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- 1. Managing Your InnovationPortfolio - Harvard Business ... Page 1 of 3 Harvard Business Publishing | For Educators | For Corporate Buyers | Visit Harvard Business School FOLLOW HBR: DIGITAL & MOBILE Register today and save 20%* off your first order! Details Subscribe Sign in / Register My Account May 2012 ARTICLE PREVIEW To read the full article: Sign in or Register for FREE. Buy Reprint » Registered HBR.org users may view 3 magazine articles per month Managing Your Innovation Portfolio by Bansi Nagji and Geoff Tuff EMAIL SHARE PRINT FEATURED PRODUCTS Judgment Calls: Twelve Stories of Big Decisions and the Teams That Got Them Right by Thomas Davenport, Brook Manville, Laurence Prusak $30.00 Buy it now » Reverse Innovation: Create Far From TOP MAGAZINE ARTICLES Home, Win Everywhere 24 HOURS 7 DAYS 30 DAYS by Vijay Govindarajan, Chris Trimble 1. The Rise of the Supertemp $30.00 Buy it now » 2. The Real Leadership Lessons of Steve Jobs Artwork: Ricky Allman, We Can See You, 2010, acrylic on Harvard Business 3. The Five Competitive Forces That Shape panel, 12" x 16" Review on Inspiring & Strategy Executing Innovation Management knows it and so does Wall Street: The year-to- by Harvard Business Review 4. How to Win in Emerging Markets: Lessons year viability of a company depends on its ability to innovate. from Japan $22.00 Given today’s market expectations, global competitive Buy it now » 5. How Will You Measure Your Life? pressures, and the extent and pace of structural change, this is truer than ever. But chief executives struggle to make the 6. The New Science of Building Great Teams case to the Street that their managerial actions can be relied 7. Vision Statement: What Makes a Great Tweet on to yield a stream of successful new offerings. Many admit to being unsure and frustrated. Typically they are aware of a tremendous amount of innovation going on inside their enterprises but All Most Popular » don’t feel they have a grasp on all the dispersed initiatives. The pursuit of the new feels haphazard and episodic, and they suspect that the returns on the company’s total innovation investment are too low. Making matters worse, executives tend to respond with dramatic interventions and vacillating strategies. Take the example of a consumer goods company we know. Attuned to the need to keep its brands fresh in retailers’ and consumers’ minds, it introduced frequent improvements and variations on its core offerings. Most of those earned their keep with respectable uptake by the market and decent margins. Over time, however, it became clear that all this product proliferation, while splitting the revenue pie into ever-smaller slices, wasn’t actually growing the pie. Eager to achieve a much higher return, management lurched toward a new strategy aimed at breakthrough product development—at transformational rather than incremental innovations. Unfortunately, this company’s structure and processes were not set up to execute on that ambition; although it had the requisite capabilities for envisioning, developing, and market testing innovations close to its core, it neither recognized nor gained the very different capabilities needed to take a bolder path. Its most inventive ideas ended up being diluted beyond recognition, killed outright, or crushed under the weight of the enterprise. Before long the company retreated to what it knew best. Once again, little was ventured and little was gained—and the cycle repeated itself. We tell this story because it is typical of companies that have not yet learned to manage innovation strategically. It demonstrates an all-too-common contrast to the steady, above-average returns that can be achieved only through a well-balanced portfolio. The companies we’ve found to have the strongest innovation track records can articulate a clear innovation ambition; have struck the right balance of core, adjacent, and transformational initiatives across the enterprise; and have put in place the tools and capabilities to manage those various initiatives as parts of an integrated whole. Rather than hoping that their future will emerge from a collection of ad hoc, stand-alone efforts that compete with one another for time, money, attention, and prestige, they manage for “total innovation.” Be Clear About Your Innovation Ambition Createhttp://hbr.org/2012/05/managing-your-innovation-portfoli... 26/4/2012 PDF files without this message by purchasing novaPDF printer (http://www.novapdf.com)
