Prioritising projects objectively at Grundfos

Grundfos used the IfM Portfolio Prioritisation Tool for their project selection process, providing clear and objective criteria to enhance decision making.

 

About the organisation

Grundfos, based in Bjerringboro in Denmark, is the largest manufacturer of pumps in the world, employing 18,000 people and manufacturing over 12 million pump units a year. The company spends over 7 million Euros each year on R&D.

  

The challenge

Grundfos was looking to improve its project selection process as a number of projects had been running late due to technical issues.

 

Previously the organisation used an externally-sourced scoring tool for project selection but this was discontinued. They decided to design their own selection tool to align with Grundfos’ unique requirements. The Technology Department, responsible for project selection, reviews a large number of project ideas, typically fifteen per month, so they needed to find an efficient way to make an initial decision on whether to progress an idea.

 

Grundfos had recently created a new ‘front loading’ department to ensure that all major technical and marketing issues had been ironed out before a project moved into the main product development process. Christian Rasmussen, Manager of the Technology Department said “We decided that front loading was the place to start because their projects had to be evaluated against a broad range of criteria, not only technical.”

 


 

“The structure of the tool and the anchoring statements makes for much more concrete discussions than we used to have. We get a lot of “buy-in” from this process” Hans Jørgen Klein, Head of the Production Technology Department, Grundfos.

 


 

Scoping and design

Experts from IfM Education and Consultancy Services worked with Grundfos to tailor the IfM’s Portfolio Management Tool to their needs. Grundfos distinguishes between longer-term strategic projects and shorter-term tactical ones, so they needed a process that would help them to make quick and objective decisions on whether a project was tactical or strategic.

 

It took two days to design and train employees on the use of the first tool and several people were involved in its development. Six questions were created, looking at factors including product design and fit with existing production networks and distribution channels.

 

Statements were scored to give a total score, with higher scores indicating strategic projects and lower scores indicating tactical projects.

 

A key step in the project selection process is the design of the scoring model. The scoring model contains two sets of factors - opportunity and feasibility. These factors are carefully scaled to ensure that no project is unfairly penalised or rewarded in deciding priorities.

 

Once employees were trained on the process of designing a template, Rasmussen estimates they could design a tool for a new requirement in a couple of hours.

 

The results

Grundfos found the approach to be effective and the Production Department used the tool to score projects including internal ideas, external ideas (from universities and other industries), and projects with the potential to directly benefit their customers. Employees can score, review and collate results for each proposed project.

 

It takes about two hours of total employee time to score, review and collate the results, which according to Christian Rasmussen is “not a lot compared to the time we used to take, debating round and round – and considering the importance of the task.”

 

This case study was based on a project with Grundfos in 2017, and has been adapted from the book Innovation Management: Effective Strategy and Implementation (Third Edition), by Keith Goffin and Rick Mitchell, Palgrave Macmillan, 2017

  


 

How can IfM Education and Consultancy Services help you?

If you would like to discuss how portfolio prioritisation can help your organisation, please contact Dr Nicky Athanassopoulou to discuss your requirements:

 

T: +44 (0) 1223 760376

E: naa14@cam.ac.uk

 

For further information please contact:

Rob Driver

T: +44 (0)1223 748263

E: rad74@cam.ac.uk