Dr Kevin McFarthing runs the Innovation Fixer consultancy, using insight and experience to help companies improve the effectiveness and efficiency of their innovation. He advises, mentors and teaches innovation and is the author of chapters in two recent books on Open Innovation. He was Head of Strategic Alliances, and Head of R&D for Health & Personal Care at Reckitt Benckiser, a $16bn consumer goods company where 35% of sales come from products launched in the last three years.

Managing Innovation Portfolios – Operational Portfolio Management

This is the second of two articles, co-written by Ralph-Christian Ohr and Kevin McFarthing. In our previous post, we discussed how Strategic Portfolio Management (SPM) ensures that the content of the portfolio is driven by innovation strategy and associated targets. We would now like to move on to Operational Portfolio Management (OPM), where the portfolio directs resource allocation, metrics and reporting on an operational and tactical level. The link between the two is shown in Figure 1 below.

Managing Innovation Portfolios – Strategic Portfolio Management

Facing increasingly dynamic and unpredictable environments, firms are required to develop convenient innovation strategies, constantly adapt them to changing conditions and properly implement strategically aligned initiatives throughout their organizations. Innovation portfolio management (IPM) can act as the pivotal tool to translate strategic objectives and priorities into project-based innovation activities. Furthermore, it provides a framework to convert raw ideas into real investment opportunities, based on their risk profile.