Innovation Portfolio Management: A Synthesis and Research Agenda

Abstract

Innovation portfolio management (IPM) addresses the resource allocation across a firm's portfolio of new product development projects consistent with corporate strategy. The paper provides a comprehensive review of IPM research and offers new conceptual arguments by systematizing prior findings in the following four categories: optimization perspective, strategic perspective, decision-making perspective and organizational perspective. These different approaches to IPM have been largely disconnected so far, but they can complement one another to provide new theoretical insights into a critical topic in innovation research. The different approaches are therefore integrated into an overarching perspective and a detailed research agenda is proposed.

Human Behavior in Project Portfolio Selection: Insights from an Experimental Study

“…Further limitations are unique and nonroutine decision environments leading to problems in measuring and assessing new projects (Tatikonda, ), unreliable data for models that are highly sensitive to parameter changes (Chao & Kavadias, ), as well as the strategic nature of decision problems, all of which cause managers to rely on their expertise rather than utilizing elaborate quantitative decision support approaches (Kester, Hultink, & Lauche, ). In his review of empirical and conceptual research in new product portfolio management, Meifort () summarizes that since optimization is rarely used in practice, decision makers play an important role. Various studies highlight that managerial decision making is crucial, for example, studying project portfolios, Jonas, Kock, and Gemünden () provide support for the impact of management quality on portfolio success, conducting interviews, Kester, Griffin, Hultink, and Lauche () conclude that individual's intuition impacts the portfolio selection, and using data from an online simulation exercise with managers, McNally, Durmuşoğlu, and Calantone () summarize that personality traits play an important role for product portfolio decisions.…”

“…Optimization is integrated in the portfolio selection process in mature industries like the pharmaceutical, the oil, and the gas industry (Lockett, De Reyck, & Sloper, 2008) and in large firms like Boeing (Dickinson, Thornton, & Graves, 2001) or Intel (Sampath et al, 2015). However, reviewing empirical portfolio studies, Meifort (2016) concludes that in most innovation portfolio settings the requirements for optimization are not fulfilled. Loch, Pich, Terwiesch, and Urbschat (2001) present a case study explaining why an implemented quantitative model for project selection was not used for its intended purpose at a major car manufacturer.…”

“…Various studies highlight that managerial decision making is crucial, for example, studying project portfolios, Jonas, Kock, and Gemünden (2013) provide support for the impact of management quality on portfolio success, conducting interviews, Kester, Griffin, Hultink, and Lauche (2011) conclude that individual's intuition impacts the portfolio selection, and using data from an online simulation exercise with managers, McNally, Durmuşoglu, and Calantone (2013) summarize that personality traits play an important role for product portfolio decisions. In his review, Meifort (2016) also addresses the organizational perspective and mentions a few articles that acknowledge the importance of interaction between decision makers in project portfolio selection, however, the author states that the concepts still need to be tested further empirically. Jonas et al (2013) identifies cooperation quality as a key aspect of management quality and studying portfolio meetings in a case-study approach, Christiansen and Varnes (2008) conclude that decision makers somehow influence each other, thus making portfolio decisions is rather concerned with appropriate than with rational decisions.…”

A Contingency Approach on the Impact of Front-End Success on Project Portfolio Success

“…Although project portfolio success and eventually company success have many antecedents (Kester, Hultink, & Griffin, ; Martinsuo, ; Meifort, ), one of the major sources for success is a company's ability to innovate (Eisenhardt & Martin, ; Wheelwright & Clark, ). Not surprisingly, new product development success has been elaborated in depth in the last decades (Evanschitzky, Eisend, Calantone, & Jiang, ; Kock, Gemünden, Salomo, & Schultz, ; Salomo, Weise, & Gemünden, ; Sicotte, Drouin, & Delerue, ).…”

The Effects of Decentralization in Strategy‐Making and National Culture on NPD Portfolio Planning

“…For example, Professor Cooper and his colleagues referred to IPM as “the tangible expression of strategy” (Cooper et al, , p. 366) and contended that “strategy and new product resource allocation must be intimately connected” (Cooper, Edgett, and Kleinschmidt, , p. 343). In keeping with this view, the current study focuses on new product development (NPD) portfolio planning, which is defined as a firm's effort to formulate portfolio decisions using a defined innovation strategy (Kopmann et al, ; Meifort, ).…”