4. RESEARCH RESULTS
4.1 Company A: Responding to uncertainties with monthly portfolio
4.1.2 Company A’s innovation portfolios and key stakeholders
Innovation project portfolio was not a familiar term for most of the interviewees. Instead, in Company A, research and development projects are managed in a coordinated way through research and product development roadmaps. Such a strategic tool enables an aggregated view on both on-going and up-coming innovation projects, aiming to link the innovation project portfolios closely to long-term strategic objectives of the company.
According to Loch (2000), such roadmaps comparable with project portfolios, where pro-jects are plotted on a timeline.
Structure and key actors of the innovation project portfolios
Even though innovation is seen an integral part of almost all operations at Company A, two teams can be seen as the key actors practicing innovation project portfolio manage-ment. Both teams engage daily on innovation activities, where team 1, Research and development, is mainly focused on the long-term research and development, and team 2, Product management, is responsible for shorter term product development and man-agement. The research and development team consist of approximately 15 members, whereas the product management team consists of approximately 27 members. Figure 6 aims to illustrate the structure of both these portfolios, where innovation project portfolio 1 is titled as research and development and innovation project portfolio 2 as product development. In addition, figure 6 contains key actors within each portfolio, that are color coded based on the typical title of the actor.
Innovation project portfolio 1 is managed by the director of research and development team and four senior data scientists designated as team leads for a their corresponding responsibility area. Each sub-portfolio contains approximately two to three on-going in-novation projects with typically one or two project members within each component. Re-gardless of the division into four sectors, the sub-portfolios share the same limited re-sources. For example, as one of the product areas is being renewed quite drastically,
over 75% of recent research and development projects have fallen under this single sub-portfolio.
Innovation project portfolio structures and key actors at Company A
The product development portfolio is divided into four sectors similarly to the research and development portfolio. However, innovation project portfolio 2 is organized a bit dif-ferently compared to the previously described research and development portfolio. The product development portfolio consists of over 20 sub-roadmaps, each managed by their own product manager. Each product manager has his or her own product development team of typically less than 10 software developers. The product managers take part in the development projects and collaborate closely with different stakeholders in order to ensure alignment with the portfolio objectives. Additionally, a designated principal prod-uct manager has been chosen to manage the portfolio on the higher level.
Although both portfolios are managed as their own entities, they are tightly linked to-gether and share the same yearly budget. When a certain solution has been developed, tested and validated by the research and development team, it might be added to the product development portfolio and therefore to the final product. Whereas some innova-tions flow from the research and development team towards product management, close collaboration between the two teams enables idea flow to the other direction as well. In other words, product management might also send a request for the research and de-velopment team to investigate how a certain functionality could be implemented into the final product.
Close collaboration between the two portfolios is also essential in program management.
At Company A, such programs with high strategic importance are called initiatives. Each initiative is assigned with an initiative owner, namely a program manager. Such programs
typically consist of multiple cross-functional projects from both innovation project portfo-lios described above.
Portfolio stakeholders
Although the research and development team and the product management team are undeniably the key actors in innovation project portfolio management at Company A, multiple other internal and external stakeholders are influencing or being influenced by the project portfolio objectives. In order to get a coherent view on key actors participating in innovation project portfolio uncertainty management, it is important to identify all rele-vant portfolio stakeholders. Hence, portfolio stakeholders mentioned during the inter-views are collected into table 10.
Top management, different internal teams, various steering groups, customers and com-petitors are all important stakeholders for the innovation project portfolios at Company A. Out of the top management, three actors were mentioned during the interviews: Chief executive officer, Chief technology officer and Chief product officer. In addition, Company A has just established a new team responsible for product strategy management, where the director of the team is also likely to be a close stakeholder for the innovation project portfolios. The top management as well as the director of product strategy management team and the head of product commercialization interact with the innovation project port-folios mainly through various steering groups, that are described in further detail later in this chapter.
Close collaboration between product managers and software engineers and developers is also seen as undeniably important to ensure smooth information flow within product development projects. According to one of the interviewees, communication between these actors is constant, as each product manager collaborates tightly with his or her own development team on daily basis. Some technical innovations may also arise from architecture boards. Hence, technical product teams are therefore crucial for successful completion of the innovation projects.
