The major reason for failure in initiating new growth projects in uncertain environments is the basic tenet of classic project management-the initial strategy is assumed to be correct, and large sums are expended without dealing with the fundamental assumptions. Discovery-driven planning is vastly different from conventional planning. In conventional planning, success means delivering numbers close to what you thought you would deliver. In discovery-driven planning, success means generating the maximum amount of useful learning for the minimum expenditure. Discovery-driven planning is most useful when the situation is highly uncertain.
A major barrier for growth of large multi-business-unit firms is the inability to resource the critical initiatives to win-both in terms of dollars and people. The underpinning of the challenge involves the conflict between resourcing current cash-generating legacy businesses vs. new initiatives which may not, in the short term, produce positive financial results. Most companies do not have a formal portfolio process to deal with this fundamental issue. The Healthcare Solutions business unit of Danaka is a fictional business based on real business experiences. The principle challenge is the need for this business to free up $300 million of current, budgeted R&D projects to fund new, unfunded initiatives to meet its five-year growth objectives. Tools and processes are introduced via interactive spreadsheets that show how to make the tough portfolio decisions on a project-by-project basis.
A major barrier for growth of large multi-business unit firms is the inability to resource the critical initiatives to win-both in terms of dollars and people. The underpinning of the challenge involves the conflict between resourcing current cash-generating legacy businesses vs. new initiatives which may not, in the short term, produce positive financial results. Most companies do not have a formal portfolio process to deal with this fundamental issue. Danaka is a fictional company based on real business experiences. The company has strong growth markets as well as markets that are commoditizing. Unfortunately, the latter represent a sizable portion of the company's business. A framework is given that establishes a matrix to analyze the Danaka businesses using their critical financial criteria-cash generation and top-line growth. Projects are divided into four categories based on how they fit into the matrix, and resource allocations are then analyzed. Students discover that the current allocation does not enable Danaka to meet its aggressive growth goals. The case incorporates an interactive spreadsheet model in which students can dynamically change the various resource allocations and see the impact on future top-line growth. The essence of the case is how to manage the resource allocation for a multi-business unit firm when present allocations will not meet future growth goals.
What happens when a company is faced with a unique market challenge with the potential to change the way business is done--a true market disruption? This was the challenge faced by the European business team of DuPont's Tyvek Housewrap business. The adoption of the Kyoto Protocol created new challenges for the construction industry in the United Kingdom that the DuPont team felt it could meet. To enforce the Kyoto Protocol, the U.K. government threatened to fine utility companies and builders who did not adhere to new emissions standards. Deploys the Innovation Radar framework, which encourages a business to think through all the issues of a business system, leading to a successful introduction and a sustainable business. DuPont's European Tyvek team had to devise a solution at the intersection of multiple elements. Specifically: Who should it target? How should it describe the product's value proposition? Through what channels could it reach the key decision makers? How could it overcome the inertia of the existing business system?
In the Second Edition of Portfolio Management for New Products, published and distributed by Perseus Books, Professors Cooper, Edgett, and Kleinschmidt (all of McMaster University) present a rigorous and practical approach to managing a company's product portfolio as you would a financial portfolio - by investing for maximum long-term growth. Numerous mini-cases illuminate key themes. This is a useful book for practitioners and educators alike. Chapter 4, "Portfolio Management Methods: Seeking the Right Balance of Projects," is the second of three chapters that examine the methods that leading corporations employ to manage their new product project portfolios and allocate their R&D resources. Chapter 4 looks at approaches used to achieve a balanced portfolio; the authors pay special attention to the use of bubble diagrams as a tool in evaluating balance.
In the Second Edition of Portfolio Management for New Products, published by Perseus Books, Professors Cooper, Edgett, and Kleinschmidt (all of McMaster University) present a rigorous and practical approach to managing a company's product portfolio as you would a financial portfolio - by investing for maximum long-term growth. Numerous mini-cases illuminate key themes. This is a useful book for practitioners and educators alike. Chapter 9, "Making Strategic Allocations of Resources: Deployment," is the first of two chapters that present in detail the authors' model Portfolio Management Process. Among the topics: resource allocation across units; estimating resource requirements; and tools for dealing with uncertainty, including sensitivity analysis and Monte Carlo simulation.
In the Second Edition of Portfolio Management for New Products, published by Perseus Books, Professors Cooper, Edgett, and Kleinschmidt (all of McMaster University) present a rigorous and practical approach to managing a company's product portfolio as you would a financial portfolio - by investing for maximum long-term growth. Numerous mini-cases illuminate key themes. This is a useful book for practitioners and educators alike. The last chapter of the book, Chapter 11, "Designing and Implementing the Portfolio Management Process," presents practical ideas for designing and implementing an effective Portfolio Management Process.
In the Second Edition of Portfolio Management for New Products, published by Perseus Books, Professors Cooper, Edgett, and Kleinschmidt (all of McMaster University) present a rigorous and practical approach to managing a company's product portfolio as you would a financial portfolio - by investing for maximum long-term growth. Numerous mini-cases illuminate key themes. This is a useful book for practitioners and educators alike. Chapter 10, "Making Strategic Allocations of Resources: Deployment," is the second of two chapters that present in detail the authors' model Portfolio Management Process. The authors consider three drivers: strategy, gating, and portfolio reviews. They also present two alternative approaches to the process, and conclude by explaining an integrated decision system.
