Crises like the COVID-19 pandemic force businesses to reassess their strategy and investment focus, and to make urgent, often dramatic choices.

Consider the case of Victorinox, the company that invented the Swiss Army knife in 1884 and built it into an iconic global brand over the past century. The Sept. 11, 2001, terror attacks hit this business particularly hard due to new restrictions on travel carry-ons and the impact on a primary distribution channel. In the words of Chief Executive Officer Carl Elsener Jr., “It was an absolute catastrophe for us. Until then our knives had sold very well in duty free shops and on-board planes. Then suddenly this distribution was closed. It was zero.” Almost overnight, the company lost over 40% of its business.

To survive and thrive in the post-9/11 environment, the company needed to reexamine its investment priorities and make hard decisions about which projects to stop or defer to free up resources, which to continue or accelerate to maintain momentum, and which to start in response to emerging threats and opportunities. These decisions included doubling down on recently introduced growth platforms such as Swiss Army watches and Victorinox luggage, increasing the focus on its traditional household knives business, and developing a new line of leisure wear.

This kind of portfolio reset is critical in times of crisis; but it’s important in normal times as well. In particular, top leadership needs to regularly review their current innovation bets and ask three questions:

  • Are we doing too much, too little or the right amount of innovation?
  • Are we doing the right kinds of innovation?
  • Have we optimized how resources are allocated to innovation?

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Answering these questions unlocks enormous near-term value while keeping options open for the long term. One leading global enterprise software company was able to free up 40% of its total investment in new growth innovation projects after the leadership team undertook a systematic portfolio review. Much of the value came from identifying projects that were no longer strategic, that focused on subscale opportunities, or that had subsisted in a “zombie” state for so long that chances of success were low. These results are not unique, as we’ve repeatedly seen cases where this type of review reveals close to half of total innovation spend that can be reallocated to higher-impact initiatives.

For such a review to be effective, leaders need to engage in a different conversation than business as usual, informed by the right “portfolio views” that visualize the portfolio from a number of different perspectives to reveal actionable insights.

Such portfolio views allow leaders to make immediate, no-regrets decisions about projects to stop or put on hold — crucial during a crisis when there is a need to free up resources. But they can guide other important decisions as well, such as the selection of promising initiatives to accelerate or new strategic projects to launch.

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