Portfolio Management in MedTech

Implementing Portfolio Management to Gain Control of Strategy Execution

Project Context and Scope

A leading Medical Device company had set themselves ambitious growth targets for 2020. Reaching these qualitative and quantitative goals depends to a good degree on conceiving, developing and launching products that were not part of the marketed product portfolio in 2012. Catenion was hired by a Senior Executive to establish the conceptual, organisational, and methodological basis for implementing portfolio management.

Approach: series of assignments with different teams of 2 Partners, 2 Associates, 1 Analyst for 18 months

Key Focus:

Step 1: Audit Phase — assessment of the organizational readiness to meet the 2020 goals in strategic and tactical dimensions

2 Partners, 2 Associates for 2 weeks

  • Interviews with senior stakeholders and experts from R&D, Manufacturing and Marketing
  • High level review of organization, process, methods & tools for R&D project related decision making
  • Interfaces between project management, project assessment and portfolio management
  • High level review of existing assessments of 2 early stage and 2 late stage R&D projects
  • Summary of findings and recommendation for changes

Step 2: Pilot Phase — in-depth assessment of all projects of one major product category

1 Partner, 1 Associate for 4 months

  • Adaptation of Catenion “blueprint methods” to client product categories
  • Definition of processes, organization, roles & responsibilities for project assessments and portfolio management
  • Establishment of a market segmentation model fit for new product inception, design, development and competitive commercialization
  • In-depth assessment of all R&D projects in selected product category
  • Coaching, training and support of senior stakeholders throughout the process
  • Category portfolio consolidation
    • Review of category portfolio and recommendation of priorities for resource allocation
    • Implications for marketed products in given category and beyond

Step 3: Portfolio Management Implementation – in-depth assessment of all projects of a further major product category

1 Partner, 1 Associate, 1 Analyst for 8 months

  • Throughout the project: Organisation & Communication of change process Portfolio Management Implementation
  • Building the Portfolio System (process, methods, tools, roles, responsibilities, deliverables, etc)
  • Special attention to balanced innovation and technology project, development projects and life cycle management projects
  • Building the Portfolio Team (joint portfolio activities alongside with Catenion consultants, formal trainings, coaching, etc)
  • Assessment of Projects in the two major product categories with special attention to cannibalization of existing products
  • Simultaneous Due-Diligence of Licensing Opportunities
  • Consolidation of the Portfolio in the two major product categories
  • Recommendation of future portfolio and first-cut portfolio prioritisation
  • Risk return profile by product category (stochastic simulation including cross-effects like cannibalisation)
  • Throughout the project: Training & Coaching Support for Committees, Teams and Senior Management

Step 4: Ongoing Implementation Support — Training and coaching of portfolio management group and management levels and decision committees during full roll-out of portfolio management to all product categories

1 Partner, 1 Associate for selected activities over a period of 8 months

  • Support in adaptation of Catenion “blueprint methods” to all client product categories
  • Support in preparation and moderation of critical decision committee meetings
  • Training & Coaching Support for Committees, Portfolio Management, Project Teams and Senior Management

Key Benefits to the Client

  • In the step-wise approach, Catenion established clients’ trust in the usefulness and impact vs risk and organizational effort of the change process
  • The client individuals and organization were in control of the breadth, depth and speed of the portfolio management implementation
  • Several projects were stopped, others were changed in priority and the overall risk/return profile of the portfolio was improved
  • As a result, senior management now has full transparency of R&D pipeline and marketed portfolio risks, potential and strategic fit
  • The strategy to reaching the 2020 goals has been revised appropriately and senior management know where they stand