Find the Strategy Hidden in Your Portfolio
The purpose of portfolio management is to select a set of projects that best fits the company strategy. However, ask three senior executives in your organization for the company’s strategy, and you may well hear three different answers—if you get any answers at all. Strategy, it turns out, is an elusive beast, especially the well-crafted, unambiguous strategy that says explicitly what the organization hopes to accomplish.
We discuss well-crafted strategies, and how to create them, in much more detail in our post on innovation strategy. There, we outline a method to build a strategy in collaboration with the executive team. But if the strategy isn’t self-evident, and you’re not in a position to facilitate a strategic planning workshop, what can you do?
One possibility is finding the strategy hidden in (inferred by) your existing R&D portfolio. Assume (pretend?) that your portfolio is driven by a concrete, actionable strategy. Then ask and answer a series of questions to discern the driving strategy. You craft this inside-out strategy from the bottom up, rather than from the top down, so begin with an inventory of the activities R&D is currently engaged in:
- Where are you spending money in R&D today?
- Which projects have been guaranteed funding? How much, and for how long?
- What non-R&D activities also compete for funds from the same sources?
It’s important to create as comprehensive a catalog as you can. Don’t make the mistake of omitting maintenance projects, IT initiatives, or infrastructure projects; if they compete for funding, they should be included in the “hidden strategy” exercise. As you compile your list of current projects, you might be surprised (or not) to find redundant initiatives and projects that many thought were cancelled still limping along.
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