Top ten learnings from successful innovation portfolios

When managing innovation, large organisations often try to make sense of two simple questions: “where are we now” and “where do we want to be”. Easy on the surface, the answers depend on complex market pressures and rapidly changing customer preferences. To understand these forces and position for long-term success, organisations require an open mind, experimentation, and continuous learning.

In this context, an innovation portfolio is not just a tool to structure all innovation efforts, it is also a necessity. A ‘portfolio approach’ to innovation takes a single view of all innovation investments, enabling the organisation to monitor the progress of the innovations it is investing in, spot duplications, and more effectively prioritise efforts to deliver the most value.

Over the years, we’ve worked with large organisations to build and nurture innovation portfolios. We have learned a lot about what makes the process thrive, but also what can stop it in its tracks. We decided to take a step back and list our ten top learnings that can help your organisation kickstart a systemic approach to innovation.

01. Define your portfolio strategy

Start your journey with an intent. What are you trying to achieve with your innovation efforts? Are you looking to launch new products or services, or increase the efficiency of your organisation? Are you trying to reach out to new industries or expand your existing relationships? Crucially, also establish what you’re not looking for. It’s much easier for your teams to focus their efforts and make effective decisions with clear guard rails and a coordinated strategy.

02. Organise your full project backlog

Your organisation is already innovating in all sorts of ways. Take an inventory of the current projects and how they align with your priorities. This will give you a clear perspective on your current strengths, technology requirements and innovation maturity level. This backlog of ‘already-in-motion’ projects can be included in your overall portfolio and will be reviewed alongside any other efforts, nurturing the promising ones and killing off the ones that falter.

03. Assure you have an active ‘ideas pipeline’

Involve the whole organisation in building a healthy innovation pipeline based on your strategic priorities. In practical terms, this means that any employee can propose ideas through, for example, dedicated innovation challenges, and take these ideas forward with company support. To build momentum around innovation, you need to be transparent and structured in how ideas are surfaced, reviewed, and developed.

04. Track your progress consistently

You will be gathering a wide variety of projects in different stages of development, with very different business models. Use simple metrics when you track these initiatives; instead of going in depth into each, think about what you can track consistently. This will help you evaluate the progress and performance of the portfolio as a whole, without getting bogged down in detail.

05. Don’t just throw money at the problem

Some problems will feel big and important. Some ideas will feel really tempting to just get started with straight away. Some teams will be very loud. This will create all sorts of incentives to leapfrog over ‘process’, putting all hands on deck to tackle specific projects, whatever it costs. Keep in mind, however, that resources alone will not help you or the teams figure out the best approach to resolving the problem, and even more so, whether this project is worth exploring in the context of your whole portfolio and strategy. Take the time to prioritise projects, test and iterate in low-cost ways until the project has proven to be valuable to your organisation or customers.

06. Look out for the hotspots

Having a full picture of your innovation efforts allows you to see duplications and overlaps between different projects. Is there a particular technology that seems to support many of your teams’ efforts? Is there a set of problems targeting the same core issue? The power of the portfolio is that you can select your next priorities based on the value they add to the portfolio as a whole, actively seeking synergies in the solutions and efficiencies for the organisation.

07. Repurpose elements

In a well-functioning, optimised system, waste is minimised. However, experimenting can be seen as a risky exercise where one out of ten trials might lead to success. A portfolio approach allows one project’s experiment to provide valuable learnings and insights across multiple; one technology to be repurposed and applied to different use cases; one disproved assumption to kill ten projects simultaneously.

08. Bring together portfolio champions

Identify people within your organisation or team who have a good understanding of the process and give them a sense of ownership over the portfolio or an aspect of it. They will be your champions, looking for project synergies and working with the teams to connect insights, technologies, and outcomes. This shared understanding will also help to avoid any dependencies on particular stakeholders or experts to drive the portfolio forward.

09. Define how you give support

The performance of your portfolio depends on the people on the ground driving ideas forward. As a portfolio manager, you need to have a clear view of what support you can provide them. Can you link teams with sponsors for their ideas? Can you coach them to outline and work on clear objectives? Do you have resources and expertise in methodologies such as Innovation Sprints and Idea Incubation to help them develop their ideas? Outline your options before you start, to assure team expectations are correct.

10. Rebalance the portfolio regularly

The portfolio is an active, continuously evolving ecosystem. Any developments will result in learnings, improved data and insights, and new requirements within and outside the organisation. Reviewing and rebalancing the portfolio at regular intervals means that you redistribute investment where it will deliver the greatest value, and prioritise or discontinue projects based on the latest data. In this way, you will be able to capture relevant learnings and be nimble in your investment approach.

Ten simple learnings, one innovation portfolio that can empower all people within your organisation to build a sustainable innovation system. By putting in the time and energy upfront, you can structure your efforts and assure your company is well positioned to face an uncertain but exciting future.