In a previous post I highlighted four tenets of EMC’s innovation strategy:
The first tenet (Gather Data), has the gathering of business data as a foundational activity.
One way to implement this strategy is via the creation of a Portfolio Intelligence team and the creation of a threshold CAGR number. In the diagram below I've made up a number of seven percent.
One of the first actions in a corporate innovation strategy should be the creation of a portfolio intelligence team. This team is responsible for working with all of the lines of business to gather business data into a centralized set of “folders” that contain key metrics about each product.
One of the most important metrics from an innovation standpoint would be CAGR, the compound annual growth rate for each of EMC’s product offerings.
At EMC we have done, and continue to do, CAGR monitoring for each of our products, and we categorize each product offering into one of four categories:
- Negative CAGR is classified as a “late life cycle” product.
- < X% CAGR is classified as a “mature” product
- > X% CAGR is classified as a “growth” product
- Infinite (or unknown) CAGR is classified as “emerging”
The value of X will vary over time and vary by industry.
The Chief Technology Officer at EMC run this Portfolio intelligence team. While the team does not solely exist for the purpose of innovation, their output does feed into a large amount of innovation activity.
Specifically, this data, along with other business data gathered by the PI team, becomes highly relevant when combined with data gathered by EMC’s innovation communities.
In an upcoming post I will describe some of these communities and highlight the specific innovation data that they generate.
Steve
EMC Fellow
