Kill difficult, low-value projects to propel meaningful innovation
In Star Wars Episode V, “The Empire Strikes Back,” there is a battle scene in which Han Solo hides the Millenium Falcon from its pursuers by landing on the back side of an Imperial Star Destroyer. He knew that it was standard Imperial procedure for a Star Destroyer to jettison its garbage before making the jump to light speed. Han was right: The garbage was dumped, the Falcon released its hold and used the garbage as camouflage, and the Star Destroyer made the jump to hyperspace – leaving the Falcon safely behind.
As we enter 2024, the pace of change in our world has accelerated beyond our collective imaginations. Innovation leaders have a choice. You can be the Millenium Falcon: float through the year surrounded by garbage, hoping to get away safely and without harm. Or you can be the Star Destroyer: dump all the dead weight that is slowing you down, set a course for a new star system, and make the jump to hyperspace. Which will you choose?
Be like the Star Destroyer: dump all the dead weight that is slowing you down, set a course for a new star system, and make the jump to hyperspace.
Step One: Understand your current state
When it comes to innovation, our collective aspirations should lean toward the Star Destroyer. But the truth is, many innovation programs behave like the Millenium Falcon – perhaps without even realizing it. Why? Many companies suffer from:
- A lack of awareness of what is in the portfolio. If your portfolio consists of a list of projects in Excel and a phase/gate designation, chances are you do not fully understand what you are working with. Projects should link to strategic objectives and the business unit that will ultimately own them. You should understand the base case value as well as the potential upside and the assumptions that drive it. Know its likelihood to succeed, and document the evidence needed to achieve that outcome.
- An inability to compare and prioritize projects. Your organization probably has a standard innovation process (e.g., Discovery -> Incubation -> Acceleration) that innovation projects generally follow. But what happens within those phases? Incubation is often referred to as “the Wild West” because the organization lacks consistency in the process, which leads to inconsistent measurements. If forced, could you identify for elimination the five projects least likely to create significant value?
- Hesitancy in walking away from sunk costs. For some projects, the desire to succeed clouds the judgement of whether the project should proceed. The consumption of resources should not create momentum for a project whose uncertainty or value has shifted or declined. Look forward, not back.
Step Two: Prepare for the Trip
Before making the jump to light speed, any pilot must prepare the crew, warm up the spaceship’s hyperdrive, and make important navigational calculations to avoid smashing into any unassuming planets. To prepare for your own hyperspace journey, you should:
- Adopt consistent incubation processes and tools that support them. Empowering people to innovate is a hallmark of an innovation culture. Avoid a “Wild West” environment by defining and adopting a singular incubation process (and accompanying tools) that encourages expansive thinking about project upside potential and the factors driving uncertainty. You will now have consistent data across projects about what drives success upon which you can make funding decisions.
- Expand your strategic portfolio management system to manage uncertainty and drive pivot decisions. A strategic innovation portfolio tool should create visibility into the potential value of each project and alignment to strategic goals. Re-orient your portfolio to account for your new incubation approach. A well-designed portfolio will help you determine what to work on, what to fund, when to pivot, and what to kill.
- Get a portfolio overview based on the new project business cases. Update the business case on your existing projects, which may take some time. Once updated, plot projects on a grid based on their Difficulty (probability of success) vs. Size (value if successful). Voila! You now have a new apples-to-apples visual representation of your innovation portfolio.
Step Three: Dump the Junk and Make the Leap
It is decision time: Do you stay the course with the projects in your current portfolio and hope for the best (the Millenium Falcon), or dump the junk, and make the leap to hyperspace (the Star Destroyer)? To act like a Star Destroyer in 2024, you should:
- Evaluate the portfolio with a critical eye. Take your Difficulty vs. Size grid and draw a horizontal line at the 50% mark on the Difficulty (Y) axis and a vertical line at whatever value designates a project of significance on the Size (X) axis. This Innovation Screen framework (see Figure 1) will help determine which junk to dump. Projects with low impact and low probability of success (aka White Elephants)? Get rid of them! High impact, high likelihood of success (aka Pearls)? Double down! Oyster and Bread and Butter projects have more nuance. But if light speed is the objective, keep as many Oysters as possible, as those are the projects from which we harvest Pearls.
Figure 1: The Innovation Screen differentiates projects based on size and difficulty
- Cultivate Oysters with early-stage projects. Look to your late-stage Discovery/Incubation projects that are not yet in the portfolio. Actively investigate your organizational blind spots to find issues that will allow the project to evolve into an Oyster. Unlock funding opportunities by building a business case that captures plausible upside, downside, and “most likely” outcomes so leaders understand which factors will drive success. Gather evidence to validate your impactful assumptions to quickly determine if the project should proceed, pivot, or shut down.
- Be strategic at the front end of your innovation funnel. Innovation programs need a vibrant funnel to produce meaningful outcomes over time. Re-examine how you bring ideas into the Discovery process. Any employee ideation, technology/start-up scouting, or open innovation efforts should have clear alignment to strategy, as this will help prevent junk projects from cluttering your innovation portfolio in the future.
Want to make the jump to hyperspace in 2024? SmartOrg’s Portfolio Navigator and Innovation Navigator software tools can help you clean up your innovation portfolio and adopt new methods for cultivating high-value/on-strategy projects. Learn more.