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Product Development

Building an Innovation Portfolio -- 10 Key Takeaways [Infographic]

I recently hosted a discussion with Forrester's, vice president, principal analyst serving CIOs, Chip Gliedman and Planview's NDP solution market manager Carrie Nauyalis about innovation and portfolio management, and how the two relate. I've included an image of the visual notes designed during the live event. They provide a visual reference for the topics and key takeaways.

Infographic: Building and Managing an Innovation Portfolio

We Had a Lively Discussion on Five Topics

  1. What an innovation really is and how it differs from change
  2. The capabilities needed to support sustained innovation across the enterprise
  3. Driving innovation forward and who typically takes the lead
  4. How to leverage an innovation network that culls ideas from inside and outside the organization; and last, but not least…
  5. How portfolio management can tie all this together

My 10 Key Takeaways

  1. Ideation is not innovation ‒‒ Innovation is a process that spans products/services, processes/operations, markets/business models, and organization/governance.
  2. Innovation differs from change; innovation:
    1. Is ongoing, not episodic
    2. Often has distinct governance and funding
    3. Implies a greater degree of creativity and risk
    4. Success metrics are different (often the driving principle is "fail fast, fail cheap")
  3. Balancing Risk vs. Reward is key; strive for innovations that drive value
  4. Exploit the entire ecosystem including employees, customers, suppliers, and more
  5. Innovation may be "everybody's job," but to thrive it is best driven, or at least supported, by a single area.
  6. Regardless of where innovation "sits" in an organization, the CIO role is going to need to shift to support the growing trend toward more innovation initiatives
  7. Product Portfolio Management (PPM) helps operationalize innovation throughout the Ideation, Product Planning, Development, and Launch processes. It also helps align projects and other investments with products, and aligns products with brand strategy.
  8. Be sure to make room in your project portfolios for innovation projects, even smaller efforts that may not have a major impact on current business operations, but help enable business change or growth.
  9. PMOs should not only help accommodate and support innovation projects (relaxing their methodology and metrics as appropriate), but should encourage and drive the trend. This can also serve to improve the image of the PMO as a bureaucratic bottleneck.
  10. To drive innovation, you need:
    • A strategy for driving and managing innovation
    • A culture that fosters innovation
    • Ideas! And lots of them!
    • Processes to filter and vet the ideas
    • A portfolio view of your innovation prototypes
    • Governance and control processes for innovation

For more information, listen to the full Webcast discussion Building and Managing an Innovation Portfolio. Meanwhile, I'd like to hear your thoughts. Who drives innovation in your organization? What processes do you have that ensure innovation is considered? What is the maturity level of your innovation program and what challenges are you facing? And lastly, what do you find stifles innovation in your organization?

Top 5 Tips for Capturing the Voice of Your Customer

Product Development managers know how critical it is to develop products people want. How do you figure that out without simply guessing? How do you ensure your choice of which product or service to produce wasn't just your opinion? You need customer-driven data. Here are my Top 5 Tips on how to get it right:

1. Ideation

Never underestimate the power of the masses to give you the best ideas. By opening up the question to the world, or even just your customer base, you will be amazed at how many great ideas you can generate. You can simply ask your internal customers, like sales and support, or find key constituents who are passionate about the topic. The key is to choose an audience, maybe 10-15 customers, that is varied enough to capture the true market yet narrow enough as not to overwhelm. At Planview, we use the Agile process that enables our target audience to participate throughout the entire lifecycle and see progress every two weeks. The product (or service, project, etc.) can be refined with each iteration, giving us flexibility with inevitable changes.

Refinement. Once you have the ideas, you need a mechanism to narrow down the choices. We incent our target audience to vote on them. Again, the Agile process enables our audience to remain involved in the process beyond ideation. Because we are using the same audience from the ideation phase, we can ensure we are capturing the voice of the market, not just the voices of our executives.Product Development and Your Customer's Voice

2. Alignment

Now that you have a list of plausible ideas, you need a mechanism to align them with your strategy. With clear strategic goals and set criteria, you can score the ideas based on key metrics, such as revenue, market share, new markets, etc. You must decide what's important and then measure the ideas to find the absolute best ones for your company. Make the criteria visible to the company so everyone can understand how each idea was scored.

3. Capacity

With your best ideas in hand, it's time to estimate your capacity to develop them. "What if" scenarios allow you to imagine specific situations and how they would affect resources, revenue, time lines, and other criteria. With this data, you can make sound decisions to prioritize ideas based on real information. Many companies still do this process manually in spreadsheets, adding tab after tab with capacity and financials. But if something changes, which it always does, it's ridiculously time-consuming to make those changes to static spreadsheets -- even with pivot tables. An automated process saves countless hours of time and risks for errors.

4. Measurement

After you develop and release the product (or service), you need to measure the results. What was the actual versus estimated revenue? How long did the project take? What did it cost to get it on the market? Actuals help you improve the next planning cycle. Comparing actual results is much easier and accurate when it is done with a product development tool rather than spreadsheets and manual reports.

5. Repeat

Although your process should remain constant, your plan will constantly change because there are so many dynamic factors in play. The ability to see where you started and track your progress throughout the product development cycle enables you to make adjustments towards best practices.

Creating a process for capturing the voice of the customer is essential to developing the products people want. In fact, we followed this process for our latest software release and incorporated 320 customer-driven enhancements.

I want to hear from you. What are your methods for capturing the voice of your customers? Share your experiences and best practices -- leave a comment below.