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Like other companies, global financial services group BBVA wanted to find a better way to prioritize new digital initiatives. Resources like staff and funding are valuable, and the company wanted to make sure they were being put toward projects that would have the biggest strategic impact.
So BBVA created an investment process called the Single Development Agenda, which evaluates and prioritizes more than 2,000 initiatives each quarter. The process has improved the company’s capacity to learn from its initiatives, and allocate resources — most notably, people — to those most likely to meet strategic objectives, according to a research briefing by research scientist Nils O. Fonstad and industry research fellow Jukka Salonen from the MIT Center for Information Systems Research.
Following these four guidelines helped the company increase investment in initiatives that advanced strategic objectives and shorten the average initiative duration.
Read the full research briefing: Four Principles for Realizing Strategy with Innovation
1. Generate evidence related to value, not just to deliverables.
It isn’t very helpful to evaluate an initiative’s strategic impact after completion — it’s too late to stop or change it. To make sure the most promising projects are prioritized, companies need to know what type of value initiatives aim to generate, and how much. Evidence of a project’s deliverables is not the same, or as valuable, for realizing a company's strategy, the researchers write.
At BBVA, each strategic initiative team completes a one-page form on a quarterly basis, noting accomplishments and plans for the future in terms of both deliverables and value generation. Initiatives are linked to a common set of strategic key performance indicators.
2. Hold individuals accountable, rather than committees.
At many companies, committees allocate budgets and launch initiatives, but they are rarely held accountable for actually gaining value.
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BBVA designated two leaders for each initiative: one held accountable for a technological solution, and another who is charged with creating value for the initiative’s client, which is either BBVA or an external customer.
Clear accountability and quarterly data make it easier to assess how individuals best contribute to initiatives and how to help people develop professionally, according to the researchers.
3. Allocate talent to initiatives.
Ensuring that projects have the right financial resources does not guarantee that they will have the right expertise to thrive.
BBVA uses staffing experts to allocate the right talent to the most promising initiatives. If an initiative does not get the people it needs for the next quarter, then it isn't executed. People are assigned based on their availability, strategic priority, and abilities, as required by the initiative.
4. Rely on one transparent process — not politics.
Portfolio management processes are often subject to politics, Fonstad and Salonen write. To avoid this, BBVA instituted a transparent, evidence-based process that is applied to every strategic initiative. The process is the only way to launch an initiative at the company. That transparency also changed company culture — having a single agenda helped the global management committee act more as a team, the researchers write.
Read next: Three Challenges to Digital Innovation and How to Overcome Them
