Total Innovation Podcast
Welcome to "Total Innovation," the podcast where I explore all the different aspects of innovation, transformation and change. From the disruptive minds of startup founders to the strategic meeting rooms of global giants, I bring you the stories of change-makers. The podcast will engage with different voices, and peer into the multi-faceted world of innovation across and within large organisations.
I speak to those on the ground floor, the strategists, the analysts, and the unsung heroes who make innovation tick. From technology breakthroughs to cultural shifts within companies, I'm on a quest to understand how innovation breathes new life into business.
I embrace the diversity of thoughts, backgrounds, and experiences that inform and drive the corporate renewal and evolution from both sides of the microphone. The Total Innovation journey will take you through the challenges, the victories, and the lessons learned in the ever-evolving landscape of innovation.
Join me as we explore the narratives of those shaping the market, those writing about it, and those doing the hard work. This is "Total Innovation," where every voice counts and every story matters.
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Total Innovation Podcast
33. Expected Value - Act 3 Chapters 8 & 9
This week's exclusive release from Expected Value, the system to prove, measure, and scale value. In this episode we enter Act 3, Total Portfolio Intelligence.
Most organizations don't suffer from a lack of innovation, they suffer from a lack of innovation clarity. Ideas live in spreadsheets, sandboxes, and slide decks. Some get launched before they're ready, others never see daylight. But the real problem is this. Few organizations truly understand how all that activity adds up.
Act three is where we make the shift from managing individual ideas to orchestrating a coherent innovation system, from counting experiments to building strategic insight, from interesting activity to strategic advantage.
In this episode, we'll explore chapter eight, strategic layering, where Freya learns how to connect innovation directly to business strategy, risks, and efficiency, turning her portfolio into a living map of value. And in chapter 9, Portfolio Governance and Decision Rights, we see how she evolves from decision bottleneck to system architect, building a governance model that balances freedom with control and turns decision making into a measurable source of performance.
This is where innovation becomes visible, governable, and scalable. This is total portfolio intelligence.
What's up?
unknown:Uh-huh.
SPEAKER_02:Uh-uh. What's a birthing?
unknown:Uh-uh.
SPEAKER_00:Welcome back to the Total Innovation Podcast and to this week's exclusive release from Expected Value, the system to prove, measure, and scale value. In this episode we enter Act 3, Total Portfolio Intelligence. Most organizations don't suffer from a lack of innovation, they suffer from a lack of innovation clarity. Ideas live in spreadsheets, sandboxes, and slide decks. Some get launched before they're ready, others never see daylight. But the real problem is this. Few organizations truly understand how all that activity adds up. Act three is where we make the shift from managing individual ideas to orchestrating a coherent innovation system, from counting experiments to building strategic insight, from interesting activity to strategic advantage. In this episode, we'll explore chapter eight, strategic layering, where Freya learns how to connect innovation directly to business strategy, risks, and efficiency, turning her portfolio into a living map of value. And in chapter 9, Portfolio Governance and Decision Rights, we see how she evolves from decision bottleneck to system architect, building a governance model that balances freedom with control and turns decision making into a measurable source of performance. This is where innovation becomes visible, governable, and scalable. This is total portfolio intelligence.
SPEAKER_01:You can't manage what you can't see.
SPEAKER_00:Most organizations don't suffer from a lack of innovation. They suffer from a lack of innovation clarity. Ideas live in spreadsheets, sandboxes, pitch decks, and post-it notes. Some get airtime, some get ignored, some get launched before they're ready, and some get left behind for no good reason. But the bigger problem is this. Very few organizations know how their innovation activity adds up. Is it balanced? Is it aligned to strategy? Is it creating value? The shift from ideas to systems. In Acts the Kinan II we established a foundation for evaluating individual innovations. The XV model gave us a dynamic way to assess confidence weighted value. The Strategic Fit framework helped us understand strategic fit. The S curve provided a lens for life cycle management and portfolio balance. These tools transformed how Freya's team approached individual innovation decisions and portfolio composition. But even with these powerful tools, many organizations still struggle with implementation, governance, and continuous learning, the operational backbone that turns frameworks into sustainable systems. This is the critical leap that most innovation functions fail to make, from managing a collection of ideas to orchestrating a coherent portfolio that delivers both immediate results and future options. From counting activities to creating strategic insight, from a pipeline of projects to a system of renewal and systematic reinvention. This shift isn't just about better metrics or frameworks, it's about a fundamental change in how innovation is positioned within the organization, not as a separate function running interesting experiments, but as an integrated system driving strategic evolution.
SPEAKER_01:Beyond frameworks, the governance imperative.
SPEAKER_00:Having the right evaluation frameworks is necessary but insufficient. Without effective governance, decision rights and learning mechanisms, even the most sophisticated tools will falter when faced with organizational complexity. Without these operational systems, organizations face several predictable challenges. One decision bottlenecks. All innovation decisions flow through a small group of people creating delays and frustration while limiting the organization's capacity to manage multiple initiatives. two trust erosion functions like finance, legal and operations perceive innovation as reckless or disconnected, leading to protective behaviors that slow progress. three learning stagnation. And perhaps most critically four unsustainable dependency. The innovation system relies too heavily on specific individuals, making it vulnerable to leadership changes and preventing true organizational capability building.
SPEAKER_01:Building the operational system.
SPEAKER_00:This is where Act III takes us beyond frameworks to operations, from knowing what to value to knowing how to decide, from isolated learning to continuous adaptation. Here we explore the essential mechanisms that make innovation governance both rigorous and responsive. We'll examine how to establish appropriate decision rights at different organizational levels, how to build the lines of trust that enable smooth cross-functional collaboration, and how to create learning loops that allow a portfolio to continuously improve. We'll see how Freya moves from managing every decision personally to creating a distributed but aligned system of innovation governance, how she transforms resource allocation from annual budgeting to dynamic rebalancing based on evidence and learning, and how she builds mechanisms that translate expected value into realized impact. Total portfolio intelligence isn't about more reporting, it's about smarter prioritization, better sequencing, and real impact. Because when you can effectively govern the system, you can finally start leading it. And that's where innovation transforms from interesting activity into strategic advantage.
SPEAKER_01:Chapter eight Strategic Layering Freya closed her laptop and exhaled.
SPEAKER_00:The quarterly portfolio review had ended twenty minutes ago, but the adrenaline was still working its way through her system. She stood alone in the boardroom, staring at the screen where her final slide still glowed, a single chart showing how every idea in the innovation portfolio now connected directly to one of the company's five growth pillars. There had been no applause, no fireworks, just a quiet, confident nod from the CEO, and from David, the CFO, who, not long ago, had asked her bluntly, what's all this actually worth? A question she never would have expected. How soon can we integrate this into the strategic planning process? She smiled just a little. Not because it had worked, but because it was working.
