Should You “Exnovate” your Product Portfolio?

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What I learned this week … came from a blog entry by Paul Hobcraft on Innovation Tools asking “What is ‘exnovation’ and where does it fit in the innovatin life cycle?” I found “exnovation” an intriguing term and an interesting concept. And then, as usual, I tried to think about how manufacturers could apply it to their product lifecycles to enhance product profitability. I think the answer may be similar to the portfolio shift depicted in this graphic:

Product Portfolio Shift

So What is Exnovation, Anyway?

From the blog entry (it’s short, take a quick read and please come back) I picked up a few key points that I will repeat here:

  • The term is credited to “Kimberly in 1981”
  • Exnovation is at the end of the innovation life-cycle where it “discards” or even purges existing practices to allow the organization to adopt different and fresh thinking to any new innovation activities.
  • Exnovation gives us the opportunity to jettison what is no longer relevant and the space to create something more relevant to the current project.

I don’t have much to add in defining the term, I am sure that Paul is much more versed in innovation literature and processes than I am. So, let’s turn to my thoughts and the “so what’s in it for us?” question.

My Thoughts

As summer draws to a close, students are getting ready to go back to school and families are wrapping up vacations. This is the time to restock school supplies (or office supplies) and get back to school (work) refreshed and ready to take on new challenges. At that time, it often makes sense to clear away the clutter and get ready for what’s next. Isn’t that exactly what we need to do coming out of the “summer doldrums” brought on by the recession? What really appeals to me in the “exnovation” idea is to clear away what isn’t necessary. To me, this can include a review of practices and policies that might be outdated, but also a review of the existing product portfolio. Shouldn’t this be the time to jettison the extra baggage in the product portfolio that is holding the company back, and then focus resources on what will rebuild the future of the company? I am not saying to throw away cash cows that generate money, but maybe get rid of the sacred cows that can no longer afford to be protected. In other words, isn’t it time to prune the product portfolio to cut away the dead wood? Wow, sorry for all of the cliches, but I hope I made my point…

What’s in it for Us? (Implications for Manufacturers)

So what does this mean for the manufacturing industry? Strip out unprofitable products and product lines. Sell off product lines that have no future. Rationalize the portfolio to one that:

a) Has profitable products to keep the company going during the down cycle

b) Has strategic up-side potential to accelerate growth during the upturn

This is exactly what I have seen many companies do in what I have talked about as the “Product Portfolio Shift.” Whether you call it rationalization, exnovation, pruning, or any other name – I think this is a healthy time to let every product and product line earn the right to be in the product portfolio. That is, instead of selectively deciding what to take out, take everything out of the portfolio and then decide what you would like to put into the portfolio to build the future of the company. You just might come up with a very different set of products, and one that will drive better profitability in both the short and long terms.

So that is what I learned, I hope you found it interesting. Who knew about “exnovation,” at least by that term? I didn’t, if you did let us know about it.

SPEAK YOUR MIND

  1. Thought I had a copy of the source book – perhaps in a past organizational life:

    Kimberly, J (1981). Managerial Innovation. In Nystrom, P and Starbuck, W (eds.), ‘Handbook of Organizational Design-Volume 1.’ New
    York: Oxford University Press, pp.84-104.

  2. I am not sure that exnovation is the right term for what you are trying to do. It refers to innovations that we actually adopted by organizations that have to be removed before NEW innovations can be adopted. (I guess you can exnovate within product development organizations, but even THEY have not necessarily adopted things to the point where extracting them is painful.)

    Your discussion is more about culling our portfolios, something that PPM is supposed to help us to do, right? But there are MANY good books on innovation and the innovation process that talk about how HARD it is to say NO once a project gets rolling. (“Breakthroughs!” was one of the first pop business volumes on this topic – http://www.amazon.com/Breakthroughs-P-Ranganath-Nayak/dp/0893842508 – although this one has a pro-innovation bias.)

  3. Stan,
    Thanks for the your comments and the references. I guess the tie to exnovation was a stretch? To me, they are both ways of clearing the clutter of past innovation to make room for the new. Thanks for sharing your insight.

    Jim