PURPOSEThepurposeoftheworkshopwastoexplorethestrengthsofVisualThinkingasacommunicationandcollaborationaidinProductPortfolioManagement.Throughouta2,5-hour workshop, the participants teamed up in smallergroups.Theytookontheroleasthemanagementteamof company facing increased growth demands, in amarketof fiercecompetition.Theirchallenge:Tocreatetheoptimumfutureproductportfolio,thatwillreachtheambitious strategic goals that are given, on a limitedbudget.

METHODBefore Innovation in Action kicked off, theparticipantswereprovidedwithacasetostudyaspreparation for the iPM Challenge. The caseincludednotonlyadescriptionofthecompanyandits challenges, but also a representation of thevisual tools thatwill aid the team. The teamwasprovided with cards representing the existingproducts and potential product developmentprojects. The team was also provided with fourCanvases. When the cards were placed on thesecanvases theyenable visualizationandanalysisoftheportfoliofromdifferentstrategicperspective.

Thisbriefingpaper includeskey take-aways fromtheInnovationPioneers2017workshophostedbyGoogolinStockholm.JanSandqvistandMyEkstrand ledtheworkshop on the application of Visual Thinking onProductPortfolioManagement.

“ITISEASIERTOHAVEADISCUSSIONONSOMETHINGTHATYOUCANSEEINFRONTOFYOU”“IFTHESETOOLSAREUSEDCONTINUOUSLYTHROUGHOUTTHEYEARTHEYAREINCREDIBLYPOWERFUL”

IPM CHALLENGE INNOVATION PORTFOLIO MANAGEMENT BY VISUAL THINKING

Innovation in Action - 2017

4TAKEAWAYS• Visualizingyourportfoliohelpsyougeta

helicopterview• Itisimportanttokeepaneyeonallthe

externalfactorsthataffectyourdecisionsandstrategies

• WorkingwithiPMmadeyourealizethecomplexityofmanagingportfoliosandbalancingresources.

• Thepowerofvisualizationasatool

InnovationinAction2017

THEiPMCHALLENGETheteamsattachedtheircanvasestothewall,startedanalysingthecardsinfrontofthem,andassignedrolestotheteammembers.TheteamwastoconsistofanR&DDirector,aMarketingDirector,aHumanResourceDirector,aSalesDirectorandaSupplyChainDirector,allprovidingdifferentperspectivesonthetaskahead.

Step1–ProductPortfolioCanvasThefirststepinthechallengewastousetheProductPortfolioCanvastovisualizetheexistingportfolio.Thecardsweresortedbyproductcategoryandplacedinthefieldswheretheybelonged.Nexttoeachfield,a small dashboard of diagrams was provided, summarizing the information from the case on eachcategory’s strategic direction, currentmarket situation and economic performance. This provided andoverviewof the current situation, and the team couldbeginmakingwell informeddecisionsonwhichproductsthatshouldberemovedfromtheportfoliotomakeroomfornewones.Foreveryinvestmentinanewproduct,anexistingproductwouldhavetoberemoved.Step2–RiskRewardMatrixCanvasItwastimeforthegrouptostartevaluatingpotentialinvestmentsinnewproductdevelopmentprojects.TheRiskRewardMatrixrepresentsRiskLevel(scale:1-4)onthey-axisandNetPresentValue(NPV)onthex-axis.Thisvisualizationhelpedtheteamtoanalyseandevaluateprojects.Theprojectcardsplacedinthefourthquadrantforexample–withlowrisksandhighNPV-arethemostvaluableprojectsinthetrade-offbetweenriskandreward.TheteamwasinstructedtoobtainanaverageRiskLevelof2intheirfinalprojectportfolio.Step3–GoogolMatrixAccordingtocorporatestrategy,thereshouldbearesourceallocationof70%/30%betweenincrementaland disruptive projects. This will result in a good balance between business sustaining and growthgeneratingproductsintheportfolio.Also,theCEOhasprovidedastrategicdirectiononresourceallocationbetweenshorttermandlongtermprojects.TheGoogolMatrixhelpedtheteamallocateresourcestofit

InnovationinAction2017

thecorporatestrategy.Forexample,theteamcouldquicklygetanoverviewofwhichprojectcardsthatarelongtermbusinesssustainers,andwhichareshorttermgrowthgenerators.Step4–StageGateModelThe team begun sorting out the projectinvestments that would align with all differentstrategic perspectives, all within their budget.The next stepwas to place these cards on thecompany’sStageGateModel.Theteamrealisedthatit isimportanttohaveanevendistributionofprojectsinthepipeline.Afterall,nopartoftheorganizationshouldbeovercapacitatedorundercapacitated.Whentheteamhadreachedagooddistribution,theystartedtosummarizevaluesontheprojectcards.First,theteammadesurethattheaverageRiskLevelwasright.Then,theteamcalculateditsInnovationperformance,definedasip=totalNPV/totalInvestment.ThisisaKPIthatexpresstheeffectivenessoftheinnovationprocessasareturnoninvestmentininnovation.Anyipvalueover3,14was said to be acceptable in this challenge, but the value could be increased by optimization of theportfolio.Step5–OptimizationbyiterationAtthisstage,thecompetitivespiritintheroombecameevident.With30minutesorsoleftoftheChallenge,teammembersdiscreetlysneakedaroundtheroomtogetapeekofother teams ip-values.Theteamsstarted to iterate theiroptimizationworkby replacingprojectsand recalculating their values, trying toincrease their Innovation performance while still aligning with all strategic goals and limitations, andkeepingthebudget.

LEARNINGSANDRESULTSManagingandoptimizingtheproductportfolioisacomplextask.Informationneedtobeobtainedfrommanypartsoftheorganization,andcommunicatedtopeopleofdifferentexpertiseandperspectivesonthe product portfolio. With the high number of variables to consider (such as risk, investment, NPV,resource allocation and organizational capabilities), and the need to make informed decisions,communicationiskey.TheCanvasesandcardsusedinthisworkshopprovideinsightsonthebenefitsofvisualthinkingasatoolforcommunicationanddecisionmakinginproductportfoliomanagement.Operatingriskmanagementinrelationtotheportfoliovalueisnotaneasytask,anditiseasytoforgetexternalfactorsthataffectyourdecisions.Theparticipantsagreedonthepowerofvisualisationasatoolinordertogetabetterunderstandingofyourportfolioandinordertounderstandhowthedailyworkcouldbeexecutedtobetterfulfilastrategy.