Better Portfolio Decisions on High-Risk Innovation Projects

Ananya Sheth
Sep 24
6 min read

Updated: Oct 30

with Colin Palombo and Magnus Ytterstad at Mondelez International, Hanover, NJ - October 29-30, 2025

This symposium's objective is to understand how to make better portfolio decisions on high-risk innovation projects

BACKGROUND

Over the last several years, the consortium has explored evidence-based research focused on the challenges of successfully implementing a transformational innovation. Topics included the challenges of scaling transformational innovations, applying rigorous hypothesis testing and experimentation, understanding the challenges of implementing an ambidextrous organization, best practices for team formation, understanding Generative AI and decision making under high uncertainty.

The upcoming consortium symposium focuses on how to make better portfolio decisions on high-risk innovation projects. A central problem is the inherent uncertainty of such projects, which makes it hard to forecast outcomes, calculate returns, or define success criteria in advance. Traditional decision-making tools, such as financial models and scoring systems, are poorly suited, as they tend to undervalue long-term strategic opportunities while overemphasizing short-term, low-risk gains. As a result, high risk innovations frequently receive less investment and attention than sustaining projects.

Organizational dynamics further complicate matters: executives and managers may be reluctant to terminate underperforming projects, either due to sunk-cost bias, internal politics, or fear of reputational damage. At the same time, influential champions within the company can skew decisions in favor of projects that do not align with strategy. This contributes to portfolios that are unbalanced and poorly positioned to support future competitiveness.

Cultural and structural barriers also play a role, as many firms are organized to reward efficiency and predictability, which conflicts with the experimentation and risk-taking required for high-impact innovation. In addition, governance processes are often too rigid or too slow to adapt portfolios to rapidly changing market or technology conditions. Ultimately, these challenges leave companies with portfolios that fail to capture the full potential of innovation, weakening their ability to pursue bold, strategic growth initiatives.

For this symposium, we have engaged two experienced consultants, Colin Palombo and Magnus Ytterstad. A synopsis of their bios is included at the end of this memorandum. Day one will be led by Colin Palombo, Managing Partner at Stage-Gate International, a firm founded by Robert Cooper, the pioneer of portfolio management processes for more than 28 years. Colin brings extensive expertise in portfolio processes and will provide a comprehensive overview of leading practices. Day two will be led by Magnus Ytterstad, who has deep expertise in portfolio management, decision analytics, and innovation, with a particular focus on high-risk, high-uncertainty R&D in the pharmaceutical industry. For day two we intentionally sought out consultants with pharmaceutical industry backgrounds, as our analysis showed that this sector consistently demonstrates the most advanced expertise in making portfolio decisions for high-risk projects. While we recognize that the pharmaceutical industry differs from the consortium companies, we believe the lessons and practices are highly transferable and valuable for our discussions.

Colin Palombo Managing Partner at Stage-Gate International

Colin is Managing Partner at Stage-Gate International, a company founded by Robert Cooper, who has pioneered the portfolio process for over 28 years. Robert published one of the first portfolio articles in Research-Technology Management in 1997, and along with his consulting firm, has remained a leading thought leader in this area.

Colin is the managing partner and leads the Digital Transformation practice, which helps global firms build innovation capability through strategic roadmap design, portfolio governance, lean Stage-Gate® systems, and agile and customer-centric methods. For more than 30 years in consulting, he has advised companies across North America, Europe, Asia, the Middle East, and South America, in industries ranging from energy and chemicals through to medical devices, financial services, and hybrid digital-physical products. He holds an MA in Engineering and Computer Science from the University of Cambridge and earned his MBA with distinction from INSEAD. Before Stage-Gate, he co-founded two innovation-software/consulting firms and served as Visiting Professor of Innovation at Strathclyde University.

Colin is an expert at supporting organizations that must make portfolio decisions in environments of high uncertainty and risk. He helps firms assess and balance technical risk and commercial risk when choosing which innovation projects to fund or halt—often using hybrid process designs (for example, combining agile methods with traditional Stage-Gate) to allow early learning, faster course correction, and avoiding over-investment in risky ideas. He emphasizes the importance of front-end work: gathering quantitative customer insight, mapping market satisfaction gaps, and defining opportunity quality vs execution quality, so that decisions on resource allocation are grounded in data—not just intuition. His leadership in digital transformation also extends to helping companies introduce innovative software tools, digitize deliverables, and make their stage-gate and portfolio governance processes more efficient and transparent.

