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Objectives of portfolio management

Updated: 9/11/2023
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best possible returns based on the market.

1.Maximize Value: Every innovation portfolio is constrained by either human or financial resources. Optimizing the risk-adjusted expected commercial value of the innovation pipeline within those constraints is the primary objective of portfolio management. Making better investment decisions increases returns.

2.Achieve Balance: Portfolios should attempt to balance investments and initiatives across a number of dimensions including both risk and reward, but also across product lines, geographically, by phase and launch date, and by innovation type. There are a number of important analyses that will help portfolio review committees answer questions regarding mix and balance in the pipeline.

3.Maintain Alignment: Innovation portfolios should be congruent with the business and innovation strategies articulated by the organization. This starts with the question of whether the pipeline is capable of delivering against the organic growth goals of the organization. We should also be aligning investment individual business unit or product line objectives.

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