In the Second Edition of Portfolio Management for New Products, published by Perseus Books, Professors Cooper, Edgett, and Kleinschmidt (all of McMaster University) present a rigorous and practical approach to managing a company's product portfolio as you would a financial portfolio - by investing for maximum long-term growth. Numerous mini-cases illuminate key themes. This is a useful book for practitioners and educators alike. In Chapter 8, "Data Integrity: Obtaining Reliable Information," the authors propose methods for improving estimates for such things as market and revenue forecasts, pricing, costing, and probabilities of success.
In the Second Edition of Portfolio Management for New Products, published and distributed by Perseus Books, Professors Cooper, Edgett, and Kleinschmidt (all of McMaster University) present a rigorous and practical approach to managing a company's product portfolio as you would a financial portfolio - by investing for maximum long-term growth. Numerous mini-cases illuminate key themes. This is a useful book for practitioners and educators alike. Chapter 7, "Challenges and Unresolved Issues," examines the pitfalls, hurdles, and concerns that managers are addressing as they attempt to implement portfolio management.
In the Second Edition of Portfolio Management for New Products, published and distributed by Perseus Books, Professors Cooper, Edgett, and Kleinschmidt (all of McMaster University) present a rigorous and practical approach to managing a company's product portfolio as you would a financial portfolio - by investing for maximum long-term growth. Numerous mini-cases illuminate key themes. This is a useful book for practitioners and educators alike. Chapter 5, "Portfolio Management Methods: A Strong Link to Strategy," Used and Performance Results Achieved," is the third of three chapters that examine the methods that leading corporations employ to manage their new product portfolios and allocate their R&D resources. Chapter 5 looks at approaches used to develop a strong link to strategy; topics include: product and technology roadmaps; strategic buckets-a powerful top-down approach; an analysis of bottom-up approaches; and a top-down/bottom-up approach. The authors conclude with a brief discussion on "how much should we spend?"
In the Second Edition of Portfolio Management for New Products, published and distributed by Perseus Books, Professors Cooper, Edgett, and Kleinschmidt (all of McMaster University) present a rigorous and practical approach to managing a company's product portfolio as you would a financial portfolio - by investing for maximum long-term growth. Numerous mini-cases illuminate key themes. This is a useful book for practitioners and educators alike. Chapter 3, "Portfolio Management Methods: Maximizing the Value of the Portfolio," is the first of three chapters that examine the methods that leading corporations employ to manage their new product project portfolios and allocate their R&D resources. Chapter 3 looks at approaches used to maximize the value of a portfolio.
In the Second Edition of Portfolio Management for New Products, published and distributed by Perseus Books, Professors Cooper, Edgett, and Kleinschmidt (all of McMaster University) present a rigorous and practical approach to managing a company's product portfolio as you would a financial portfolio - by investing for maximum long-term growth. Numerous mini-cases illuminate key themes. This is a useful book for practitioners and educators alike. Chapter 2, "Three Decades of R&D Portfolio Methods: What Progress?," probes the literature on portfolio management, identifies the main generic types of portfolio management tools proposed in the literature, and defines the requirements for an ideal portfolio management approach. The chapter ends with a look at the three goals in portfolio management.
In the Second Edition of Portfolio Management for New Products, published and distributed by Perseus Books, Professors Cooper, Edgett, and Kleinschmidt (all of McMaster University) present a rigorous and practical approach to managing a company's product portfolio as you would a financial portfolio - by investing for maximum long-term growth. Numerous mini-cases illuminate key themes. This is a useful book for practitioners and educators alike. Chapter 1, "The Quest for the Right Portfolio Management Process," introduces major themes in product portfolio management, including the integration of new products with established ones. Key terms are introduced and defined.
In the Second Edition of Portfolio Management for New Products, published and distributed by Perseus Books, Professors Cooper, Edgett, and Kleinschmidt (all of McMaster University) present a rigorous and practical approach to managing a company's product portfolio as you would a financial portfolio - by investing for maximum long-term growth. Numerous mini-cases illuminate key themes. This is a useful book for practitioners and educators alike. Chapter 6, "Portfolio Management Methods Used and Performance Results Achieved," lowers the microscope on portfolio performance. The authors reveal the performance results achieved by each portfolio management method and how users rate the various methods.
In the Third Edition of Winning at New Products, published by Basic Books and distributed by Perseus Books, Professor Robert Cooper of McMaster University demonstrates why consistent product development is vital to corporate growth and explains methods for maximizing the chances of success. The book's final chapter -- Chapter 12, "A Product Innovation and Technology Strategy for Your Business" -- deals with strategy. The author look at how the tactics of new product process fit into the larger picture, addressing the following questions: In which arenas should you play the game? How should you enter each arena? How should you allocate your resources? What strategic or key initiatives should you undertake?
In the Third Edition of Winning at New Products, published by Basic Books and distributed by Perseus Books, Professor Robert Cooper of McMaster University demonstrates why consistent product development is vital to corporate growth and explains methods for maximizing the chances of success. Chapter 11, "Implementing the Stage-Gate Product Process in Your Company," looks at implementation issues. The author considers the results achieved by businesses that have implemented the Stage-Gate new-product process. He also provides insights into how to design and implement Stage-Gate within your business.
In the Third Edition of Winning at New Products, published by Basic Books and distributed by Perseus Books, Professor Robert Cooper of McMaster University demonstrates why consistent product development is vital to corporate growth and explains methods for maximizing the chances of success. Chapter 10, "The Final Play-Into the Market," is the last of six chapters on the implementation of the author's Stage-Gate, a process for driving new products to market successfully and quickly. The chapter addresses topics such as defining a target market, positioning the product, and establishing a value proposition for the product.