SPEAKER_01:The strategic disconnect.
SPEAKER_00:It hadn't started that way. Two months earlier, Freya had walked into a leadership off site with a full innovation portfolio ready to present. X V scores, strategic fits, cost ratios, S-curve mapping, even a few carefully framed kill decisions. It was a solid system. It told a clear story. But it still landed flat. Not because the content was wrong, but because the context was missing. Her slides were smart, but they still read as innovation slides. Separated.
SPEAKER_01:Self-contained. A parallel narrative.
SPEAKER_00:When David challenged her again about ROI, just as he had done in that first disastrous presentation months before, and Sarah, the COO, pushed back on resourcing. Freya felt it. They're not rejecting the ideas, they're rejecting the relevance. She didn't argue, she took her laptop, her printouts, her notes, and she sat with Axel that night over drinks and fries in the hotel bar. We have a good system, she said. Yeah, he replied. But it's not their system. Axel nodded slowly. We need to integrate.
SPEAKER_01:That was the beginning of strategic layering, though she didn't call it that then. What is strategic layering?
SPEAKER_00:Strategic layering is the deliberate mapping of innovation initiatives to the organization's strategic imperatives, risk profile, and future intent. It creates visibility not just of what innovation is happening, but why it matters to the broader business. Unlike traditional strategic alignment, which often focuses solely on whether innovation supports stated goals, strategic layering creates a multidimensional view that connects innovation to the full strategic landscape, from declared growth priorities to emerging risks, from capability gaps to future trends. This approach transforms innovation from an activity that needs to be justified to a mechanism for delivering on strategy. It shifts the conversation from is innovation worth funding to how is innovation addressing our most critical business challenges.
SPEAKER_01:The first layer growth alignment.
SPEAKER_00:It started with one simple move. Freya took every initiative in the portfolio and remapped it, not by stage or theme, but by the company's own growth pillars. Digital expansion, supply chain resilience, customer intimacy, carbon reduction, and talent capability. These weren't innovation priorities, they were business priorities, the strategic imperatives the executive team had established for the next three years. The language came from the strategic plan, not from Freya's team. She wasn't creating a new framework. She was connecting to an existing one. Then she sat down and with each business unit lead, one by one, no slides, just the mapping. I'm not here to show you what we're working on, she told them. I'm here to show you where we're already working on what you care about. The shift was subtle but powerful. The head of HR previously ambivalent, saw a dormant idea about skills profiling and lit up. Why isn't this moving faster? The chief customer officer realized one idea tagged for explore was actually solving a live retention problem and pulled it forward. For the first time, innovation wasn't being pitched, it was being recognized.
SPEAKER_01:The second layer, risk alignment.
SPEAKER_00:Then came the next move. Freya took the same approach and overlaid it against the company's strategic risk register. This time she worked with Sarah, the COO, to identify which innovation bets directly addressed emerging operational vulnerabilities. The risk register wasn't Freya's creation. It was a core operational tool maintained quarterly by the executive team, identifying key risks to the business across domains like technology, market, regulation, talents, and competition. These weren't theoretical concerns. They were actively tracked, quantified issues that kept the leadership team awake at night. And Freya realized that many of her innovation initiatives were directly addressing these risks, but the connection had never been made explicit. Two ideas that had struggled to gain traction suddenly reappeared in board level conversations. One, a quiet automation pilot in customer service, was now linked to a 7% cost exposure representing approximately$2.1 million annually. The prototype demonstrated potential to reduce this exposure by 42%, a value calculation that resonated immediately with the finance team. The other, a prototype for energy usage analytics, was reframed as a mitigation measure for upcoming carbon legislation that carried potential penalties of up to$3 million if not addressed. At first there was skepticism. Are we sure these innovations can actually deliver on these risk metrics? The COO had asked during their initial mapping session. That's where XV comes in, Freya explained. We're not just claiming impact. We're showing our confidence levels based on evidence and mapping that against the quantified risk. After that, no one asked about XV in isolation. They didn't have to. It had become the how. Now they understood the why. The third layer efficiency alignment. Freya's next breakthrough came when she overlaid cost efficiency data onto the strategic map. Working with David, she calculated the cost per XV point for each initiative in the portfolio. The results were shocking. Look at this, David said, pointing to the analysis. These five initiatives in digital expansion all have similar XV scores, around eight hundred thousand dollars, but their efficiency varies by a factor of fifteen. Digital expansion initiatives Efficiency Analysis Initiative A internal development Expected value eight hundred twenty thousand dollars Total cost one hundred eighty thousand dollars Cost per XV.0.2 dollars Development Tine months Initiative B Open Innovation Expected Value$795,000 Total cost$12,000 Cost per X V.0.015 dollars Development Tree months Initiative C hybrid approach Expected value$810,000 Total cost$45,000 Cost per X V point zero point zero five six dollars Development time five months Initiative D external partnership Expected value seven hundred ninety thousand dollars Total cost ninety five thousand dollars Cost per X V point zero point one two dollars Development time six months Initiative E crowdsourced solution Expected value eight hundred and five thousand dollars Total cost eight thousand five hundred dollars Cost per X V point zero point zero one one dollars Development time two months The efficiency range was a twenty times difference with the average internal efficiency twenty two cents per point versus the average external efficiency twenty four cents per point. We've been treating these as equivalent because their expected values were similar, Freya realized, but from an efficiency perspective they're completely different investments. David pulled up another view, this time showing efficiency patterns across all five strategic pillars. Strategic pillar efficiency analysis digital expansion traditional approach fifteen dollars thirty cents per X V point. Open innovation approach eight dollars fifty cents per XV point Efficiency gain eighteen times supply chain Resilience Traditional approach twenty two dollars forty cents per XV point Open innovation approach one dollar and twenty cents per XV point Efficiency gain nineteen times Customer Intimacy Traditional approach eight dollars ninety cents per X V point Open innovation approach zero dollars ninety five cents per X V point Efficiency gain nine times Carbon reduction traditional approach thirty one dollars twenty cents per X V point Open innovation approach one dollars eighty cents per X V point Efficiency gain seventeen times Talent capability Traditional approach eleven dollars fifty cents per X V point Open innovation approach sixty five cents per X V point efficiency gain eighteen times This isn't just about doing innovation cheaper, David noted, his perspective completely transformed from their early interactions. It's about being able to do ten to twenty times more innovation with the same resources. That's not cost cutting, that's strategic transformation. The COO leaned forward, studying the data. If we shifted just thirty percent of our innovation investment to these high efficiency approaches, we could address twice as many strategic priorities with forty percent less budget, Freya completed, or maintain our current coverage while freeing up millions for other strategic investments. The efficiency layer revealed several critical insights. Which strategic pillars could be addressed most cost effectively? Where open innovation approaches offered the greatest advantages, how to achieve the same strategic outcomes with 70 to 90% less investment. Which internal capabilities were genuinely differentiated versus which should be accessed externally. What this really shows, Freyer explained, is that innovation isn't expensive by nature, it's expensive by choice. When we choose traditional approaches for challenges that could be solved more efficiently, we're essentially burning shareholder value. Challenge driven innovation, framing through problems. This risk and efficiency alignment naturally connected to the concept of challenge-driven innovation, the approach of framing innovation work around specific high value problems rather than solutions. What I realized, Freya later explained to her team, is that our innovation portfolio could be seen not