Prioritizing Your Innovation Portfolio

In part 3 of this series on A Portfolio Approach to Strategic Planning we shared some tools and frameworks to help you build your innovation portfolio. Now we’re going to discuss some tools and frameworks to help prioritize what is likely a long list of projects within the portfolio that are competing for what is always limited time, attention, and resources.

We find it useful to start by understanding whether you should be playing offense or defense on any particular endeavor. It takes both offense and defense to win, but it’s important to understand the differing implications for each. This is related to the ‘extend the line/ bend the line/ transcend the line’ framework we have been referencing throughout this series, with a slightly different nuance on understand how good we need to be to achieve our tactical objective.

More in this Series:

• Read Part 1: A Portfolio Approach to Strategic Planning
• Read Part 2: Plotting the Growth Vectors of Your Strategy
• Read Part 3: Building your Innovation Portfolio

Playing to Not Lose vs. Playing to Win

When you’re playing defense, the overarching objective is not to lose, so any efforts that go beyond achieving that objective amount to a waste of our limited resources that could better be reallocated towards achieving a different important objective.

Recently the team of a relatively small community bank with just a few locations and less than a billion dollars in assets talked to us about their goal to be what they kept calling best in class in digital banking.

We replied that that was a pretty tall order-- not to mention expensive; but they were undeterred. They had seen the future, it was definitely digital, they were convinced they had some world-beating ideas no one else had, and they were ready to go all-in to make it happen.

We then asked, assuming you could become best in class despite your limited resources, how long do you think you could maintain that lead before a multi-billion or multi-trillion dollar institution copied whatever you came up with?

Suddenly their bravado faded and they appeared deflated. Despite all of their enthusiasm and planning, they apparently hadn’t considered that sobering fact. So we asked them to talk more about their current situation and their future ambitions. It was full of buzzwords and consultants’ jargon, but the picture became a little clearer for us. We noted that what they were really saying was that today, they were pretty much worst in class in digital banking presently, and they clearly needed to address this deficit.

Understanding this context allowed us to refocus the conversation. We said that we have never heard any buzzwords or consultants talk about ‘okayest in class’ but that’s really what they should aspire to, because they can’t realistically win in a digital arms race against superpowers. The biggest risk when you’re playing defense, is spending too much time and money when ‘good enough’ is good enough.

Then we started to talk about where they could win. The more we talked, they actually had a few unique areas where they could potentially differentiate themselves from a sea of similar competitors.

Playing offense is all about winning, and most cases, that’s about finding that ‘blue ocean’ where they could build and maintain real differentiation. That’s not to say that whoever spends the most energy and resources always wins, but the real risk when playing offense is letting off the gas before you get to the finish line. Any resources conserved through avoiding waste in playing defense can be reallocated to make sure you can see through your offensive moves...

Read the entire post on our FinTech Forge Blog