New Problems, New Solutions: Making Portfolio Management More Effective

Most companies' development portfolios suffer from: too many projects for the limited resources available; ineffective project prioritization; Go/Kill decisions made in the absence of solid information; and too many minor projects in the portfolio. The end result is poor performance: low-impact projects; too long to get to market; and higher-than-acceptable failure rates. Solutions are proposed based on the experiences of firms in the study. The first is to implement a systematic gating or Stage-Gate new product process, complete with tough Go/Kill decision points. Next, build in resource capacity analysis—a quantitative assessment of resource supply versus demand in your new product pipeline. A third solution is to develop a product innovation and technology strategy for your business to help guide the selection of the best projects. Finally, integrate portfolio management into your gating process using one of the two approaches utilized by leading companies in the study.