Dynamic Portfolio Management for New Product Development

Abstract

Overview: Effective portfolio management is vital to maximizing the value of the business’ new product development (NPD) portfolio; it is also one of the weakest facets of NPD. Ongoing evaluation tends to be backward looking and process focused, and business cases are not updated with real time and more reliable data. A dynamic portfolio management approach is one solution, including the use of the Productivity Index (PI). Building in multiple iterations to get updated and robust data improves estimates of financial value and the PI. And since the value of a project depends on many factors, we present a multidimensional Value Based Scorecard that we developed using proven, research-based criteria, that companies can use to select and prioritize NPD projects effectively.

Keywords::

• Portfolio management
• New product development
• Project selection
• Value-based scorecards
• Strategic buckets

Additional information

Notes on contributors

Robert G. Cooper

Robert G. Cooper is ISBM Distinguished Research Fellow at Penn State University’s Smeal College of Business Administration, Professor Emeritus at McMaster University’s DeGroote School of Business (Canada), and a Crawford Fellow of the Product Development and Management Association. He has published 11 books and more than 140 articles on the management of new products. He has won the Innovation Research Interchange’s prestigious Maurice Holland Award three times. Cooper holds bachelor’s and master’s degrees in chemical engineering from McGill University in Montreal, Canada, and a PhD in business and an MBA from Western University in London, Ontario, Canada. [email protected]

Anita Friis Sommer is head of Sustainable Operations at the LEGO Group (Denmark). She holds a post doctorate in process modelling at the University of Cambridge (UK), a PhD in product development management, and a master’s degree in engineering management from Aalborg University, Denmark. She is a double recipient of the Innovation Research Interchange’s prestigious maurice Holland Award (2016 and 2019) for articles on the use of Agile in physical product development. [email protected]