategic mix.
- Tracking: monitor the progress of learning plans, collect and update actual performance data.