(600e) Gambling on Innovation and Experimental Portfolios

How to place bets on projects or experiments in your innovation portfolio? Innovation or capital budgeting portfolios can have dozens, 100s, even 1000s of projects or experiments. Companies use various methods to allocate their resources, including Stage Gate. While these processes provide guidance for the decision, they do not predict what should be the precise allocation for optimal returns at low risk.

Is there a framework that is practical and quantitative, that improves communication between the technical and commercial functions, that increases IRR and peace of mind, and which allocates your entire innovation portfolio in a global optimum, rather than just project-by-project or experiment-by-experiment? In this presentation I’ll show a method that enables you to allocate rigorously the resources among all projects in your portfolio, using parameters for which you might already have estimates. I’ll show examples of how this technique can increase IRR by 15% or more, improve technical-commercial communication and focus, and give you greater peace of mind as you make critical innovation resourcing decisions for your company.