I’ve had hundreds of conversations with Innovation Teams across the US, and this is the relationship that seems to be the least understood. Yes, we woman love to talk about relationships, and men seem to turn us off even before we get started, but this is one relationship we can’t afford to ignore. More portfolio management initiatives fail because of this relationship, than for any other reason as far as I’m concerned. I’ve seen it, and watched others live through it―failed empowerment can be devastating.
In the book titled, The Three Keys to Empowerment, the authors state that “involving employees in an empowered culture allows them to use their knowledge, experience, and internal motivation to accomplish tasks for the organization.” Most leaders believe this. The difficulty everyone experiences is that talking about empowerment is lots easier than creating a culture where the empowered decision making processes can prosper. Yes, empowerment is meaningless, unless it’s used in context of decision making… Ops, another relationship, like I said, it’s hard for us gals.
Portfolio Management is a decision making tool that can be used up and down the Innovation Value Chain. It’s a tool that nurtures the culture where “the empowered decision making processes can prosper.” Recently, I was at the Gartner PPM Summit 2013, and most of the people I spoke with stated that they enjoyed the Summit, but the most common critique was “Yes, we know what needs to be done, but how?” Let me share with you how portfolio management nurtures the decision making process.
There are five conditions required for portfolio management:
- There must be a list or set of alternatives to choose from.
- There must be a prioritized list of selection criteria.
- There must be specified metrics to measure the quantities of alternatives matching the selection criteria.
- There must be a set of predetermined portfolio thresholds that constrain the portfolio and cause limitations. In a constraint free environment, you’d select everything, and there would be no need for decisions.
- Insight into resource availability or needs. Unless you have the power to make your decisions real, your portfolio decisions are in vain.
Each of these conditions helps empower the decision maker, and nurtures the innovation culture.
Decisions about the market evidence portfolio and balancing the sources of evidence are portfolio management activities within the Innovation Value Chain.
- Determining what problem statements produce a balanced set of business opportunities, with the greatest reward potential, to the market and to the stakeholders, is a portfolio decision.
- Identifying a set of product features in a roadmap that stay within business constraints is a portfolio management problem.
- Determining what requirements should be placed in a product launch, to provide the greatest value to the market, within current resource availability, is a portfolio problem.
These are all examples of how portfolio management empowers the innovation team to make command level decisions.
With choice, comes the ability to experience the consequences of our choices. If after the innovation team makes a choice, some “other agency” nullifies their decisions, did the team really have a choice? I think not. But how, how can that “other agency” trust the innovation team to make the decisions they would?
In portfolio management, formally stated selection criteria and thresholds are used to represent that “other agency”, and provide a method of delegating values and motives to the decision makers. They form a set of guidelines that empower the decision makers to make decisions which represent the values and motives of that “other agency.” It’s a mechanism used to transfer authority. I should now identify that “other agency,” as the stakeholders of the innovation initiative.
If the stakeholders of the innovation initiative desire an empowered culture that uses their knowledge, experience, and internal motivation to accomplish new innovative solutions which satisfy market needs then, they need to provide the selection criteria and performance thresholds required in portfolio management decision making. Too many times this isn’t provided, and portfolio management practices are abandoned.
If the stakeholders have a tool like ProModel’s EPS, and use it to establish meaningful selection criteria, profitable performance thresholds, and efficient resource utilization plans, the empowerment of the Innovation Team is simple. Portfolio management can truly nurture the innovation culture, and become the powerful decision making tool it should be, from strategy development, opportunity selection, roadmapping, and all the way down to the day-to-day decision points throughout the Innovation Value Chain.
For more from Cathy: thesalesgal.com