Tech Scouting: Portfolio and Business Fit

Article #7:  Portfolio and Business Fit

Opportunities and technologies should be viewed through the lens of your organization’s growth strategy and should fit with your product portfolio/roadmap. The question of “fit” applies to both immediate and longer-range needs.  The decision to partner (versus make or buy) and the level of resource investment are also informed by the fit.

Clorox’s “Go deep” process, discussed in the previous article, assesses capabilities and technology for the purpose not only of identifying the right partners, but also to understand the fit with Clorox’s technology platforms and business strategy.

They use an alignment scorecard with three components:

  1. strategic alignment: a weighted score that looks at capabilities the partner/supplier has relative to Clorox’s technology interests
  2. product alignment: a downstream measure of the maximum potential that a partner/supplier has to provide technology or raw materials given the current product line
  3. cultural alignment: specific metrics to quantify the partner’s ability to collaborate (a somewhat subjective measure)

The alignment scores (0-4) are placed on the y axis of a four-box grid, innovation potential is scored on the x axis, also 0-4.  The true innovation partners will be those in box four where alignment and innovation are highest; those in box one will be more suitable as transactional suppliers.

Another framework, used by Avery Dennison, is the “three horizons” model developed by McKinsey and described in The Alchemy of Growth: Practical Insights for Building the Enduring Enterprise (Baghai, Coley, and White) which examines opportunities in relation to 1. core business, 2. adjacencies, or 3. entirely new business areas.  The further from your core business and the higher the potential value, the more worthwhile it is to partner.  This model can also help determine priority among projects and where funds and other resources are most likely to achieve success.

Finally, Steve Steinhilber, Cisco’s VP of Strategic Alliances, cites six “must-have” checkpoints that Cisco applies to ensure that partnerships not only fit, but are mutually profitable.  Number one is a Shared Strategic Map which includes external factors (opportunities/threats), customer value proposition, delivery/support strategy, joint solution architecture, roles and responsibilities, mutual goals, routes to goals, competitive positioning and exit options.

Other factors to consider in terms of strategic fit are your company’s risk tolerance and how new platforms will operate as a business, i.e. what enablers are necessary.

Once you have evaluated the opportunity, IP value, prospective partner (articles 4, 5 and 6) and strategic fit, you will have identified the opportunities and technologies with potential to deliver the highest value.

Further reading:

This article published in conjunction with MRT’s workshop series:
Technology Scouting to Accelerate Innovation – Implementing an External Sourcing Program – check our website for the latest dates and locations of this popular seminar.

To be on the mailing list to receive these articles (along with other special updates), sign up here.


One thought on “Tech Scouting: Portfolio and Business Fit

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s