Value Innovation Portfolio Management: Achieving Double-Digit Growth Through Customer Value

by Sheila Mello, Wayne Mackey, Ronald Lasser

The quest for successful products — and a simple, predictable way to determine in advance which products will be successful — is a core concern of all companies. Most firms use financial projections to select the best portfolio of products in which to invest their limited human and capital resources and are frustrated repeatedly by under-forecast sales, lower than expected margins, and outright failures of new products. Value Innovation Portfolio Management addresses this core concern by showing you a more reliable decision-making method based on high customer value, tight business strategy alignment, and optimal investment intensity. These inputs will enable your company to invest more wisely and create more successful new products. Best-in-class companies like Motorola, DuPont, and Hewlett-Packard have used customer value in crafting winning portfolios. Supported by various case studies and examples, the authors demonstrate the significantly improved results that can be achieved from using customer value as the business driver for creating a portfolio of products. It is a must read for senior executives and anyone involved in strategic planning, portfolio management, product development, sales and marketing, and R&D. Senior executives will discover a path to achieving double-digit growth, greater market share and improved shareholder value. The managers and teams involved directly in the product development process will learn how to create a robust and thorough product definition process aligned with the portfolio management of the enterprise.

Hardcover

First published September 1, 2006

Reviews

[Robert · Rating 5 out of 5]

What Mayo (lead author) and her co-authors have learned about value innovation portfolio management is provided in this book. Whether or not the organizations of those who read it achieve “double-digit growth through customer value” will depend on how effectively the MDPD methodology is executed. Here are several of the questions to which Mayo and her collaborators respond:

1. How to define or re-define a product portfolio along the value dimension?
2. What are the leading causes of product failure and how to avoid or correct them?
3. What is innovation’s proper role within the MDPD methodology?
4. In what respect(s) is the “optimized” portfolio “the sweet spot”?
5. In terms of MDPD alignment, why is the “why?” so important?
6. What is an “actionable” portfolio? A “fortified” portfolio?
7. How to use MDPD to “hear the voice of the customer”?

I presume to share two caveats. First, when creating and then developing a VIP, focus on what is most important…and most appropriate. Nail the fundamentals. For example, make certain that all decisions are based on accurate, current, and sufficient information. Keep in mind what Peter Drucker once observed: Also, beware of over-complicating the VIP design and implementation process. Recall what Albert Einstein once observed: "Everything should be made as simple as possible, but not simpler."