As programs are tightly linked to the innovation project portfolios, program managers are also significant portfolio stakeholders. In addition, solution consultants are also seen as important stakeholders giving input for the research and development projects. As these actors often have backgrounds as senior project managers, their input on topics related to the innovation project portfolios is highly valued. Similarly, customers are also seen as a valuable stakeholder according to the interviewees. As one of the interviewees ex-plains:
“Maybe more on a general level one major stakeholder in multiple ways is of course our customers. So, even though those are not internal stakeholders, they have their own wishes, but we also really want to listen to those requests and incorporate them into our process.” – I1
Table 10. Key portfolio stakeholders at Company A
Stakeholders
Product management • Principal product manager
• Head of product management
• Team members, Product managers Research and development • Director of research and development
• Team leads, Senior data scientists
• Team members, Data scientists Top management • Chief executive officer, CEO
• Chief technology officer, CTO
• Chief product officer, CPO Technology and software
devel-opment • Software engineers and developers
• Architecture boards
Product strategy management • Director of product strategy management Product commercialization • Head of product commercialization
Steering boards • Product council
• Portfolio steering groups
• Program steering groups
• Project steering groups
Others • Program managers, Initiative owners
• Solutions consultants
• Customers
• Competitors
Most of the internal stakeholders shown in table 10 interact with the innovation project portfolios through various steering boards: a product council, and steering groups on portfolio, program and project level. These steering boards and their typical participants are shown in the table 11 below, where the typical chairman of the group is bolded in the participants column.
Product council consists of representatives from the top management, product manage-ment, research and developmanage-ment, product strategy management and product commer-cialization. The product council meeting is held once a month with an agenda of approv-ing, prioritizing and starting new programs with high strategic importance and making
decisions related to product life cycle management. This group holds the highest deci-sion-making power related to the product management and development.
Table 11. Steering boards at Company A
Group Typical participants
Product council • Top management
o Chief technology officer, CTO o Chief product officer, CPO
• Product management
o Principal product manager o Head of product management
• Research and development
o Director of research and development
• Other stakeholders
o Director of product strategy management o Head of product commercialization o Software architects
Portfolio and sub-portfolio steering groups
Innovation project portfolio 1: Research and development
• Research and development
o Director of research and development o Team leads, Senior data scientists Innovation project portfolio 2: Product development
• Product management
o Principal product manager o Product managers
Program
steering groups • Product council members
• Other stakeholders o Initiative owner
o Representatives from relevant, program specific teams Project
steering groups
Innovation project portfolio 1: Research and development
• Research and development
o Team lead, Senior data scientist o Project manager, data scientist o 1-2 other team members
• Product management o Product manager
Both innovation project portfolios have their own practices for portfolio steering. The re-search and development team organizes portfolio steering meetings approximately once a month, where the director of research and development team and the four team leads gather to discuss about the innovation roadmap. The product management team also
organizes monthly portfolio steering meetings, although they have been divided into four groups based on the product area. Hence, those meetings only concentrate on a certain sub-portfolio at a time and involve only product managers from that specific product area.
Program status is monitored in the program steering groups, where the participants in-clude product council members, the initiative owner and representatives from relevant teams such as product development and customer operations. The meetings are led by the corresponding program manager. Similarly to these program steering groups, the research and development teams also organizes project steering groups. These meet-ings are held approximately every other week with a purpose to discuss about topical issues related to the project work. During these meetings, the team member acting as the project manager presents his or her current project status to one to two peers. In addition, the corresponding team lead as well as a representative from product manage-ment might attend the meeting when needed. Such project steering meetings also pro-mote the is fail-fast mentality, where unsuccessful projects can be quickly terminated when necessary.
These various steering groups have an important role in managing innovation project portfolio uncertainties, as the main purpose of those meetings is mainly to monitor, con-trol and guide the portfolio, program or project. The responsibilities related to uncertainty management are described further in the following chapter.