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Innovating for the Future 157

ness, what should be “destroyed” because it is underperforming or has little
upside, and what should be “created for the future.” Their research sug-
gests that most leaders significantly overweight their focus and investment
on preservation, and don’t put enough thinking and resources behind what
should be destroyed and created for the future.
The portfolio idea extends beyond simply balancing riskier, long-range
projects with low-risk, near-term growth. Even within their more innova-
tive projects, companies such as Google, Intuit, 3M, P&G, and Apple don’t
put all their eggs in one basket. Instead they create portfolios of innovation
projects, including some core initiatives and also innovation of different
types, technologies, and markets. The companies then actively manage
these portfolios by allocating resources differentially, periodically killing
some projects while doubling down on others. One of the reasons that com-
panies struggle with innovation is that they don’t manage the portfolio of
projects with enough rigor or discipline, allowing poorly performing ef-
forts to continue while starving those with more potential.
You can organize your innovation portfolio along a number of different
axes. One way is to include projects with different time frames. As Robert
Schaffer and Ron Ashkenas described in their book Rapid Results: How
100-Day Projects Build the Capacity for Large-Scale Change, adhesives
maker Avery Dennison used a framework developed by McKinsey that
separated projects by time horizons: horizon one projects were short-term
innovations (less than two years) that would use existing proprietary tech-
nology; horizon two were medium-term innovations (two to five years)
that required modifications of existing technology; and horizon three were
longer-term (more than five years) breakthroughs that required significant
new research and development. (You can find numerous examples of ho-
rizon charts online.) Plotting projects in this way revealed to then-CEO
Philip Neal and then-president Dean Scarborough that the company’s
investments were too heavily weighted toward longer-term projects that
wouldn’t pay off for many years (even if they were successful). To decrease
risk, Neal and Scarborough shifted much more focus to horizon one proj-
ects that could pay off in the short term and provide a basis for funding the
longer-term and more speculative initiatives.