Portfolio Management For New Products: Second Edition [Hardcover]

Robert G. Cooper (Author), Scott J. Edgett (Author), Elko J. Kleinschmidt (Author)

Book Description

Publication Date: January 4, 2002

In this fully updated edition of Portfolio Management for New Products, the authors present a rigorous and practical approach to managing a company's product portfolio as you would a financial portfolio-investing for maximum long-term growth. With its field-tested, step-by-step framework, the book provides corporations and managers with the strategies they need to assess and realign their current R&D operations; determine which products are most worthy of resource allocation; design and implement a portfolio management process; maximize the value of their portfolios; and recognize and solve challenges as they arise. This book will be an essential resource for any company whose profitability, and very existence, relies on the products it chooses to develop and the speed with which it brings them to the market.

Editorial Reviews

About the Author

Robert G. Cooper is a professor of marketing at McMaster University. Founder of the widely employed StageGate product development process, he lives in Oakville, Ontario. Scott J. Edgett is associate professor of marketing at McMaster University and director of the Product Development Institute. He lives in Ancaster, Ontario. Elko J. Kleinschmidt is professor of marketing and international business and director of the engineering and management program at McMaster University. He lives in Ancaster, Ontario. Robert G. Cooper is a professor of marketing at McMaster University. Founder of the widely employed StageGate product development process, he lives in Oakville, Ontario. Scott J. Edgett is associate professor of marketing at McMaster University and director of the Product Development Institute. He lives in Ancaster, Ontario. Elko J. Kleinschmidt is professor of marketing and international business and director of the engineering and management program at McMaster University. He lives in Ancaster, Ontario. Robert G. Cooper is a professor of marketing at McMaster University. Founder of the widely employed StageGate product development process, he lives in Oakville, Ontario. Scott J. Edgett is associate professor of marketing at McMaster University and director of the Product Development Institute. He lives in Ancaster, Ontario. Elko J. Kleinschmidt is professor of marketing and international business and director of the engineering and management program at McMaster University. He lives in Ancaster, Ontario.

Product Details

• Hardcover: 400 pages
• Publisher: Basic Books; 2nd edition (January 4, 2002)
• Language: English
• ISBN-10: 0738205141
• ISBN-13: 978-0738205144
• Product Dimensions: 9.2 x 6.4 x 1.3 inches
• Shipping Weight: 1.3 pounds (View shipping rates and policies)
• Average Customer Review: 4.5 out of 5 stars  See all reviews (14 customer reviews)
• Amazon Best Sellers Rank: #86,858 in Books (See Top 100 in Books)

More About the Author

Dr. Robert G. Cooper is one of the most influential innovation thought leaders in the business world today. He pioneered the original research that led to his many groundbreaking discoveries including the Stage-Gate Idea-to-Launch Process. Now implemented by almost 80% of North American companies, it is considered to be one of the most important discoveries in the field of innovation management. He has spent more than 30 years studying the practices and pitfalls of 3,000+ new product projects in hundreds of companies and has assembled the world's most comprehensive research on the topic. His presentations and practical consulting advice have been widely applauded by corporate and business event audiences throughout the world making him one of the most sought-after speakers.

A prolific author, he has published more than 100 academic articles and eleven books, including his latest book Winning at New Products: Creating Value Through Innovation, 4th Edition. He is the recipient of numerous prestigious awards including the Crawford Fellow from the Product Development and Management Association (PDMA) and the Maurice Holland Award from the Industrial Research Institute (IRI). Dr. Cooper is a Professor Emeritus of Marketing and Technology Management at the Michael G. DeGroote School of Business at McMaster University in Ontario, Canada and Distinguished Fellow at the Institute for the Study of Business Markets (ISBM) at Penn State University in Pennsylvania, USA.

Customer Reviews

Most Helpful Customer Reviews

90 of 100 people found the following review helpful:

2.0 out of 5 stars No theory behind an incomplete collection of case studies!!, March 18, 1999

By A Customer

This review is from: Portfolio Management For New Products (Hardcover)

Huge disappointment. Chapter 1, page 1 starts with "Those
companies that succeed at new product dvelopment are the future
Mercks, HPs, 3Ms, and Microsofts; those companies that fail to excel
at developing new products will invariably disappear or be gobbed up
by the winners. .....". Despite this quite promising catch
phrase you will not find a single word on how the above mentioned
companies develope new products.

Things actually get worse. What you
will find in this book are random generated case studies on various
portfolio models the authors encountered in the few firms willing to
meet them - no theoretical framework is given on portfolio management,
criteria to be included and best practices in various industries.

As
a major disappointment I found the fact that not a single case/best
practise study came from the pharmaceutical industry and the software
industry, those industries where portfolio management/selection are at
the very heart of the strategic management process. It would have been
a huge (and logical) opportunity to cover in this book how Merck or
Pfizer steer their new product development processes. But don`t look
for clues to this questions in this book. The case studies you will
find in this book are about a small Canadian bank, a small US chemical
company, and about Hoechst US. The last case study offered at least
some ideas useful for improving the portfolio management process (that
is the main reason for the second star).