just as a collection of solutions, but as responses to the organization's most pressing challenges, and we need to solve those challenges as efficiently as possible. By mapping initiatives to specific risk domains and efficiency metrics, Freya reframed the innovation narrative. Rather than asking what cool things are we building, the conversation shifted to which critical business challenges are we solving and how efficiently are we solving them? This reframing had profound implications. It positioned innovation as strategic problem solving rather than creative exploration. It created natural sponsorship from the executives who owned the challenges being addressed, and it established clearer success metrics based not just on risk reduction or value creation, but on the efficiency of achieving those outcomes. The challenge-driven approach also opened the door to contributions from beyond traditional innovation domains. By focusing on the desired outcomes rather than the solutions themselves, Freya created space for ideas to emerge from unexpected places, both inside and outside the organization, often at dramatically lower costs. The Strategic Value Conversation. The conversation shifted dramatically. Instead of innovation competing for attention against other priorities, it became a vehicle for addressing those priorities efficiently. In one particularly telling meeting, the CTO, historically skeptical of innovation initiatives outside IT, became a vocal advocate for a data integration project he had previously ignored. Not because the project had changed, but because he now saw how directly it addressed a high priority risk in his domain, and at fifteen times better efficiency than the internal approach he'd been planning. This isn't just an interesting experiment, he noted in an executive meeting. It's addressing our core capability gap in distributed data architecture at a fraction of what I budgeted. We need to accelerate it. Freya hadn't changed the substance of her portfolio, she had changed how it was framed, connected, and communicated. Strategic layering wasn't about rebranding, it was about genuine integration with the organization's existing strategic frameworks and revealing the economic advantages of different approaches.
SPEAKER_01:The fourth layer Intense mapping.
SPEAKER_00:The final piece came almost by accident. In a workshop with her team, Freya was reviewing ideas that had recently stalled. They looked like a graveyard. But Axel challenged the framing. What if these aren't dead? he asked. What if they're just out of sync, or what if they're too expensive for their current stage? Together they began tagging each idea by intent. Exploit, expand, explore. They used specific criteria to make these classifications. Exploit initiatives leveraged existing capabilities to optimize or extend current business models, with clear paths to implementation and typically higher confidence scores 0.6 to 0.9. Expand initiatives applied core competencies to adjacent markets or customers, often with moderate confidence and medium term horizons. Explore initiatives investigated new capabilities or business models, typically with lower initial confidence zero point one to zero point four, but potential for significant future growth. Then they added efficiency thresholds for each category. Exploit maximum two dollars per XV point must be highly efficient. Expand maximum five dollars per XV point, moderate efficiency acceptable. Explore maximum ten dollars per XV point, learning value justifies higher cost. They color coded them across the S curve and added efficiency, heat mapping. Patterns emerged, clusters, gaps, tension. Freya suddenly saw the portfolio as more than a flow. It was a system of belief with an economic framework. Each bet told a story about what the business was trying to do, preserve, grow, evolve, and how efficiently it was pursuing each goal. And by layering those intents over the growth pillars, risk domains, and efficiency metrics, Freya found what she hadn't known she was looking for. Coherence with capital discipline, three-dimensional portfolio visualization. With these four layers, growth alignments, risk alignments, efficiency mapping, and intense classification, Freya's innovation portfolio transformed from a flat list into a four-dimensional strategic map. She could now view the portfolio through multiple lenses. Through the growth lens she could see which strategic pillars were well supported and which had innovation gaps. Digital expansion had numerous initiatives across all stages, while talent capability had few early stage bets. Through the risk lens she could identify which vulnerabilities were being actively addressed and which remained exposed. The portfolio was strong on competitive and technology risks, but weak on regulatory and market shift risks. Through the efficiency lens, she could see where the organization was overspending on innovation and where dramatic savings were possible. Supply chain initiatives showed the greatest efficiency improvement potential with possible 20 times gains. Through the intent lens, she could evaluate the balance of short-term optimization versus long-term exploration within each strategic domain, and whether the efficiency profile matched the intent. Some explore initiatives were paradoxically cheaper than exploit ones, revealing misaligned approaches. These views weren't separate analyses, they were integrated perspectives on the same portfolio, allowing Freya to make connections that had previously been invisible. For example, she identified that while the portfolio appeared balanced overall at the intent level, roughly 40% exploit, 35% expand, 25% explore, this balance didn't hold within individual strategic pillars. Some pillars were almost entirely focused on short-term exploitation with minimal future-focused exploration. Similarly, high confidence ideas, the upper end of the XV spectrum, clustered heavily in certain risk domains while leaving others addressed only by early stage low confidence initiatives, and the efficiency analysis showed they were pursuing the highest risk domains with the most expensive approaches. From integration to influence. In the next portfolio review, Freya didn't talk about innovation. She talked about growth. About how 62% of current bets supported declared strategic priorities. About how 31% of those also addressed known risks. About how the portfolio was underweight on expand, meaning resilience was at risk. About how shifting to high efficiency approaches could address two times more strategic priorities with the same budget. She showed distribution across ambition levels, confidence, momentum, cost weighted X V projections by pillar, efficiency improvement opportunities were three point two million dollars annually. No one questioned the data, no one asked for a slide count. They leaned in. Because now innovation wasn't something Freya was doing, it was something they were already a part of, and they could see how to make it dramatically more effective. The CEO stopped her halfway through the presentation with a question that signaled everything had changed. Based on what you're seeing across these initiatives and especially these efficiency patterns, where should we be considering adjustments to our strategic priorities? The question wasn't about how innovation fits into strategy, it was about how innovation insights, particularly the dramatic efficiency advantages of open approaches, might inform strategy. That shift from integration to influence marked a fundamental change in how innovation was positioned within the organization. Leveraging AI and agentics for strategic alignment. As the strategic layering approach matured, Freya recognized an opportunity to make the connections between innovation and strategy even more dynamic using AI and agenci technologies. Our manual mapping was powerful, she explained to Axel, but it's still a point in time exercise. What if we could create a system that continuously monitors, aligns, and suggests adjustments, including efficiency optimizations? Working with the technology team, they developed what they called the strategic alignment engine, an AI powered tool that continuously scans strategic documents, board papers, and leadership communications to identify shifting priorities and emerging risks. Analyzed innovation portfolios to assess alignment with these evolving priorities. Flagged potential disconnects where strategic shift weren't reflected in innovation focus. Suggested portfolio adjustments to maintain optimal alignment. Identified efficiency improvement opportunities by comparing internal and external approaches for similar challenges. Predicted which high cost initiatives could be replaced with 10 to 20 times more efficient alternatives. In its first month of operation, the system identified a subtle but significant shift in how executives were discussing supply chain priorities. While the formal strategy still emphasized cost efficiency, leadership communications had begun focusing increasingly on resilience and regionalization, likely in response to recent global disruptions. We would have eventually spotted these patterns, Freya noted, but the AI caught them weeks before they would have surfaced in formal strategy discussions. And the efficiency insights are transforming how we think about resource