04. Three NPD Portfolio Fundamentals: My Perspective

If you've sat in Portfolio Management Review (PMR) meetings, you've likely found yourself squinting at a 6-point font gantt chart with the entire three-year NPD schedule squeezed onto one page

While that's relevant and important information, sometimes we need to step back and look at the bigger picture. At its core, managing your NPD pipeline is really about three simple things: what's going in, how it's flowing through, and what's coming out. Everything else builds from there.

That might seem overly simple, but I believe that just three fundamental key measures can give PMR attendees better insights and drive more meaningful discussions up front in the early stages of a PMR journey.

Understanding how these measures fit into the bigger picture is important: the PMR is the first review in the 5-step monthly Integrated Business Planning (IBP) cycle. As a true portfolio management review, it should cover the entire portfolio of products or services that your organisation offers, new, existing and old. However, in looking at just the new innovation portion, these three fundamentals consistently emerge as the foundation of effective portfolio management.

Think of it as simply as "in, through and out": How much product is going into your NPD pipeline, how well it's flowing through it, and how much value is coming out and being delivered. Let's examine each component:

Pipeline Fullness (‘In’): Feeding the Beast

Picture your innovation pipeline like a restaurant's kitchen. No matter how efficient your chefs (your development teams) are, if there aren't enough ingredients (ideas) coming in, you'll run out of meals (products) to serve. Measuring pipeline fullness isn't just about counting projects - it's about ensuring your future growth. When someone asks "Do we have enough ideation entering the development funnel to convert into NPD to meet our growth targets?" you need a clear answer and a clear target.

Milestone Performance (‘Through’): Keeping the Promise

For those products in the NPD pipeline, are we hitting our planned gating milestones, or aren't we? No complex algorithms are needed. Set a modest time tolerance against the planned gating date, and then track how you deliver against it. When projects consistently miss their milestones, it's usually a signal of deeper issues - perhaps resource constraints, scope creep, or overly optimistic planning. Milestone tracking quickly highlights these patterns, allowing you to address root causes rather than symptoms.

Value Delivered (‘Out’): Making It Count

At the end of the day, innovation needs to create value. Whether it's revenue, margin, sustainability improvements, or market share - measuring the actual value delivered against what was promised keeps everyone honest about the real impact of your innovation efforts. We often see a common pattern: a project launches, hits the market, and suddenly everyone's attention shifts to the next exciting initiative. The previous project becomes yesterday's news before you even understand its true impact. By maintaining focus on value delivery well after launch, you not only ensure accountability but gather crucial learnings that make future launches more successful.

"But what about measuring portfolio health? Kill rates? Strategic alignment?"

All valid points, absolutely. These aspects matter. But I believe the best start is to focus on some basics. Get these three fundamentals right, and you'll find that many other metrics naturally follow. Plus, when everyone in the room - from R&D to Marketing to Finance - clearly understands what's being measured, you get better discussions and better decisions.

Think about it: If your pipeline is healthy, milestones are being hit, and value is being delivered, isn't that a strong indicator that at least the NPD portion of your portfolio management is working?

This is not a complete picture of portfolio health, but it's a clear starting point that drives action rather than analysis paralysis.

Get these basics right first. Then, as your organisation's portfolio management maturity grows, you can layer in additional metrics for the entire portfolio that add value to your decision-making process.

What's your experience with portfolio metrics? Have you found that less can sometimes be more? Share your thoughts - your perspective might help others simplify their approach to portfolio management.

#Innovation #ProductDevelopment #PortfolioManagement #ProductManagement #IBP

About me: An IBP practitioner who believes that a ruthless focus on some simpler metrics often leads to better decisions, especially when they drive meaningful cross-functional conversations.

Want to learn more? Visit me at www.planninglab.co.nz