The business units have more than a dozen pilots running. Most are past their planned end date. Each pilot has someone who wants to keep it alive, so the proposal on the table is to “park” a few. Meanwhile, leadership asks the innovation team for the next round of ideas, and the strategy deck still promises double-digit growth from new business.

Noel Sobelman has spent 25 years on this gap between the strategy leadership signs off on and where people and money actually go. In his experience, people run out before the budget does. One consumer goods company spent three years improving how it ran projects, and time to market barely moved, because the people it needed were tied up elsewhere. Noel’s water line ranks projects against the people actually available and stops staffing everything below the line. For pilots, his rule is simple: cancel or continue, never “on hold.”

The piece follows Tenneco, which gave a new suspension business its own team and earned two to three times the returns of its core; Bard, which funded big bets from a corporate pool; and Carrier, where knowing which roles each project needed let one engineering leader move people fast when a quality crisis hit. It ends with a seven-point check to run before your next portfolio review.

Ruth ran a specialty materials division with about $5 billion in revenue. Her teams were capable and her businesses performed well, yet each year most resources flowed back to the core. David Matheson, who worked with her, sees the same pattern in many companies: portfolio processes favor projects that are easier to explain, forecast and justify.

The first step was making opportunity cost visible. In one meeting, a division leader ended a favorite project he had protected for years, once he saw what it cost the opportunities his team ranked highest. Across the division, about 30% of the portfolio went. What remained already held enough potential value to meet the growth goals.

The harder question was how to manage it. David sorts every project by two questions, how big it could become and how likely it is to succeed, into four types that each need a different kind of management. The piece also shows how an antenna project with disappointing economics became a winning business case after a phone call between two CEOs and a redesigned pilot.

Why is innovation usually the first thing a company kills when it starts cutting costs?

Patrycja Anna Jakubiuk, trained in finance, couldn’t make sense of it: an investment that promises high returns in a short time should be attractive. Today she leads about 80 innovation initiatives at a large corporation, and some years finance sends her a savings target during budgeting and then two, three or four more.

She found out that in a corporation, even a strong business case doesn’t guarantee funding. So she uses what she learned on cost-cutting programs before her 15 years in innovation. She puts the full cost of the old way of working, spread across business, IT and procurement budgets, next to the cost of the new solution. She plans funding past the handover to the business, where many initiatives die. And when cuts come, she protects the initiatives closest to go-live.

When the third or fourth target arrives, she turns to the people who had been challenging her spend: IT, procurement and FinOps. A portfolio that does this for the first time, she estimates, can find 20 to 30% in savings. The piece includes a three-number comparison to prepare before your next budget discussion.

Next week: why so many employees don’t see themselves as innovators, even when the program and the process are in place.

Clatterbridge shows how a team of 1.25 people changed that across a hospital trust in 18 months. RBI rebuilt a successful training program after only 41% of participants applied what they learned. And Avi has a rule his innovation team hasn’t broken in 12 years. It got 75% of employees involved.

Hans

Hans Balmaekers
Founder, the Compass and Novum