Portfolio management is a dynamic decision process,whereby a business's list of active new product (andR&D) projects is constantly up-dated and revised. Inthis process, new projects are evaluated, selected andprioritized; existing projects may be accelerated,killed or de-prioritized; and resources are allocatedand re-allocated to the active projects

projects are starved for resources ± they take toolong, and may fail to achieve their full potential.* No focus. Another outcome of poor portfoliomanagement is a strong reluctance to kill projects:there are no consistent criteria for Go=Kill deci-sions, and projects just get added to the active list.The result is a lack of focus ± too many projects,and resources thinly spread. This in turn leads toincreased times to market, poor quality of execu-tion, and decreased success rates.* The wrong projects. Poor portfolio managementmeans that often the wrong projects are selected.With no formal selection method, decisions are notbased on facts and objective criteria, but rather onpolitics, opinion and emotion ... for example, `pet'projects of some senior executive. Many of theseemotionally-selected projects fail

One negative side of poor portfoliomanagement is that strategic criteria are missing inproject selection. This translates into no strategicdirection to projects selected; projects not strategi-cally aligned with the business strategy; manystrategically unimportant projects in the portfolio;and R&D spending that does not reflect strategicpriorities of the business. The end result is ascattergun R&D and new product effort that doesnot support the company's strategy.* Low value projects. Poor portfolio managementmeans deficient Go=Kill and project selectiondecisions, which in turn leads to many mediocreprojects in the pipeline ± too many extensions,modifications, enhancements and short-term pro-jects. Many of these are marginal value projects tothe business. This translates into a lack of stellar,high reward projects, while the few really good