take time each year to reflect on how the portfolio management tool impacts decision-making. Did it result in better decisions and better outcomes? Did it deliver insights that weren’t visible before? Are there decisions that were made that would not have been made before? Too often I see companies make decisions that are either too broad or too local. Decision-making without clear context, criteria, and data is not only difficult but also vulnerable to politics and other negative influences.
Learning and Evolving
Here’s the paradox: as a commercial business, we want predictability in meeting financial goals. As an R&D center, we want to nurture and invest in breakthrough innovation—which is by definition unpredictable in how it will shape our (and our clients’) futures.
To balance these competing interests, we created a novel portfolio management approach. But I should note that the above framework does not account for our early-stage, exploratory projects; these projects are only included when they reach a level of investment that warrants inclusion within the portfolio management framework. Where do we manage these projects then? Locally, within research divisions—because that’s where PARC’s cultural norms (for technical vetting among peers, debating impact of ideas, exploring passions and intuitions, etc.) prevail. This ensures we continually and evenly invest in exploratory ideas. We’ll share lessons learned in managing the tradeoffs between possibility and reality as we continue on our journey.
Portfolio management at PARC is new, and it will evolve as our organization and the overall innovation ecosystem does. While we have borrowed, sometimes loosely, from financial portfolio management principles and adapted them to our needs here, I hope you can draw on our approach and experiences to help you understand your R&D investments more holistically.