allocation. This agentic approach to strategic layering created a form of continuous alignment that traditional quarterly reviews couldn't match. It ensured that innovation responded promptly to strategic shifts while constantly optimizing for maximum efficiency. Open innovation extending strategic layering beyond boundaries The strategic layering approach also transformed how Freya's team engaged with external innovation ecosystems. Rather than treating open innovation as a separate activity, they integrated it directly into the layered strategic view. The team began using their four layer strategic map to identify specific capability gaps where external innovators could add unique value. Define challenge statements for crowdsourcing platforms like Innocentive that directly address strategic risk areas. Create focused briefs for startup engagement that are lined with specific growth pillars. Develop partner ecosystems around high priority strategic domains. Prioritize external approaches for areas showing the greatest efficiency gains. This targeted approach to open innovation dramatically increased its effectiveness. Rather than broad searches for interesting ideas the team could articulate exactly what kinds of external innovation would create strategic value. Our strategic map became a precision tool for engaging the right external partners at the right time, Freya noted. We moved from random collaboration to strategic orchestration at ten to twenty times better efficiency. Moving from expected to realized value perhaps the most profound impact of strategic layering was how it accelerated the transition from expected to realized value. By connecting innovation directly to strategic priorities risks and efficiency targets, Freya's team could demonstrate tangible contributions to business outcomes that mattered. Before strategic layering we tracked expected value through XV scores, Freya explained, but we struggled to show when and how that value was actually delivered. The layer connections created natural pathways to value realization. This shift manifested in several ways innovation initiatives linked to growth pillars could demonstrate direct contribution to strategic key performance indicators. Ideas addressing risk domains could show quantifiable risk reduction. Exploitation focused innovations could trace clear paths to operational improvements and cost savings. Efficiency metrics showed not just value delivered but value delivered per pound. Invested the team began supplementing their XV tracking with a new metric realized value RV. This measured the actual value delivered by innovations as they moved from expectation to implementation and impact. A customer onboarding automation project provided a perfect example of this transition. Initially scored with an XV of$650,000 and developed for just$15,000 through an open innovation challenge$0.023 per XV point the project moved through implementation with increasing confidence. Six months after deployment they could document an RV of$8200 through measured reduction in onboarding costs, decreased error rates and improved conversion metrics, while the traditional internal approach would have cost$280,000 to develop the magic happened when we could show not just a strong XV at the start, but a documented RV at the end, delivered at nineteen times better efficiency than the traditional approach, Freya noted that's when innovation truly earned its seat at the strategic table Building two-way strategic connection As the approach matured Freya realized strategic layering wasn't just about mapping innovation to strategy. It was about creating a two-way relationship where innovation not only supported strategy but informed it, particularly around what was possible with radically efficient approaches. The portfolio offered a unique lens on emerging opportunities and challenges, often detecting weak signals before they appeared in formal strategic processes. The efficiency data revealed which strategic ambitions were economically viable versus which would consume disproportionate resources. Freya established regular emerging signals reviews where her team shared pattern recognition from across the portfolio trends in what was gaining or losing momentum shifts in confidence across strategic domains connections between seemingly unrelated initiatives that pointed to larger opportunities efficiency patterns showing where traditional approaches were particularly wasteful. One such review led to a significant strategic adjustment. Freya's team had noticed that open innovation challenges in the sustainability domain were generating solutions at 25 to 30 times better efficiency than internal efforts. This wasn't just a tactical insight it suggested the company could afford to be far more ambitious in its environmental goals than previously thought possible. When we showed that we could achieve our 2030 carbon reduction targets for three million dollars through open innovation versus$75 million through traditional RD, it fundamentally changed the board's appetite for aggressive sustainability commitments, Freya explained. This two way relationship fundamentally changed how strategy and innovation interacted. Innovation was no longer just a downstream implementation process. It was an integral part of the strategy development ecosystem with efficiency insights often driving strategic choices personal integration beyond the portfolio The final dimension of strategic layering happened at the personal level as Freya herself became more integrated into the strategic leadership of the organization. She began attending strategy development sessions not as a representative of the innovation function, but as a full strategic partner. She was included in risk assessment workshops, market planning discussions and capability development initiatives. This integration wasn't just symbolic, it allowed Freya to shape innovation priorities based on deeper understanding of strategic context and to influence strategic thinking based on insights from the innovation portfolio particularly around what was economically possible with efficient innovation approaches. The change was perhaps best illustrated by a shift in executive team dynamics. In the past innovation updates had been scheduled as separate agenda items often at the end of meetings when attention was waning. Now innovation perspectives especially efficiency insights were integrated into core strategy and performance discussions with Freya contributing throughout rather than delivering a standalone report the path to genuine integration later after everyone had left the boardroom Freya stood quietly. She looked at the room differently now not as a place she had to earn her seat but as a place she had helped reshape. The portfolio was live it was layered it was connected to strategy in a way that was real not cosmetic and it showed a path to ten to twenty times more efficient innovation that could transform what was possible but she also knew something else that it wasn't enough. If the system stayed with her team it would stall if the mindset stayed in meetings it would fade. If the language didn't spread the decisions wouldn't either she had built the scaffolding now she had to build the culture to support it one that embraced not just innovation but radically efficient innovation not just tools not just frameworks but a way of working thinking and leading every day at every level that recognized efficiency as a strategic advantage rather than a cost cutting exercise that would be the next test the real one too long didn't read to make innovation truly relevant to executive decision makers Freya maps her portfolio against the company's established strategic priorities and risk register. This strategic layering transforms how innovation is perceived from a parallel activity to an integrated approach for addressing the organization's most important objectives and challenges. The addition of efficiency metrics reveals that open innovation approaches can deliver the same strategic value at 10 to 20 times better efficiency, fundamentally changing resource allocation decisions. By extending this approach with AI powered alignment and a focus on realized value, she shifts innovation from having to sell itself to being recognized as essential to business success and economically transformative chapter nine Portfolio Governance and decision rights with XV, strategic fit and the S curve in place, Freya's innovation system had matured from chaos into clarity. Ideas were evaluated with structure, prioritized with confidence, mapped across horizons, layered into strategy it felt like a living breathing portfolio. But there was a problem everyone still came to Freya for every decision, every gate, every kill call, every funding shift, every escalation. The system was working, but it wasn't scaling one Tuesday afternoon Freya found herself cancelling her third lunch in a row to review a modest pilot extension that, according to her own governance model, shouldn't have required her involvement at all. As she quickly approved the additional resources, barely glancing at the confidence data she had insisted was essential, she realized the irony. She had built a sophisticated decision system but remained its central bottleneck. And as Freya stepped into a more strategic role speaking in executive