Organization wide Innovation Portfolio Analysis

Organization wide Innovation Portfolio Analysis

Today, due to globalization and other mega-trends, competition between companies become more and more intensive. To win this race, even temporarily, they need to invest more and more to innovations. While having limited resources, companies try to focus their effort to the most promising directions.

There are number of obstacles of selection of the most effective innovation directions. First, usually companies produce large number of different products. What product should be selected for immediate innovation? To make a right decision, it is necessary to compare competing products, as well as different products (like bicycles and refrigerators). Second, the question is, what parameters of selected product should be improved, and to what level?  

Usually comparison of competing products (benchmarking) is done using the weighted sum method: every engineering system scored for every criterion, the scores are multiplied by weighting coefficients representing relative importance of the criteria, and the results are summed into a final score. The system with the highest score is considered best.

Important weakness of the weighted sum method is linearity: it implies the possibility of compensating for a fatal (limiting) disadvantage with multiple minor advantages. In addition, using normalized weighted criteria does not take into account the fact that the user's response to a particular parameter is not linear with respect to its value. Moreover, existing approach ignores product’s potentials: probably, current outsider is the most perspective.

GEN TRIZ approach is much more effective. We take into consideration everything: non-linear relation between parameters and their perception, various types of potentials, and even level of market niche saturation. All formulas are incorporated into convenient software.