Change vs Stability

“To improve is to change; to be perfect is to change often.” — Winston Churchill

How does a company manage change/transform, while making sure there is some sense of stability throughout the organization?

Let’s start with the “manage change/transformation” part of that question. It’s no secret anymore that companies need to innovate. One of the most frequent questions we are asked is, “what/where to innovate.” This is where having an innovation portfolio can be extremely valuable.

First, we need to discuss the mindset of having 2 different portfolios. One portfolio should be for organizing existing project/products/services (Run the Business-RTB) and another for only identifying “innovation” projects.

Why have two? Well, you can’t value, track and group your innovation projects with the same variables as your RTB projects/products/services.

To begin, we will start with understanding the innovation portfolio.

Our favorite innovation portfolio management tool is the 3 Horizons approach from McKinsey. Why do we like this model: it’s simple, visual, and gives execs a clear picture to what they usually care about most, time and profit.

We have adapted it slightly to show how you can add a “heat map” style visual on top to identify another layer of diversification. Once you have selected your 12–18-month strategic priorities as a company/BU/team, give each one a color. Then, you can plot projects on the model using the dots and get a quick view of where you are over/under diversified.

Now that you have created and agreed on your portfolio balance or diversification, it’s time to plot your current “innovation” projects.

Back to the “what/where to innovate” question above, congrats…we just created you’re playing field. It’s time for you to fill your portfolio with projects in areas where you are underfunded and kills projects where you are overloaded. Go find problems/opportunities in those horizons and rebalance your portfolio!

If we look at our RTB projects/products/services, one tool we like to use is the classic BCG Growth/Share Matrix. It’s a great tool to see what’s working and what’s not.

It’s your call what you want to do with the “Cash Cows” and “Dogs” but realize that these will/should eventually get killed off by your “Stars”, “Question Marks”, and success projects from your innovation portfolio.

So how do we balance this level of constant change with stability for our employees?

We all know that secretly most employees don’t like change. They get comfortable with doing their “job” and rarely want to reinvent themselves, learn a new skill or procedure on a frequent basis.

However, there are some ways your innovation and RTB portfolio management will help ease some of these concerns:

· Clearly defines your innovation strategy — Avoids people feeling like you never have a unified strategy or is not clearly documented.

· Gives timelines for pivot, pursue it, kill it — This helps kill those zombie/pet projects that waste resources and fund things that look promising.

· Provides transparency and visibility on projects — Identify synergies, duplications, and scaling opportunities to make employee’s jobs easier.

· Data, not gut feelings — Our opinion is that employees respond better to change when you show them facts/figures rather than saying “we think.”

So where does this leave us?

Companies that evaluate both portfolios on a quarterly basis and have strict evaluation criteria can embrace constant change. Not only can they embrace change, they are able to rationalize it against their innovation strategy and give their employees the information they need to do their jobs effectively.

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