sessions, integrating innovation into planning cycles, she could feel the strain decision bottlenecks weren't a failure of the model. They were a failure of governance. To move forward Freya had to answer a deceptively simple question who gets to decide what from control to clarity. In most organizations innovation decision rights are fuzzy at best. Innovation leads often walk a tightrope, needing autonomy to move quickly, but authority to justify action and air cover when things go wrong. Freya had lived this tension for years. Now, with a functioning system in place she had the chance to formalize what had always been implied. She started by mapping the key types of decisions her team faced and who was involved Idea admission who decides what enters the pipeline progression and investment who approves movement from one stage to the next kill decisions who has authority to stop an initiative and under what conditions Resource reallocation who controls budget, time and people for each stage Strategic alignment who verifies that ideas still fit business priorities as they evolve what she realized was sobering. Most of these decisions were still concentrated in her team or in her personally that created fragility and friction and so she built a framework the innovation governance challenge The governance challenge Freya faced wasn't unique it reflects a fundamental tension in how innovation functions operates within established organizations. On one hand, innovation requires agility, experimentation and autonomy to thrive. Excessive oversight or rigid approval processes can stifle creativity and slow progress. Innovation teams need the freedom to test ideas, learn from failures and pivot when necessary. On the other hand, innovation consumes organizational resources and creates strategic commitments. Without appropriate oversight it can lead to fragmented efforts, misaligned priorities and wasted investment. The business needs confidence that innovation resources are being deployed effectively and in service of strategic goals. This tension creates what Freya came to call the governance paradox in innovation. Too little governance leads to chaos, misalignment and waste. Too much governance leads to bureaucracy, slowdown and risk aversion. The goal wasn't to maximize governance but to optimize it, creating just enough structure to ensure strategic alignment and resource stewardship without stifling the agility and experimentation that innovation requires this optimization required a nuanced approach that recognized different types of innovation decisions need different levels of oversight, different participants and different processes Challenge driven governance Freya's experience with strategic layering had already moved her team toward challenge driven innovation, framing work around critical business problems rather than abstract ideas. Now she realized that governance too could be challenge driven. If we organize our innovation around specific challenges, she explained to Axel, shouldn't our governance also reflect those challenges? This insight led to a fundamental shift in how they designed their governance model. Rather than creating generic decision processes they mapped decision rights to the nature and scope of the challenges being addressed. Business unit challenges with localized impact would have governance anchored in those units. Cross functional challenges affecting multiple domains would have representation from all affected areas. Strategic challenges with enterprise wide implications would have executive level governance. The challenge determines the stakeholders Freya noted and the stakeholders determine the governance this approach ensured that decisions were made by those with the most relevant perspective and the most at stake in the outcome it created natural ownership of both the problems and the solutions the three tier decision model Freya and Axel co-designed a three-tiered model of innovation governance scaled to match the risk, cost and strategic weight of an idea Tier 1 team-led decisions The first tier centered on team-led decisions. Low cost, early stage and exploratory ideas stayed within the innovation team's remit. Anything under$5000, roughly 5% of their annual innovation budget and not tied to strategic risk could move forward with internal governance. This approach included X V based thresholds for experimentation, pre-agreed sandbox budgets and monthly internal reviews for kill shinue decisions. This gave autonomy to act without overburdening the business the team led decision model operated with clear guardrails rather than tight controls. Financial thresholds typically under fifty thousand dollars per initiative risk boundaries no reputational, regulatory or major operational impacts timeline expectations delivering results or clear learning within ninety days transparency requirements monthly portfolio updates to broader stakeholders within these guardrails teams had significant freedom to explore, learn and adapt. This freedom wasn't arbitrary it was deliberately designed to maximize learning efficiency at the early high uncertainty stages of innovation where rapid experimentation is most valuable. The model included specific decision protocols to ensure consistency and quality peer review for all new experiment proposals weekly progress reviews with documented learning kill triggers defined at initiation spelling out conditions under which the experiment would end resource caps per initiative to prevent scope creep. This approach balanced autonomy with accountability allowing innovation teams to move quickly while maintaining strategic alignment and resource discipline. Take the customer data analytics experiment that Dennis proposed under the new system his team could allocate$30,000 to test the technical feasibility and gather initial user feedback without seeking higher approval. They defined clear learning objectives and a 60 day timeline with weekly check-ins to assess progress and adjust as needed. The team pivoted twice based on early findings, something that would have taken weeks under the old approval model. Tier two Portfolio Committee decisions The second tier involved portfolio committee decisions. For ideas moving into experimentation or pilot phases those requiring cross-functional collaboration or modest investment were reviewed by a portfolio governance group. Freya structured the group to include finance, operations, at least one BU sponsor and innovation herself or Axel. The group met monthly their role wasn't to micromanage, it was to ensure the system stayed aligned, their decision making focused on the following areas fit reassessment at inflection points kill fund reframe calls for ideas with rising or falling expected value capacity reviews to ensure they weren't spreading too thin. The portfolio committee became the critical bridge between innovation teams and executive leadership. It was deliberately cross functional, bringing together representatives from finance, strategy, business units and innovation to create shared ownership of mid-stage decisions. The committee operated with specific remits and limitations, authority over ideas requiring$50,000 to two hundred fifty thousand dollar investment, approval of cross-functional resources and commitments, oversight of transitions between emergence and acceleration phases, management of portfolio level resource allocation and rebalancing. Crucially, the committee's role wasn't just approval it provided strategic context, connection to related initiatives and identification of potential synergies or conflicts. It became a forum for joint problem solving rather than binary go no go decisions. The AI enhanced customer service platform exemplified this tier in action. With its initial testing complete and showing promise confidence score rising from 0.3 to 0.5 the portfolio committee reviewed its request for$180,000 to develop a full pilot. The cross-functional group evaluated not just its XV score but how it intersected with the upcoming CRM update and regulatory changes. They approved the funding but recommended a partnership with the contact centre team to ensure operational alignment. Freya implemented several key practices to ensure the committee's effectiveness, pre-reading materials distributed seventy two hours before meetings, standard assessment templates for all initiatives, clear voting and escalation protocols, decision rationale documentation for accountability post decision communication plans. Perhaps most importantly, committee membership included rotating seats for business unit representatives based on the initiatives being considered. This ensured relevant domain expertise while preventing the committee from becoming an isolated administrative layer. Tier three Executive escalation The third tier addressed executive level escalation. Any idea that exceeded set thresholds typically over two hundred fifty thousand dollars in cost, touching regulatory issues or flagged as impacting strategic risk domains was taken to the executive leadership team ELT. But by this point decisions weren't based on gut feel or politics. They were presented with X V trends over time, fit radar profiles, alignment to S curve stage and business pillar, resource forecasts and potential trade-offs. Innovation didn't come in cold anymore. It came in with