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Building a Strategy Driven Product Portfolio

Are you winning the war? 5 ways to advance your portfolio strategy

Building a Strategy Driven Product Portfolio

So, you have an effective Stage-Gate® process in place with both project teams and gatekeepers functioning well. What now? Often what gets lost in the go/kill decision-making process is how these changes will impact the overall portfolio.

  • Do the projects you say “GO” to align with your innovation strategy?
  • Have you “KILLED” a project that may have contributed greatly to the success of your business?
  • Have you “KILLED” enough projects to limit grid lock?
  • Do you have an innovation strategy?And if so, has it been communicated throughout the organization?
  • What’s does such a strategy look like, you might ask?

These lead to the bigger question…

Are You Winning Battles or the War?

Battles = In-Flight and Potential Projects

Gate meetings represent a bottom-up approach to managing both in-flight and potential projects. Let’s refer to these as battles. What is often forgotten when analyzing the battles is your organization’s business strategy, which is partly comprised of an innovation strategy. The innovation strategy dictates the how and what of your new product development (NPD) efforts will contribute to organizational business goals.

 War = Business Strategy

The top-down approach or business strategy to managing the organization’s NPD efforts is the war. It’s the complete vision, at the portfolio level, encompassing the long-term strategy of the business. While, the decisions made at the gate meetings might make complete sense in terms of the battle, they don’t amount to much if your organization’s overall portfolio is a failure…at that point, the war is lost.

A good portfolio strategy connects the business goals of the NPD process to the individual projects and products.  It ensures that the projects in flight roll up to the desired impact in terms of revenue and profit to drive growth.

Of course, it’s easier said than done. How do you get there? How can you win the war and deliver the products that create the most impact on the businesses bottom line?

Here are five recommendations to help you connect strategy to your product portfolio:

  1. Define the goals of your NPD campaign
    For your organization to be successful, your business strategy must be directly linked to your NPD efforts  and the overall portfolio. Your NPD effort is an investment that is meant to contribute to a portion of the business plan and hopefully drive growth forward. Being able to answers to questions, like “What percent of your sales will come from new products is a good example of this.
  1. Choose battles strategically
    When looking across your portfolio makeup and the products in flux, where should you attack? More importantly, where should you not? Which products will you choose to deliver that will fit into these strategic areas? Battles shouldn’t be waged for their own sake. They must be strategic in the larger context of the war. To take it a step further, identify the strategic areas within each battle.  These areas will help you identify how many of the various types of projects you will focus on within each battlefield, i.e., new innovations, line extensions, maintenance and cost improvements, or customer requests. Use your business goals as a guide to determine how many projects need to be in each category to meet the plan, then meet periodically to ensure that the balance of each area is maintained. Understanding your portfolio at this level will go a long way toward understanding resource commitments that will be required when it comes time to deploy the troops.
  1. Develop a plan of attack
    You have projects/battles identified. How and when will you attack? Or how and when will your new product innovations go to market? Does it make more sense to be aggressive so you’re first to market? Or, is your strategy more conservative. Being a fast follower who waits and watches can help you make a more competitive decision.
  1. Deploy the troops
    You can’t win a battle or the war without troops and rations. You’ll need human and financial resources to commit to the individual projects if you want to deliver on the revenue and profit goals of the business. The question is threefold: balance, commitment, and timing.  Those who own the resources must share and balance them across projects in the strategic areas while avoiding over commitment.  Once the decision has been made to commit resources, those troops should remain deployed unless game changing information leads to killing the project.  And because resources are not infinite, be smart about make timing and priority decisions.
  1. Command from the top of the hill
    A good general isn’t on the front lines. They understand they need to see the complete picture to make well informed strategic decisions. For product development professionals, roadmaps offer a bird’s eye view into resource conflicts as well as when projects need to be launched. When done correctly, a product roadmap gives you complete visibility by allowing you to understand how projects line up against each other, for both resources and timing.  Being on top of these conflicts gives you a competitive advantage. You need to be able to make adjustments to the portfolio ensuring on time and on budget product launches.

Hopefully, if the right projects have been chosen, the results will lead to revenue gains and growth in the market.

Top performers, by a more than two to one, apply an innovation strategy to their NPD effort using similar formula to the above.  They realize that sustainable growth can only be achieved from having a functional process that is driven by a well-defined strategy.

Intrigued yet? I invite you to read the new eBook “Top 5 Evaluation Criteria for your Product Portfolio: Advancing your Stage-Gate Process with Portfolio Management.”

I’d like to hear from you. What are you doing to create an effective, focused, and resourced innovation strategy that will help your organization win the war? Share by leaving a comment below.

Stage-Gate® is a registered trademark of Stage-Gate Inc.

Several thoughts and ideas in this blog where inspired from chapter 1 of Dr. Cooper and Edgett, Product Innovation and Technology Strategy, Copyright 2009, pages 23-29.


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Barry Novotny
Written By

Barry Novotny is a Managing Consultant for the Stage-Gate International USA’s Value Center, specializing in enterprise solutions to drive business value through innovation management and new product development. Barry’s experience spans over 20 years within the Manufacturing environment where he utilized Stage-Gate processes to manage new product, new process and technology development innovation projects. Since joining the Stage-Gate International team Barry has worked with several clients across various industries including manufacturing, chemical, household goods, technology (software) and cosmetics. He has provided services such as deliverables design and development, process assessments, process implementations, data analysis, portfolio management and innovation strategy consulting, training and best practice blogging and webcasting.   Barry holds a BS in Accounting from Penn State University and an MBA from St. Francis University in Lorreto, Pennsylvania and is pursuing certification by the Product Development and Management Association as a New Product Development Professional (NPDP).