The PDMA Handbook of New Product Development

3.2. Portfolio Planning and Management—A Useful Framework

An effective new product program is essentially a system for rapidly gathering and assimilating information and then systemically adding value to it until it describes how to sell, make, use, and support an exciting new product or service (Patterson, 1999). From another perspective: "The ability to learn faster than your competitors may be the only sustainable competitive advantage" (De Geus, 1988).

The portfolio planning and management framework depicted in Figure 3.1 is one of the key learning systems in the business enterprise. Business leaders need to lead, carry out, track, and manage this essential system.

This framework includes new product portfolio activities, shown inside of the dashed boundary, as well as other support functions and related efforts shown outside this boundary as context. The portfolio work that concerns the business leadership team includes a strategic process, labeled "portfolio planning," and several tactical tasks under the heading of portfolio management. Tactical tasks include portfolio assessment, resource management, and portfolio review.

Figure 3-1. PORTFOLIO PLANNING & MANAGEMENT WITH RELATED ACTIVITIES.

The overarching objective of this system is to transform the business strategy of a company into effective and specific new product investments. To be effective, these investments must ...