You can’t go an entire commercial break during the World Cup or a State of the Union address without hearing the word innovation pop up at least once or twice. Companies have added innovation to their company values and mission statements in accelerating numbers.
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.
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.