Organizations suffer from decision fatigue when the innovation pipeline isn’t managed.
When Drive Strategy starts working with a client, we interview 10 to 20 people. In the first five, I am already being quietly told that the company doesn’t care about innovation. It is a side job, an after-hours activity or impossible to get resources to focus on it. I love hearing that because I know why they feel that way and changing it does not require a big investment.
First some background. Ten years ago, when I shifted from technology consulting to innovation management, I had run through a similar cycle of change. I had heard the same complaints. Y2K had ignited an urgency and focus around stopping past technology compromises from crashing the current customer experience. To further complicate decision making, the internet was a new low-speed distraction with tremendous promise.
Quickly after January 1, 2000, Y2K faded and the internet became relevant. IT departments gained power, projects proliferated, and I started hearing staff complain about the struggle to move off old platforms onto a dizzying list of critical new technologies.
Now fast forward to 2010 with the passing of the Affordable Care Act. Health insurance companies were in the same situation – a deadline effecting the entire industry and 800 pages of ambiguity that brought into focus the compromises the old system had made in the customer experience. HCSC, BCBS Michigan, Highmark and several other health insurance companies were our clients and up against the same complaints that were sapping productivity.
With those experiences, I was motivated to seek out and create methods and tools to manage the innovation process so people felt supported. It has been very rewarding. Talk to employees of any company with a mature innovation competency and the first thing you will hear are stories of overcoming industry-changing difficulties in order to serve existing and emerging consumer markets — company funded and fully supported.
One of the most effective methods to begin developing a supportive environment is active portfolio management. Just having a portfolio mindset is enough to impact decision-making as demonstrated via Abbie Griffin’s research (JPIM: An Empirical Investigation of the Antecedents and Outcomes of NPD Portfolio Success, June 2014).
Drive Strategy recommends grouping projects into four categories defined by how difficult they are to execute and the maturity of the market they target. Once grouped, they are evaluated on a regular basis with the expectation that metrics, trends and executive power will establish a firm go/stop/hibernate decision until the next review cycle.
Why does this have such an immediate impact on how people feel? Basically, the organization loses the ad hoc sense that projects are driving the strategy. Executives, managers and staff all understand how the entire portfolio of projects will provide opportunity for the company. Speed to market, leadership impact and even failure does not bring the capabilities of the company into question.
With an active portfolio approach, a company can build reusable innovation assets, clarify roles and improve year-over-year return on innovation. In time, corporate strategy is actively integrated into the overall portfolio.