The Innovation Matrix Excel Tool helps management teams visualize and discuss how innovation investments are distributed between product development, technology development, and initiatives combining both.
Companies frequently face competing development priorities: improving existing products, creating new capabilities, investing in future technologies, or pursuing more ambitious innovations. Choosing between these alternatives requires a clear understanding of their strategic importance, investment requirements, and development implications.
This innovation decision framework provides a practical way to position projects according to their degree of product and technology innovation, while visualizing relative investment levels through bubble sizes. Used as an innovation matrix and portfolio analysis tool, it helps teams identify investment concentrations, consider development complexity, and explore alternative priorities.
It supports structured discussions about innovation strategy, portfolio balance, and alternative development paths, helping teams align investment decisions with the company’s strategic objectives.
Designed for professional use, the tool is provided as an Excel file in English.
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Innovation decisions frequently involve competing investment priorities.
Should a company concentrate on improving existing products using technologies it already masters? Should it invest in new technical capabilities that may support future product generations? Or should it pursue ambitious initiatives combining both product and technology innovation?
These alternatives involve different investment requirements, time horizons, and levels of uncertainty. Selecting individually attractive projects does not necessarily produce a coherent innovation portfolio.
The Technology vs Product Innovation Matrix helps management and cross-functional teams:
The objective is to support a structured discussion about which innovation investments best serve the company’s business priorities, using a clear visual representation of projects, development paths, and investment levels.
For a detailed explanation of the approach, see our methodology: Technology vs Product Innovation Strategy.
The Innovation Matrix Excel Tool positions development projects according to two dimensions:
Each project is represented by a bubble positioned according to its relative level of product and technology innovation.
Bubble size represents the relative level of investment, making it possible to visualize how resources are distributed across the innovation portfolio.
Projects can also be organized into user-defined segments. These segments can distinguish project categories, development priorities, business units, or other meaningful groups.
The resulting graph helps teams identify where investments are concentrated and discuss the implications of different development choices.
The visualization helps management teams explore the implications of different innovation paths, considering development complexity, uncertainty, investment requirements, and alignment with the company’s strategic objectives. These insights provide a stronger foundation for discussing and prioritizing innovation investments.
See how the Excel workbook helps visualize product and technology innovation projects, compare investment levels, and use segments and filters to explore different innovation portfolios.
For the underlying strategic approach, see our Technology vs Product Innovation Strategy methodology.
The Technology vs Product Innovation Excel Tool provides a configurable environment for visualizing and discussing innovation portfolios.
Its main features include:
Multiple-project visualization – Display several innovation initiatives on the same graph, using different colors to distinguish development paths or other project groups.
Flexible segmentation and filtering – Assign projects to user-defined segments and filter the graph to focus on selected groups, priorities, or alternative project selections.
If investment values are not yet available, uniform bubble sizes can be used to focus the discussion on the positioning of projects.
An important prerequisite is that participants share a common understanding of both innovation dimensions. Consistent project positioning is essential for meaningful portfolio comparisons.
The Excel application supports a straightforward five-step process.
Step 1 – Define the innovation dimensions
Establish how product innovation and technology innovation will be evaluated. Make sure the participating teams understand and agree on the definitions.
Step 2 – Enter the development initiatives
List the relevant projects in the Excel table and position them according to their degree of product and technology innovation.
Step 3 – Represent investment levels
Enter the relative investment requirements for each initiative. The application uses these values to determine bubble sizes on the graph.
Step 4 – Organize and filter projects
Assign projects to appropriate segments and use filtering to focus on particular categories, priorities, or development alternatives.
Step 5 – Analyze the portfolio and discuss priorities
Review the distribution of projects and investments. Identify concentrations, challenge development assumptions, and consider whether the proposed portfolio supports the company’s strategic objectives.
The graph provides a shared visual reference for the discussion. The investment decisions remain the responsibility of the participating management team.
A useful application of the Innovation Matrix is the preparation or review of an annual innovation investment portfolio.
For example, management may discover that a significant share of its proposed development budget is concentrated on incremental product improvements, while relatively little investment is directed toward technologies required for future competitiveness.
Alternatively, the portfolio may contain several ambitious initiatives combining significant product and technology changes, creating substantial investment requirements and uncertainty.
Neither distribution is necessarily right or wrong.
The relevant question is whether these investments support the company’s mission, business objectives, customer needs, and longer-term strategic direction.
The matrix makes these trade-offs visible and helps teams examine whether different investment priorities or development sequences would be more appropriate.
Returning to the WHY behind the proposed investments helps distinguish individually attractive projects from those most important to the company’s strategic objectives.
The Excel tool also allows projects to be organized into segments and selectively displayed using filters.
For example, teams may identify different development priorities or alternative project selections and switch between them within the same workbook.
Segments and filters help teams examine selected groups of innovation projects within the same portfolio. For comparing complete alternative investment portfolios, creating separate versions of the Excel workbook is generally the simplest approach. Each version preserves its own project data, investment assumptions, and visual representation.
For more extensive comparisons, we recommend creating a separate Excel workbook for each scenario. This keeps the alternative portfolios independent and avoids sharing the application’s 100-row capacity across multiple scenarios.
Select the green Show Toolbar button to access additional configuration options.
These options help adapt the visualization to different innovation portfolios and make project discussions easier to follow.
Users have access to the embedded macros and may adapt the application to their specific needs, subject to the applicable license conditions.
The Innovation Matrix Excel Tool complements several Marketing Decision Solutions methodologies:
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Purchase and use of the application are subject to the applicable General Sales Conditions.