evidence, framing and options. Executive escalation wasn't treated as a stage gate that every significant initiative had to pass through. Instead it was reserved for truly substantial commitments with enterprise wide implications major strategic initiatives requiring over two hundred fifty thousand dollars investment innovations with potential regulatory impact solutions creating significant change for customers or employees projects requiring formal partnerships or acquisitions initiatives creating material changes to risk profile The blockchain based verification solution exemplified this tier, with a projected investment of four hundred fifty thousand dollars and implications for regulatory compliance, customer data handling and partner ecosystem development, it required executive level approval. The proposal arrived at the ELT with a comprehensive package showing its evolution from 0.2 to 0.7 confidence, clear strategic fit across all four dimensions and detailed implementation pathways. The discussion focused on strategic questions rather than technical details, with a decision rendered in a single meeting rather than the months of back and forth that had been common previously for these decisions Freya developed a carefully structured approach to executive engagement, preview sessions, one on one conversations with key executives before formal reviews to address concerns and refine approach comprehensive decision materials, concise briefing documents that integrated innovation frameworks with traditional business case elements structured discussions, facilitated formats that balanced time for questions, debate and decisions, follow through protocols, clear documentation of decisions, commitments and next steps. This approach transformed executive engagement from unpredictable high stakes presentations to structured, evidence based discussions. Executives weren't asked to evaluate innovation initiatives in a vacuum but to make informed judgments based on a comprehensive view of strategic fit, confidence trajectory and resource implications. The three tier governance model balancing autonomy with alignment effective innovation governance balances structured oversight with creative freedom. Too much control stifles experimentation and agility too little creates misalignment and waste. The three tier governance model creates bounded autonomy, clear decision rights that enable speed while maintaining strategic coherence The three decision tiers one team led decisions empowers innovation teams to make independent decisions for early stage lower risk initiatives without seeking higher approval. This tier operates with financial thresholds typically under fifty thousand dollars per initiative risk boundaries no significant reputational regulatory or operational impacts timeline expectations results or clear learning within ninety days decision protocols, peer review, weekly progress checks and predefined kill triggers this tier maximizes learning velocity where uncertainty is highest and rapid experimentation is most valuable. two Portfolio Committee decisions creates cross functional governance for midstage initiatives requiring broader coordination. This committee has authority over initiatives requiring fifty thousand to two hundred fifty thousand dollars investment approves cross functional resources and transitions between emergence and acceleration phases manages portfolio level resource allocation and rebalancing includes representatives from finance, strategy, business units and innovation. This tier ensures initiatives align with broader organizational priorities while maintaining reasonable decision velocity. three Executive escalation reserves senior leadership involvement for high impact strategic initiatives this tier addresses major strategic initiatives investments exceeding two hundred fifty thousand dollars regulatory impact cases innovations affecting compliance posture customer experience transformations solutions creating significant change for customers ecosystem initiatives projects requiring formal partnerships or acquisitions this tier ensures appropriate senior sponsorship for transformative initiatives while preventing executive overload with routine decisions the governance paradox resolved This tiered approach solves the fundamental governance paradox by creating appropriate decision structures for different types of innovation. For emergent innovation, lightweight governance focused on learning and rapid iteration. For adjacent innovation, balanced governance integrating strategic fit and operational feasibility. For transformative innovation, strategic governance connecting to enterprise level direction and risk management. The model doesn't just distribute decisions, it matches decision rights to the information and expertise needed for good judgment at each level. The result isn't less governance but more effective governance, with decisions made at the right level by the right people, with the right context. When implemented well, this system achieves what traditional innovation governance cannot, decisions that are both fast and well aligned, maintaining strategic coherence without sacrificing agility.
SPEAKER_01:AI enhanced decision support.
SPEAKER_00:As the three-tier governance model became established, Freya recognized an opportunity to enhance decision quality through artificial intelligence. Working with the technology team, she developed a decision intelligence layer that provided analysis and recommendations at each governance level. The AI enhancement operated differently at each governance tier, team level AI support. At the team-led decision level, AI analyzed experiment designs and results, flagging patterns across similar initiatives to inform learning. It also identified potential risks or dependencies that might not be obvious to the team, and suggested optimizations for experiment design based on historical patterns. For instance, when reviewing an early stage customer analytics experiment, the AI flagged that three similar initiatives in the past two years had encountered the same data integration challenge. This allowed the team to proactively address the issue rather than rediscovering it weeks into testing. It's like having an experienced mentor looking over your shoulder, one team member noted. The AI spots things we might have missed and helps us design more efficient experiments. Portfolio Level AI support For the portfolio committee, AI provided pre-meeting analysis highlighting key decision points, changing confidence patterns, resource allocation opportunities, and potential portfolio imbalances. It didn't make recommendations, but it surfaced the relevant data and patterns to focus discussion on critical issues. Before one monthly meeting, the AI analysis identified that three initiatives targeting the same customer segment were developing in isolation, creating potential redundancy. This focused the committee's discussion on coordination opportunities that might otherwise have been missed. The AI doesn't decide for us, Freya explained to the committee. It helps ensure we're focusing on the most important questions and seeing the full picture. Executive level AI support. At the executive level, the AI system provided scenario modeling, showing how different decision options might affect the portfolio balance, resource distribution, and strategic alignment. It also highlighted unexpected connections between initiatives that might create synergies or conflicts. When evaluating a major blockchain investment, the AI generated three resource allocation scenarios showing how each would impact other strategic initiatives and overall S-curve balance. This visualization helped executives understand the trade-offs involved in a way that static presentations never could. This decision intelligence layer significantly improved both the efficiency and quality of governance. Meeting time decreased by 30% as discussions focused on key decision points rather than information sharing. More importantly, decision quality improved as stakeholders had access to richer, more nuanced information patterns. Establishing governance cadence. Governance wasn't just about structure, it was about rhythm. Freya worked with Axel to embed a consistent cadence across all three tiers. Weekly team review sessions allowed frontline innovation leads to reflect on what changed, X V deltas, confidence movement, fit shifts, monthly portfolio board meetings created spaces where mid-stage decisions were made collaboratively, trade-offs were logged, and resource tensions surfaced. Quarterly executive reviews framed discussions around S-curve distribution, budget pacing, and kill learn metrics. Each level had its own logic, but they worked together. No more decision limbo, no more ask for forgiveness later plays. It was clarity without bureaucracy, ownership without bottlenecks. The governance rhythm was designed to provide regular, predictable touch points, without consuming excessive time or creating decision delays. Issues identified in team sessions informed portfolio committee discussions. Portfolio patterns and recommendations shaped executive reviews. Importantly, this wasn't just a reporting structure, it was a decision structure. Each forum had clear authority to make specific types of decisions, with escalation paths for exceptions or disputes.