Somewhat disturbing are
platidudes widely used throughout the book (e.g. " ....Remember:
understanding the problem is the first step to a solution!
.... (p. 184)). If esclamation marks after platitudes make you
nervous, then you will probably throw this book away before reaching
page 100.

The only bright side of this book are the first 20 pages,
where the authors discribe present shortfalls of the portfolio
management process currently used in some firms (i.e. in the firms
they interview, and these firms are underperformers). It helps to get
an idea of what effective portfolio management should do - and these
points are very agreeable indeed (e.g. value creation, balance,
strategic fit). That these questions are inadequeately and only
empirically adressed in this book, is a source of frustration for its
readers. I would give only a very very weak recommendation for this
book....

databaseU

16 of 18 people found the following review helpful:

4.0 out of 5 stars Actionable approach and excellent reference, March 29, 2004

By 

Robert B. Towry "Bob" (CO United States) - See all my reviews

This review is from: Portfolio Management For New Products: Second Edition (Hardcover)

The purpose of this book is to provide the reader with an actionable approach for implementing a product-oriented project portfolio management process which corporate leaders can use to ensure that the organization's portfolio delivers value, is balanced, and is aligned with strategy.
While the book addresses product-oriented projects, it seems well suited to limited generalization to aid the non-product based project portfolio.

The Thesis
The authors state that a portfolio process is key to success since projects operationalize strategy. To determine how well organizations manage their product project portfolio, they evaluate leader satisfaction with the process the organization uses along six metrics:
* Projects aligned with business's objectives
* Portfolio contains very high value projects
* Spending reflects the business's strategy
* Projects are done on time (no gridlock)
* Portfolio has good balance of projects
* Portfolio has right number of projects

While I think this is a good list for any project portfolio manager to begin using, I note that this survey is simply a ranking of leader satisfaction with leaders in organizations which use portfolio management. The authors did not try to link leader satisfaction with business success. It is difficult to prove that portfolio management led to business success, but one might assert that a measure of portfolio management on business is not fair because what one is really measuring is strategy success. The goal of portfolio management then might be stated as alignment with strategy, not business success. I think an organizational survey asking senior leaders to rank satisfaction along the six metrics might be interesting - how many of the questions can they answer at all? Presumably, knowing the answers and being dissatisfied with them might be better than not knowing the answers.

Actionable Information
This book is well organized and appears well researched. This is not surprising given that it was written by academic professionals. What is a little surprising, given the authors' profession, is that is so thoroughly action-oriented. The authors never seem to loose sight of the fact that if portfolio management is to help an organization it must be implemented. Over and over again, they point out pitfalls, limitations, cautions, and implementation steps for overcoming these. I expect to use this book often to fill in the gaps in other approaches, leaning heavily on the best-practice implementation suggestions they authors recommend in suggestions tailored to specific goals.

Among the useful, researched insights was this one: "Those businesses that use financial models as the dominant portfolio selection method end up with the poorest-performing portfolios!" (p 169). One reason for this (in product portfolios) is that the sophistication of the financial tools exceeds the quality of the predictive value data. Conversely, businesses that rely principally on strategic models outperform the rest. Allocating resources to strategic areas seems to work well, and we are reminded that "strategy begins when you start spending money" (Ibid).

Conclusion
Many books are over-blown magazine articles. This is not one of those books. The authors did a lot of plain hard work bringing this book together and it shows. They authors never forget that someone must sell the notion of portfolio management to senior leaders, then provide them with specific, relevant and actionable information to make difficult and important project decisions with strategic impact. I appreciate the fact that the authors frequently provide suggestions on how to keep thinks simple, starting small and scaling sophistication as processes are prototyped, then refined and adapted in specific organizations.

There is a possible limitation in how appropriately one may generalize these approaches to non-product-oriented project portfolios. This book does such a good job talking about project portfolio management that the reader can forget at times that the book is about product project portfolio management. It may be that some of the research findings do not apply or cannot be generalized with validity to other types of project portfolios. The reader should keep his grain of salt handy. However, there are still too few project portfolio management books available, especially books based on research, so this is a very useful reference. By way of balance, it does not seem too far a stretch to use this book for other, non-product project portfolio management since the aim of the process is to align projects with strategy, obtain high value from projects, and obtain a balanced portfolio of projects. These are good goals for any portfolio, and organizations are free to define and measure dimensions however they wish.
Possibly the highest compliment I can pay the authors is to say that having read the book, my copy is full of underlined passages and pages encumbered with sticky-notes. This book will not gather much dust on my shelf - at least not for quite some time.

7 of 7 people found the following review helpful:

4.0 out of 5 stars Good summary of advantages of conducting a portfolio review, September 20, 1998

By A Customer

This review is from: Portfolio Management For New Products (Hardcover)

Edgett, et al provide an easy to read summary of their research findings on how various companies conduct portfolio management. They provide examples, pitfalls to avoid, and structures to use in building your own company's portfolio management program.

If you are already conducting portfolio reviews, this is a good book as a reference to see how to improve the process. If you are not using portfolio reviews in your company, here is a good reference to learn how to do it.

There is no earth-shattering new information in this book. I would have liked to have seen information on portfolio management based on the type of product such as high tech, consumer, etc. If you're just learning about portfolio management this is a good starting place, if you are already knowledgeable about the area, search out other books.