Colin has been a frequent speaker, author, and coach on these topics, publishing research, leading webinars, and guiding executive teams. He is motivated by the challenge of helping organizations choose wisely among multiple high-risk innovation projects—investing in what has the best balance of risk and reward, stopping what doesn’t, and maintaining a healthy innovation portfolio.

Magnus Ytterstad - VP Portfolio Product and Head of Sales at Captario

Olivier Sibony is a professor, author and advisor specializing in the quality of strategic thinking and the design of decision processes. Olivier Sibony is a Professor of Strategy (Education Track) at HEC Paris, where he was awarded the Vernimmen Teaching award in 2020. He is also an Associate Fellow of Saïd Business School at Oxford University and has taught at London Business School, Ecole Polytechnique, ENA, IE Madrid, and other institutions. Previously, he spent 25 years with McKinsey & Company in France and the U.S. as a Senior Partner. There, he was, at various times, a leader of the Global Strategy Practice and the Consumer Goods & Retail Sector.

Olivier’s latest book, Noise: A Flaw in Human Judgment, co-authored with Daniel Kahneman and Cass R. Sunstein, has appeared on multiple bestseller lists worldwide, including the New York Times, Wall Street Journal and Sunday Times lists. His previous book, You’re About to Make a Terrible Mistake!, was awarded the 2019 Manpower Foundation Grand Prize for best management book of the year, and has been translated into 21 languages. He is also the co-author of Cracked It! How To Solve Big Problems and Sell Solutions Like Top Strategy Consultants (with B. Garrette et C. Phelps), and a contributor to the 2019 edition of Strategor, the best-selling French-language strategy textbook. In addition, he has published numerous scientific articles in peer-reviewed journals and practitioner-oriented publications (Harvard Business Review, McKinsey Quarterly, MIT Sloan Management Review, California Management Review).

Olivier builds on this research and experience to advise senior leaders on strategic and operational decision-making. He is a frequent keynote speaker and facilitator of top management and board meetings. He also serves on the boards of several companies.

Olivier Sibony is a graduate of HEC Paris and holds a Ph. D. from Université Paris-Dauphine. He is a knight in the French Order of the Légion d’Honneur. He is married and the father of two children. He lives in Paris.

Magnus Ytterstad has deep expertise in portfolio management, decision analytics, and innovation, especially in high-risk, high-uncertainty R&D and life sciences settings. He currently is VP pf Portfolio Product development at Captario, which is a start-up company with about 30 -40 employees that provides portfolio cloud-based decision support and simulation tools for pharmaceutical industry, helping organizations make better strategic decisions under uncertainty.

Before this, he built a track record at organizations including AstraZeneca and Semcon, where he regularly made tough trade-off decisions under uncertainty—balancing risk, reward, regulatory constraints, and technological feasibility. Magnus has co-authored academic research on optimizing portfolios in pharmaceutical innovation, including models that account for patent expiration, budgetary limits, and strategic objectives. In particular, his work on “Project portfolio planning in the pharmaceutical industry — strategic objectives and quantitative optimization” shows his ability to forecast revenue gaps, design inflows of new projects, and set criteria that guide investment in high-uncertainty ventures. His research also explores how to use tools like PIT-plots to highlight which projects may have outsized impact in a portfolio, offering decision-makers better visibility into extreme risk versus extreme gain.

Throughout his career, Magnus has earned a reputation for making decisions where stakes are high: interpreting noisy or incomplete data, projecting long timelines, managing budget uncertainty, and aligning innovation efforts with organizational strategy. He is known for combining rigorous quantitative modelling with a pragmatic sense of which bets to place and which to prune. His leadership style emphasizes stakeholder alignment, transparency, and learning—ensuring that even when risky projects fail, they advance knowledge and sharpen strategic focus. Magnus holds advanced academic credentials (including in statistical modelling) and remains active in research, bridging the gap between theory and real-world innovation practice.

Meeting content (To be updated)

Pre-readings (Podcasts)