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Chapter 6

Summary

Selecting and managing the portfolio of innovation projects is a difficult but
vital part of managing innovation. Failure to make good and timely decisions is
bad for efficiency in the short term, and for profit, or even survival, in the long
term. In this chapter we have reviewed a variety of techniques to help managers
select the innovation projects to pursue:

• Financial methods of varying degrees of sophistication take centre-stage,
  but they must be backed up by more subjective methods that allow strategic
  and other factors to be included in the analysis.
  
• Particular care is necessary in valuing risky projects. Good techniques are
  available for a very large number of simultaneous projects but prioritizing a
  small number of such projects is problematic.
  
• Scoring systems are particularly helpful in the early stages of projects when
  financial information may not be reliable.
• The portfolio of projects selected must not only represent the best possible
  use of resources, but must also be balanced in terms of risk, timing and
  strategic impact.

No one set of tools suits all situations; the choice depends on the information
available, the type and complexity of the projects involved and how close they
are to commercialization.