- 2. Managing Your InnovationPortfolio - Harvard Business ... Page 2 of 3 What does it mean to manage an innovation portfolio? First, let’s consider how broad a term HBR.ORG ON FACEBOOK “innovation” is. Defined as a novel creation that produces value, an innovation can be as slight as a Eight Apps to Make You More Productive - new nail polish color or as vast as the World Wide Web. Most companies invest in initiatives along a Harvard Business Review broad spectrum of risk and reward. As in financial investing, their goal should be to construct the 245 orang menyarankan ini. portfolio that produces the highest overall return that’s in keeping with their appetite for risk. Nice Girls Don't Ask 173 orang menyarankan ini. One tool we’ve developed is the Innovation Ambition Matrix (see the exhibit below). Students of Managing Yourself: The Paradox of management will recognize it as a refinement of a classic diagram devised by the mathematician H. Excellence Igor Ansoff to help companies allocate funds among growth initiatives. Ansoff’s matrix clarified the 990 orang menyarankan ini. notion that tactics should differ according to whether a firm was launching a new product, entering a Your Use of Pronouns Reveals Your Personality new market, or both. Our version replaces Ansoff’s binary choices of product and market (old versus 565 orang menyarankan ini. new) with a range of values. This acknowledges that the novelty of a company’s offerings (on the x Difficult Conversations: Nine Common axis) and the novelty of its customer markets (on the y axis) are a matter of degree. We have Mistakes - Harvard Business Review overlaid three levels of distance from the company’s current, bottom-left reality. 181 orang menyarankan ini. Plugin sosial Facebook The Innovation Ambition Matrix In the band of activity at the lower left of the matrix are core innovation initiatives—efforts to make STAY CONNECTED TO HBR incremental changes to existing products and incremental inroads into new markets. Whether in the form of new packaging (such as Nabisco’s 100-calorie packets of Oreos for on-the-go snackers), slight reformulations (as when Dow AgroSciences launched one of its herbicides as a liquid suspension rather than a dry powder), or added service convenience (for example, replacing pallets Facebook Twitter RSS iPhone with shrink-wrapping to reduce shipping charges), such innovations draw on assets the company already has in place. At the opposite corner of the matrix are transformational initiatives, designed to create new offers—if Newsletters LinkedIn YouTube Google not whole new businesses—to serve new markets and customer needs. These are the innovations that, when successful, make headlines: Think of iTunes, the Tata Nano, and the Starbucks in-store experience. These sorts of innovations, also called breakthrough, disruptive, or game changing, generally require that the company call on unfamiliar assets—for example, building capabilities to gain a deeper understanding of customers, to communicate about products that have no direct antecedents, and to develop markets that aren’t yet mature. To continue reading, register now or purchase a single copy PDF. Registered users may view 3 HBR magazine articles for free each month. Become a paid subscriber for full uninterrupted access. Already an online or premium subscriber? Sign in. Bansi Nagji and Geoff Tuff are partners at Monitor Group and leaders of the firm’s global innovation practice. COMMENTS Like 2 people liked this. Showing 0 comments Sort by Newest first Subscribe by email Subscribe by RSS Real-time updating is paused. (Resume) ADD NEW COMMENT Post as … Posting Guidelines We hope the conversations that take place on HBR.org will be energetic, constructive, free-wheeling, and provocative. To make sure we all stay on-topic, all posts will be reviewed by our editors and may be edited for clarity, length, and relevance. We ask that you adhere to the following guidelines. 1. No selling of products or services. Let's keep this an ad-free zone. 2. No ad hominem attacks. These are conversations in which we debate ideas. Criticize ideas, not the people behind them. 3. No multimedia. If you want us to know about outside sources, please link to them, Don't paste them in. All postings become the property of Harvard Business School Publishing The editors Createhttp://hbr.org/2012/05/managing-your-innovation-portfoli... 26/4/2012 PDF files without this message by purchasing novaPDF printer (http://www.novapdf.com)
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