Lack of Portfolio Management
Here at IMS Projects, we are all about unleashing your innovation potential. Time and time again we come across companies whose innovation ambitions far exceed their ability to innovate. When you look closer, their under-delivery is not because they are not capable of solving technical challenges, or have a shortage of ideas, but rather it is due to some systemic challenges that act like invisible chains holding them back from achieving their innovation potential.
The reason we refer to them as invisible chains is because these are factors that are hard to point to but can be identified by the symptoms they present. They are like an illness in the body that shows itself as a headache or a fever but is difficult to identify without doing further investigation.
In this series, I will unpack some of these invisible chains that hold companies from reaching their innovation potential.
First off the ranks is lack of portfolio management. This is a very common invisible chain. In most companies, innovation initiatives are treated like any other project. Teams are set up around what appears to be good ideas or opportunities and individual projects are tracked in terms of their progress towards completion.
On the surface, there is nothing wrong with this approach to innovation management. Projects are formed and resourced and eventually completed or killed off. But in reality, this approach to innovation management can cause some major problems, which manifest in the form of the following symptoms:
Very long project timelines
We typically underestimate what we can achieve in the long term, but overestimate what we can deliver in the short term. Innovation projects are often motivated by a pending opportunity, further skewing the accuracy of our estimated capacity to deliver. If you add to the mix the inherent uncertainties of innovation projects and limited capacity of key individuals who need to work on these projects, it is very easy to see why these innovation projects typically take much longer than anticipated to complete.
Underperforming projects or Catastrophic failures
Managing innovation initiatives as independent projects form a bias towards making the project a success no matter what. This bias can blind those who are personally invested in the project from sensing critical signs that the project should be stopped. Consequently, projects reach the launch stage, having consumed large amounts of resources yet carrying significant unresolved uncertainties and risk. The eventual outcomes are often underperforming projects and at times catastrophic failures.
Mostly incremental innovations
A track record of cost and time overruns, coupled with underperformance of innovation projects, lead to a business becoming risk-averse. One of the ways to make sure projects are managed to completion on time and delivering desired outcomes is to take on fewer, smaller and less risky projects. As a result, the business will take on mostly incremental innovation projects, and will not develop the confidence to take on more transformational projects in line with its innovation ambitions.
If you are experiencing any of the above symptoms in your business and would like to learn how Innovation Portfolio Management can help overcome these issues, contact an IMS consultant.