Portfolio management for
product development

<strong>The Strategy for Product Innovation:</strong> Investing in the right development projects and platforms is at the heart of a successful innovation program. But effective project selection and <a href="portfolio-management.html">Portfolio Management</a> depend on having a clearly defined innovation strategy.<br> <a href="seminar-portfolio-strategy.html">portfolio-seminar.html</a> <TABLE BORDER="1" CELLPADDING="12" BGCOLOR="#cccccc" CELLSPACING="0" FRAME="lhs"> <TR><TD WIDTH="50%"><I>Can be arranged as <a href="shared-pages/seminars-robert-cooper.html">an in-house seminar</a></I><BR><br><BIG>Portfolio management for new products</BIG><BR>Optimise your product development investments<BR> <BR> <B>Learn the best practices in order&nbsp;to</B> <TABLE WIDTH="100%" BORDER="0" CELLSPACING="0" CELLPADDING="0"> <TR> <TD VALIGN="top"> <img src="images/blackdot-5.gif" border="0" width="5" height="5" alt="">&nbsp;</TD> <TD VALIGN="top">Maximise the value of your product development investments.</TD> </TR> <TR> <TD VALIGN="top"><img src="images/blackdot-5.gif" border="0" width="5" height="5" alt="">&nbsp;</TD> <TD>Achieve the right balance of projects.</TD> </TR> <TR> <TD VALIGN="top"><img src="images/blackdot-5.gif" border="0" width="5" height="5" alt="">&nbsp;</TD> <TD>Ensure strategic alignment of the portfolio.</TD> </TR> </TABLE> </TD> <TD WIDTH="30%" VALIGN="top"> <<img src="images/blackdot-5.gif" border="0" width="5" height="5" alt="">&nbsp;<B>See the<BR>&nbsp;&nbsp;&nbsp;&nbsp;<A href="seminars/in-house-portfolio-coo.pdf">most recent program</A></B><BR>&nbsp;&nbsp;&nbsp;&nbsp;(Requires Acrobat Reader)<BR><BR> <IMG height=5 alt="" src="images/usynlig.gif" width=15 border=0> <IMG height=119 alt="" src="images/bubble-icon.gif" width=129 border=0></TD> <TD WIDTH="20%"><IMG height=141 alt="" src="images/robcoo-small.jpg" width=116 border=0></TD></TR> </TABLE> <TABLE BORDER="1" CELLPADDING="12" CELLSPACING="0" FRAME="lhs"> <TR> <TD WIDTH="50%" VALIGN="top"> <A href="staff-robert-cooper.asp">Robert G. Cooper: A world guru: The UK’s Cranfield University has singled out Professor Cooper as the person who has made the greatest single, international contribution in the field of innovation management.</A><BR> </TD> <TD VALIGN="top"><B> Participants give this seminar top marks</B><BR> Cooper is an incredibly inspiring, entertaining teacher.<BR><BR> Some of the participants that have given this seminar top marks came from ABB, Alfa Laval, AstraZeneca, Atlas Copco Tools AB, Carlsberg Breweries, Danfoss A/S, Electrolux AB, IBM, Halton OY, Husqvarna AB, LEGO A/S, Nokia Mobile Phones, Nycomed Pharma AS, Orkla Brands, SKF, SAAB AB, Telenor and Volvo<BR><BR> <B><A href="portfolio-management.html">More about portfolio management</A></B><BR>Information, articles and more. </TD> </TR> </TABLE>
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The goal of product development
portfolio management is
to help management invest its product development resources as effectively as possible by achieving the right portfolio of projects and development investments.


Three decision processes in product portfolio management

1. Strategy development is where you specify the product development goals (e.g., profit from new products), arenas of strategic focus (e.g., those markets and product areas that new products will be developed for) and relative priorities (e.g., the breakdown of product development spending across markets, product areas and project types).

2. The new-product process has gates where the gatekeepers make go/kill decisions on individual projects and thereby allocate resources to development work.

3. The portfolio review meeting This is where the senior executives periodically reviews all projects. The vital question is: Do we have the right portfolio of new-product projects? Is this how we want to spend our money in order to maximise our performance?
     
portfolio management for new products - product development

Executive management looks for three things at portfolio reviews

1) Maximum value of our program of projects:  Here, we use data about each project derived from the Stage-Gate® development process. Typical data include net present value (NPV) adjusted by the technical and commercial probabilities of success for each project. The projects are then selected and prioritised according to their expected commercial values.

2) The right balance:  The active development projects must have a good balance in terms of high risk versus low risk projects, different markets and types of projects and other important factors. The balance dimensions are portrayed by visual charts such as bubble diagrams and pie charts. Again, the data come from the Stage-Gate® process.

3) Alignment with the company's strategy:  Here, we use the Strategic Buckets approach to allocate funds so they reflect our strategic priorities. Again we use various charts and diagrams that show spending splits across strategic focus areas (project types, markets, product lines, etc.)

Designing a quality process usually includes:
 Clarification of the company's strategy for new products  Designing the details of the system  Selection and installation of software, trial runs and adjustment  Adjustment of the existing Stage-Gate® process

The system or process is usually designed and implemented in three steps. (See figure). During the design phase (step 2), the results are presented and tested several times against executive management and other key users to allow for adjustment of the process before the implementation begins. This greatly improves the process and facilitates buy-in and ownership.

We can help you developing a professional best-in-class solution for your company. Please click here if you wish to order more information about how to tailor and implement a professional process. 		The design and
implementation process

The design and implementation process
Stage-Gate development process | ProBE: Benchmarking best practices
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© Jens Arleth, 2009