The goal of portfolio management is to select and invest in a set of new-product (NP) projects that maximizes the value of the development portfolio for a given resource expenditure. But how should value be defined? Traditional financial metrics, such as net present value (NPV), capture value to the shareholder; but today, with environmental, social, and governance goals so prominent, reducing the carbon footprint must be a factor in NP project selection. So should maximizing the customer's experience. A single-variable model, such as net present value (NPV) or the productivity index (PI), while useful, cannot gauge the multidimensional facet of value of the project. To meet the changing needs of companies, and based on its successful applications in some larger firms, the value-based scorecard (VBS) is introduced. The VBS is a multidimensional model based on a set of factors that are proven to be both useful and predictive in project selection. The VBS is built on three main value factors, S-R-Wstrategic and mission, reward, and likelihood of winningand ten items that make up these three value factors. How to best deploy the VBS is also highlighted, along with key charts to help decision makers better visualize their rating assessments and the prospects for the project.
