We used to think of the future as something that is far, far away. Time between disruptive changes has become significantly more compressed and how much time we have to prepare for the future is shrinking ever faster. The pressure this places on organizations to continually reinvent themselves is staggering. You cannot just dream up a future by working on a long-term plan. To make matters worse, even if you manage to be at the forefront of the next emerging opportunity, there is no staying power without having a clear series of second and third acts to sustain the momentum. This is where the Future-Fit Manifesto comes in: It presents an essential set of values and principles that should be embraced by organizations of all types and sizes. One of the principles relates to portfolio management and is as follows:

“Shape the future through a range of initiatives, from quick wins to long shots, with a preference for game-changing opportunities.”

With over 20 years of experience working closely with corporate innovation leaders from across the globe, the Planbox team was able to study its clients’ success thoroughly and define best practices for building a balanced innovation portfolio. Below is a summary of what was observed from leading organizations and recommended for all innovation maturity levels – for those that recently launched an innovation program to those that have fully optimized their innovation culture, processes, and strategy.

The foundation to building a future-fit portfolio starts with  your team’s assessment of your organization’s current innovation capability. This 5-minute online assessment will help identify areas of strength and opportunity based on your specific answers. Upon completion, you will have a precise indication of your organization’s innovation maturity level and what steps you need to take to improve. Here’s an overview of the innovation capability spectrum: 

  1. Initial: Level 1 organizations do not provide a stable environment to support ideation and idea development. Innovation success in these organizations depends on the competence and heroics of a few. Maturity Level 1 organizations tend to make riskier investment decisions, overcommit to poorly developed and misaligned ideas, manage by crisis, and are unable to repeat their past successes.
  2. Launched: In Level 2, the organization has ensured that basic ideas, suggestion management, opportunity assessment and problem-solving processes are planned and executed in accordance with the company’s standards and policy. The process rigor established in Level 2 ensures that existing practices are maintained in times of stress.
  3. Established: In Level 3, process standardization has been achieved. Innovation management processes are documented, well understood, and described in standard operating procedures.
  4. Managed: In Level 4, the organization has made considerable progress to ensure that all innovation activities are aligned with the organization’s stated business strategy and objectives.
  5. Optimized: In Level 5, the organization has reached a state of continuous innovation management process improvement based on a quantitative analysis of investments, engagement levels and outcomes. In this level, the organization formalizes the consistency and frequency of various innovation activities launched in Level 4, with a preference for game-changing opportunities.

To manage a future-fit portfolio, your team has to build out your organization’s Innovation Breakdown Structure (IBS). A IBS will help your team track all innovation-related information such as innovation type, activity, category, focus area, and challenge as well as organization related structures such as business units, departments, and resource types. This model is used to plan, analyze, and assess your innovation efforts, including its costs and benefits. IBS helps you answer questions like:

  • What percentage of our investments are focused on continuous improvement?
  • Is your team making the right decisions for transformational innovation (H3) initiatives?
  • What innovations had the optimal return on investment?
  • Which focus areas work best?
  • Which business units have the best return on innovation investment?

Some of the key elements are described below:

  • Portfolio: The portfolio consists of innovation investments such as products, services, R&D, six sigma quality management, and continuous improvements. Portfolios generally include a set of strategic objectives, budgets, investment criteria, and business priorities that are used to determine which initiatives and investments to pursue.
  • Innovation Type: Specifies what type of innovation you are looking to pursue such as Continuous Improvement (CI), Core (Horizon 1 or H1), Adjacent (Horizon 2 or H2) or Transformational Innovations (Horizon 3 or H3). An innovation portfolio may include a predetermined mix of Innovation Types for budget and resource allocation purposes. 
  • Activity Type: Describes the innovation activity that is planned, such as Discovery Sessions, Jam Session, Open Innovation, Idea Rally, Shark Tank Business Competition, Challenge or Idea Contest.
  • Category: Defines a class or division for ideas, such as a segment, geographic area,  industries, or new ventures. You can define a hierarchy of categories and even specify various rules such as which categories are required or optional information during the idea submission and evaluation process.
  • Challenge/Focus Area: A focus area that forms the base of all the activities that take place for innovation activities being planned, including the opportunity to seize or the problem you wish to solve, who should participate, what subject matter experts are required, the types of rewards and recognitions to offer, and how to market the campaign. Examples of focus areas: Best Practices & Next Practices, Customer Success, Employee Satisfaction and Engagement, Environmental, Social and Corporate Governance (ESG), Health & Safety, Sustainability and Social Responsibility, Risk Management, Emerging Threats and Crisis Prevention, Breakthrough and Disruptive Innovation.

There are many more elements of the IBS structure that are not covered here, so make sure to check out this Innovation Break Structure Guide for a more detailed explanation.

As we all witnessed the pandemic’s repercussion on the global economy, simply responding to change is no longer sufficient. A Future-Fit Innovation Portfolio should be built on the pillars of adaptivity, creativity, and resilience to delight key stakeholders and realize their most pressing aspirations.



Ludwig Melik

CEO at Planbox and author of the Future-Fit Manifesto. I help organizations build a sustainable culture of innovation. Follow me on Twitter or LinkedIn.