SPEAKER_01:Open innovation governance beyond boundaries.
SPEAKER_00:As Freya's organization increasingly engaged with external innovators through open innovation approaches, the governance model needed to expand beyond organizational boundaries. Traditional governance assumed all decisions involved internal stakeholders working with internal resources, but open innovation introduced new complexities. We need governance that works when the ideas, expertise or execution aren't entirely within our control, Freyer explained to the portfolio committee. Working with the legal and procurement teams, she developed specific governance approaches for different open innovation models. Challenge based innovation. For challenge based innovation through platforms like Innocentive, they established clear decision protocols for challenge framing, solution evaluation, and implementation pathways. This included specific criteria for when and how external solutions would be integrated with internal capabilities. Their sustainability challenge illustrated this approach in action. When a solver from Argentina submitted a novel waste reduction process, the governance system had clear protocols for IP acquisition, technical validation, and integration planning. What might have taken months of legal debate was resolved in weeks through pre-established pathways, startup partnerships. For startup partnerships they created a dedicated decision track with accelerated timelines and simplified approval processes, recognizing that startups operate at different speeds and with different constraints than established organizations. Ecosystem co-creation. For co-creation initiatives with customers or ecosystem partners, they implemented shared governance models where decision authority was explicitly distributed across participating organizations according to clear agreements. These open innovation governance approaches maintained the principles of the three tier model while adapting to the unique requirements of cross boundary collaboration. They provided clarity on critical questions. Who owns the intellectual property? Who decides when to pivot or stop? How are resources contributed and managed? What happens when priorities shift? Effective open innovation isn't just about finding great external ideas, Freya noted, it's about having clear governance to turn those ideas into realized value without getting stuck in bureaucratic limbo. This expanded governance approach significantly improved the success rate of open innovation initiatives. External partners reported greater confidence in the collaboration process, and implementation timelines for external innovations decreased by nearly forty percent.
SPEAKER_01:Decision rights matrix bringing clarity to complexity.
SPEAKER_00:To make this governance model operational, Freya developed a comprehensive decision rights matrix that mapped specific innovation decisions to the appropriate forums and individuals. The matrix used the well-known RACI model, responsible, accountable, consulted, informed, to clarify roles for each decision type across different innovation stages. The matrix covered dozens of decision types across the innovation life cycle, providing clear guidance on who needed to be involved in what decisions and how. This eliminated the ambiguity that had previously caused delays, conflicts, and frustration. The matrix wasn't just distributed, it was workshopped with key stakeholders to ensure shared understanding and commitment. Role plays and scenario discussions helped teams internalize the decision rights before they were officially implemented. Decision rights does not equal decision power. One of Freya's most important insights came not from the boardroom, but from a moment with Axel late in a planning session. Just because you have the right to make a call, he said, doesn't mean you should. He was right. Governance wasn't about control, it was about trust. Her system needed space for expertise, descent, and escalation. Not everything could be decided in a spreadsheet, but everything could be surfaced with shared language, clear framing, and respect for the system. Over time Freya saw something surprising. When people knew who had the right to decide, they argued less. When they understood the rationale behind the model, they contributed more, and when decisions were made transparently, they were accepted, even when people disagreed. This insight shaped how Freya approached decision making within the governance model. Formal authority was treated as a responsibility, not a privilege. Those with decision rights were expected to. Seek diverse input before making decisions, especially from those with relevant expertise or who would be affected by the outcome. Consider escalation when decisions, even if technically within their authority, might have significant implications beyond their scope. Document rationale to create transparency about why decisions were made, not just what was decided. Review outcomes to learn from both successful and unsuccessful decisions. This approach created what Axel called responsible authority, the expectation that decision rights came with corresponding obligations for thoughtful, inclusive, and accountable decision making.
SPEAKER_01:Accelerating value realization through governance.
SPEAKER_00:One of the most significant benefits of the new governance model was how it accelerated the path from expected value XV to realized value RV. By creating clear decision pathways and removing bottlenecks, the time from concept to implementation dramatically decreased. Good governance isn't about adding control points, Freya explained to her team. It's about removing friction from the value creation process. This acceleration manifested in several ways. Decision velocity, the average time from request to decision decreased by sixty four percent, from twenty three days to eight days. Implementation efficiency. Clear handoff protocols reduce transition delays by forty seven percent. Resource optimization, the ability to quickly reallocate resources to high confidence initiatives improved portfolio ROI by twenty eight percent. Ideas no longer languished in decision limbo, waiting for someone to take ownership. The clear decision rights meant that every initiative had a defined path forward or a deliberate kill decision. Resources flowed more efficiently to high potential opportunities. The portfolio committee could quickly shift budgets and people to initiatives showing strong confidence signals without waiting for annual planning cycles. Implementation handoffs became smoother. Clear governance created well-defined transition points from innovation teams to operational units, with explicit decision criteria for when and how this would happen. Most importantly, the governance model created accountability for value realization, not just idea generation or experimentation. Each tier of governance included explicit consideration of how value would be measured, tracked, and captured. We used to measure success by how many ideas we moved through the pipeline, Freya noted in a quarterly review. Now we measure it by how much value we actually deliver to the business. This shift from pipeline metrics to value realization metrics fundamentally changed how innovation was perceived within the organization. It transformed innovation from a creative function focused on novelty to a performance function focused on outcomes.
SPEAKER_01:Special governance for breakthrough innovation.
