About Innovation Portfolios
Portfolio approaches help reveal, connect and orient diverse and multi-faceted innovation activities according to an overall strategy.
Why are portfolios needed?
Innovation can be an uncertain investment. There is no guarantee that any single innovation will work, how it will work or what the unintended or unanticipated consequences might be. In an uncertain world, it is dangerous to rely too heavily on any one single strategy or approach. Changing circumstances (such as a crisis or disruptive development) can make promising or dependable approaches suddenly unreliable or unsuited to the new reality. Furthermore, a singular approach to innovation, such as a focus on efficiency gains, does not adequately respond to the multi-faceted and complex problems faced by the public sector. Portfolios respond to the need for pluralistic strategies in innovation activities.
What are the benefits of innovation portfolios?
A portfolio approach can orient innovation activities according to a strategy, mission or mandate, create variety to spread risk and foster opportunities, identify trends and gaps in overall innovation activity and reveal linkages to support learning and collaboration opportunities.
From a strategic perspective, a portfolio of innovation activity is a better bet than a lone project in achieving a purpose or mission, especially if the operating environment is uncertain and one cannot be confident about where (or when) an innovative response might be needed.
A portfolio approach helps public sector organisations to:
- Avoid projectification: When innovation activities need to fit into neat prescribed project formats, this influences the types of problems considered suitable for innovation. Portfolios reveal the collective impact and potential of a range of projects and activities toward an overarching purpose or mission.
- Tackle risk aversion: Innovation portfolio management shows the bigger picture of a wide range of projects. Distributing resources and risk in multiple directions can normalise failure and learning, a natural part of innovation.
- Find synergies between activities: Innovation activities do not exist in isolation. They form part of a broader organisational or systemic context. Portfolio approaches uncover how activities could be linked or form the basis of collaborative relationships.
- Build value chains and support scaling: Innovation portfolios consider the entire innovation value chain, including the potential for scaling up or adopting innovations. They can also mobilise complementary partner relationships and different sources of knowledge and resources to help innovation activities advance from exploration to exploitation.
- Monitor layered activities connected to big reforms: Innovation portfolios can be analysed at the team/unit, organisational and wider ecosystem level to assess the desired strategic impacts. Visualising these relationships provides ways to co-ordinate, measure and align innovation at multiple levels towards a shared purpose or overall strategy.
- Plan across ecosystems: Complex problems span several sectors and necessitate the alignment of innovation activities across ecosystems including, for instance, innovation in basic research and local action to achieve a societal goal like green transition. Portfolios can identify how and who should be accountable for results, evaluate performance, and facilitate co-operation.
- Avoid lock-in and capture by innovation fads: Due to the complex nature of wicked problems, innovations linked to these challenges must be open-ended and interconnected, and avoid pre-determined rigid logic models and pathways to solutions. Singular solutions or linear processes are attractive in their simplicity but they do not replace regular, systematic portfolio reflection and alignment to ever-changing contexts.
Facets of Innovation
Based on years of learnings from public sector organisations around the world, OPSI developed a framework for clarifying the strategic intent and purpose behind innovation, helping governments to better understand and manage multi-faceted innovation. OPSI developed the Innovation Facets framework which identifies four facets:
1. Enhancement-oriented innovation
2. Mission-oriented innovation
3. Adaptive innovation
4. Anticipatory innovation
Explore your own portfolio
Take advantage of OPSI’s free self-assessment tool and adaptable workshop for exploring and assessing the balance of innovation activities undertaken by civil servants, leaders and decision-makers.
- The Portfolio Exploration Tool, an online self-assessment tool, helps you determine your team’s or organisation’s innovation portfolio. The self-assessment and accompanying materials are accessible below.
- The Innovation Portfolio Workshop was built to accommodate a group of up to 100 people, but can also be used as an individual reflection activity. Workshop modules for both half-day and full-day agendas are available for you to download and use. Alternately, OPSI can help you run innovation portfolio workshop. Please contact us at [email protected] if you are interested or have questions about this topic.