SPEAKER_00:As the governance model matured, Freya recognized that certain types of innovation required special treatment. In particular, potential breakthrough innovations, those that might create entirely new business models or capabilities struggled within standard governance processes. These initiatives often featured extreme uncertainty and ambiguity, potential for massive impact but high likelihood of failure, need for protection from traditional performance metrics and timelines, multidisciplinary requirements that crossed organizational boundaries. For these special cases, Freya established a parallel breakthrough governance path with distinct characteristics. Direct executive sponsorship, typically from the CEO or COO, protected funding not subject to standard allocation processes, specialized metrics focused on learning and option value, extended timelines with custom milestone review points, multidisciplinary teams with dedicated resources. The risk assessment platform exemplified this approach, with potential to transform the company's entire business model, but requiring exploration of unproven technologies, it received breakthrough designation. This meant direct sponsorship from the CEO, protected funding of$1.2 million over 18 months, and evaluation based on learning milestones rather than traditional ROI metrics. This approach created a space for potentially transformative innovations that would otherwise be killed by traditional governance processes. It acknowledged that breakthrough innovations needed different conditions to thrive, without making all innovation governance exceptional. The key was balance. Too many special cases would undermine the core governance model, while too rigid a model would kill potential breakthroughs. Freya established clear criteria for breakthrough designation, limiting it to a small number of initiatives with genuine transformative potential. The challenge of geographic and business unit governance. As Freya's company operated globally with multiple business units, she faced an additional governance challenge. How to balance central coordination with local autonomy. Different regions and business units had different market conditions, competitive pressures, and strategic priorities. A one size fits all governance approach would either constrain local innovation or create fragmentation and duplication. Freya addressed this through a hub and spoke governance model. Core decisions about portfolio balance, major investments and strategic direction remained centralized. Local decisions about specific initiatives, resource allocation and implementation approach were delegated. Shared standards, tools and processes created consistency without uniformity. Regular cross business unit forums facilitated knowledge sharing and collaboration. This approach allowed business units to adapt the governance model to their specific contexts while maintaining enough consistency for portfolio level view and resource optimization. Freya implemented specific connection points between central and local governance. Business unit innovation leads participated in the Central Portfolio Committee. Local governance followed the same three tier structure, but with tailored thresholds. Quarterly cross business unit synchronization sessions identified opportunities for collaboration. Central resources could be deployed to support local priorities based on shared assessment criteria. This balance between centralization and decentralization prevented innovation governance from becoming either too rigid or too fragmented, maintaining strategic coherence while enabling local relevance.
SPEAKER_01:The culture of letting go.
SPEAKER_00:Freya had built this system, she designed the scoring models, aligned the strategy, led the prioritization, and stood in front of the most difficult conversations. But now, her biggest growth curve wasn't structural, it was personal. To make this work she had to let go of every decision, of every call, of every instinct to solve it all herself that wouldn't happen overnight. But with this new governance in place it could happen deliberately. Decision intelligence wasn't just about data, it was about designing decisions that didn't always need you in the room. For Freya, this required a fundamental shift in leadership approach. She had built her reputation and credibility on personal expertise and judgment. Now success meant distributing that judgment throughout the system. This transition involved several deliberate steps. One from decider to coach Freya shifted from positioning herself as the final authority on innovation decisions to becoming a coach, helping others make better decisions. She asked questions instead of providing answers, guided teams through the assessment frameworks rather than delivering verdicts and celebrated decisions made without her involvement. two building decision capability Simply distributing authority wasn't enough. The organization needed to build decision capability. Freya invested in training programs on innovation decision making, created decision simulation exercises, and established mentor relationships to develop judgment across the organization. three accepting imperfect decisions. Perhaps hardest of all was resisting the urge to override or second guess decisions made within the governance model even when she disagreed with the outcome. four measuring decision quality not just outcomes. To reinforce good decision practices, Freya shifted from evaluating decisions solely on outcomes, which might be influenced by factors beyond the decision maker's control, to assessing decision quality. Was the process followed? Was appropriate information considered? Were alternatives evaluated? This personal transformation wasn't easy. There were moments of frustration when decisions didn't go as Freya would have preferred, or when processes took longer than if she had simply made the call herself. But gradually the benefits became clear. More decisions were being made, with greater ownership from the teams implementing them. Different perspectives were being incorporated, leading to more robust solutions, and Freya herself had more bandwidth to focus on strategic issues rather than operational decisions. 5. From framework to practice. The governance model Freya established wasn't just a framework on paper, it became an operational reality through careful implementation. Rather than rolling out the full governance model at once, Freya piloted it with a subset of the portfolio. This allowed the team to identify and address issues before full implementation. Initially there was resistance. Some team members worried about bureaucracy, others feared losing access to Freya's experience. Several business unit leaders questioned whether their domain expertise would be properly considered in cross-functional decisions. Freya addressed these concerns directly, inviting skeptics to help refine the model rather than just accept it. This isn't about less involvement, she explained to one concerned technical lead. It's about more appropriate involvement, getting the right people engaged at the right time. The team developed practical tools to support the governance approach, standard assessment templates, decision documentation formats, visual information displays, digital platforms for remote participation. They established regular reviews to assess how well the governance model was working, gathering input from decision makers and those affected by decisions. They created training programs and coaching to support the development of innovation decision skills across the organization. And they planned a deliberate transition rather than an abrupt change, with clear communication about what was changing, why and how it would affect different stakeholders. In the weeks that followed, the burden started to shift. More decisions were made without escalation, more tension surfaced early. Kill decisions came with reasoning. Progression came with sponsorship, and for the first time, Freya's calendar got lighter. Not because she was doing less, but because others were doing more. That was the difference between leading innovation and leading through innovation.
SPEAKER_01:The governance paradox resolved.
SPEAKER_00:The governance model Freya and her team established ultimately resolved the paradox she had identified at the outset, finding the balance between too much control and too little. The system created what might be called bounded autonomy, clear parameters within which teams had significant freedom to innovate, experiment, and make decisions. Authority was matched to risk levels, with lightweight governance for early exploration and more structured processes for significant commitments. Perhaps most importantly, governance shifted from being perceived as an administrative burden to being recognized as a strategic enabler. It provided clarity, alignment and decision efficiency that accelerated innovation rather than constraining it. As one team member put it, we used to spend half our time trying to figure out how to get decisions made. Now we spend that time actually making better decisions. The real measure of success wasn't the governance structure itself but its impact on how innovation functioned within the organization. Decisions that once took weeks now happened in days. Resources flowed more freely to high potential opportunities. Strategic alignment became the norm rather than the exception. And perhaps most tellingly, when asked about innovation governance, executives no longer talked about process or approvals, they talked about confidence, clarity, and control. That wasn't just a semantic shift, it was a transformation in how innovation was perceived, managed, and valued from an unpredictable creative process to a disciplined, strategic function. Governance had become invisible, not because it wasn't there, but because it was working so well that people no longer noticed it. They just experienced its benefits. Faster decisions, clearer accountability, and better outcomes. That was the goal of Freya's governance redesign, not to create a perfect process, but to make good decisions so natural that the process itself faded into the background. However, as she would soon discover, even the best designed governance system depends on something more fundamental and fragile trust. TLDR Even a well-designed innovation system becomes a bottleneck without clear decision rights. Freya implements a three-tier governance model, team-led decisions for early stage, low cost initiatives, a portfolio committee for mid-stage cross-functional efforts, and executive escalation for major strategic investments. This governance model balances autonomy with alignment, incorporating AI-enhanced decision support, open innovation pathways, and accountability for value realization. By distributing authority while maintaining strategic coherence, she creates bounded freedom that accelerates decisions while ensuring innovation delivers measurable business impact.
